Borvigilant, Owners of the v Owners of the Romina G
| Jurisdiction | England & Wales |
| Judge | Lord Justice Clarke,Lord Justice Dyson,Lord Justice Peter Gibson |
| Judgment Date | 08 July 2003 |
| Neutral Citation | [2003] EWCA Civ 935 |
| Docket Number | Case No: A3/2002/2417 and 2421 |
| Court | Court of Appeal (Civil Division) |
| Date | 08 July 2003 |
[2003] EWCA Civ 935
lord Justice Peter Gibson
Lord Justice Clarke and
Lord Justice Dyson
Case No: A3/2002/2417 and 2421
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE ADMIRALTY COURT
The Hon Mr Justice David Steel
QUEEN'S BENCH DIVISION
Mr Andrew Popplewell QC (instructed by Bentleys Stokes & Lowless) for the Respondents
Mr Jeremy Russell QC (instructed by Clyde & Co) for the Appellants
Introduction
This is an appeal from a decision of David Steel J dated 4 November 2002 made on the trial of certain preliminary issues. It is brought with the permission of the Judge.
The Facts
On 22 July 1998 the Respondents' tug BORVIGILANT collided with the Appellants' tanker ROMINA G off Kharg Island in the Persian Gulf. As a result of the collision the skipper and some of the crew of the tug lost their lives and the owners of both vessels suffered loss and damage. The tugowners are Borkan General Trading ("Borkan") and the owners of the ROMINA G are Monsoon Shipping Limited ("Monsoon"). Each claims damages against the other, Borkan in contract and tort and Monsoon in tort. It is agreed that the issues between the parties, both in contract and tort, should be determined in England in accordance with English Law.
The preliminary issues concern the alleged contract between the parties. The underlying facts are not in dispute. On 22 July 1998 the ROMINA G was inbound and due to berth at the Kharg Island terminal in order to load a cargo of crude oil. The terminal is operated by the National Iranian Oil Company ("NIOC"). The ROMINA G required both a pilot and tugs before berthing at the terminal. Soon after boarding the pilot handed the master of the vessel two documents for his signature on behalf of Monsoon. They were entitled "Conditions of Use of Terminal of Kharg" and "Tug Requisition" respectively. In this appeal we are concerned only with the latter.
NIOC only made tugs available to assist the vessel after the Master had signed the tug requisition form. Four tugs were provided in all including the BORVIGILANT and one other tug owned by Borkan. It is not known whether the other two tugs were owned or chartered by NIOC. Borkan relies upon the terms of the tug requisition form both in order to protect itself against Monsoon's claims and in order to entitle it to an indemnity in respect of its own loss and damage.
The Preliminary Issues
The preliminary issues determined by the judge were in these terms:
"1. In respect of the rights and liabilities of Borkan and Monsoon arising out of and in connection with a collision between the ships BORVIGILANT and ROMINA G on 22 July 1998, is Borkan entitled to rely upon and take the benefit of the conditions contained in the "Tug Requisition Form" and/or the "Conditions of Use of the Terminal of Kharg" both of which were signed by the Master of ROMINA G on 22 July 1998?
2. If so, and if the collision was caused or contributed to in whole or in part by the negligence of Borkan or its crew:
(A) is Borkan exempt from liability for the heads of loss claimed by Monsoon arising out of the collision, comprising:
(1) detention of the ROMINA G at Kharg/Fujairah and
(2) permanent repairs and related costs and
(3) delays during repairs and
(4) indemnity in respect of liability for claims brought by dependants of deceased crew members and associated legal costs and expenses?
(B) is Monsoon liable for the heads of loss claimed by Borkan arising out of the collision, comprising:
(1) loss of the BORVIGILANT and bunkers on board and
(2) loss of the use of the BORVIGILANT and
(3) indemnity against settled crew and related claims and
(4) indemnity against miscellaneous costs and expense claims?"
The judge answered the first question "yes" and the second question "yes unless caused by want of reasonable care to make the tug seaworthy". I should note that, like the judge, we are not concerned with the causes of the collision. It is sufficient to note, as the judge did, that each party contends that the collision was caused by the fault of the other and, in addition, Monsoon contends that it was caused by the unseaworthiness of the tug.
I should perhaps note in passing, as the judge did, that Borkan were not able to pray in aid section 1 of the Contracts (Rights of Third Parties) Act 1999 because it only came into force on 11 May 2000.
The Tug Requisition
The document signed by the master begins as follows:
"I/we hereby request and authorise the Company on behalf of the MV ROMINA G to supply such tug or tugs as may be considered necessary by the Company for the moving or otherwise assisting of the vessel whilst entering or leaving the port of KHARG, such hiring to be on the terms of the Company's usual conditions printed below."
The date of 22 July 1998 and the signature of the master then appear on the tug requisition followed by "CONDITIONS OF HIRE OF TUGS" which include the following:
"2. When a tug is engaged in towing operations
(a) The Master and crew thereof become the servants of and identified with the Hirer and are under the control of the Hirer and his servants or agents and anyone on board the Hirer's vessel who may be employed and/or paid by the Company shall be considered the servants of the Hirer.
