Becher (Kurt A.) G.m.b.H. & Company (K.G.) v Roplak Enterprises S.A. (World Navigator)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PARKER,LORD JUSTICE STAUGHTON,SIR DAVID CROOM-JOHNSON |
| Judgment Date | 12 April 1991 |
| Judgment citation (vLex) | [1991] EWCA Civ J0412-3 |
| Docket Number | 91/0362 |
| Court | Court of Appeal (Civil Division) |
| Date | 12 April 1991 |
[1991] EWCA Civ J0412-3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Mr. Justice Phillips)
Royal Courts of Justice
Lord Justice Parker
Lord Justice Staughton
and
Sir David Croom-Johnson
91/0362
MR. MARTIN MOORE-BICK Q.C. and MISS G. CLARK (instructed by Messrs Richards Butler) appeared on behalf of the Respondents (Plaintiffs).
MR. DAVID JOHNSON Q.C. and MR. M. HAVELOCK-ALLAN (instructed by Messrs Sinclair Roche & Temperley) appeared on behalf of the Appellants (Defendants).
In this judgment I shall refer to the respondents, Kurt A. Becher GmbH & Co. KG., as "the buyers" and to the appellants, Roplak Enterprises Panama, as "the sellers".
By contracts dated respectively the 7th December 1984, 11th February 1985 and 14th February 1985, the sellers agreed to sell and the buyers agreed to buy 9,000 metric tonnes, 18,000 metric tonnes and 9,000 metric tonnes of Plate Maize FOB, Rosario. Each contract provided for shipment by equal instalments in April, May and June 1985. The total quantity to be shipped in June was accordingly 12,000 tonnes. Each contract was upon the terms of two standard sets of conditions, GAFTA No. 64 and Argentine Centro Terms.
The only material term of GAFTA No. 64 is Clause 7 which provides:
"DELIVERY—Buyers shall tender vessel(s) in readiness to load between…both dates inclusive. Sellers shall be entitled to receive at least…consecutive days notice of…probable readiness of the vessel and of the estimated tonnage required. Vessel(s) to load in accordance with the custom at port of loading unless otherwise stipulated…"
The relevant Centro Clauses are:
" Pre-advice. Buyers to give sellers at least fifteen days notice of readiness to load. Vessel to be loaded in berth suitable to sellers.
Loading Rate.
Once vessel is berthed alongside berth suitable to sellers and ready to load this parcel, sellers guarantee, provided that the vessel is able to receive, a minimum average loading rate of 500 t per weather working day, Sundays, Holidays and Saturday afternoons excluded, according Centrocon, but sellers shall not be responsible for any time lost due to act of God, strikes, lockouts, riots, civil commotions, labour stoppages, breakdown of machinery and/or winches, failure of power, fire or any other cause of Force Majeure. No despatch is due by buyers to sellers."
The relevant facts fall within a narrow compass and are not disputed. On the 24th May 1985, the buyers nominated the vessel World Navigation to load the 12,000 tonnes representing the June portion of the three contracts with which we are directly concerned. She reached Zona Comun on 13th June 1985 and on that date tendered notice of readiness to load. On the 25th June 1985 she would have berthed had the shippers' necessary documentation for loading been in order. It was not, and as a result she was by-passed by the vessel next in turn and five other vessels and did not in fact berth until the 18th July. Between then and the 22nd July she loaded a total of 24,000 tonnes including the 12,000 tonnes, the June portion of the three contracts. The buyers claimed that the sellers were in breach of their obligations under the contracts in effect in not having the goods ready to load at the time the vessel was ready to receive them. They contended that the damages recoverable for such breach consisted in the demurrage which they, the buyers, under the charterparty pursuant to which they had provided the vessel, had to pay for the period between the 25th June and the 18th July. I leave out the specific timings in the foregoing account for they are not relevant to the issues arising on this appeal. The sellers disputed the buyers' claim on the basis, inter alia, that they were not in breach of any obligation and that even if they were the buyers had suffered no damage and would therefore be entitled to no more than nominal damages. This was on the basis that, if the vessel had kept her turn on the 25th June, they would have had 48 days in which to load the entire cargo of 24,000 tonnes and that, albeit loading had not begun until the 18th July, it had been completed within that time. As an alternative, it was said that to load the 12,000 tonnes under the three contracts they had 24 days and had completed that amount within that time.
