Attica Sea Carriers Corporation v Ferrostaal Poseidon Bulk Reederei G.m.b.H. (Puerto Buitrago)
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE ORR,LORD JUSTICE BROWNE |
| Judgment Date | 21 November 1975 |
| Judgment citation (vLex) | [1975] EWCA Civ J1121-3 |
| Court | Court of Appeal (Civil Division) |
| Date | 21 November 1975 |
[1975] EWCA Civ J1121-3
In The Supreme Court of Judicature
Court of Appeal
The Master of the Rolls
(Lord Denning)
Lord Justice Orr
Lord Justice Browne
MR. ROBERT ALEXANDER Q.C.,MR. J. GILMAN and MR. M. WHITE (instructed by Messrs. Richards Butler & Co.) appeared on behalf of the Appellants
MR. M.O. SAVILLE Q.C.and MR. T. COOKE (instructed by Messrs. Ince & Co.) appeared on behalf of the Respondents.
This is an urgent case. A vessel - the Puerto Buitago - is lying at Kiel with only a caretaker aboard. She was let on a bareboat charter, which expired three months ago. She is out of repair. So much so that it would cost more to repair her than she is worth, even after the repairs have been done. The cost of repairs is said to be twiceas much as her value when repaired. The shipowners say that it is the charterer's duty to repair her, whatever the cost, and that the charterers must pay the charter-hire until she is repaired, even to the crack of doom. The charterers say that that is absurd: and that they are entitled to hand her back to the shipowners at this very moment, just as she is, out of repair: and that the shipowners should sell her for what they can get. The shipowners, they say, can get damages for the delivery up out of repair, but not the charter-hire.
The vessel is owned by a Liberian Company, Attica Sea Carriers Corporation, and is managed by the Goulandris group. Since 1970 she has been let on successive time-charters to one of the Ferrostaal group in Hamberg. The latest of these charterparties is a Bareboat Time-Charter by demise, under which the vessel was manned and maintained by the charterers. It is a type of charterparty which was once said to be 'obsolete'; see Sea and Land Securities -v- William Dickinson & Co, (1942) 2 K.B. at page 69: but it appears to be coming back into fashion. Here it was a demise for seventeen months, from January 1974 to my 1975.
The Puerto Buitrago is a fairly old vessel. She was built in Japan in 1959, She is a bulk-carrier of 21,888 deadweight tonnage. She is powered by steam turbines. When she was delivered to the charterers in January 1974 she was presumably in good repair. After six months use, in July 1974, she was dry-docked at Gdansk in Poland, and any necessary repairs were done. In August 1974 she was surveyed and passed for classification without any recommendations or qualifications. Soon afterwards there was trouble with her engines. She was repaired temporarily. But more serious trouble arose in March 1975, when she was at Rio Grande in Brazil. She had leaded a cargo of soya-bean meal for Europe, but she could not sail because her boiler tubes werefound to be leaking. Temporary repairs were done, but the surveyor recommended that permanent repairs be effected when the vessel reached Europe. She sailed for Europe on 22nd March, 1975, but after a few days she had more trouble with her boilers and had to put in to Rio de Janeiro. She was inspected there. The charterers thought that the best thing was to sell her then and there for scrap. They were losing $2,000 a day on her. But no agreement was reached. So the charterers tried to repair her again. Temporary repairs were done and she set sail again from Rio de Janeiro, on 13th May. But after a few days she again broke down and had to return to Rio. The charterers then decided that the only thing to do was to have her towed all the way to Europe. This was done. On 18th June, 1975, the vessel, full of a cargo of soya-bean meal, was towed out of Rio and then for six weeks across tine oceans till she reached Gdynia in Poland on 1st August, 1975. Her cargo was there discharged. She was then towed to Kiel, where she arrived on 7th September 1975.
At Kiel a survey was commenced by the surveyors for the parties. The owners produced specification for dry-docking and repairs. If these repairs were all done, they would cost, it is said, about $2 millions, whereas the value of the vessel, when repaired, would only be $1 million. Her scrap value would be about $2 million. The charterers admit that repairs to the tune of $400,000 are their responsibility: but they dispute the rest. Seeing the huge claim by the shipowners, the charterers consulted their solicitors. They advised the charterers that it was open to then to re-deliver the vessel to the osiers in its unrepaired state - thus terminating the charter-hire, but being liable in damages.
