Carboex SA (Claimant/Appellant) v Louis Dreyfus Commodities Suisse SA
| Jurisdiction | England & Wales |
| Judge | Mr Justice Field |
| Judgment Date | 12 May 2011 |
| Neutral Citation | [2011] EWHC 1165 (Comm) |
| Docket Number | Case No: Folio No 812 of 2010 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 12 May 2011 |
[2011] EWHC 1165 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
IN THE MATTER OF THE ARBITRATION ACT 1996
AND
IN THE MATTER OF AN ARBITRATION CLAIM
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Field
Case No: Folio No 812 of 2010
Charles Kimmins QC and Socrates Papadopoulos (instructed by Thomas Cooper) for the Claimant/Appellant
Siobán Healy QC and Jessica Sutherland (instructed by Reed Smith) for the Defendant/Respondent
Hearing dates: 17 and 18 March 2011
This is the Claimant's appeal under s. 69 of the Arbitration Act 1996 against an award of an arbitral tribunal dated 11 June 2010 ("the Award"). The claim referred to the tribunal was for demurrage alleged to be due in respect of four vessels, the Co-op Phoenix, the Alpha Glory, the C Young and the Royal Breeze, each of which was chartered by the Defendant to the Claimant under a Contract of Affreightment dated 6 March 2008 ("the COA") for the carriage of coal from Indonesia to Puerto de Ferrol in Spain, to be discharged at the terminal of Endesa SA ("Endesa"), the largest power utility company in Spain. The Claimant is a subsidiary of Endesa for which it imports coal for use in Endesa's power stations.
The COA was on an amended version of the AmWelsh voyage charterparty form. It was a berth as distinct from a port charter. The relevant clauses of the COA are clauses 9 and 40. They are set out below. Clause 9 is one of the standard printed clauses of the AmWelsh Charterparty. It was amended by the parties as shown by underlining for words added and striking through for words excised. Clause 40 is a bespoke typed amendment to the standard clause 9 agreed by the parties.
9. The cargo to be discharged by consignee at port of discharge, free of expense and risk to the vessel, at the average rate of 25,000 metric tons per day weather working day of 24 consecutive hourspermitting, Sundays and holidays and after noon on Saturdays included, excluded Superholidays, see also CL 40excepted provided vessel can deliver at this rate. If longer detained, Charterersconsignee to pay vessel demurrage at the rate of See Cl 68… per running day (or pro rata for part thereof). If sooner dispatched, vessel to pay Charterer or his agentsSee Cl 68… per day (or pro rata for part thereof) dispatch money for all working time saved. Time to commence twenty-four (24) hours, Sundays and holiday excepted, after vessel is ready to unload and written notice given, whether in berth or not, even if vessel is already on demurrage, and the time allowable for discharging to be calculated on the basis of bill of lading quantity. In Case of strikes, lockouts, civil commotions or any other causes included but not limited to breakdown of shore equipment or accidents beyond the control of the Charterersconsignee which prevent or delay the discharging, such time is not to count unless the vessel is already on demurrage.
Cl. 40 At port of discharge, time to commence twelve (12) hours after the vessel's arrival at berth, vessel is ready to unload and Notice of Readiness received and accepted, unless sooner commenced in which case time actually used to count. If the berth is not available when vessel tenders Notice of Readiness, but provided vessel/Owners not at fault in relation thereto, then laytime shall commence twelve (12) hours after first permissible tide, Notice of Readiness received and accepted, whether in berth or not, whether in free pratique or not, whether in customs clearance or not, unless no customs clearance or no free pratique due to vessel's fault, unless sooner commenced in which case only time actually used to count. Notices to be tendered in writing Telex, Cable, Fax or Radio form from usual waiting place, any time day or night Sundays and Holidays included excepting Superholidays as below. ….
Co-op Phoenix tendered NOR at 12:30 on 14 June 2008. At that time, there were two vessels ahead of her in the line-up waiting to discharge coal, Double Progress and Iron Manolis, which had arrived on 14 June. These vessels respectively berthed on 19 June and 26 June and completed discharge on 22 and 29 June 2008. Co-op Phoenix commenced discharge at 14:45 on 30 June and completed discharge by 18:20 on 2 July 2008.
The Alpha Glory tendered NOR at 13:30 on 15 June, at which time the above-named 3 vessels were ahead of her in the line-up. Discharge of the Alpha Glory commenced at 17:33 on 3 July and was completed by 09:00 on 7 July 2008.
