Emeraldian Ltd Partnership v Wellmix Shipping Ltd [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Teare J |
| Judgment Date | 17 June 2010 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 17 June 2010 |
Queen's Bench Division (Commercial Court).
Teare J
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.
The following cases were referred to in the judgment:
A Meredith Jones & Co Ltd v Vangemar Shipping Co Ltd (The Apostolis) (No. 2) [2000] CLC 1488.
Antaios Compania Naviera SA v Salen Rederierna AB (The Antaios)ELR [1984] AC 191.
B&S Contracts and Design v Victor Green PublicationsICR [1984] ICR 419.
Bulman & Dickson v Fenwick & CoELR [1894] 1 QB 179.
Channel Island Ferries Ltd v SealinkUNK [1988] 1 Ll Rep 323.
County Ltd v Girozentrale SecuritiesUNK [1996] 3 All ER 834.
Frontier International Shipping Corp v Swissmarine Corp Inc (The Cape Equinox) [2005] 1 CLC 1.
Independent Petroleum Group Ltd v Seacarriers Count Pte Ltd (The Count)UNK [2008] 1 Ll Rep 72.
Inverkip Steamship Co Ltd v Bunge & CoELR [1917] 2 KB 193.
Investors Compensation Scheme Ltd v West Bromwich Building Society [1997] CLC 1243; [1998] 1 WLR 896.
Iran Shipping Lines v Ierax Shipping Co of Panama (The Forum Craftsman)UNK [1991] 1 Ll Rep 81.
Kodros Shipping Corp of Monrovia v Empresa Cubana de Fletes (The Evia) (No2)UNK [1982] 1 Ll Rep 334.
Kristiansands Tank Rederi A/S v Standard Tankers (Bahamas) (The Polyglory)UNK [1977] 2 Ll Rep 353.
Leeds Shipping Co v Societe Francaise Bunge SA (The Eastern City)UNK [1958] 2 Ll Rep 127.
Navrom v Callitsis Ship Management SA (The Radauti)UNK [1988] 2 Ll Rep 416.
Ocean Pride Maritime Ltd Partnership v Qingdao Ocean Shipping Co (The Northgate) [2010] 1 CLC 953.
Portolana Compania Naviera Ltd v Vitol SA Inc (The Afrapearl) [2004] 2 CLC 199.
Prekookeanska Plovidba v Felstar Shipping Corp (The Carnival) [1994] CLC 277.
Regazzoni v KC Sethia (1944) LtdELR [1956] 2 QB 490 (CA); [1958] AC 301 (HL).
Shipping — Demurrage — Safe berth — Guarantee — Laydays — Exceptions from laytime — Delay at loadport — Two out of three berthing dolphins successively damaged before vessel arrived — Five week delay while repairs carried out — Claim for demurrage — Vessel within exception from laytime for “partial interruption…on port”— Interruption did not have to be fortuitous or beyond control of seller — Interruption beyond control of charterer — Delay caused by unsafety of berth arising from difficulty of stern-on berthing, set-up at port and condition of fender — Breach of safe berth warranty — Shipowner also entitled to succeed on guarantee of charterer's liability.
These were two claims by the owners of a Capesize bulk carrier against the first defendant charterers for demurrage and against the second defendant as the alleged guarantor of the liabilities of the charterers.
The claims arose out of delay in loading the vessel 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 nominated berth was only 143m in length so both Capesize and Panamax vessels were longer than the berth itself. The berth had three berthing dolphins (D1, D2 and D3) and a number of mooring dolphins. 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 per cent of the energy absorption capacity of D1 and D3.
In July 2007 a vessel (Pacific Fortune) caused damage to D3 with the result that D3 was no longer in use. A contingency plan for berthing at the terminal was drawn up which involved vessels always berthing on the starboard side, using four tugs and always contacting D1 first.
In December 2007 work began in connection with the repairs to D3. Shortly afterwards a vessel (Nordstar) caused damage to D2 and a further contingency plan was agreed involving the use of five tugs and vessels being moored about five metres off the berth using the port anchor and 14 mooring lines.
On 7 January 2007 mooring of vessels off the berth pursuant to the further contingency plan stopped and underwater work on the D3 repairs commenced.
The claimant's vessel arrived the next day but did not berth until some five weeks later when the repairs to D3 were completed. During the same period work was undertaken to replace D2 with two new dolphins.
The charterers submitted that the reason why the berth operator chose to repair D3 when it did was the Nordstar incident in December 2007 which made it imperative to carry out all of the required repairs to the berth quickly.
The issues were whether the delay in berthing counted as laytime, and whether, if the delay in berthing counted as laytime, the cause of that delay was a breach by the charterers of their obligation to nominate a safe berth.
The charterers relied on cl. 5.10 of the charterparty which provided that time lost as a result of any of the following causes should not be computed as laytime, namely “(iv) accident at the mines, railway or ports”, “(viii) Partial or Total interruptions on railways or port” and “(ix) Any cause of whatsoever kind or nature, beyond the control of Seller, preventing cargo preparation, loading or berthing of the vessel”. The berth operator was a wholly owned subsidiary of the seller.
The owners said that the berth was not safe and that as a result of that unsafety the Nordstar incident was caused which in turn led to delay in berthing their vessel.