On 22nd September, 1975, the charterers telexed the owners' agents, saying that they intended to re-deliver the vessel at 12 noon the next day, 23rd September. The owners, however, refused to accept re-delivery. They had a few men on the vessel and removed then next morning at 10 a.m. At 12 noon the charterers' men loft. The only men left on the vessel were watchmen provided by the repairers. On that very afternoon at 2 p.m. the ownersby their counsel went to the vacation judge in London and obtained an injunction restraining the charterers from redelivering the vessel, but this was too late to have any effect because everyone had then left the vessel. Nevertheless, the owners lodged another action against the charterers claiming hire at the charter-rate of $46,000 a month until the vessel was repaired and redelivered in sound condition. The dispute was so serious and so urgent that it was brought speedily before the Commercial Judge, Mr. Justice Mocatta. The parties agreed that he should decide four preliminary questions of law. On the 16th October, 1975, he gave judgment in favour of the shipowners, holding in effect that the charterers were bound to repair the vessel before redelivery, and that the owners were entitled to the hire until the charterers repaired the vessel. The charterers appeal to this Court. We heard the matter within a fortnight and now come to give judgment.
THE FIRST QUESTION
The first question is as to the true construction of the charter party. I will not set it out in full, but in substance the question is whether or not, on the wording of the charterparty, the charterers are entitled to redeliver; the vessel now: or must wait until after the ship has been surveyed and all repairs done (ordinary wear and tear excepted) and passed in class without recommendations. Each side relies on particular clauses which I must set out.
(i) The Charterers' Clauses
"3. Period of Charter Unless sooner terminated as hereinafter provided, this Charter shall remain in force from her delivery until the 28th May, 1975) one month more or lose in Charterers' option.
5. Charter HireCharterer shall pay to Owner during the charter period …. monthly charter hire of U.S. Dollars Two and Fifteen cents. (U.S.$2.15) per ton on 21,888 d.w.t.
10E Maintenance and Repairs
Should any disputearise between the Owner and the Charterer in respect to responsibility for repairs, renewals or replacements, or as to the condition of the vessel at the time of redelivery, the matter shall bedecided by arbitration in London. In the event that such arbitration results in a decision that the Charterer is liable … the Owner shall have the right at Charterer's expense to do the work …. The Charterer shall also pay the Owner hire at the rate provided in the Charter for all time lost by reason of such repairs …. and reimburse the Owner for vessel's expense during such time.
(ii) The Owner's Main Clauses
4. Before redelivery the vessel to be dry-docked and surveyed at the Owner's expense and in its time. However, if such survey should reveal that the vessel is not in a condition as required under the terms of this Charter and repairs will be necessary, time and expense; spent on repairs are for Charterer's account.
6B. …. There shall be made a survey of the vessel before redelivery to determine and state its condition …. The redelivery survey shall include … dry-docking.
10A. Charterer shall, during the period of the charter, maintain the vessel, her machinery, boiler, appurtenances and spare parts in good state of repair and in efficient operating condition.
15 Conditions on Redelivery
The vessel shall be redelivered to the Owner in the same good order and condition as on delivery, having been maintained in accordance with Clause 10A, ordinary wear and tear excepted and in class without recommendations. At the redelivery survey, surveyors … shall determine and state the repairs or work necessary to place the vessel in the condition and class required in this paragraph. Charterer before redelivery, shall make all such repairs and do all such work sc found to be necessary at its expense and time. In addition, the survey provided for in Clauses 4 and 6B hereof shall be made and Charterer shall, at its own expense and time, comply with any recommendations agreedby the Surveyors."
Such being the principal clauses of this Charter, it is plain that the Charterer is under an obligation to put the vessel in good repair before redelivery. Bat the question is whether that stipulation is a condition precedentto his right to redeliver the vessel (so that he is not entitled to redeliver the vessel until he has performed it): or whether it is merely a stipulationwhich, if broken, gives a remedy in damages but does not prevent him from redelivering the vessel to the Owner. This is the sort of question which has come before the Courts for the last 200 or 300 years. I summarised the history in Cehave N.V. -v- Bremer m.b.H.(C.A.) (1975) 3 W.L.R. at pages 453 and 454.
The parties can, by clear words, provide that complete performance of a particular stipulation can be a condition precedent: but, in the absence of dear words, the Court look to see which of the rival interpretations gives the...
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