Bilgent Shipping PTE Ltd v ADM International SARL
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Teare |
| Judgment Date | 02 October 2019 |
| Neutral Citation | [2019] EWHC 2522 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2018-000429/CL-2018-000451 |
| Date | 02 October 2019 |
[2019] EWHC 2522 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
Fetter Lane, London EC4A 1NL
Mr. Justice Teare
Case No: CL-2018-000429/CL-2018-000451
“Alpha Harmony”
Charles Priday (instructed by Winter Scott LLP) for Bilgent
James M. Turner QC (instructed by Hill Dickinson LLP) for ADM
Michael Davey QC and Mark Stiggelbout (instructed by MFB Solicitors) for Oldendorff
Hearing date: 26 July 2019
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
These are two appeals from two related arbitrations, pursuant to section 69 of the Arbitration Act 1996. Permission to appeal was given by Knowles J. The appeals concern a question of law relating to the cancellation of a voyage charterparty on the grounds that a valid notice of readiness had not been given in time. When granting permission Knowles J. observed that the answer on each appeal may be different.
The appeals arise out of two charterparties which were not in identical form. The Head Charter was dated 13 November 2014 and was on an amended Norgrain 1973 form. It was between Oldendorff as Owner and ADM as Charterer. It provided for two voyages from Brazil, Argentina or Uruguay to China. The Sub-Charter was dated 5 November 2014 and was on an amended Baltimore Form C Berth Grain form. It was between ADM as Disponent Owner and Bilgent as Sub-Charterer. It provided for a voyage from Brazil to China. The vessel nominated to perform the voyage from Brazil to China was the ALPHA HARMONY.
The Head Charter provided for two laycan periods, the second of which ended on 31 May 2015. The Sub-Charter provided for a laycan period ending on 31 May 2015. On 2 April 2015 the laycan spread was narrowed by Bilgent to 1–10 May 2015 and also by ADM under the Head Charter. The vessel tendered notice of readiness by email at 0704 on 10 May 2015 which was a Sunday. The email stated that the vessel had arrived at 0250.
Under both charters a clause provided for notice of readiness to be delivered between 0800 and 1700 on a weekday and between 0800 and 1100 on a Saturday. No express provision was made for delivery of a notice of readiness on a Sunday. Laytime was to commence at 0800 on the next working day after a valid notice of readiness had been tendered.
Bilgent cancelled the Sub-Charter at 2047 on Sunday 10 May 2015 and ADM cancelled the Head Charter at 0555 on Monday 11 May 2015. The question is whether the cancellations were lawful in circumstances where, although notice of readiness had been tendered before the relevant time on the cancelling date, it had not been tendered during the permitted hours. The arbitration panel in both arbitrations held that the cancellations were not valid. Bilgent appeals the award made against it in favour of ADM. ADM resists that appeal but appeals against the award made against it in favour of Oldendorff.
The relevant terms of the Sub-Charter
Clause 14 dealt with notice of readiness in these terms:
“Notification of the vessel's readiness to load at the loading port must be delivered by mail/fax at the office of Charterers or their agents, between 0800 hours and 1700 hours from Monday to Friday, between 0800 hours and 1100 hour on Saturday, Vessel also having been entered at the Custom House. Laytime is to commence 0800 hours the next working day, also see Clauses 43,44,74.”
Clauses 43 and 44 concerned the discharge port. Clause 74 repeated the provisions concerning notice of readiness at both the loading and discharge port.
Clause 16 dealt with the cancelling date in these terms:
“Should the Notice of Readiness at loading port not be delivered as per Clause 14 by twelve o'clock noon on the 31st day of May 2015, the Charterers or their Agents shall at said hour and at any time thereafter, but not later than the presentation of Notice of Readiness together with the required certificates at said office, have the option of cancelling this Charter Party. Charterers to narrow into “10” days spread latest in 40 days advance prior to first layday.”
