Bulk Transport Group Shipping Company Ltd v Seacrystal Shipping Ltd (Kyzikos)

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Bridge of Harwich,Lord Brandon of Oakbrook,Lord Templeman,Lord Ackner,Lord Oliver of Aylmerton
Judgment Date20 Oct 1988
Judgment citation (vLex)[1988] UKHL J1020-1

[1988] UKHL J1020-1

House of Lords

Lord Bridge of Harwich

Lord Brandon of Oakbrook

Lord Templeman

Lord Ackner

Lord Oliver of Aylmerton

Bulk Transport Group Shipping Limited
(Appellents)
and
Seacrystal Shipping Limited
(Respondents)
Lord Bridge of Harwich

My Lords,

1

I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Brandon of Oakbrook. I agree with it and, for the reasons he gives, I would allow the appeal.

Lord Brandon of Oakbrook

My Lords,

2

By a voyage charterparty dated 26 October 1984 the appellants ("the charterers") chartered the m.v. Kyzikos ("the ship") owned by the respondents ("the owners") to carry a cargo of steel and/or steel products from Italy to the U.S. Gulf. The ship was ordered to discharge at the port of Houston. She arrived and anchored there at 06.45 on 17 December 1984, and at some time before 12.00 the master gave notice of readiness to discharge. Then, and at all material times afterwards, the berth at which the ship was to discharge was available for her use. She was, however, prevented from proceeding to it immediately because of fog, which resulted in the pilot station being closed. Because of this the ship did not arrive in her berth until 14.50 on 20 December 1984.

3

A dispute arose between the owners and the charterers with regard to the liability of the latter for demurrage at the port of discharge. The owners claimed U.S.$30,435.72 in respect of a balance of demurrage remaining unpaid. The charterers denied liability. The essential question governing the validity of the claim was whether time for discharging counted during the period for which the ship was prevented from proceeding to her berth by reason of fog.

4

The dispute was referred, pursuant to a London arbitration clause contained in the charterparty, to Mr. Bruce Harris as sole arbitrator. By a reasoned award dated 26 November 1985 the arbitrator decided that the owners' claim succeeded in full. The charterers obtained leave to appeal against the award and on 30 July 1986 Webster J. in the Commercial Court gave a reserved judgment [1987] 1 Lloyd's Rep. 48 allowing the appeal and dismissing the owners' claim. The owners appealed with the leave of Webster J. to the Court of Appeal (Lloyd and Glidewell L.JJ. and Sir John Megaw). That court on 15 May 1987 gave reserved judgments [1987] 1 W.L.R. 1565 allowing the appeal and restoring the arbitrator's award. The charterers now bring this further appeal against the decision of the Court of Appeal by leave of your Lordships' House.

5

The charterparty was on the (Gencon Box Layout 1974) printed form, which contains 21 boxes, each with a printed heading, followed by a series of printed clauses. Typed entries were made in the boxes and typed amendments were made to a number of the printed clauses. A large number of typed clauses were also added by way of rider. The material provisions, with typed entries and typed amendments indicated by underlining, were as follows:

Box 11.

"Discharging port or place (Cl. 1)

1/2 safe always afloat, always accessible berth(s) each port - 1/2 safe port(s) U.S. Gulf excluded Brownsville and no port North of Baton Rouge."

Box 15.

"Laytime allowed for loading (Cl. 5)

See clause 17"

Box 17.

"Laytime allowed for discharging (Cl. 6)

See clause 17"

Box 18.

"Demurrage rate (load and disch) (Cl. 7)

USD. 3.000, --per day/pro rata …"

Clause 1. … the vessel shall proceed to the discharging port or place stated in Box 11 or so near thereto as she may safely get …"

Clause 5. "Loading … Time to commence at 2 p.m. if notice of readiness to load is given before noon and at 8 a.m. next working day if notice given during office hours after noon. … Time lost in waiting for berth to count as loading time. Time to count as per Clause 5 Wipon/Wibon/Wifpon/Wccon and master to have the right to tender notice of readiness by cable, both in the loading and discharging port(s)."

Clause 6. "Discharging Cargo to be received by merchants … and to be discharged in the number of running working days stated in Box 17. Time to commence at 2 p.m. if notice of readiness to discharge is given before noon and 8 a.m. next working day if notice given during office hours after noon. Time lost in waiting for berth to count as discharging time.

