Eastern Pacific Chartering Inc. v Pola Maritime Ltd
| Jurisdiction | England & Wales |
| Judge | Ms Clare Ambrose |
| Judgment Date | 10 August 2022 |
| Neutral Citation | [2022] EWHC 2095 (Comm) |
| Docket Number | Case No: LM-2021-000208 |
| Court | Queen's Bench Division (Commercial Court) |
| Year | 2022 |
[2022] EWHC 2095 (Comm)
Ms Clare Ambrose
(Sitting as a Deputy Judge of the High Court)
Case No: LM-2021-000208
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
LONDON CIRCUIT COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
David Semark (instructed by Wikborg Rein LLP) for the Claimant
Peter Stevenson (instructed by MFB Solicitors) for the Defendant
Hearing dates: 3 rd–5 th July 2022
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This is the trial of a claim and counterclaim arising under a trip time charter (“the Charterparty”) dated 18 September 2019 of a bulk carrier called “DIVINEGATE” (“the Vessel”) under which the Claimant chartered the Vessel to the Defendant for the carriage of a cargo of pig iron via the Baltic sea to the Mississippi River in the USA. The cargo was loaded in Riga and discharged in New Orleans.
The Claimant, as disponent owner, claims outstanding hire, bunkers and some expenses totalling some US$99,982.79. There is no dispute as to the period under which the Vessel was under charter.
The dispute is as to whether the Defendant, as charterer, can answer the claim by way of its own counterclaims. It seeks deductions from hire and also claims damages for breach of charter regarding the Vessel's performance. It also makes a separate counterclaim for US$72,629.01 as damages in tort on grounds of the Claimant's allegedly wrongful arrest of a different vessel, the POLA DEVORA. The counterclaims are made by way of set-off and if the Defendant is successful on both aspects of the counterclaim, then the balance would give rise to a judgment in its favour in the sum of US$59,129.25.
In light of the sums at stake it is surprising that the parties have chosen to incur substantial costs in pursuing this matter to a High Court trial listed for 4 days (following a half-day CMC before Cockerill J), especially where the court made directions for ADR at an early stage and both parties expressed disappointment at the matter going to trial.
Performance disputes under charterparties would more commonly be subject to arbitration but under clause 93 of the Charterparty the parties agreed that any dispute (unless the amount in issue was less than US$50,000 and referable to LMAA Small Claims arbitration) would be submitted to the exclusive jurisdiction of the High Court in England and Wales.
Procedural background
On 4 August 2020 the Claimant issued its Claim Form and filed its Particulars of Claim. On 7 September 2020 an ADR order was made by Foxton J but mediation did not take place.
The Defendant served a defence and counterclaim on 10 November 2020. By an application dated 15 December 2020 the Claimant challenged the court's jurisdiction to hear the Defendant's counterclaim for wrongful arrest.
That application was heard by Deputy Judge Patricia Robertson QC on 14 June 2021 and in her judgment dated 28 June 2021 [2021] EWHC 1707 (Comm), she dismissed the application holding that:
a) the Defendant's counterclaim arising out of the arrest of the POLA DEVORA came within the scope of the Charterparty jurisdiction clause properly interpreted;
b) it was appropriate to exercise a discretion available under Article 22 of the 1968 Brussels Convention (which regulates jurisdiction as between the Courts of Gibraltar and the UK) so as to refuse to decline jurisdiction or to stay the wrongful arrest claims, even though this court was second seised as between two sets of related proceedings.
Evidence
There was a large amount of documentary evidence, including photographs, a number of videos, weather routing reports, large extracts from the Vessel's deck and engine logs, noon reports, correspondence between the parties' solicitors and material relating to the Vessel and also the POLA DEVORA, including charters and documentation including certificates.
Both parties relied on expert evidence on the Vessel's speed and performance. The Claimant called Captain Ian Hodges of TMC, and the Defendant called Mr Nicholas Chell of ABL. The Claimant also served a statement from the Master, Captain Kalender but did not call him to give evidence. The Claimant served a statement from Mr Raymond Triay on the law of Gibraltar, and the Defendant served a statement from its solicitor, Mr James Burrows but it was agreed that they need not be called to give evidence.
