BP Oil International Ltd v Target Shipping Ltd [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Mr Justice Andrew Smith |
| Judgment Date | 14 June 2012 |
| Neutral Citation | [2012] EWHC 1590 (Comm) |
| Docket Number | Case No: 2010-728 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 14 June 2012 |
[2012] EWHC 1590 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Andrew Smith
Case No: 2010-728
John Russell and Paul Toms (instructed by Clyde & Co) for the Claimant
Steven Berry QC and Thomas Raphael (instructed by Lax & Co) for the Defendant
Hearing dates: 12, 13, 16 and 19 December 2011 and 12, 13 and 16 January 2012
Introduction
This case arises from a difference about how much was payable by the charterers under a charterparty by which BP Oil International Limited ("BP") hired the oil tanker "Target" from her owners, Target Shipping Limited (the "Owners"), and in particular about whether BP are entitled to recover some $1 million that the Owners charged them by way of overage freight and that, as BP claim, they paid by mistake.
The vessel loaded a cargo of fuel oil in Odessa and Marmara Ereglisi ("Marmara") in March 2010 and discharged it at Galveston and Houston. On 5 May 2010 BP paid against the Owners' invoice hire of US$3,651,215.32, a sum calculated on the basis that freight was payable in respect of all the oil carried, that is to say on 86,821.957 mt of oil loaded at Odessa and on 26,021.543 mt loaded Marmara. BP contend:
i) That they were liable to pay the Owners only $2,635,862.37, a sum calculated on the basis that freight was payable on 80,000 mt, the minimum quantity to be loaded under the terms of the charterparty, and that $1,015,352 is recoverable; or alternatively:
ii) That they were liable to pay only $2,846,582.43, a sum calculated on the basis that freight was payable only on the oil loaded at Odessa and not on that loaded at Marmara, and that $804,632.89 is recoverable; or in the further alternative
iii) That the Owners were entitled to only $3,440,495.26, a sum calculated on the basis that freight was payable on 80,000 mt loaded at Odessa and all the oil loaded at Marmara, and that $210,720.06 is recoverable.
(There is a minor difference between the parties about these calculations reflecting a disagreement about the proper treatment of brokers' commission that emerged in the course of closing submissions. I deferred consideration of this question on the basis that, if necessary, I would hear submissions about it after delivering this judgment.)
The Owners contend that their invoice for $3,651,215.23 was for the sum properly due under the terms of the charterparty agreed in February 2010. They have alternative contentions:
i) That, even if under the original terms of the charterparty freight was not payable on the oil loaded in Marmara, nevertheless, because of exchanges between the parties (in particular, exchanges on and shortly after 11 March 2010 about the vessel loading at Marmara and/or exchanges on 16 March 2010 when the vessel was at Marmara and/or subsequent exchanges before discharge of the cargo was completed at Houston), BP were liable for freight in that sum or at least they are estopped from disputing their liability for it.
ii) That the parties agreed that BP should pay $3,651,215.23 by a compromise agreement in the course of exchanges about the Owners' invoice.
iii) That in any case any overpayment by BP is not recoverable on the grounds that it was paid under a mistake or on any other basis.
Thus, the broad issues between the parties are:
i) Whether under the original terms of the charterparty the Owners were entitled to freight calculated at the agreed rate on all the cargo carried (as they contend) or to freight calculated on the minimum cargo specified in the charterparty (as is BP's primary case) or to freight calculated only on cargo loaded at Odessa (as is BP's secondary case) or on some other basis;
ii) Whether the exchanges between the parties during the voyage affect how much freight BP are liable to pay or give rise to an estoppel against BP with regard to their liability for freight (and, in the context of this issue, there is a question whether BP were entitled to instruct the vessel to load at Marmara);
iii) Whether the parties made a compromise agreement about the amount payable by BP; and
iv) Whether BP are entitled to recover any overpayment as money paid under a mistake. (BP also pleaded cases (i) that any overpayment was recoverable because of implied terms in the charterparty that the Owners would render invoices only for sums properly due and would reimburse any overpayment if the Owners invoiced them for more, and (ii) that the overpayment was the result of the Owners' negligent misrepresentation in their invoice of the sum for which BP were liable; but both those contentions were abandoned.)
