Frontier International Shipping Corporation v Swissmarine Corporation Inc. [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Nigel Teare QC |
| Judgment Date | 11 January 2005 |
| Neutral Citation | [2005] EWHC 8 (Comm),[2004] EWHC 8 (Comm) |
| Date | 11 January 2005 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2004 Folio 434 |
[2005] EWHC 8 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT
Mr.nigel Teare QC
Case No: 2004 Folio 434
Mr.Michael Ashcroft (instructed by Lawrence Graham) for the Applicant
Mr.Charles Kimmins (instructed by Hill Taylor Dickinson) for the Respondent
Hearing dates : 16 December 2004
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 Nigel Teare QC:
This is an appeal from an arbitration award of Mr.Timothy Rayment, Mr.William Packard and Mr.Patrick O'Donovan dated 23 April 2004 which is brought pursuant to permission for appeal granted by Cooke J. on 17 August 2004. Permission to appeal was granted because the questions of law raised are of general importance in relation to strikes clauses and Cooke J. considered that the arbitrators' decision was at least open to serious doubt.
The issues raised stem from a voyage charterparty dated 9 October 2001 on the Americanised Welsh Coal Charter Form (amended 1979). Pursuant to that charter Swissmarine Corporation Inc. as owners chartered the vessel CAPE EQUINOX to Frontier International Shipping Corp. for a voyage from Dalrymple Bay Coal Terminal in Australia to Lazaro Cardenas in Mexico.
The vessel arrived at the discharge port on 12 December 2001 and discharge commenced on 13 December 2001. There was then a strike of employees of Sicartsa (who were the receivers and consignees of the cargo) which commenced on 17 December 2001 and did not end until 16 January 2002. Discharge was completed on 17 January 2002. The arbitrators upheld a claim by the Owners for demurrage in the sum of US$236,763.51.
The charterparty provided as follows:
"9. The cargo to be discharged by the consignee at port of discharge, free of expense and risk to the vessel, (See Clause 30). If longer detained, consignee to pay vessel demurrage at the rate of $10,500 US Currency per day (or pro rata for part thereof) dispatch money for lay time saved (See Clause 30) In case of strikes, lockouts, civil commotions, or any other causes or accidents beyond the control of the consignee which prevent or delay the discharging, such time is not to count unless the vessel is already on demurrage. ………..
26. The Charterer's liability shall cease as soon as the cargo is shipped except for all other matters provided for in this CP where Charterers liability is specified, and the freight, dead freight and demurrage in loading/discharging (if any) are paid, the Owner having a lien on the cargo for freight, demurrage and average.
30.
……….
B. The cargo to be discharged free of risk and expense to the vessel at the average rate of 10,000 metric ton, per weather working day of 24 (twenty four) consecutive hours including Saturdays, Sundays and holidays.
44. Force Majeure
Any time lost through war or the anticipated imminence thereof, between any nations, restraints or rulers, governments or peoples, legislation, decrees, regulations or the like in the country of origin or receipt or of vessel's flags; blockade, sanctions, civil commotion, political disturbances, revolution, revolt or riot, strikes, lockout, industrial disturbances accidents or stoppages, whether total or partial, at mines, ports, railways, roadways, or other means of transportation, epidemics, acts of God, storms, frost, floods, snow, tempest or washaway, or any other event or occurrence of any nature or kind whatsoever beyond the control of the Charterers, not to be computed as part of the loading time unless vessel already on demurrage (unless any cargo be actually loaded during such time.) ………………
In the event of any stoppage or stoppages arising from any of these causes continuing for the period of 6 (six) running days from the time of the vessel's being ready to load, this Charter shall become null and void; …………….."
The arbitrators found that although the Charterers could not have avoided the strike it was not outside the control of the consignee. The Owners maintained and the arbitrators held that in order to rely upon clause 9 the Charterers had to prove not merely the existence of a strike which prevented or delayed discharging but one which was beyond the control of the consignee.