Factual background
Prior to the Charterparty
The Vessel is a bulk carrier almost 200m in length with 4 cargo cranes and a single fixed pitch propeller. It was built in 2019 and only left the shipyard in March 2019 so was still relatively new when entering into service under the Charterparty. On an earlier voyage the Vessel had stayed at Paradip as her then loadport between 9 June and 11 July 2019. Following this voyage, cleaning of the underwater hull and propeller took place on around 20 July 2019 at Trincomalee in Sri Lanka. There was a dispute as to the state of the hull both before and after cleaning.
The Vessel subsequently sailed to Nueva Palmira, Uruguay and loaded a separate cargo, staying there between around 22 and 26 August 2019. She discharged that cargo in Rotterdam in September 2019 directly prior to delivery under the Charterparty.
Performance of the Charterparty trip in Oct/Nov 2019
There was considerable common ground as to the basic facts relating to the disputed trip. The Vessel was delivered into the Charterparty at Rotterdam at 0700 on 21 September 2019 and it is perhaps worth noting that the trip covered (and hire was payable for) the ballast leg from Rotterdam to Riga, and then the laden leg from Riga to New Orleans.
Following delivery, the Vessel departed Rotterdam on 21 September 2019 and proceeded in ballast to Riga, where she loaded a cargo of 56,992.06MT of Pig Iron and 2,145MT of Ferro Manganese. The Vessel departed Riga on 3 October 2019 and then sailed to New Orleans.
It is common ground that the Defendant's instructions were for the Vessel to steam at eco-speed on the laden voyage.
On 5 October 2019, the Vessel called at Skaw for bunkers and departed the following day. The Vessel arrived at New Orleans on 27 October 2019 and completed discharge on 1 November 2019.
During the laden voyage from Riga to New Orleans Owners employed the services of a weather routeing company – Applied Weather Technology (“AWT”) and also the linked entity StormGeo. AWT reported that there was a loss of time of 1.15 hours and no overconsumption of heavy fuel oil and marine gas oil.
Following completion of discharge at New Orleans, a surveyor from Fernandez Maritime Consultants LLC (“FMC”) attended on board on 1 November 2019 to inspect the Vessel on behalf of the Defendant. Their report states that “the vessel had considerable marine growth (barnacles) on her visible hull area… After disembarking from the vessel we again made an inspection around the “DIVINEGATE” by launch and found barnacles all around the vessel that started approximately from her load line (13 meters draft) down to the water level”.
The Vessel was redelivered to the Claimant at 0415 on 3 November 2019.
On 8 November 2019 the Defendant sent a message to the Claimant stating that the Vessel's performance was ‘ significantly affected’ during the voyage to New Orleans and asserted that this was likely caused by hull fouling identified in New Orleans or a breach of the Claimant's ‘ obligations under Clause 8 of the Charter’.
On 21 November 2019 the Defendant wrote to the Claimant enclosing a statement of hire, a report prepared by StormGeo showing a loss of time of 22.73 hours and the FMC survey report it had commissioned at New Orleans, stating that a claim would be advanced under clause 15 and/or clause 1 of the Charterparty; and reserv4r a right to provide further analysis when deck and engine logs were supplied.
On 17 January 2020 the Defendant's solicitors sent the Claimant a letter before action providing an account of the performance claim that the Defendant was advancing. In that message the Defendant's solicitors:
a) confirmed the existence of a dispute ‘with regard to certain underperformance issues which arose during a voyage between Riga, Latvia and New Orleans, USA in October 2019’;
b) alleged that the Vessel had underperformed during the voyage and attributed this to fouling of the hull which had been observed following the FMC inspection at New Orleans and attached that report;
c) asserted that damages would be assessed by reference to the average performance of the Vessel throughout the voyage and asked for all deck and engine logs to be disclosed to permit a further investigation of the cause and impact of the underperformance;
d) reserved the Defendant's rights to advance the claim on alternative bases when the Vessel's documents were provided.
The Arrest in July 2020
On 1 July 2020 the Claimant's solicitors (who were newly instructed) contacted the Defendant's solicitors indicating that they were instructed in relation to the claim for hire and that “ Pola need to pay up as soon as possible, otherwise, legal proceedings and appropriate action to obtain security are to follow without further notice.”
Late in the day on Thursday 2 July 2020, the Claimant (acting through its lawyers in Gibraltar, Triay & Triay) effected an arrest of a different bulk carrier the POLA DEVORA in Gibraltar to secure its claim against the Defendant for hire (“the Arrest”).
The Arrest was sought on the basis of a claim form dated 2 July 2020 issued by way of admiralty claim in rem in the Supreme Court of Gibraltar...
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