The parties
The "Target" is a modern aframax tanker with a capacity of some 112,000 mt. She was hired to BP by the Owners under a voyage charterparty agreed on 26 February 2010 between BP's brokers, Sovereign Shipbrokers ("Sovereign"), and her commercial managers, Geden Operations Limited ("Geden").
Geden are a subsidiary of Geden Lines, who are based in Istanbul. In early 2010 Geden managed some fifteen tankers (although they now manage more vessels), and their Tanker Chartering Manager was and is Mr Alexander Cooper. He has been employed by Geden since October 2009, having worked in the shipping industry since 1983, and he worked in London. He was responsible for the hire of tankers both on time charters and on the spot market, and he dealt with the hire of the "Target" to BP. Geden's managing director was and is Mr John Uttley.
The important negotiations and exchanges relating to the fixture were conducted for Sovereign by Mr John Savage, who had worked for them as a broker for some seven years. Mr Simon Glanville, another broker, and Mr James Wackett, who was training to be a broker, were involved relatively peripherally. Ms Shirin Jenkins was responsible at Sovereign for operational matters relating to the vessel.
The charter of the vessel was handled within the BP group by Mr Andrew Finlinson, who worked for BP Shipping Ltd ("BP Shipping") until October 2010, having joined the group on their graduate scheme in 2000. In October 2010 he joined BP as a trader. Before then he was working in BP Shipping's Chartering Department, dealing with crude and fuel oil business and both chartering vessels out and hiring in tonnage on the spot market for BP. Mr Finlinson was not responsible for operational matters: they were handled by BP Shipping's Operations Department, and within the department Ms Mariska Bassie and Mr Sam Megwa shared the ship operator's role for the "Target". BP had sold none of the fuel oil when it was shipped on the "Target", and its sale was handled by Mr Daniel Rathbone, who has worked as a Crude and Fuel Oil Trader for BP since 1999. The payment of the Owners' freight invoice was authorised by BP's Demurrage Department, and specifically by Ms Rebecca Myers, who was then employed by BP as a Demurrage Negotiator, and her superior, Mr Simon Rickwood, a Senior Demurrage Negotiator, who has worked for BP for some 21 years and in their Demurrage Department for about six years. The payment processes were dealt with by Mr Jason Matthews, then an Ancillaries Financial Operator, and by Mr George Witsey of BP's Global Data Management Team.
The charterparty
The terms of the charterparty were set out in a "recap" email (the "Recap") sent on 26 February 2010 at 11.14am by Sovereign to Mr Cooper and Mr Finlinson, which was introduced with the words, "Pleased to confirm following fixture with all subs [subjects] in order". It was made between the Owners and BP Shipping "for and on behalf of" BP. The terms were not reduced to any more formal document, and the Recap records the contract that, subject to any later variation arising from exchanges or the parties' conduct in the course of the voyage, governed the hire of the vessel.
The Recap provided that the hire was on the terms of the amended BPVoy 4 form. This standard form, after stating the agreement between owners and charterers for hire of a vessel, includes a Part 1 comprising sections A to M to be completed for the specific charter, a Part 2 comprising standard clauses numbered 1 to 49 (which may, of course, be adapted and amended by the parties), and a "BP Shipping Questionnaire" (which in this case was a Q88 form sent on 25 February 2010: see para 39 below). The Recap set out agreed terms by reference to the sections of Part 1 of the BPVoy 4 form, including additional clauses or "rider clauses" under section L of Part 1; amendments to the standard wording of Part 2 of the form that the parties had agreed; and additional clauses, by way of "Mandatory Additional Clauses" and "Voyage Specific Additional Clauses" (or "SACs").
Part 2 of the BPVoy 4 form includes at clause 31 a provision headed "Freight Rate". Amendments to the standard wording of the clause were agreed and recorded in the Recap and, as amended, clause 31 of the charterparty was (as far as is material for present purposes) in these terms:
"31.1 The Freight Rate shall be that stated in Section H of PART 1. If the cargo quantity stated in Section C of PART 1 is a minimum quantity, then the freight payable for any cargo loaded in excess of the said minimum quantity shall, notwithstanding this Clause 31, be at the Overage rate stated in Section H of PART 1, unless a lump sum freight has been agreed in which case no Overage shall be payable. Where the Freight Rate stated in Section H of PART 1 is expressed as a percentage of Worldscale the Worldscale rate shall be the rate in force at the...
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