The C Young tendered NOR at 20:30 on 7 July. There were 3 vessels ahead of her in the line: the Red Seto (NOR on 28 June, discharge completed on 12 July); the Island Globe (NOR on 28 June, discharge completed on 13 July); and the Bellatrix (NOR on 6 July, discharge complete on 22 July).
The Royal Breeze tendered NOR at 16:00 on 16 July, at which time the Island Globe, the Bellatrix and the C Young were ahead of her in the line. Discharge of the Royal Breeze commenced on 10:00 on 26 July and was completed by 29 July. This and the following three paragraphs are in accordance with the facts stated in the Award. (Paragraphs 3–6 are in accordance with the facts stated in the Award).
The Charterers contended that the discharge of the four vessels was delayed by reason of the strike, official and unofficial, and this period was excluded from the computation of laytime in virtue of clause 9 of the COA, particularly the last sentence thereof.
The Owners contended that the combined effect of clauses 9 and 40 was that Charterers took the risk of delay caused by congestion at the port, so that it was only delay suffered once the vessel had berthed by reason of a strike then in progress that was excluded by clause 9. Since the strike was over when each of the vessels eventually berthed, no period stood to be deducted from the laytime and demurrage calculated accordingly was due.
The parties agreed that two preliminary issues should be decided by the tribunal:
(i) Whether clause 9 of the COA applies in the case of a vessel which is delayed by the after effects of a strike which has ended; and
(ii) Whether clause 9 of the COA applies in the case of a vessel which has arrived after the strike has ended.
Question (i) was relevant to the Co-op Phoenix and the Alpha Glory, whilst question (ii) was relevant to the C Young and the Royal Breeze.
The tribunal answered these questions "No". They concluded that clause 9 was ambiguous and should be construed contra proferentem. They further held that clause 9 was materially the same as the clause construed in Central Argentine Railway v Marwood [1915] AC 981 and that the House of Lords there held that the clause did not apply to a vessel prevented from berthing because the berths are occupied by other vessels, even where the reason for this congestion is a strike.
The tribunal also held that pursuant to the ejusdem generis rule, the words "other causes" in the last sentence of clause 9 ("[i]n Case of strikes, lockouts, civil commotions or any other causes included but not limited to breakdown of shore equipment or accidents beyond the control of the Charterers ….") did not include congestion caused by strikes.
At the hearing of the appeal Ms Healy QC for the Owners formulated another preliminary question which it was agreed the court should answer since this would decide construction issues that were common to those raised by questions (i) and (ii) answered by the tribunal. This reformulated question is:
Does the strike exception in clause 9 apply to a vessel which is unable to berth due to berth congestion caused by a strike?
Ms Healy submitted that the effect of the WIBON provision within the bespoke clause 40:
If the berth is not available when vessel tenders Notice of Readiness, but provided vessel/Owners not at fault in relation thereto, then laytime shall commence twelve (12) hours after first permissible tide, Notice of Readiness received and accepted, whether in berth or not, whether in free pratique or not, whether in customs clearance or not, unless no customs clearance or no free pratique due to vessel's fault, unless sooner commenced in which case only time actually used to count [Emphasis supplied]
was that prima facie the risk of delay due to congestion at the discharge port was on the Charterers. She relied on the fact that clause 40 was a bespoke clause and cited the following passages in Lord Brandon's judgement in The Kyzikos [1989] 1 Lloyd's Rep 1;
…. The first consideration is the meaning which has been given to the phrase "whether in berth or not" in the authorities relating to it 1. …..
So far as the authorities are concerned, they present two aspects, one positive and the other negative. The positive aspect of the authorities is that in them the phrase "whether in berth or not", when used in a berth charter-party, has uniformly over a long period been interpreted as relating to the availability or unavailability of a berth. In other words the phrase has been interpreted as dealing with the problem of congestion in ports, and putting on the charterers rather than the owners the risk of delay caused by such congestion….
The negative aspect of the authorities is this. The phrase "whether in berth or not" has been used in berth charter-parties at least since 1909, the date of the the charter-party in Northfield Steamship Co v Compagnie L'Union des Gaz [1912] 1 KB 434. Yet counsel for the owners was unable to point to any reported case in which it had ever been contended that the phrase covered a case where a berth was available for a ship but she was prevented by bad weather from proceeding to it.
The inference which it seems to me to be right to draw from these two aspects of the authorities, the...
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