Dow Chemical (Nederland) B.v v B.P. Tanker Company Ltd (Vorras)
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE KERR,SIR SEBAG SHAW |
| Judgment Date | 13 December 1982 |
| Judgment citation (vLex) | [1982] EWCA Civ J1213-1 |
| Docket Number | 82/0474 |
| Court | Court of Appeal (Civil Division) |
| Date | 13 December 1982 |
[1982] EWCA Civ J1213-1
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)
(MR. JUSTICE BINGHAM)
Royal Courts of Justice.
The Master of The Rolls
(Sir John Donaldson)
Lord Justice Kerr
and
Sir Sebag Shaw
82/0474
1982 D. NO. 152
MR. ROBERT ALEXANDER, Q.C. and MR. ANDREW POPPLEWELL (instructed by Messrs. Sinclair Roche & Temperley) appeared on behalf of the Appellants.
MR. ANTHONY EVANS. Q.C. and MR. DAVID GRACE (instructed by Messrs. Ince & Co.) appeared on behalf of the Respondents.
This appeal concerns demurrage and the meaning and effect of "72 running hours, weather permitting" in the BEEPEEVOY 2 form of charterparty.
The m.v. "Vorras" was chartered "to proceed One port Algeria or so near thereunto as she may safely get" to load a cargo of petroleum products for carriage "to One or two ports United Kingdom, Continent (Bordeaux-Hamburg) range". This was therefore a port, as contrasted with a berth, charterparty.
The vessel arrived at the nominated loading port of Skikda, Algeria, on the 15th December, 1960 and tendered notice of readiness. There was a special provision that laytime should not commence before the 19th December, 1980. Loading was not completed until the 13th January, 1981, when the vessel sailed for Rotterdam. Disputes have arisen as to the amount of demurrage payable, but these disputes can be settled amicably if one point of principle can first be resolved. In order to understand that point, it is necessary to explain in outline what caused the delay at the loading port.
When the "Vorras" arrived, the loading berth was occupied by another vessel, the "Brese Jarl". That vessel left on the evening of the 16th December, 1980, but within a very short time the port was closed due to bad weather. This closure was maintained until the afternoon of the 20th December when another vessel, the m.v. "Skikda", occupied the loading berth. She eventually left on the morning of the 26th December, but her loading was interrupted by bad weather and it seems that at one time the weather was such that she had to leave the berth temporarily. After she left finally, the port was again closed due to bad weather and the "Vorras" only went on the berth on the 28th December, 1980. Thereafter her loading was continually delayed by bad weather.
Against this background the point of principle can be simply stated. Under this charterparty laytime takes some account of weather, but demurrage time does not. Bad weather was a major, albeit intermittent, feature of the vessel's visit to the loading port. Once laytime expired, the risk of delay for any reason, including bad weather, lay on the charterers. Accordingly it is no surprise to find the owners arguing that laytime expired very soon after the vessel's arrival and the charterers arguing that the effect of bad weather was to postpone its expiry for a very substantial period. Put more precisely, the owners say that laytime is only extended if the weather at the berth is such as to prevent the loading of the "Vorras" and that this could not happen when she was not on the loading berth and another vessel was there. The charterers, for their part, say that laytime is extended if the weather was such as to prevent loading at the berth, whether the "Vorras" or another vessel or no vessel at all was on the berth.
The disponent owners, Dow Chemical (Nederland) B.V., issued a writ in the Commercial Court claiming some U.S. 400,000 as demurrage or damages for detention and issued a summons for summary judgment under order 14. Since the issue was purely one of law, the exact figure for demurrage being capable of agreement between the parties, Mr. Justice Bingham rightly decided not to give leave to defend upon the basis that the issue was arguable and indeed highly arguable. Instead he treated the matter as if it had confronted him on a preliminary point of law and found in favour of the charterers. So long as this remained a summons under order 14, this would have led Mr. Justice Bingham to give leave to defend and to him, or some other judge, re-hearing the argument.
