Compania Sud Americana De Vapores Sa v Sinochem Tianjin Ltd (Formerly Sinochem Tianjin Import and Export Corporation) (The "Aconcagua")
| Jurisdiction | England & Wales |
| Judgment Date | 09 December 2010 |
| Neutral Citation | [2009] EWCA Civ 1373,[2010] EWCA Civ 1403 |
| Date | 09 December 2010 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2009/1777 |
[2009] EWCA Civ 1373
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR JUSTICE CHRISTOPHER CLARKE)
Lord Justice Aikens
Case No: A3/2009/1777
Mr Robert Bright QC (instructed by Reed Smith LLP) appeared on behalf of the Appellants.
Mr Nicholas Craig (instructed by Holman Fenwick & William) was present but was not entitled or required to speak on behalf of the Respondents.
Lord Justice Aikens:
This is a renewed application, made orally, for permission to appeal by the defendant in the action, which I shall call Sinochem for short. Sinochem was the shipper of a cargo of calcium hypochlorite in small drums in a container on board a container ship called the “ACONCAGUA”, which was chartered to the claimant in the action, whom I shall call for short “CSAV”. The calcium hypochlorite, which I will call “CH” for short, exploded in the course of the voyage from Pusan, South Korea to San Antonio, Chile. As a result of the explosion great damage was caused to the ship. The owners of the ship sued CSAV for damages in an arbitration and succeeded in obtaining an interim award in their favour. CSAV then reached a settlement with the owners pursuant to which they paid the owners US$27,750,000.
CSAV then sued Sinochem under the bill of lading. The basis of the suit was that Sinochem as shippers had shipped a dangerous cargo within the terms of Article 4 Rule 6 of the Hague Rules, which were incorporated into the bill of lading, and therefore Sinochem were liable to indemnify CSAV in respect of the damages that they had to pay the owners, together with all the costs involved in that arbitration and other damages.
The judge, after a hearing which lasted some 11 days, found in favour of CSAV. He set out his reasons in a very comprehensive, and extremely lucid judgment which runs to 108 pages. There are several appendices. I cannot help but have enormous sympathy for difficulties which the judge faced with all the expert evidence put before him, which are referred to in appendix 3 of his judgment.
Mr Bright QC this morning makes two main submissions. First of all, he submits that the judge's findings on the régime that was adopted with regard to the heating of bunkers in various bunker tanks during the course of the voyage are flawed. That is because the judge failed to take sufficient account of what had been recorded by one of the experts (Dr Beeley) who saw the chief engineer, Mr Gruener, shortly after the casualty and who made notes of that conversation. It was not an informal conversation, it was a formal one. Dr Beeley, the relevant expert, took notes of that meeting where lawyers were not present. He did not take notes of other meetings because only the lawyers did so. However, it seemed to have been common ground that what Dr Beeley noted in that meeting was material that had been said by the chief engineer in other meetings with the lawyers. The lawyers' notes were, of course, privileged material.
Mr Gruener was a witness in the arbitration but this note of Dr Beeley was not available in the arbitration and therefore Mr Gruener was not cross-examined about it. The note was made available for the trial but Mr Gruener was not a witness in the trial. The judge, therefore, made his findings as to what was the régime for heating of the bunker tanks without the benefit of Mr Gruener's cross-examination on this note.
The critical findings of the judge in this regard are set out at paragraphs 250 and 251. I have no doubt that the judge took all this into account. He had to reach a conclusion on a balance of probabilities as to what the bunker heating regime was, and bearing in mind the extremely careful way in which he approached all matters of evidence, whether of fact or expert, I have no doubt that there is no prospect of success with regard to challenging those critical conclusions.
It follows, as Mr Bright accepted in oral argument this morning, that if the finding of fact on the Gruener régime cannot be challenged, then the judge's finding that heating of the bunker tanks was not a cause of the explosion cannot also be challenged. It means, therefore, that one never gets into further issues with regard to unseaworthiness and so forth.
