Furness Withy (Australia) Pty Ltd v Black Sea Shipping Company (Roman Karmen)
| Jurisdiction | England & Wales |
| Judge | Mance J. |
| Judgment Date | 17 February 1994 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 17 February 1994 |
Queen's Bench Division (Commercial Court).
Mance J.
John Lockey (instructed by Lawrence Graham) for the charterers.
Stephen Ruttle (instructed by Sinclair Roche & Temperley) for the owners.
The following cases were referred to in the judgment:
Darling v RaeburnELR [1906] 1 KB 572; [1907] 1 KB 846 (CA).
Mandla v Dowell LeeELR [1983] 2 AC 548.
Weir v Union Steamship Navigation CoELR [1905] AC 525.
Arbitration — Charterparty — Construction of charterparty — Owners' claim for unpaid hire — Cross-claim for damages for refusal to load cargo to charterers' instructions — Construction of clause on loading — Whether considerations other than safety or seaworthiness to be taken into account in refusing to load to charterers' instructions — Whether clause to be interpreted so as to enable owners to comply with classification society's rules.
This was an appeal by charterers from an arbitration award by which the owners were awarded unpaid hire of US$114,250.63. The charterers' cross-claim for damages for alleged refusal to load cargo in accordance with the charterers' instructions was rejected. The issue was whether the charterparty was to be construed to provide for the vessel to be loaded with cargo she could physically and safely carry or whether wider considerations restricted the permissible load.
By a charterparty on the New York Produce Exchange form with amendments the owners let the vessel “Roman Karmen” to the charterers. Clause 7 provided: “…the whole reach of the vessel's hold, decks, and usual places of loading (not more than she can reasonably stow and carry)…shall be at the charterers' disposal…” Having loaded a cargo of zinc concentrates, the vessel was still above her marks. The charterers wanted more cargo to be loaded, spread over all five holds. But for the segregation required by the charterers, the cargo could have been properly carried in three holds, leaving two empty. The master refused because he calculated, correctly, that the further cargo loaded to the charterers' instructions would have involved a breach of a rule on super-stability imposed by the vessel's classification society. No other classification society imposed a similar rule on ship stability, but others were considering it. The owners claimed unpaid hire from the charterers, who admitted the sum but cross-claimed for damages for the refusal to load cargo according to their instructions. The arbitrator rejected the cross-claim and awarded the owners the amount of the unpaid hire plus interest. The charterers appealed.
Held, upholding the arbitrator's award and dismissing the appeal:
1. There was nothing in cl. 7 which limited “reasonableness” to considerations of physical safety or seaworthiness of the vessel.
2. Other relevant considerations making it reasonable not to load or carry further cargo, having regard to the interests of owners and charterers arising from the particular charter, could come within the scope of cl. 7 where such considerations bore directly on the loading or carriage of such cargo.
3. The words “not more than she can reasonably stow and carry” in cl. 7 enabled the owners to comply with the rational rules laid down by her classification society regarding the stowage and disposition of cargo in the general interests of the vessel's physical safety during her operation.
Mance J: This is an appeal from an award of Ian Kinnell QC made on 14 October 1993 in respect of a charterparty dated 28 February 1992 whereby the present defendants (“the owners”) let the vessel “Roman Karmen” to the present plaintiffs (“the charterers”). In the arbitration the owners were claiming unpaid hire totalling US$114,250.63, which was undisputed save for the charterer's cross-claim for damages for alleged refusal to load cargo in accordance with the charterer's instructions. The arbitrator rejected the charterer's set-off or counterclaim and so awarded the owners the sum claimed and interest. From this award the present appeal is brought with leave.
The charterparty was on the NYPE form with amendments. It was expressed as made between the:
“Owners of the good SOVIET FLAG motorship “ROMAN KARMEN”…with hull, machinery and equipment in a thoroughly efficient state, and classed L3 CLASS RUSSIAN REGISTER…and about 39369 metric tons deadweight capacity (cargo and bunkers, including fresh water and stores on a draft of 11.80 metres on summer freeboard, inclusive of permanent bunkers…”
Under its terms the vessel was to undertake one timecharter trip via safe port(s) in or out of geographical rotation, on or off route, being delivered on passing Cape Leeuwin, Western Australia and redelivered on dropping last outward sea pilot Gibraltar-Skaw range. On her delivery she was to be:
“ready to receive cargo with clean-swept holds fit and safe for the reception, carriage and preservation of cargo…and tight, staunch and strong and in every way fitted for the ordinary cargo service…”
The charterparty further provided:
“1. That the owners shall provide and pay for all provisions, wages and consular shipping and discharging fees of the crew; shall pay for the insurance of the vessel, also for all the cabin, deck, engine-room and other necessary stores, including boiler water and maintain her in class and keep the vessel in a thoroughly efficient state in hull, machinery and equipment whilst on hire for and during the service.
6. That the cargo or cargoes be laden and/or discharged in any dock or at any wharf or place that charterers or their agents may direct, provided the vessel can safely lie always afloat at any time of tide.
7. That the whole reach of the vessel's hold, decks, and usual places of loading (not more than she can reasonably stow and carry), also accommodations for supercargo, if carried, shall be at the charterers' disposal, reserving only proper and sufficient space for ship's officers, crew, tackle, apparel, furniture...
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