The dispute went to Arbitration. The Arbitrators upheld the buyers' claim. The sellers appealed to the Board of Appeal of GAFTA, who allowed the appeal and awarded that the buyers' claim failed. The last paragraph of their award is in the following terms:
"Laytime commenced earliest on 26th June 1985, and the vessel finished loading 24,000 metric tonnes on 22nd July 1985. Taking the two facts into account and on the evidence before us, it is clear the vessel used less than 18 days of laytime (allowing for time not counting), whilst under this contract alone, 24 days were allowed."
By leave of Hirst J, the buyers appealed to the High Court. The appeal was heard by Phillips J. who allowed the appeal and remitted the award to the Board of Appeal for reconsideration in the light of his judgment. The sellers now appeal to this court by leave of the judge.
The following principal issues arise on this appeal:
(1) What was the sellers' obligation, if any, with regard to enabling the vessel to reach loading berth after having received valid notice of readiness?
(2) What was the sellers' obligation with regard to rate of loading once the vessel had berthed and was able to receive cargo?
(3) On what basis should damages be assessed if the sellers were in breach of any obligation under (1) above?
I shall consider first issues (2) and (3) above on the assumption that the sellers were in breach of contract in not having the necessary documentation to enable the vessel to keep her turn on the 25th June and that it was that breach which caused her to be unable to berth thereafter until the 18th July.
Put in its shortest form the buyers' contention on issue (2) is that, although the Centro loading rate clause provided for a minimum average rate of 500 tonnes per weather working day etc., the obligation to load according to the Custom of the Port to be found in Clause 7 of GAFTA remained, except for the loading rate specified in the Centro Clause. The Custom of the Port might for example be to load by a method which would produce a faster rate than that specified in the Centro Clause. If this was so, the sellers would be obliged to comply with it, notwithstanding that it would put upon them a higher obligation than that specified in the Centro Clause.
Phillips J. rejected this contention. He concluded that "the loading rate in the Centro Form does, on its true construction, set out a comprehensive statement of the sellers' obligations in relation to loading." I agree.
The GAFTA provision is that the vessel is to load in accordance with the Custom of the Port unless otherwise stipulated. The Centro Clause does, in my judgment, otherwise stipulate. Under that clause the buyer will not be in breach if he maintains an average of at least 500 tonnes a day. Mr. Moore-Bick Q.C. for the buyers accepted that if the Custom of the Port was to load at a higher rate per se, the buyers could not contend that such rate was applicable. He submitted however that, if the Custom of the Port was such that compliance with it would result in a faster rate, that rate would be applicable. I cannot accept this. As Phillips J. held, the clause is on its face intended to be a comprehensive clause providing as it does for exceptions from laytime time for Sundays, Holidays and Saturday afternoons, for the sellers not to be responsible for any time lost due to a number of specific events "or any other cause of Force Majeure", and even for the exclusion of despatch money.
The point is a short one and I do not find any assistance from authority. Accordingly the sellers were, in my judgment, entitled once the vessel was in berth to take up to 48 counting days to load the complete cargo or 24 counting days to load the three contracts in question.
I turn now to consider, on the assumptions which I have mentioned, the question of:
Damages
The buyers' contention is that, given that the vessel was delayed by the breach, the proper course is to consider what would probably have happened had there been no breach. If it would probably have resulted, had the vessel berthed on the 25th or 26th June, in her loading at the same rate as she actually loaded when she did berth, then they are entitled to damages because, but for the breach, the vessel would have been free and demurrage under the charterparty would have ceased to accrue by the 1st July. Their damage is therefore the demurrage incurred between that date and the 22nd July when she was finally free. The buyers, it is said, lost the chance of freeing the vessel earlier and the value of the lost chance is that which they claim.
For the sellers the contention is that since, had the vessel berthed on the 26th June, they would not have been obliged to complete loading and free the vessel any earlier than they in fact did, no damage has been suffered.
On this issue we were referred to a considerable number of authorities but in my judgment it is only necessary to refer to two of them.
I begin with Lavarack v. Woods of Colchester Ltd. [1967] 1 QB 278 and I do so because Mr. Moore-Bick's submissions appear to be advancing propositions in the judgment of Lord Denning M.R. in...
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