Bulk Transport Group Shipping Company Ltd v Seacrystal Shipping Ltd (Kyzikos)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE LLOYD,LORD JUSTICE GLIDEWELL,SIR JOHN MEGAW |
| Judgment Date | 15 May 1987 |
| Judgment citation (vLex) | [1987] EWCA Civ J0515-1 |
| Date | 15 May 1987 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 87/0459 |
[1987] EWCA Civ J0515-1
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Lord Justice Lloyd
Lord Justice Glidewell
Sir John Megaw
87/0459
MR M. J. MOORE-BICK, Q.C, and MR C. N. B. PRIDAY, instructed by Messrs Middleton Potts & Co., appeared for the Appellant (Defendant).
MR H. B. EDER, instructed by Messrs Holman Fenwick & Willan, appeared for the Respondent (Plaintiff).
The amount at stake in this appeal is relatively small. Bat the case raises two questions on which there is said to he no direct authority and on which arbitrators in the City of London are said to have differed. Both questions are of some importance in calculating laytime under charterparties which allow owners the right to give notice of readiness "whether in berth or not".
The first question is whether owners can give a valid notice of readiness when a berth is vacant but the vessel is prevented from reaching her berth by reason of bad weather, in this case fog. Mr Eder submits, and the judge has held, that "whether in berth or not" applies only when the berths are congested or otherwise unavailable.
The second question is whether, if that be wrong, and if the effect of "whether in berth or not" is, as is often said, to convert what would otherwise be a berth charter into a port charter, the vessel can be said to be at the "immediate and effective disposition of charterers" even though she is unable, at the moment of giving her notice of readiness, to proceed to her berth by reason of fog. Mr Eder submits, and the judge has held, that the vessel would not be an "arrived ship" in such circumstances under a port charter, and therefore could not give a valid notice of readiness in reliance on the "whether in berth or not" provision.
The facts are that the Kyzikos was chartered on the Gencon Box layout form to load a cargo of steel and/or steel products in Italy for discharge in U.S. Gulf. She arrived at Houston on 17th December 1984 at 0645 hours. A berth was available for her, but she could not proceed to her berth by reason of fog. She gave notice of readiness as soon as she arrived on 17th December. The precise time does not matter. Owners say that time began to run at 1400 hours the same day. If they are right, they are entitled to 30,435 dollars by way of demurrage. The vessel was not able to berth, by reason of the fog, until 1450 hours on 20th December. Charterers say that the owners were not entitled to give notice of readiness until the vessel berthed, or perhaps until she left her anchorage on her way to the berth. If they are right, there is nothing due by way of demurrage.
The charter provided that the vessel was to proceed to her discharging port or place, namely: "1/2 safe always afloat, always accessible berth(s) each port—1/2 safe port(s) U.S. Gulf: see Box 11. Clauses 5 and 6 provide as follows:
"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 Master to have the right to tender Notice of Readiness by cable, both in the loading and discharging port(s)".
"6. Discharging
"Cargo to be received by Merchants at their risk and expense alongside the vessel not beyond the reach of her tackle 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 at 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."
The last sentence of clause 5 was introduced by an insert, typed vertically in the central space between the two columns of printed clauses. It is connected to clause 5, which is in the ordinary horizontal position in the left hand column, by means of an asterisk and a black line.
It was common ground that, by virtue of Box 11, the contractual destination was the discharging berth. In other words this was a berth charter rather than a port charter. Mr Eder advanced a preliminary argument that "whether in berth or not" applied only to loading (clause 5) and not to discharging (clause 6). This argument did not occur to the experienced arbitrator, Mr Bruce Harris, who made his award on documents without any oral hearing. The argument was rejected by the, judge. He seems to have been in doubt whether the argument was even open. I agree with the judge, and say no more about it.
The arbitrator held on what he regarded as "well established authority" that the effect of "whether in berth or not" was to make what would otherwise have been a berth charter into a port charter. He went on to hold that time started to run at 1400 hours on 17th December, in accordance with the owners' time sheet. He does not seem to have considered that the notice of readiness might be invalid on the ground that the vessel was not then at the immediate and effective disposition of the charterers by reason of fog.
The judge took a different view on both points. As to the first point he held that the primary obligation of the shipowners was to reach the contractual destination, namely the berth. "Whether in berth or not" does not override that obligation. The charter remains a berth charter. Whether in berth or not has only a limited effect. It means that notice of readiness can be given, and time starts to run, when the vessel is within the named port, waiting for a berth to become available. Here the vessel was not waiting for a berth to become available. She was waiting for the fog to clear. The point is put with admirable clarity and precision as follows:
"…It is one thing to say that a vessel can give notice of readiness when it is ready to unload and cannot come alongside because no berth is available; it is another thing to say that a vessel is to be treated as having arrived at the berth when it has arrived at the port, even though a berth is available."
Mr Eder supports the judge's reasoning by a number of powerful arguments. He accepts that the risk of a berth being unavailable is normally for charterers' account. But the navigational risk of getting to berth is normally for owners' account. There has never been a case, he says, in which "whether in berth or not" has been applied where a berth has been available but the vessel has been prevented from reaching her berth by bad weather. On principle the provision should not be applied in such a case. He relies on the dictum of Lord Diplock in Federal Commerce and Navigation Company Limited v Tradax Export S.A. ( The "Maratha Envoy") (1978) A.C. 1 at page 14:
"…The effect of this well known phrase in berth charters has been settled for more than half a century. Under it time starts to run when the vessel is waiting within the named port of destination for a berth there to become vacant."
I feel the force of these arguments. But I cannot accept them. I do not doubt that the reason why the provision was originally included in berth charters was to cater for the case where the port is congested and a berth unavailable. But there is nothing in the wording of the provision which limits its operation to such a case. The wording is quite general. Notice of readiness may be given whether in berth or not. Ex hypothesi, therefore, notice of readiness may be given before the vessel has reached its contractual destination. Some limit must, of course, be placed on the provision. Nobody suggests that notice of readiness can be given while the vessel is still at sea (I say nothing as to the effect of "whether in port or not", which was also included in this charterparty, but as to which we heard no argument).
If then a limit is to be placed on the clause, it is to my mind better that the limit should be by reference to the place at which notice of readiness may be given rather than the reason why the vessel is unable to proceed to her berth. Certainty, as has been said so often, is of great importance in these matters. The traditional view of "whether in berth or not" has always been that it becomes operative so as to enable a valid notice of readiness to be given as soon as the vessel has arrived in port, provided the other conditions of a valid notice of readiness are satisfied. The traditional view is preferable as a matter of construction and affords a greater degree of certainty in practice. I would hold that "whether in berth or not" enables a valid notice of readiness to be given once the vessel has arrived in port, even though the reason why she is prevented from proceeding further is not the unavailability of a berth but bad weather.
The arbitrator held, as I have mentioned, that the effect of "whether in berth or not" when included in a berth charter is to convert the berth charter into a port charter. No doubt he had in mind Lord Justice Roskill's dictum in Oldendorff & Co. v Tradax Export S.A. ( "The Johanna Oldendorff") (1974) A.C. 479 at 515 where he said:
"…The phrase 'whether in berth or not' was designed to convert a berth charterparty into a port charterparty and to ensure that under a berth charterparty notice of readiness could be given as soon as the ship had arrived within the commercial area of the port concerned so that laytime would start to run on its expiry."
To the same effect is a sentence of Lord Diplock in The Maratha...
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