The second defendant said that the employee who issued the letter of guarantee was not authorised to do so and that it was issued in breach of Chinese exchange control laws.
Held, giving judgment for the owners:
1. On the balance of probabilities the cause of the decision to close and repair the berth was likely to have been the Nordstar incident. No other cause was suggested. Therefore the delay in berthing the claimants' vessel on and after 8 January 2008 was caused both by the Pacific Fortune incident which gave rise to the need to repair D3 and by the Nordstar incident because it caused the berth operator to commence the repair work.
2. The delay in berthing due to repairs to D3 was a partial interruption “on port”, meaning of the business of the port. The phrase “partial interruption”, when contrasted with “total interruption” of the business of the port, was apt to refer to interruption of business at a particular berth within the port. That seemed the reasonable and natural meaning of the two phrases. The concept of an interruption of the business of the port did not require the interruption to be fortuitous. The concept of an “accident”, the other exception relied upon, plainly did. However, the ordinary meaning of “interruption” should not be restricted to interruptions which were not planned in advance by the port. The interruption did not have to be “beyond the control of the Seller”.
3. Clause 5.10 specifically addressed the question of “control” in one place, namely, sub-cl. (ix) — albeit control of the seller rather than the charterer. The reasonable meaning of cl. 5.10 was that control was not a relevant aspect of any of the causes in the sub-clauses other than that in sub-cl. (ix). Thus there was not to be implied in all sub-clauses of 5.10 a requirement that the event in question be beyond the control of the charterer. In any event if it was necessary for charterers to show that the interruption was beyond their control in order to invoke the exception they did so. The charterers had to delegate to the berth operator performance of their duty to load. If the operator delayed in completing loading the charterers would not be permitted to say that the delay was beyond their control. But it did not follow that an earlier failure to repair D3 had to be attributed to the charterers. When failing to repair D3 the berth operator was not performing or failing to perform a duty delegated to it by the charterers. (B&S Contracts v G PublicationsICR[1984] ICR 419, The Forum CraftsmanUNK[1991] 1 Ll Rep 81, The Afrapearl[2004] 2 CLC 199andThe Apostolis (No. 2)[2000] CLC 1488considered.)
4. The charterers could not rely on the exception for “Accident at the mines, railways or ports”. The loss of time in berthing the vessel was caused by the continuing need to repair D3 and by the Nordstar accident. The continuing need to repair was not, or had not been shown to be, an accident. In those circumstances the charterers were unable to bring the loss of time within the accident exception because one of the two effective causes of the lost time was not an accident.
5. In relation to sub-cl. 5.10(ix) the charterers were unable to show that the time lost in January 2008 was beyond the control of the seller. The berth was operated by its subsidiary and there was no evidence that it could not have repaired the berth sooner had it wished to do so.
6. Even if time was lost by an event within cl. 5.10, the charterers could nevertheless be liable if that time was lost by reason of the berth being unsafe in breach of the charterers' warranty. The fact that there might have been no breach of the obligation to load within the laydays did not disable the owners from claiming the agreed rate of damages for delay caused by breach of another obligation. The same result followed if the correct analysis was that where an event was caused by a breach of the safe berth warranty such an event could not, as matter of construction, fall within an exception to laytime. (The CountUNK[2008] 1 Ll Rep 72 and Inverkip Steamship v BungeELR[1917] 2 KB 193 considered.)
7. The berth when it was nominated, shortly before the Nordstar incident, was unsafe. The need to berth stern on to D1 under the contingency plan required more than ordinary navigation and seamanship to avoid the danger of any contact with D3 and first contact with D2. The absence of a system for informing masters and pilots of...
To continue reading
Request your trial
-
Spar Shipping as v Grand China Logistics Holding (Group) Company, Ltd
...Elsey & Co Ltd v Hyde (unreported, 1926). Emeraldian Limited Partnership v Wellmix Shipping Ltd (The Vine)UNK [2010] EWHC 1411 (Comm); [2010] 1 CLC 993. Empresa Cubana de Fletes v Lagonisi Shipping Co Ltd (The Georgios C)ELR [1971] 1 QB 488. ENE 1 Kos Ltd v Petroleo Brasileiro SA Petrobras ......
-
British Arab Commercial Bank Plc v Bank of Communications
...J. A recent decision decided under the Rome Convention applied similar reasoning ( Emeraldian Ltd Partnership v Wellmix Shipping Ltd [2010] 1 CLC 993 at [[170], Teare J), though the case did not involve a 29 In the present case, it is not in dispute that the interpretation of the Rome Conve......
-
Aquavita International SA and Another (Respondent/Claimant) v Ashapura Minecham Ltd
...[1988] 1 Lloyds Rep 191). 20 The same principle was applied by Teare J under Article 3 of the Rome Convention in Emeraldian Ltd Partnership v Wellmix Shipping Ltd [2012] CLC 993 (see in particular paragraph [170]). Article 3 of the Rome Convention was in similar but not identical terms to A......
-
Aquavita International SA and Another v Ashapura Minechem Ltd
...v Xenakis [1982] 2 Lloyd's Law Rep 304, was applied in Mitsubishi Corporation v Alafouzos [1988] 1 Lloyd's Law Rep 191 and in Emeraldian v Wellmix Shipping [2010] 1 CLC 993, a case very closely analogous involving a guarantee of a charterer's obligation under a charterparty in circumstances......