Carboex SA v Louis Dreyfus Commodities Suisse SA
| Jurisdiction | England & Wales |
| Judge | Lord Neuberger,Moore-Bick,Toulson L JJ |
| Judgment Date | 19 June 2012 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 June 2012 |
Court of Appeal (Civil Division).
Lord Neuberger of Abbotsbury MR, Moore-Bick and Toulson L JJ.
Siobn Healy QC and Jessica Sutherland (instructed by Reed Smith) for the appellant.
Charles Kimmins QC and Socrates Papadopoulos (instructed by Thomas Cooper) for the respondent.
The following cases were referred to in the judgment:
Bulk Transport Group Shipping Co Ltd v Seacrystal Shipping Ltd (The Kyzikos)ELR[1989] 1 AC 1264.
Central Argentine Railway Ltd v MarwoodELR[1915] AC 981.
Ida Blumenthal, TheUNK(1927) 29 Ll Rep 84.
Leonis Steamship Co Ltd v Joseph Rank Ltd (No. 2)UNK(1908) 13 Com Cas 295.
London and Northern Steamship Co v Central Argentine Railway Ltd(1913) 108 LT 527.
Reardon Smith Line Ltd v Ministry of Agriculture, Fisheries and FoodELR[1960] 1 QB 439; [1962] 1 QB 42 (CA).
Sueton D Grant & Co v Coverdale, Todd & CoELR(1884) 9 App Cas 470.
Triton Navigation Ltd v Vitol SA (The Nikmary)UNK[2003] EWCA Civ 1715; [2003] 2 CLC 1113.
Westoll v LindsayENR1916 SC 782.
Shipping Laytime Demurrage Delay at discharge port Congestion Strike Contract of affreightment COA on American Welsh Coal Charter form (1979 amendment) Carriage of coal from Indonesia to Spain Discharge delayed by congestion caused by strike Strike over when vessels eventually berthed Whether delay excluded from computation of laytime Whether only delay suffered once vessel had berthed by reason of strike then in progress excluded Delay caused by congestion in aftermath of strike excused Strike exception applied to vessel unable to berth due to congestion caused by strike.
This was an appeal from a decision of Field J ([2011] 1 CLC 954) concerning liability for delay to four vessels waiting to discharge cargoes of coal at Ferrol, north-west Spain, in June and July 2008.
The appellant (Dreyfus), as owner, entered into a contract of affreightment (COA) with the respondent (Carboex), as charterer, for the carriage of ten cargoes of coal from Indonesia to Ferrol or Carboneras in charterer's option between 1 April and 15 August 2008. The contract was made on an amended American Welsh Coal Charter 1979 form, clause 9 of which provided that: 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 Charterers which prevent or delay the discharging, such time is not to count unless the vessel is already on demurrage.
Between 9 and 16 June 2008 there was a nationwide haulage strike in Spain and during that period no coal was removed from the terminal at Ferrol. When the strike ended there was a large amount of coal stockpiled at the terminal, which took some time to clear. An unofficial stoppage by some lorry drivers took place between 23 and 24 June. No discharging took place on either day, but some cargo was removed from the stockpile on 25 June.
The four vessels nominated by Dreyfus under the contract of affreightment gave notice of readiness but were delayed in discharging by congestion due to the haulage strike and later unofficial stoppage. Carboex maintained that in accordance with clause 9 the time lost by each of the vessels as a result did not count against laytime. Dreyfus maintained, however, that on the true construction of clause 9, read in the context of the other terms of the charter, inparticular clauses 4 and 40, the words the discharging referred to the working of cargo and that therefore time ceased to count only if the vessel was in berth and was ready to discharge cargo or had begun cargo handling operations.
Arbitrators considered preliminary issues and determined that clause 9 of the COA did not apply in the case of a vessel which was delayed by the aftereffects of a strike which had ended; and that the clause did not apply in the case of a vessel which had arrived after the strike had ended. In reaching their decision they relied on the decision of the House of Lords in Central ArgentineRailway v MarwoodELR[1915] AC 981. The judge came to the contrary conclusion on those issues and held that the strike exception in clause 9 applied to a vessel which was unable to berth due to berth congestion caused by a strike. He set aside the award and Dreyfus appealed.
