Anglo-Saxon Petroleum Company Ltd v Adamastos Shipping Company Ltd (Saxon Star.)

JurisdictionEngland & Wales
CourtCourt of Appeal
JudgeLORD JUSTICE DENNING,LORD JUSTICE PARKER,LORD JUSTICE SELLERS
Judgment Date16 April 1957
Judgment citation (vLex)[1957] EWCA Civ J0416-8
Date16 April 1957

[1957] EWCA Civ J0416-8

In The Supreme Court of Judicature

Court of Appeal

Before:-

Lord Justice Denning,

Lord Justice Parker and

Lord Justice Sellers.

Anglo Saxon Petroleum Company Limited.
Claimants
and
Adamastos Shipping Company Limited,
Respondents

Mr A.A. MOCATTA. Q.C. and Mr S.O. OLSON (instructed by Messrs Waltons & Co.) appeared on behalf of the Claimants (Charterers).

Mr ASHTON ROSKILL. Q.C., the Hon. T.G. ROCHE. Q.C. and Mr BASIL S. ECKERSLEY (instructed by Messrs Constant & Constant) appeared on behalf of the Respondents (Owners).

LORD JUSTICE DENNING
1

: The facts are so well and fully set out In the Award of the Umpire that I will only state them in outline.

2

The case concerns the misfortunes that befell an oil tanker called the "Saxon Star". She was owned by the Adamastos Shipping Company and chartered to an oil company, the Anglo Saxon Petroleum Co. Limited. Our task is to construe the charter party. It was neither a time charter nor a single voyage charter, but a consecutive voyage charter. It was made In London on the 25th May, 1950. Clause 1 said: "That the said vessel being tight, staunch and strong, and every way fitted for the voyage, and to be maintained in such condition during the voyage, perils of the sea excepted, shall, with all convenient despatch, sail and proceed to" one of several named ports and there load a full and complete cargo of oil. Clause 43 said that the charter party was "to remain in force for as many consecutive voyages for which vessel can tender for loading within a period" of eighteen months expiring on the 31st December, 1951. The vessel was to carry oil from one part of the world to another at specified rates of freight per ton per voyage or a return cargo of fresh water at a lump sum.

3

Before entering on the chartered service, the vessel was surveyed and repaired at Baltimore In the United States. On the 27th July, 1950, she entered on the charter. She sailed from Baltimore for Curacao in the Dutch West Indies to load her first cargo under the charter party, but on the way she broke down and had to be towed into San Juan (Puerto Rico) for repairs. This breakdown was due to the incompetence of the engine – room staff in not handling properly a minor trouble. Some repairs were done at San Juan, but they were not done properly. The boilers were left in a condition in which they were likely to leak. She got to Curacao and loaded a cargo of oil for carriage to Buenos Aires. She set sail from Curacao on the 19th August, 1950, but within three or four days the boilers began to leak and continued leaking so badly that she had to put into Recife, the Port of Pernambuco, Brazil, for repairs. She was there for t fortnight and properly repaired had left on the 2nd September for Buenos Aires, where she docked on the 2nd October and discharged her cargo of oil. She then picked up a cargo of fresh water from the river and set call back to Curacao. On way beck, there was continuous trouble with the machinery. This again was all due to the incompetence of the engine-room staff, so much so that when she arrived in Curacao on the 5th November, "the plant of the ship was again in complete chaos". At Curacao she discharged her cargo of fresh water and tock en a cargo oil. Some repairs were done at Curacao, but only sufficient to enable her to go to the United States for such core extensive repairs. She eventually left Curacao on the 30th November for New Jersey. She got there on the 12th December end, having discharged her cargo, went in for extensive repairs which took nearly two months. Eventually, on the 10th February 1951, he left and there was no more trouble. Thereafter, during the period of the charter party, the vessel functioned satisfactorily.

4

The findings of the Umpire show that root trouble was the incompetence of the engine-room staff. The owners at all times exercised due diligence properly to ran the ship. They believed they appointed competent men at the start end, when the troubles arose, they made changes. For instance. they made changes in the engine-room staff at San Juan end at Buenos Aires: but still the staff remained incompetent until the November, 1950, when the whole lot were changed at Curacao on the way back. The charterers say that, as a result of these troubles, they lost the services of the vessel for 106 days: and, inasmuch as freight rates rose much during the period of the charter, they have lost over £80,000 on this account. The owners deny liability. They contend that their only obligation was to exercise due diligence themselves personally and they have done it.