Clause 7. "Demurrage Demurrage at the rate stated Box 18 per day or pro rata for any part of a day to allowed at ports of loading and discharging."

" Clause 17: … The cargo to be loaded … and discharged … within 18 total weather working days of 24 consecutive hours, Saturdays/Sundays/Holidays excepted, unless used, in which case actual time used to count half. …"

6

The acronyms used in clause 5 have the following meanings: "wipon" - whether in port or not, "wibon" - whether in berth of not, "wifpon" - whether in free pratique or not, "wccon" - whether cleared customs or not. Clauses 17 is one of the additional typed clauses referred to in box 21.

7

Much of the argument in this case has revolved round the difference between two kinds of voyage charterparty, a port charterparty on the one hand and a berth charterparty on the other. The characteristics of a port charterparty are these. First, the contractual destination of the chartered ship is a named port. Secondly, the ship, in order to qualify as having arrived at the port, and therefore entitled to give notice of readiness to discharge, must satisfy two conditions. The first condition is that, if she cannot immediately proceed to a berth, she has reached a position within the port where waiting ships usually lie. The second condition is that she is at the immediate and effective disposition of the charterers. By contrast, the characteristics of a berth charterparty are these. First, the contractual destination of the chartered ship is a berth designated by the charterers within a named port. Secondly, the ship, in order to qualify as an arrived ship, and therefore entitled to give notice of readiness to discharge, must (unless the charterparty otherwise provides) have reached the berth and be ready to begin discharging.

8

The basis of the arbitrator's decision in the present case is to be found in paragraph 7 of his reasons where he said:

"Box 11, as completed, appeared to make this a berth charter … But the point is of no significance since, on well established authority, the reference in clause 5 to 'wibon' (whether in berth or not) has the effect of making the charter into a port charter."

9

It is common ground that the charterparty here concerned is, as the arbitrator said that it appeared to be, a berth and not a port charterparty. With regard to the "well established authority" referred to by the arbitrator, it will be necessary later to examine what exactly was decided by that authority, and whether it supports the conclusion which he reached on the basis of it.

10

It was no doubt because the arbitrator expressed the ground of his decision in the way stated above, and also because the case was argued before him on the basis that the arbitrator had correctly identified the essential question for decision, that Webster J., when he gave the owners leave to appeal from his decision, formulated the question of law for decision by the Court of Appeal in the way in which he did. That question, as formulated by him in paragraph 4 of his order dated 31 3uly 1986, was "whether the provision 'whether in berth or not' has the effect of converting a berth charterparty into a port charterparty in circumstances where a berth is available for the vessel."

11

In my view this formulation of the question, while agreeably succinct, and derived, as I have indicated, from authority, tends to telescope the legal issues involved. Lloyd L.J. who gave the leading judgment in the Court of Appeal considered [1987] 1 W.L.R. 1565, 1568, that the appeal raised, potentially at least, two questions in relation to a voyage charterparty which it was common ground was a berth and not a port charterparty, but contained a provision allowing the ship to give notice of readiness to discharge "whether in berth or not." The first question was whether the ship could give a valid notice of readiness to discharge when, on her arrival in the discharging port, a berth for her was vacant but she was prevented from reaching it by bad weather, in this case fog. The second question, which only arose if the first question was answered in the affirmative, was whether the ship, in the situation postulated, could properly be said to be at the "immediate and effective disposition of the charterers" as would be required to enable her to qualify as an arrived ship under a port charterparty.

12

I agree with this analysis and it will be convenient to examine what Lloyd L.J. described as the first question first. In doing so I shall treat the amendment to clause 5 of the charterparty (loading) as applying also to clause 6 (discharging). That it was intended to do so appears to have been accepted by both sides at the arbitration. The contrary view seems to have been raised, to some extent at least, before Webster J., who was not impressed by it. Before the Court of Appeal and in your Lordships' House the matter was common ground.

13

Two views have been advanced, at each stage of the proceedings, with regard to the meaning of the phrase "whether in berth or not" in a berth charterparty. One view, put forward by the charterers and accepted by Webster J., is that the phrase covers cases where the reason for the ship not being in berth is that no berth is available, but does not cover cases where a berth is available and the only reason why the ship cannot proceed to it is that she is prevented by bad weather such as fog. The other view, put forward by the owners and accepted by the arbitrator and the Court of Appeal, is that the phrase covers cases where a ship is unable to proceed to a berth either because none is...

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