However, that leaves Mr Bright's second point, which is based on the very well-known decision of Rhesa Shipping Co SA v Edmunds, otherwise known as The “Popi M”, [1985] 1 WLR 948. It is a decision of the House of Lords on the burden of proof in a marine insurance claim, but Mr Bright submits the principles in that case are applicable by analogy in a claim under Article 4 Rule 6. He submits that the judge fell into what he describes as the “ Popi M error”. He submits that the judge effectively concluded that it was not possible to make a finding of fact as to the characteristics of the cargo that was shipped from direct information or indirect inferences as to the nature of the cargo based on evidence surrounding its production at the Jingang factory. Therefore, the judge said at paragraph 232:
“…it is necessary to determine its characteristics by reference to what occurred on the voyage.”
That is what the judge went on to do. Mr Bright says that this is impermissible because it does not follow by making findings that the material exploded on the voyage at a temperature which was about 25 to 30 degrees centigrade, that therefore the material that was shipped had been unstable at the moment that it left the Jingang factory. Mr Bright says that at the trial it was canvassed, although not very far, that there may have been causes between the time the material left the factory to the time that it got on board in the container at the slot near the bunker tank where it was stowed which could have made the material unstable. He submits that if that is the case then the claimants could not have proved that the material was dangerous for Article 4 Rule 6 purposes.
Mr Bright says, therefore, the judge fell into error by saying in effect that by rejecting one thesis he had to accept the other. Mr Bright relies on his points about the heating régime—we have already dealt with those—and he also says that the judge failed to give sufficient weight to such tests and other aspects of the regime at the factory which indicated that the chances of the Jingang factory producing rogue CH were extremely low. In particular he points to paragraph 268 of the judgment and says that that is wrong.
I have very grave doubts as to whether or not this point will ultimately succeed, but I am just satisfied that this point is arguable for the purposes of giving permission to appeal. I am going to give permission in respect of that point alone. Sinochem will not be able to pursue the appeal with regard to the issue of fact on the heating régime; it has to take the facts as found in that respect, and it has to concentrate the argument on the Popi M point.
CSAV, the respondent, has given notice that it wishes to argue that a condition should be imposed before permission can be granted. There is neither insufficient time nor is there sufficient material before the court at this stage to deal with that issue. Therefore it is adjourned. Any further submissions on that should be put in writing by CSAV and responded to by Sinochem. That must be done in seven days each. I will consider the material in writing and if there is a necessity for a further oral hearing there will be one, but otherwise I will deal with that issue on paper.
I will need to know from counsel what they say would be the estimate for the appeal on the basis for which I have given permission. Again, as we are now very late that cannot be done today but should be dealt with in the same paper material that I have already mentioned. If it is felt by either side that this case needs a case management conference in advance of the appeal hearing, then they should say so and I will deal with that either on paper or orally as seems appropriate.
Mr Bright, your costs of today will be costs in the appeal. There must be three Lords Justices, and two should be Lords Justices with commercial experience.
Order: Application granted in Part.
[2010] EWCA Civ 1403
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
The Honourable Mr Justice Christopher Clarke
Before: The Right Honourable Lord Justice Maurice Kay
(Vice President of the Court of Appeal, Civil Division
The Right Honourable Lord Justice Longmore
and
The Right Honourable Lord Justice Stanley Burnton
Case No: A3/2009/1777
Mr Robert Bright QC & Ms Anna Gotts (instructed by Reed Smith LLP) for the Appellant
Mr Simon Rainey QC (instructed by Holman Fenwick Willan) for the Respondent
Hearing dates: 15 th November 2010
Lord Justice Longmore:
Introduction
At about 0230 local time on 30 th December 1998 an explosion took place in the No 3 hold of the m.v....
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Compania Sud Americana de Vapores SA v Sinochem Tianjin Ltd (Aconcagua)
...Willan) for the respondent. The following cases were referred to in the judgment: Athanasia Comninos, TheUNK [1990] 1 Ll Rep 277 [2010] EWCA Civ 1403 Court of Appeal (Civil Division). Maurice Kay, Longmore and Stanley Burnton L JJ. Compania Sud Americana de Vapores SA and Sinochem Tianjin ......