Fercometal S.A.R.L. v Mediterranean Shipping Company S.A. (Simona)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PARKER,LORD JUSTICE RALPH GIBSON,THE VICE-CHANCELLOR |
| Judgment Date | 22 May 1987 |
| Judgment citation (vLex) | [1987] EWCA Civ J0522-1 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 May 1987 |
| Docket Number | 87/0512 |
[1987] EWCA Civ J0522-1
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 LEGGATT.
Royal Courts of Justice
The Vice-Chancellor (Sir Nicolas Browne-Wilkinson)
Lord Justice Parker,
Lord Justice Ralph Gibson
87/0512
1984 A/C 156/8/84
MR M. DEAN Q.C. and MR A. FENTON (instructed by Messrs Lloyd & Co.) appeared on behalf of the appellants (respondents).
MR D. DONALDSON Q.C. and MR H. PAGE (instructed by Messrs Holman, Fenwick and Willan) appeared on behalf of the respondents (applicants).
This appeal arises out of a charterparty dated the 11th June 1982 between the respondents, Fercometal S.A.R.L ("charterers") and the appellants, Mediterranean Shipping Co. S.A. ("owners").
The charterparty was on a Gencon form. It provided for the carriage of a part cargo of 6,000 metric tons of hot rolled steel coils fromDurban to Bilbao in the vessel "Simona" then trading and expected ready to load the 3rd July 1982.
Box 19 of the charterparty, which was headed "Cancelling date ( C1.10)", contained the words LAYCAN 3/9 July 1982.
Clause 10, so far as material, provided:
"10. Should the vessel not be ready to load (whether in berth or not) on or before the date indicated in Box 19, Charterers have the option of cancelling this contract, such option to be declared, if demanded, at least 48 hours before vessel's expected arrival at port of loading ·····"
The only other clause which it is necessary to mention at this stage is clause 46, which provided:
"46. The Owner has the option to complete with other cargo but this not to interfere with loading/discharging operations and not to cause any contamination to cargo loaded under this Charterparty. Completion cargo to be suitably/adequately separated at Owner's expense and time".
"Simona" arrived in Durban on the 8th July 1982 but was not in fact ready to load charterer's cargo until some time after the 12th July. On that date charterers gave notice of cancellation of the charterparty. They thereafter tendered no cargo and in due course the vessel sailed from Durban.
Owners contend that charterers were not entitled to cancel, that the purported cancellation and failure to tender cargo were accordingly repudiations of the charterparty which were accepted by the departure of the vessel and that they are accordingly entitled to damages by way of dead freight.
The single issue before this court, as it finally emerged, is whether the right to cancel, which prima facie accrued to charterers by reason of the fact that the vessel was not ready to load by the cancelling date, had been lost by reason of prior events. If it had, owners are entitled to dead freight. If it had not, owners' claim fails.
Owners' claim to dead freight was originally advanced by way of counterclaim in arbitration proceedings in which there were many other issues which do not now arise. It succeeded and charterers were ordered to pay to owners U.S $116,870 plus interest at 12% from 1st September 1982 to date of award, namely the 16th November 1984. Charterers appealed to the High Court pursuant to the provisions of the Arbitration Act 1979 and by a judgment dated the 31st October 1985, Leggatt J. allowed the appeal and, in effect, set aside the award. From that judgment owners now appeal to this court.
It became apparent during the course of argument before us that the contentions advanced before Leggatt J. differed materially from those presented to the arbitrators and that the contentions advanced before us differed both from those presented to the arbitrators and from those advanced before Leggatt J. It was, indeed, not until a comparatively later stage in the hearing in this court that the true issue emerged. For this reason I find it unnecessary to analyse or comment upon the reasoning of either Leggatt J or the arbitrators and I shall not, in this judgment, do so.
The facts upon which owners base their contention that charterers had lost their prima facie right to cancel must now be stated. They fall into two parts, first the loading system in operation at Durban at the material time, and, secondly, the particular facts relating to the loading of "Simona".
The Loading System.
In South Africa all railways and harbours are under the control of South African Transport Services ("SATS"). In 1982 two loading systems were operated by SATS at Durban, a permit system and an owners' risk system.
