BP Oil International Ltd v Target Shipping Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Longmore,Lord Justice Moses,Lord Justice Ward |
| Judgment Date | 14 March 2013 |
| Neutral Citation | [2013] EWCA Civ 196 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2012/1693 |
| Date | 14 March 2013 |
[2013] EWCA Civ 196
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION COMMERCIAL COURT
MR JUSTICE ANDREW SMITH
2010728
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Ward
Lord Justice Longmore
and
Lord Justice Moses
Case No: A3/2012/1693
Mr Steven Berry QC and Mr Thomas Raphael (instructed by Lax & Co LLP) for the Appellant
Mr John Russell and Mr Paul Toms (instructed by Clyde & Co LLP) for the Respondent
Hearing date: Tuesday 12 February 2013
This appeal is about "overage" in the context of freight payable under a voyage charterparty. "Overage" is defined in the Oxford English Dictionary as:
"A surplus, an excess, an additional amount"
Charterparties often specify that a minimum quantity of tons of cargo is to be loaded in any event but that charterers are to have an option to load more than that minimum. If the freight rate is stated to be for a minimum quantity, a question may arise whether freight is to be payable on any quantity of cargo additional to that minimum or, in other words, the "overage". That is the issue before us.
On 26 February 2010 BP Oil International Ltd ("BP") chartered the vessel "Target" from her owners, Target Shipping Ltd ("the owners") on the Beepeevoy 4 form. The vessel was to load a cargo of fuel oil at 1 or 2 ports in the Ukraine or Black Sea and discharge at 1 or 2 ports in the European Mediterranean (not east of but including Greece) and/or in the charterers' option ports in the Singapore/Japan range.
"or in the charterers' option 1/2 port (s) US Gulf excluding Florida/ Mississippi"
The cargo was to be a minimum of 80,000 metric tons with, in charterers' option, an entitlement to load a full cargo of fuel oil and it was further agreed
"Owners warrant vessel loads 87,000 metric tonnes basis 12.5m. Odessa, 112,000 metric tonnes basis no restrictions"
The freight rate was to be Worldscale 135 if discharge was in the US Gulf.
BP nominated Odessa as the first loading port and the vessel loaded 86,821.957 metric tons as it was warranted she could. BP exercised their option for a further loading port at Marmara where she loaded a further 26,021.543 metric tons. The vessel then proceeded to the US Gulf, discharging at Galveston and Houston.
The Worldscale rate for loading at Odessa and Marmara with discharge at Galveston and Houston was $23.17 per metric ton and in due course the owners rendered an invoice in the sum of US $3,651,251.32 calculated on the basis of the full amount of the cargo x 23.17 x 13BP paid that invoice but subsequently sought to argue (inter alia) that they should have only paid freight on the minimum quantity of cargo as stated in section C of Part 1 of the charter -party by reason of the terms of clause 31.1 in Part 2 of the charterparty. They therefore sought to recover the overpaid sum as having been paid by mistake.
The judge held that the owners were not entitled to freight at WS 135 based on the entire quantity shipped but that BP were not entitled to pay nothing in respect of freight for tonnage carried in excess of the minimum of 80,000 tons; since the parties had not made any express agreement as to the amount due in that respect, there would have to be an inquiry as to what would be a reasonable figure for owners to recover over and above the amount of freight calculated on the minimum quantity of 80,000 metric tons. Both the owners and BP now appeal.
The charterparty was formed partly by an e-mail recapitulation (or "recap" as it is termed in the trade) and partly by the standard BPVOY4 form as referred to and amended or added to in that recap. That form begins with a Preamble and then has two parts. The first part consists of sections A-M with titles such as "C. Cargo Quantity" and "H. Freight Rate" but largely left blank and intended to be filled in by reference to the recap. The second part consists of 49 enumerated clauses which may or may not be amended or added to by reference to the recap. The recap and the standard form are intended to be read together.
The recap deals with sections C and D of Part I of the BPVOY4 Form under the heading of "Cargo Quantity, Description" as follows:—
"Minimum 80,000 Mts Chopt up to full cargo of fuel oilOwners warrant vessel loads 87,000 metric tonnes basis 12.5m Odessa, 112,000 metric tonnes basis no restrictions"
Section H of the recap is headed "Freight rate /Overage/Commission" and provides, so far as relevant:-
"Basis load Odessa /Singapore: USD 3,000,000 lump sum 1 to 1 Euromed: WS 120 Basis MFR Augusta USG WS 135 USAC/CARIBS WS 140
If discharge east of Singapore Charterers to pay lump sum rate agreed for Singapore minus USD 20,000 plus additional freight coming out of following formula: 80.000 MT x Flat rate spore to actual discharge port (s) x WS 110 with no overage
Suez Canal transit costs to be for owners account
All lump sum freight rates basis 1st load to last discharge only
Overage: Overage 50PCT applicable for Euromed discharge only"
This is intended to be inserted and read with section H of the...
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...more difficult to persuade the court to imply terms into complex commercial arrangements. The reason is that given in BP Oil International Ltd v Target Shipping Ltd [2013] 1 Lloyd's Rep. 561, where Longmore LJ said (at [19]) that where parties had taken elaborate trouble to set out their a......