(b) The Company shall not bear or be liable for damage of any description done by or to the tug or done by or to the Hirer's vessel or for loss of the tugs or the Hirer's vessel or for loss of or damage to anything on board the Hirer's vessel or for any personal injury or loss of life arising from any cause whatsoever, including negligence at any time of the servants or agents of the Company, unseaworthiness, unfitness or breakdown of the tug, its machinery, boilers, towing gear, equipment or hawsers, lack of fuel, stores or speed or otherwise and the Hirer shall pay for and indemnify the Company against all such loss, damage, personal injury and loss of life as .. aforesaid and the consequences thereof.
3. When a tug is rendering any service other than towing operations at the request, expressed or implied, of the Hirer or his servants or agents the Company shall not be held responsible for any loss of or damage to the Hirer's vessel or for any loss of life or personal injury to anyone on board the vessel or to any third party other than a member of the crew of the tug and the Hirer shall pay for and indemnify the Company against all such loss, damage, personal injury and loss of life as aforesaid.
4. Nothing in the preceding paragraphs shall
(a) Make the Hirer liable to pay for or indemnify the Company against any loss, damage, personal injury or loss of life caused by want of reasonable care on the part of the Company to make the tug seaworthy for the navigation of the tug during towing operations or other services, the burden of proof of any failure to exercise such reasonable care is being upon the Hirer.
(b) Prejudice any claim the Company shall have under the Iranian law against the Hirer.
7. The Company shall have the right to perform their obligations under this contract by using a tug or tugs not owned by themselves but made available to the Company under charter parties or other arrangement. In such circumstances, without prejudice to the Company's rights, the Hirer agrees to the Owners or Charterers of such tug or tugs have the benefits of and being bound by these conditions to the same extent as the Company.
8. The Expression 'The company' in these conditions means National Iranian Oil Company which is the owner of the hired Tug/Tugs.
9. These Conditions shall be governed by Iranian law, and the parties hereto shall submit to the jurisdiction of the Iranian Courts, unless otherwise mutually agreed."
As to clause 9, as I indicated earlier, the parties have agreed otherwise.
The Judgment
The judge held that the agreement contained in the tug requisition form was made by the master not only with "the Company", which is defined by clause 8 as NIOC, but also with Borkan as the owners of the BORVIGILANT. He so held on two alternative bases, first that NIOC had the implied actual authority to make the agreement on behalf of Borkan and that it did so and secondly, in the alternative, that Borkan ratified the making of the contract on its behalf. Mr Russell challenges all three of those conclusions. I will consider them in turn.
Agency
The judge quoted extensively from the classic cases in this area of the law. Before considering them, it is I think appropriate to make these observations in the context of the instant case. First (at any rate on the construction of clauses 2(b) and 4(a) favoured by the judge) there is nothing unusual about the terms imposed. Indeed, they are modelled on the pre-1986 version of the United Kingdom Standard Conditions for Towage. Secondly, it is plain from clause 7 that NIOC was entitled under the agreement to use tugs owned by others and that Monsoon, as hirer, agreed that the owners of such tugs, which thus included Borkan as owner of the BORVIGILANT, were to have the benefit of and be bound by the terms to the same extent as NIOC. It is plain that the draftsman of the contractual terms intended that the owners of each of the tugs should have the same rights and obligations, whether they were NIOC or not.
The judge considered whether the four criteria identified by Lord Reid in the classic passage from his speech in Midland Silicones Ltd v Scruttons Ltd [1962] AC 446 at 474 were...
To continue reading
Request your trial
-
Mohan Jogie v Angela Sealy
...rule, and there can be exceptions where no injustice is caused to a third party, that remains the general rule. In The Borvigilant [2003] EWCA Civ 935; [2003] 2 Lloyd's Rep 520, para 87, Clarke LJ said the following: “[I]n the vast majority of cases it would be unjust to the third party t......
-
Mrs Adelle Challinor and 20 Others v Juliet Bellis & Company (Defendant and Part 20 Claimant) Mr Geoffrey Egan (Second Defendant and Part 20 Defendant)
...erase other legal consequences. (7) As Bowstead and Reynolds observes, as approved in a slightly earlier form by the Court of Appeal in The Borvigilant [2003] EWCA Civ 935per Clarke LJ at paragraphs 59 to 90: "Ratification is not effective where to permit it would unfairly prejudice a third......
-
Nigel Anthony Harden Gray Against Braid Logistics (uk) Ltd
...the relevant principles in considering this issue are as set out in Owners of the Ship ‘Borvigilant’ v Owners of the Ship ‘Romina G’ 2003 EWCA Civ 935. (“The Borvigilant”). In that case the court carried out a review of the authorities with respect to this issue and at paragraph 70 Clarke L......
-
Tan Cheng Han, The Law of Agency
...Bannatyne developed the Scots law of ratification by reference to Owners of the Ship “Borvigilant” v Owners of the Ship “Romina G” ([2003] EWCA Civ 935, [2003] 2 All ER (Comm) 736). This book illustrates this process taking place in the context of the law of Singapore. In the book, the auth......