Blue Horizon, Shipping Company S.A. v E.D. & F. Man Ltd (Aghios Nicolaos)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ORMROD,LORD JUSTICE EVELEIGH |
| Judgment Date | 14 June 1979 |
| Judgment citation (vLex) | [1979] EWCA Civ J0614-2 |
| Court | Court of Appeal (Civil Division) |
| Date | 14 June 1979 |
[1979] EWCA Civ J0614-2
In The Supreme Court of Judicature
Court of Appeal
On Appeal from the Queen's Bench Division
Commercial Court
Lord Justice Ormrod
and
Lord Justice Eveleigh
MR. M. MOORE-BICK (instructed by Messrs. William A. Crump & Son) appeared on behalf of the Appellants/Respondents.
MR. A. G. S. POLLOCK. Q.C. (instructed by Messrs. Holman Fenwick & Willan) appeared on behalf of the Respondents/Claimants.
This is an appeal by the charterers from an order which was made in Chambers by Mr. Justice Parker on 9th November 1978 under which he ordered that "so much of the interim award dated 31st August 1978 made by the Umpire, Comdr. William Warwick, as relates to the costs of the Arbitration herein be remitted to the Umpire for his further consideration and that the costs of the application be taxed by a taxing master if not agreed and paid by the Defendants to the Plaintiffs." The appeal raises a somewhat unusual point in relation to an award of costs by an arbitrator.
The background to the case is briefly this. As long ago as 1972 a ship called the "Aghios Nicolaos", owned by the shipowners and chartered to the charterers, sustained damage on two occasions in the port of Valparaiso. It had been berthed at a berth called Barons Wharf, and on 16th/17th September 1972 the weather deteriorated, with the result that the ship ranged, as it is put, and while still tied up at Barons Wharf suffered considerable damage to its hull A few days later, on the night of 20th/21st September 1972, whilst still in the same position there was what was described as a very strong swell which caused the ship once again to range and to be buffeted against the berth, and it sustained further damage. The shipowners claimed damages against the charterers for breach of the term of the charterparty requiring them to provide a safe berth. They did not sub-divide the damage suffered to the vessel as between the two incidents but claimed simply a total in respect of the damage to the ship in the two incidents.
The arbitration with which we are concerned, as it developed, was solely on the issue of liability in respect ofeach of these two occasions; the question of quantum was left over to he determined later. The award was given in the form of a special case, and it is before us. As I understand the finding of the Umpire, he came to the conclusion that this particular berth at Barons Wharf was potentially an unsafe berth because, as was admitted by the harbour authorities at Valparaiso, in certain weather conditions it was dangerous and they provided, or sought to provide, a warning system so as to enable the masters of ships tied up at Barons Wharf to get away in the event of deteriorating weather conditions which would be likely to render the berth unsafe. The Umpire came to a conclusion of fact that on the first occasion on 16th/17th September 1972 the warning system did not work properly. The reasons for its failure to work do not seem to me to be relevant, but in paragraph 31 the Arbitrator says: "As the Port Authority acknowledges that under certain weather conditions it is 'unsafe' for vessels to lay alongside the Baron Wharf, it follows that unless:- (a) The warning system which advises of the onset of such conditions is 100% foolproof (in this case it was not ref. paras. 12, 19 and 21), (b) The communication services between the Port Authority and the vessels lying alongside the Baron Wharf are available at all times (in this case they were not, ref. paras. 22, 23 and 25), (c) Assistance is available in the form of Pilot, tugs and linesmen as may be required to enable a vessel to leave the Wharf immediately upon being warned so to do or at any time the Master of any vessel lying alongside the Wharf should feel that his vessel is at risk by remaining there (in this case it was not, ref. paras. 20, 24 and 25), then the Baron Wharf is potentiallyunsafe at all times and Valparaiso vas not a safe port for 'Aghios Micolaos' after 1800 hours on the 16th of September, 1972." The Arbitrator then found "The cause of the damage sustained by the 'Aghios Nicolaos' during the night of the 16th/17th September, 1972 was the failure of the Chatterers to provide a safe berth."
To come to the second episode, on 20th/21st September 1972, the Arbitrator's findings were that on that occasion the weather had not deteriorated in the way in which it had on the previous occasion. He found by implication, I think, that the berth was not an unsafe one on that occasion and that the damage was caused by a heavy swell occurring in relatively calm weather, and he held that the damage then was due to the failure of the Master to take steps in sufficient time to get the ship away from the wharf in order to avoid the damage. In paragraph 45 he puts his findings on the second occasion in this way: "The cause of the damage sustained by the 'Aghios Wicolaos on the 21st September, 1972 was the failure by the Master to leave the Baron Wharf before the swell increased to the extent of creating risk for the safety of the vessel. The 'unsafe' berth factor was not contributory to the damage to the vessel. That the Chatterers are not liable to the Owners for the damage sustained by the 'Aghios Nicolaos' on the 21st of September, 1972." He then directed "That the Claimants shall bear and pay their own costs in the Reference and that the Respondents shall bear and pay their own costs in the Reference" and that the costs of the award should be borne equally between the parties.
He was later asked to give reasons for his award ofcosts in that form – that each party should pay its own costs – and set out his reasons in writing in a document which is before us. After setting out briefly the nature of the litigation he says this: "I found and held that the damage sustained on the 16th/17th September, 1972 (1st occasion) was caused by the unsafety of the port and/or berth and that the Respondents were liable to the Claimants in respect of the damage sustained by the 'Aghios Nicolaos' on this the first occasion. I further found that the damage sustained on the 21st September, 1972 (2nd occasion) was caused by the failure of the Master to leave the Baron Wharf before the swell increased to the extent of creating a risk for the safety of his vessel, namely the 'Aghlos Nicolaos', and that the Respondents were not liable to the Claimants in respect of the damage sustained on this the second occasion. Thus the Claimants allegation that the Respondents are liable to them in damages in respect of damage alleged to have been sustained by the 'Aghios Nicolaos' succeeded only in part and costs became a matter of apportion." He then went on to say this: "In my opinion the fraction of costs that each party should bear ought to be in proportion with the effect of the findings on the total damages claimed. Therefore if the damage sustained on the first occasion was greater than that sustained on the second occasion, the Claimants should be entitled to recover the greater part of the costs. Likewise if the damage sustained on the second occasion was greater than that sustained on the first occasion then the Respondents should be entitled to recover the greater part of the costs. To adjudge in accordance with this principle, it would be necessaryto know which damages were sustained on each occasion. The damages listed in the pleadings were detailed to the occasion (first or second) on which they were sustained. The damages were listed as resultant of both occasions, it is not possible to relate the effect of the findings to the total claim, and consequently apportionment could only be guesswork. I therefore decided that each party should pay their own costs plus half the cost of the arbitration."
That statement of reasons was attacked in various ways. As far as the judgment of Mr. Justice Parker is concerned, the main point of attack was on the sentence I have just read: "Thus the Claimants' allegation that the Respondents are liable to them in damages in respect of damage alleged to have been sustained by the 'Aghios Nicolaos' succeeded only in part and costs became a matter of apportion." The learned Judge below read that statement as what he called a "plain statement" by the Umpire that he considered that as the claimants had succeeded in part only, it automatically followed that costs should be a matter of apportion in some way or another. I take the learned Judge to be saying in effect that the Umpire misdirected himself in law in holding that having reached the conclusion that the claimants had succeeded in their claim only in...
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