Held, dismissing the appeal:
1. Clause 9 was clearly intended to transfer the risk of some delay caused by strikes from the charterer to the owner and there was nothing in the language of the clause itself to indicate that its operation was restricted to time lost while the vessel was alongside the berth. The expression the discharging was capable of being given a wider or narrower construction, although it was naturally to be read as referring to the discharging operation as a whole. However, even if it was to be understood as referring to the physical operations involved in handling cargo, those could be delayed just as much by a strike which prevented the vessel getting into berth as by one which interrupted the handling of cargo. What clause 9 lacked was any language which indicated an intention to restrict its operation to the period during which the vessel was alongside the quay ready to work. The language of clause 9 suggested that the parties intended that the charterer should be protected from the effects of strikes that prevented or delayed the vessel entering berth in order to discharge and not only from strikes that directly interfered with cargo handling operations. Had the parties intended to confine the charterer's protection more narrowly, they would have used clearer language. On that basis clause 9 operated to protect the charterer in respect of any time lost to the vessel by reason both of the strike and of the unofficial stoppage.
2. Marwood was authority for two related propositions: (i) that such time in clause 9 meant time lost to the vessel in completing discharging by reason of one of the excepted causes; and (ii) that in order to obtain the protection of clause 9 the charterer had to establish that the event on which it relied fell within the clause and was the effective cause of delay to the vessel. The clause therefore excluded time actually lost to the vessel by reason of strikes, not merely time during which the vessel was prevented from entering berth by reason of strikes, although, if the evidence was clear enough, the two might come to the same thing. Marwood was not authority for the proposition that clause 9 protectedthe charterer only once the vessel had reached the discharge berth. Therefore the decision in Marwood did not prevent the court from giving clause 9 the meaning which it naturally bore. Accordingly, if and to the extent that Carboex could establish that the strike at Ferrol was the effective cause of delay to the discharge of any of the vessels, the time lost as a result would not count against laytime. Whether the strike was the effective cause of delay was a question of fact. The closer the vessel was to the head of the queue when the strike broke out, the easier it was likely to be to establish the causal link, but each case would turn on its own facts. Nonetheless, in principle the possibility of establishing the necessary causal connection could not be excluded even in relation to vessels arriving after the strike had ended.
Moore-Bick LJ:
1. This appeal concerns liability for delay to four vessels waiting to discharge cargoes of coal at Ferrol, north-west Spain in June and July 2008.
2. On 6 March 2008 the appellant, Louis Dreyfus Commodities Suisse SA (Dreyfus), as owner entered into a contract of affreightment with the respondent, Carboex SA, as charterer for the carriage of ten cargoes of coal from Indonesia to Ferrol or Carboneras in charterer's option between 1 April and 15 August 2008. The contract was made on the American Welsh Coal Charter form (1979 amendment), clauses 4 and 9 of which contained provisions governing the calculation of laytime at the loading and discharging ports and the payment of demurrage or despatch money, as the case may be.
3. Clause 4, which related to laytime at the loading port, contained the following provision:
Any time lost through riots, strikes, lockouts, or any dispute between masters and men, occasioning a stoppage of pitmen, trimmers or other hands connected with the working or delivery of the coal for which the vessel is stemmed, or by reason of accidents to mines or machinery, obstructions, embargo or delay on the rail way or in the dock; or by reason of fire, floods, frosts, fogs, storms or any cause whatsoever beyond the control of the Charterer affecting mining, transportation, delivery and/or loading of the coal, not to be computed as part of the loading time (unless any cargo be actually loaded during such time).
4. Clause 9, which governed laytime at the discharging port, contained the following provision:
9. 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 Charterers consignee which prevent or delay the discharging, such time is not to count unless the vessel is already on demurrage.
The words underlined were inserted in type into the printed form.
5. As is commonly the case, the parties agreed a number of additional clauses, only one of which, clause 40, need be referred to in detail. It provided as follows:
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...
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