On behalf of the Charterers Mr.Michael Ashcroft submitted that the natural reading of clause 9 of the charterparty was that (i) in the event of a strike preventing or delaying discharge the laytime clock will stop and (ii) in the event of some different cause (ie other than the named causes) preventing or delaying discharge the laytime clock will stop—but only if that other cause is beyond the control of the consignee. It was said that the words "any other cause beyond the control of the consignee" were intended to enlarge the protection conferred by the clause, not to diminish the protection afforded by the prior exceptions of "strikes, lockouts, civil commotions". This construction of the clause was said to be illustrated by the approach of Wright J. to an identical strike clause in The Antonios Stathatos (1931) 40 Ll.L.Rep.274. It was emphasised that clause 9, so construed, did not enable the Charterers to rely upon the mere existence of a strike so as to interrupt the running of laytime. They had to show that it was causative of delay in discharge which they could not do if there was a means by which the Charterers could discharge notwithstanding the existence of the strike.
On behalf of the Owners Mr. Charles Kimmins submitted that the word "other" in the phrase "or any other cause beyond the control of the consignees" referred, not only to the unspecified causes, but also to the specific events and therefore meant that the specific events had to be beyond the control of the consignees as well as the unspecified causes. This approach to the construction of the words was said to be supported by the approach of Kerr J in The Mareva AS [1977] 1 Lloyds Rep.368 and of Aikens J. in Mamadoil-Jetoil v Okta [2003] 1 Lloyds Rep.1. In the event that the meaning of the clause was ambiguous the clause was to be construed against the Charterers. In this regard reliance was placed on The Mozart [1985] 1 Lloyds Rep. 239 and The Solon [2000] 1 Lloyds Rep.292.
Both Counsel submitted that commercial considerations favoured their construction of the clause.
Firstly, the contractual context in which clause 9 is found must be noted.
a) Clause 9 concerns demurrage at the discharge port. In the standard Americanised Welsh Coal Charter Form (amended 1979) the liability for demurrage at the loadport is expressed to be that of the Charterers (see clause 4 line 39) whilst liability for demurrage at the discharge port is expressed to be that of the consignee (see clause 9 line 64). The consignee is not a party to the charterparty but the Owner has a lien on the cargo for demurrage. It was accepted by the Charterers that in this case the addition of the word "discharging" to clause 26 had the effect that the Charterers were liable for demurrage at the discharge port as well.
b) Clause 44, which deals with exceptions to laytime at the load port contains a similar phrase to clause 9; "any time lost through …strikes ….or any other event or occurrence of any nature of kind whatsoever beyond the control of the Charterers, not to be computed as part of the loading time unless vessel already on demurrage". Although the Charterers did not concede that under clause 44 a strike was only excepted if it was beyond the control of the Charterers Counsel accepted that it would be difficult to argue that a strike need not be shown to be beyond the control of the Charterers for the purposes of being an exception to the running of laytime at the loadport.
Secondly, an ambiguous clause cannot give the Charterers any protection. Thomas J. explained why this is so in The Solon [2000] 1 Lloyds Rep.292 at pp.297–298; charterers are seeking to be exempted from their primary obligation to load within the laydays. However, before this principle is applied there must be a credible alternative construction narrower than the construction relied upon by the charterers; per Mustill J. in The Mozart [1985] 1 Lloyds Rep.239 at p.242.
Clause 9 provides for both specified and unspecified events to interrupt the running of laytime. In my judgment, the natural construction of clause 9, which states that the "consignee" is to pay demurrage, is that the words "beyond the control of the consignee" apply not only to "any other causes or accidents" but also to the specified events of strikes, lockouts and civil commotions. I have reached that conclusion essentially for two reasons. Firstly, by reason of the word "other", the words "beyond the control of the consignee" are capable of referring both to the specified events and to the unspecified causes. Secondly, it makes sense to exclude from the running of laytime events which are beyond the control of the consignee but does not make sense to exclude from laytime causes which are not beyond the control of the consignee. I accept that the words "beyond the control of the consignee" are also capable, as a matter of language, of applying only to the unspecified causes but I do not consider that such a construction can have been the intention underlying clause 9. That is because there is sense in interrupting the running of laytime where a strike is beyond the control of the consignee but it is difficult to identify any reason for interrupting laytime where a strike is not beyond the control of the consignee.
If, as accepted by the Charterers, the effect of the amendment to clause 26 (the addition of the word...
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