Emeraldian Ltd Partnership v Wellmix Shipping Ltd (The Vine)

JurisdictionEngland & Wales
JudgeMr. Justice Teare
Judgment Date17 June 2010
Neutral Citation[2010] EWHC 1411 (Comm)
Docket NumberCase No: 2008 FOLIO NO.286
CourtQueen's Bench Division (Commercial Court)
Date17 June 2010

[2010] EWHC 1411 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Before: Mr. Justice Teare

Case No: 2008 FOLIO NO.286

Between
Emeraldian Limited Partnership
Claimant
and
(1) Wellmix Shipping Limited
(2) Guangzhou Iron &steel Corporation Limited
Defendants

Michael Coburn QC and Charlotte Tan (instructed by Holman, Fenwick and Willan LLP) for the Claimant

Lionel Persey QC and David Walsh (instructed by DLA Piper UK LLP) for the Defendants

Hearing dates: April 19-21 and 26-28 and May 4-5 2010

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.

MR.JUSTICE TEARE

Mr. Justice Teare

Mr. Justice Teare:

1

This is the trial of two claims by the Claimants, the Owners of VINE. The first is a claim against the First Defendants, the Charterers of VINE, for demurrage in the sum of about US$5m. The second is a claim against the Second Defendants, the alleged guarantor of the liabilities of the Charterers. The claims arise out of delay in loading the Capesize bulk carrier VINE in January and February 2008 at an iron ore terminal in Itaguai (also known as Sepetiba) in Brazil when repairs were being carried out to the berth.

The charterparty

2

The vessel was the subject of a charterparty evidenced by a fixture recap dated 3 December 2007 which provided for a voyage from 1 or 2 safe berths, 1 safe port Itaguai, Brazil, always afloat” to China with a cargo of 120,000 mt. of iron ore.

3

The fixture recap stated that “SCALE terms” were to be part of the charterparty. These were set out in an appendix and were taken from a long term contract for the sale and purchase of iron ore between the Second Defendant and CVRD International SA, subsequently known as Vale SA, a major exporter of iron ore from Brazil.

4

The charterparty provided for about 2 and half days laydays which was to commence 6 hours after tendering notice of readiness.

5

Clause 4.1 of the SCALE terms dealt with Notice of Readiness and, so far as relevant, provided as follows:

“Notice of Readiness (NOR) may be tendered after arrival of the vessel at Loading Port, at any time, ……provided that the vessel is ……cleared by the Port Authorities…….”

6

Clause 5 of the SCALE terms dealt with Laytime. Clause 5.10, so far as relevant, provided as follows:

“5.10 Time lost as a result of all or any of the causes hereunder shall not be computed as laytime, unless vessel is already on demurrage:

………

(iv) Accident at the mines, railway or ports;

………

(viii) Partial or Total interruptions on railways or port;

………

(ix) Any cause of whatsoever kind or nature, beyond the control of Seller, preventing cargo preparation, loading or berthing of the vessel.”

7

The fixture recap also provided that “otherwise C/P to be based on Vine/PML c/p dtd 21 June 2007”. Although this charterparty contained other exceptions from laytime it is unnecessary to mention them further because Mr. Lionel Persey QC, counsel for the Charterers, accepted that there was such overlap between the exceptions in the SCALE terms and the other exceptions in the earlier charterparty that he made no submissions about the other exceptions in his closing submissions. I shall therefore say nothing about them.

The nominated berth

8

The port of Itaguai, which is referred to in the fixture recap, is known locally as Porto de Sepetiba. It is one of the ports that serves Rio de Janeiro in Brazil. Within the port there are separate terminals for containers, alumina, coal, iron ore and solid and liquid bulk cargoes. The Charterers nominated a berth leased to and operated by Companhia Portuaria Baia de Sepetiba (“CPBS”), a company owned by Vale SA. It is one of three terminals in the bays of Ilha Grande and Sepetiba used for the export of iron ore.