In these circumstances the parties, with great good sense, agreed that the proceedings should be treated as if Mr. Justice Bingham had been concerned with a preliminary question of law and had answered it in favour of the charterers. The question of law is in the following terms:
"Whether, on the true construction of the charter party dated 15th December 1980 made between the parties herein and upon the facts asserted in the Points of Claim and the affidavits of Stuart Will Alexander Fitzpatrick and the exhibits thereto and admitted or appearing from the Points of Defence and the affidavit of Simon Howard Baker, the Defendants are liable to the Plaintiffs for loading port demurrage and, if so, in what sum".
Mr. Justice Bingham must be taken to have answered this question in favour of the charterers, but the terms in which he is to be taken to have answered it are obscure. The learned judge then gave the owners leave to appeal.
Having stated that the charterparty was a port and not a berth charterparty, the only clauses to which I need refer are clauses 15, 16 and 17 which are in the following terms:
"Amount of 15. 72 running hours, weather permitting, Sundays Laytime and holidays included, unless loading or discharging on the Sunday or holiday in question is prohibited by law or regulation at the port of loading or discharge, shall be allowed. Charterers for loading and discharging, Charterers having the right of loading and discharging during the night, paying all extra expenses incurred ashore.
"Commencement 16. Subject only to Clause 17 hereof and (i) laytime shall at each loading and each discharge Termination port commence at the expiry of 6 hours after the of Laytime Notice of Readiness to load or discharge, which may be given either by letter, telegram, telex, radio or telephone (and if given by radio or telephone shall subsequently be confirmed in writing), has been received from the Master or his agent by Charterers or their agents, berth or no berth, or when the vessel commences to load or discharge at the berth or other loading or discharging place, whichever first occurs;
(ii) laytime shall run until the cargo hoses have been finally disconnected upon termination of loading or discharging, such disconnection to be effected promptly;
"Termination (iii) demurrage, if incurred, shall continue until of the cargo hoses have been finally disconnected upon Demurrage termination of loading or discharging, such disconnection to be effected promptly.
"Suspension 17. Time shall not count against laytime or, if of Laytime the vessel is on demurrage, for demurrage, when spent or lost
(i) on an inward passage, including awaiting tide, pilot, or tugs and moving from anchorage, even if lightening has taken place at the anchorage, until the vessel is securely moored at the berth or other loading or discharging place specified by Charterers;
(ii) due to breakdown, inefficiency or other cause attributable to the vessel and/or Owners, including inability of the vessel to pump out the cargo at the rate indicated by the description of the pumps set out in Clause 1 (f) hereof after taking account of any variations in specific gravity or back pressure;
(iii) as the result of a labour dispute, or strike, involving Master, officers or crew of the vessel or tugs or pilot;
(iv) in handling ballast unless this is carried out concurrent with loading/discharging such that no loss of time is involved, or is carried out to comply with a shore restriction. Nothing herein contained shall be affected by the provisions of Clause 38 hereof."
Authority apart, the charterers' case is simplicity itself. They say, "Clause 15 says that we shall be allowed 72 running hours during which the weather permits loading before the vessel comes on demurrage. If laytime expires at midnight on 21st/22nd December, as the owners say it did, we have been robbed, because during none, or virtually none, of the previous three days could anyone have loaded a vessel. If the weather had been suitable for loading, but we could not get the vessel to the berth because another vessel was there, that would be our bad luck. But if the owners are right, whatever the weather we are only entitled to three days1 lay-time unless we can actually get the vessel on to the berth. This is not what the charter says."
The owners' case can be equally simply stated. They say, "We agreed a rate of freight which allowed you 72 free hours for loading. It was up to you to make sure that the berth was free. The only qualification which we accepted was that if you could not use some of those hours because of the weather, the time would be extended. You had your 72 hours and the weather did not prevent your loading. What prevented your loading was the fact that another vessel was on the berth".
Authority apart, I would have no doubt that the charterers were right. As Mr. Justice Parker pointed out in Gebr. Broere B.V. v. Saras Chimica (1982) 2 Lloyd's Law Reports 436, the owners' construction can lead to a very surprising result. Assume that two tankers arrive on successive days and each has a laytime of 72 running hours weather permitting. The first gets into the berth and bad weather prevents loading for the next 21 days, after which she loads in 72 hours. Her charterers will neither pay demurrage nor receive despatch. The...
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