5

On one matter, however, the owners admitted liability. Having regard to the findings of the Umpire, they admitted that repairs were not properly executed at San Juan, with the result that there was leakage from the boilers on the way to Recife, for which they are liable: but they say that was a comparatively minor matter because the machinery was all properly repaired at Recife. The Judge thought that, in view of the way the Umpire had phrased paragraph 58 of his Award, this admission of the owners left his (the Judge) with nothing to do but to affirm the Award; but, at the request of the parties, he answered three questions as if they had been asked by the Umpire. I cannot help thinking that the Judge construed the Award with too rigid an eye. The Umpire stated the questions of law very clearly in paragraph of his Award and I think we should do our best to answer them.

6

The real question is whether the incompetence of the engine-room staff and consequent damage to the machinery and delay to the vessel was a breach of the terms of the charter-party. Unless the owners are protected by the exempting clauses, I think they were clearly in breach of the charter-party on any one or more of the following grounds: (i) The owners were under an express or alternatively an implied obligation to ensure that the vessel was in seaworthy condition at the beginning of each successive voyage, that is to say, when she called from Baltimore on the 27th July, from Curacao on the 19th August and from Buenos Aires on the 5th October, 1950. ( Glertsen v. Turnbull. 1908 Session Cases, 1101; concerned a time charter which is different). In fact, this vessel was not seaworthy at any of those points because she was not manned by a competent engine-room staff, (ii) The owners were under an express obligation to maintain the vessel in a seaworthy condition during each of the successive voyages, perils of the sea excepted. Their obligation was, I think, an absolute obligation to ensure the vessel was throughout in a seaworthy condition, save only when the vessel was rendered unseaworthy by perils of the sea, or perhaps by any of the excepted perils in Clause 9. The introduction of the exception "perils of the sea" would be meaningless unless the obligation to maintain was an absolute obligation to ensure that the vessel remained efficient. (The case of Tynedale v. Anglo-Soviet, 1936, 41 Commercial Cases, 206, depended on the particular words of that charter party). This obligation to maintain was broken by the fact that the machinery broke down on the voyages from Baltimore to Curacao, from Curacao to Recife, and from Buenos Aires to Curacao. None of those breakdowns were due to perils of the sea, but to the incompetence of the engine-room staff. (iii) The owners were under a duty to carry out their part of the contract with reasonable care and skill. They failed in that duty by the Incompetence and consequent negligence of the engine-room staff, (iv) The owners were under an express or alternatively an implied obligation to sail and proceed with all convenient despatch to the nominated port of loading for each successive voyage and to proceed upon and complete such voyage with all reasonable despatch. They broke this obligation by the delays which took place unless they can show some just cause or excuse for them.

7

Such being prima facie the obligations of the ship owners, the question is whether they are saved by the exempting clauses of the charter party. There is an exempting clause No.9 which exempts the ship owners from liability, inter alia, for "perils of the sea", "accidents of navigation even when occasioned by negligence" and from "any latent defect in the machinery not resulting from want of due diligence". This clause does not avail the ship owners, because the trouble was not due to "perils of the sea", the accidents were not "accidents of navigation", and the defects in the machinery were not "latent". In these circumstances, the ship owners fall back on the "Paramount Clause" which was expressly incorporated in the charterparty and annexed to it by a typed slip in these words: "Paramount Clause. This Bill of Lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States, approved April 16th, 1936, which shall be deemed to be incorporated herein, and nothing herein contained shall be deemed a surrender by the Carrier of any of Its rights or immunities or an increase of any of its responsibilities or liabilities under said Act. If any term of this Bill of Lading be repugnant to said Act to any extent, such term shall be void to that extent, but no further".

8

It is a strange thing to find a shipowner relying on the Paramount Clause to exempt himself from liability. Historically, its purpose was to make him liable. Shipowners used to insert clauses in bills of lading exempting themselves from all liability, no matter how much they or their servants were at fault. The purpose of the Hague Rules, speaking broadly, was to prevent shipowners from availing themselves of all these wide exemptions and to render them liable for want of due diligence to make the ship seaworthy and other matters: but, so long as they used due diligence in these regards, they were relieved...

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