The relevant terms of the Head Charter
Clause 4 concerned Laydays and Cancelling. It provided as follows:
“Laytime for loading, if required by Charterers, not to commence before 0001 on 01 st day of April/May 2015. Should the vessel's notice of readiness not be tendered and accepted as per Clause 17 before 2359 on the 30 th/31 st day of April/May of 2015, the Charterers or their Agents shall at any time thereafter, but not later than one hour after the notice of readiness is tendered, have the option of cancelling this Charterparty. Charterers to narrow Laycan into a 10 days spread latest 30 days prior first Layday ……”
Clause 17 concerned Time Counting and provided as follows:
“(a) Notice of readiness and Commencement of Laytime See also Clause 70
Notice of vessel's readiness to load and/or discharge at the first or sole loading and/or discharging port, shall be delivered in writing or by cable/telex/email to Charterers/Receivers (or their Agents). See also Clause 70. Such notice of readiness shall be delivered when vessel is in the loading or discharging port and is in all respects ready to load/discharge in case loading/discharging berth is occupied vessel to be allowed to tender Notice of readiness whether in port or not, whether in berth or not, whether customs cleared to not, whether in free pratique or not.
Following receipt of notice of readiness to load or discharge as above, laytime will commence at 0800 on the next working day, after the valid Notice of readiness has been tendered and hold passed, laytime to commence to restart at 0800 hours on Monday or the day following a public holiday. ………”
Clause 70, which dealt with Notice of Readiness and Layime and to which the reader of clause 17 was directed to see, provided as follows:
“Loading port:
If loading at East Coast South America, the Notice of readiness to be tendered within office hours 0800–1700 hours Monday to Friday and 0800–1100 hours Saturday. Layime to commence at 0800 hours the next working day after valid Notice of Readiness being tendered. ………………”
The submissions in summary
The submission made by Mr. Priday on behalf Bilgent was simple. Clause 16 of the Sub-charter identified when Bilgent had an option to cancel, namely, in the event that notice of readiness was not delivered as per clause 14 by 12 noon on 10 May 2015. Clause 14 required the notice of readiness to be delivered within certain hours on a weekday or on a Saturday. The notice of readiness had not been delivered within those hours. It had been delivered on Sunday 10 May at 0704. It followed that from Sunday 10 May at 12 noon Bilgent had a right to cancel.
The primary submission made by Mr. Turner QC on behalf of ADM was that the arbitral tribunal was right to say that no right of cancellation had accrued. He submitted that, when construing the words “as per clause 14” in clause 16, only those parts of clause 14 as are sensible to include and are not in conflict with clause 16 should be read into clause 16. He submitted that there was a tension between “an entitlement to cancel if the notice of readiness has not been delivered by noon on a Sunday” and the “stipulation that notice of readiness cannot be delivered after 11 am on a Saturday.” The office hours requirement should not therefore be incorporated into clause 16. He submitted that the right to cancel in clause 16 arose if no notice of readiness had been delivered before noon on Sunday 10 May. A notice of readiness had been delivered by noon on Sunday 10 May; for it had been delivered at 00704 on that Sunday.
The alternative submission made by Mr. Turner on behalf of ADM was that under the Head Charter a notice of readiness could only take effect during the office hours identified in clause 70. The notice of readiness relied upon by Oldendorff was tendered out of office hours and therefore could not prevent the right to cancel from arising at 2359 on Sunday 10 May. This alternative submission reflected the submission made by Mr. Priday under the Sub-Charter appeal.
The submission made by Mr. Davey QC on behalf of Oldendorff was that clause 4 of the Head Charter provided for an option to cancel where there had been no notice of readiness as per clause 17 before 2359 on the cancelling date. Clause 17 contained no office hours requirement; such a requirement had been in the standard form of the Norgrain charterparty but had been deleted. Accordingly, in order for there to be a right to cancel, there had to have been no notice of readiness tendered and accepted by 2359 on 10 May. There had been a notice of readiness at 0704 on 10 May and so there was no right to cancel.
Approach to questions of construction
The court is concerned with a question of construction. The Court of Appeal has recently summarised the correct approach to matters of construction; see Ark Shipping Company LLC v Silverburn Shipping (IOM) Ltd. [2019] EWCA Civ 1161 at paragraph 41 per Gross LJ:
41. Rather than adding to an all too well travelled area, it suffices to adopt (with respect) Lord Hodge's synthesis as to interpretation in Wood v Capita Insurance Services Ltd [2017] UKSC 24; [2017] AC 1173, at [10] – [15]:
“10. The court's task is to ascertain the objective meaning of the language which the parties have chosen to express their agreement. It has long been accepted that this...
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