9

Porto de Sepetiba is described by CPBS in their “Notice to Ships” as being “within very sheltered waters without swell influence”. The CPBS berth is only 143m. in length so both Capesize and Panamax vessels are longer than the berth itself. The berth had 3 berthing dolphins known for the purposes of this case as D1, D2 and D3, numbered from east to west. In addition there were several mooring dolphins to both the east and west, set inside the line of the berth. Vessels berthed starboard side to so that D3 was the dolphin furthest forward and D1 the dolphin furthest aft. D2 was about amidships and was designed to have approximately 50% of the energy absorption capacity of D1 and D3. There was no evidence that the lesser capacity of D2 was advertised to mariners. Thus the Notice to Ships issued by CPBS described the berth in these terms:

“The pier and the ore loading system were dimensioned to serve bulk carriers in the range of 40,000 DWT to 230,000 DWT……The berthing pier has a total length of 143 meters and three berthing dolphins equipped with Sumitomo Type fenders spaced 60 meters one from another plus four mooring dolphins..…”

10

So long as D1 and D3 remained available for use the lesser capacity of D2 probably mattered little. If a vessel first contacted either D1 or D3 that dolphin would absorb much of the energy imparted by the vessel as it rotated about the contact point so that it was then safe for the vessel's starboard side amidships to breast D2. Equally if the vessel contacted D1, D2 and D3 simultaneously the energy absorbed by D1 and D3, the primary berthing dolphins, would ensure that the contact with D2 was safe.

The PACIFIC FORTUNE incident and the contingency plan

11

On 19 July 2007 PACIFIC FORTUNE caused damage to D3 with the result that D3 was no longer in use. The circumstances which gave rise to this damage were not investigated in this action. The Owners referred to a local enquiry which was said to attribute the damage to environmental factors rather than any fault on the part of the ship. The Charterers referred to other local reports which attributed the damage to “irregular berthing” and suggested the fault lay in closing the berth too fast.

12

D3 had to be repaired. Pending the execution of such repairs a contingency plan for berthing was approved by the port authority. At some stage it appears that D3 was removed and the piles severed to a height level with high water.

13

The contingency plan for berthing at the terminal was drawn up on 20 July 2007 by persons associated with the terminal including CPBS, the port captaincy and the senior pilot Mr. Damasco. The minutes of the meeting recorded that the pilots were in favour of resuming operations at the terminal and that the plan was discussed and agreed. The plan was described in these terms:

“Vessels must always berth on the starboard side; the damaged dolphin [D3] will be lit and must not be touched by the vessel during the berthing operation. Four tugs to be used for berthing operations—two of them at least 45 tons tbp. Wind conditions of 15 knots or more must be assessed during the operation by the pilot.

……

The vessel's portside anchor must always be used as an aid in the berthing operation in order to limit the distance from the dolphin and reduce the approach speed.

……

During berthing, the vessel must always contact Dolphin D1 first”

14

The following day a “special procedure” was set out in a document signed by others concerned with the operation of the port. The procedure listed 14 steps and included those set out in the contingency plan of the previous day.

15

Although the plan made no mention of D2 the requirement that “during berthing, the vessel must always contact Dolphin D1 first” implied that the final approach of the berthing vessel was expected to be at an angle to permit the vessel's starboard side aft to contact D1. Only by so doing could a mariner ensure that D1 was contacted first. Having done so the starboard side would then contact D2 and the vessel would then be securely moored.

16

Although D3 required to be repaired and a drawing of the required repairs was issued on 5 September 2007, D3 was not in fact repaired in 2007. Vessels continued to berth using the contingency plan. Between 20 July and 8 December 2007 some 73 vessels berthed, of which 46 were Capesize vessels.

17

One such vessel was CAPE STORK. She was managed by Zodiac who were also the managers of VINE. On 3 November 2007 her master noticed “the sharp edges” of the submerged piles of D3 as his vessel approached the berth. He requested a tug to stand by his vessel after she had berthed. He did not consider that mooring lines and the port anchor were sufficient to keep his vessel away from the sharp edges.

18

On 3 December 2007 the work of “mobilisation and installation of construction job site” commenced in connection with the repairs to D3. It is unclear when, at this time, it was anticipated that the underwater work on D3 would be carried out. A vessel “line-up” dated 3 December 2007 allowed for no vessels to berth between 8 and 15 January but this soon changed. By 7 December 2007 four vessels, the last of which was VINE, were scheduled to berth between 6 and 15 January 2008.

The NORDSTAR incident

19

On 8 December 2007 NORDSTAR caused damage to D2. There is a dispute between the parties as to the cause of this incident. The Owners say it was the unsafety of the berth. The Charterers say it was negligent navigation of the vessel. On 9 December 2007 CPBS issued a force majeure notice in respect of the incident. Berthing had to be stopped. A stoppage of 10 days was anticipated.

20

On 14 December 2007 the Port Captain agreed that for a period of up to 45 days a further contingency plan using buoys could be operated. This required the use of 5 tugs and involved vessels being moored about 5 metres off the berth using the port anchor and 14 mooring lines.

21

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