Under the owners' risk system the shipper would rail the cargo to be loaded to the port, without a permit, in the hope of immediate transfer from rail trucks to loading vessel. If this turned out to be impossible "demurrage" would be payable to SATS after one day.
Under the permit system the ship's agent and the shipper would apply for, and be allotted, a fixed loading day. If the cargo were not shipped on that day it might be left in rail trucks for three days without incurring demurrage charges, but thereafter it would do so.
SATS would not consider granting a permit unless the application preceded the date applied for by the expected rail transport time from place or origin to Durban plus two days, Charterers' cargo originated from Vanderbijlpark, which was six days rail transport time from Durban. Thus no loading date would be allotted earlier than 8 days from application. SATS also required applications to be lodged by 9 a.m. each day.
Particular Facts.
On June 29th 1982 owners advised the steel shippers that the vessel was nominated to load the steel from July 6th to 9th at 1,500 metric tons per day, and on the same day applied to SATS for a permit which stated that the vessel's ETA was July 4th and estimated departure date July 11th.
This application was thus in time for a loading permit for the 6th July to be granted in respect of the steel.
On the following day, however, an amended application for a permit was made which showed ETA as July 7th and departure date July 17th. This application showed that a parcel of copper and a substantial parcel of granite would be loaded before the steel. It is to be noted that this change was not in any way due to any action or communication on the part of the charterers.
On July 2nd owners, by telex, requested an extension of the cancelling date to cover cargo loading dates from July 13th to 16th. This led, on the same day, first to discussions between the representatives of owners and charterers and thereafter to a telex from charterers to owners stating that the later loading dates were unacceptable and that they were cancelling the charter.
It is common ground that this constituted a repudiation of the charter by anticipatory breach. It is also common ground that such repudiation was not accepted by the owners who, on July 5th, telexed to charterers that, contrary to previous communications, the vessel would start loading on July 8th.
At the same time, however, charterers received a telex from their agents in Durban to the effect that information from the permit office indicated that no permit had been granted for the steel and that permits would be granted for July 13th to 16th.
In fact about 4,700 of the 6,000 tons of the steel was by that time, and had since July 2nd been, already in Durban. The remainder was in Vanderbijlpark.
By that time also charterers had provisionally fixed the vessel " Leo Tornado" to carry the steel from Durban to Bilbao. They now confirmed the fixture.
Later on the same day owners notified charterers by telex that "Simona" would be ready to load p.m on July 7th or a.m on July 8th, specifically stating that she would then be ready to load the steel.
The vessel in fact arrived in Durban on the morning of July 8th and tendered notice of readiness. This was not accepted by charterers who endorsed it "vessel off charter 2/7". Charterers began loading steel into " Leo Tornado" on the same day.
On the following day, July 9th, owners' London solicitors telexed to charterers that the vessel was now open in Durban for the charterers' cargo and, since notices had already been given to them, would charterers confirm their intentions. Charterers did not reply to this, but on July 12th they gave a further cancellation notice.
The arbitrators in their reasons make no specific finding that "Simona" was not ready to load the steel on July 8th, when notice of readiness was given, or on July 9th, when owners stated that she was open to load the steel; or at any time thereafter until July 12th, when charterers gave their second notice of cancellation. It is, however, accepted by Mr Dean Q.C. on behalf of owners that it is an inevitable inference from the findings which they in fact made that "Simona" was not ready to load the steel at any time prior to the charterers' notice of cancellation on July 12th.
The arbitrators held:
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(i) that charterers, in addition to repudiating the charterparty by their purported notice of cancellation on July 2nd, had further repudiated it by confirming the fixture of " Leo Tornado" on July 5th, and/or by programming the loading of the steel into her on July 6th and/or by commencing to load the steel into her on July 8th and/or by instructing their agents in Durban not to accept any notice of readiness on behalf of "Simona",
(ii) that such repudiation was not accepted by owners.
On these facts owners contend that charterers options to cancel for failure to meet the cancelling date had been lost.
In considering the validity of this contention it is of assistance to examine first the legal...
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