Gard Marine & Energy Ltd v China National Chartering Company Ltd (formerly known as and/or successor in title to China National Chartering Corporation) Daiichi Chuo Kisen Kaisha (Third Party) Ocean Line Holdings Ltd "Ocean Victory" (Fourth Party)

JurisdictionEngland & Wales
JudgeThe Honourable Mr. Justice Teare,Mr. Justice Teare
Judgment Date30 July 2013
Neutral Citation[2013] EWHC 2199 (Comm)
CourtQueen's Bench Division (Commercial Court)
Date30 July 2013
Docket NumberCase No: 2010 FOLIO 720

[2013] EWHC 2199 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Rolls Building 7 Rolls Buildings

Fetter Lane London EC4A 1NL

Before:

Mr. Justice Teare

Case No: 2010 FOLIO 720

Between:
Gard Marine & Energy Limited
Claimant
and
China National Chartering Co. Ltd. (formerly known as and/or successor in title to China National Chartering Corp.)
Defendant

and

Daiichi Chuo Kisen Kaisha
Third Party

and

Ocean Line Holdings Limited "Ocean Victory"
Fourth Party

Jeremy Russell QC & James TurnerQC (instructed by Ince & Co LLP) for the Claimant and the Fourth Party

Timothy Saloman QC (instructed by Winter Scott LLP) for the Defendant

Dominic Kendrick QC & David GoldstoneQC (instructed by MFB Solicitors) for the Third Party

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.

The Honourable Mr. Justice Teare Mr. Justice Teare
1

On 24 October 2006 OCEAN VICTORY, a Capesize bulkcarrier, part-laden with a cargo of iron ore, sought to leave the port of Kashima, Japan during a severe gale. As she proceeded along the Kashima Fairway she was confronted by northerly or north-north-westerly winds of about Beaufort scale force 9 and by heavy seas generated both by the winds and by the dominant swell from the north- east. When north-west of the seaward end of the South Breakwater, without steerage way and with her portside exposed to the gale she was set down onto the end of the breakwater. She was then driven southwards by the weather, went aground and was abandoned by her crew who were airlifted ashore. Notwithstanding the assistance of Nippon Salvage on LOF 2000 terms she broke apart just after Christmas 2006. A wreck removal contract was entered into with Fukada Salvage and by August 2008 the wreck had been removed.

2

This was a remarkable maritime casualty. Although OCEAN VICTORY had the full use of her engines she lost steerage way when leaving a modern, purpose-built port and navigating a fairway which had been used by many ships without incident. The casualty has given rise to a claim in the sum of approximately US$137.6m. made up of the loss of the vessel, some US$88.5m., loss of hire of the vessel until 27 December 2006, some US$2.7m., SCOPIC costs pursuant to LOF 2000 in the sum of US$12m., and wreck removal costs of some US$34.5m. The Claimants, the hull underwriters who are suing as assignees of the owners and demise charterers, say that the casualty was caused by the unsafety of the port of Kashima to which the time charterers had ordered the vessel. The time charterers say that the port of Kashima was not unsafe but that even if it were unsafe the cause of the casualty was not that unsafety but a misapprehension by the master of the vessel that the vessel had been ordered to leave the port and/or by the negligent navigation of the master when leaving the port. The time charterers also say that certain of the losses claimed are irrecoverable for other reasons. The following guide to the contents of this judgment may assist the reader:

The vessel

The vessel

paras.3–4

The port of Kashima

paras.5–8

The weather on 24 October 2006

paras.9–12

The port "set-up"

paras.13–15

The charterparties

paras.16–17

The witnesses

paras.18–22

The events prior to 23 October 2006

paras.23–29

The events of 23 October 2006

paras.30–49

The events of 24 October 2006

paras.50–76

The departure of the vessel

paras.77–92

The safety of the port

paras.93–135

The cause of the vessel leaving the port

paras.136–149

The navigation of the vessel

paras.150–172

Negligent navigation and causation

paras.173–175

The recoverability of the value of the vessel

paras.176–204

Limitation

para.205

Loss of hire

para.207

Conclusion

para.207

Postscript

paras.208–213

3

OCEAN VICTORY was a single deck gearless bulk carrier, with 9 holds, built in Shanghai in August 2005. She was registered in Hong Kong. She was 289 metres in length overall and 45 metres in breadth. Her summer deadweight was 174,148 metric tonnes on a draft of 18.12 metres. She was powered by a six cylinder MAN B&W diesel engine which produced 22,920 bhp at 91 rpm. Her full sea speed in laden condition was 14 knots. She was equipped with the usual navigational aids, including gyro compass, two radars and two GPS. She was manned by a crew of 24.

4

Her master at the material time was Captain Dong. In 2006 he was 47 years of age. He had obtained his PRC (People's Republic of China) master's certificate in October 1995. He had commanded several bulk carriers, both Handysize and Panamax, between 1998 and 2006. In July 2006 he was appointed master of OCEAN VICTORY, his first command of a Capesize bulk carrier. Until the events with which this case is concerned neither the master nor the vessel had visited Kashima.

The port of Kashima

5

Kashima is a large modern port, construction of which began in 1969 and continued for many years thereafter. It appears to be one of the largest ports in Japan. The port contains over 9 miles of wharves serving an industrial zone. There are iron and steel works, an oil refinery, chemical works and a foodstuffs industry within the port. The port serves a variety of vessels from smaller coastal ships to VLCCs (up to 280,000 DWT) and Capesize bulk carriers (up to 230,000 DWT) as well as LPG and chemical tankers. Between 1971 and 2006 some 1254 VLCCs and some 5316 Capesize vessels had visited the port. There was no history of incidents such as that which befell OCEAN VICTORY on 24 October 2006.

6

One of the fairways within the port is the Central Fairway which runs in a NE/SW direction. Along its northern shore is the Raw Material Quay, with three berths A, B and C. OCEAN VICTORY had been moored at that quay for the purposes of discharging her cargo. A vessel leaving the port via the Central Fairway, as OCEAN VICTORY did, proceeds in a north easterly direction and turns to port into the Kashima Fairway which runs in a N/S direction. The eastern side of the fairway is bounded by the South Breakwater which extends 1.75 miles north and affords a measure of protection from the swell coming in from the Pacific Ocean. At the inward end of the breakwater, and to the south-west, are two leading lights aligned on a bearing of 183.5 degrees. The line of those leading lights is marked on the Admiralty chart. For an outbound vessel that line marks the course to follow along the fairway, just to the east of north. At the seaward end of the breakwater is a light on a tower some 11m. in height. Beyond the breakwater are two buoys, nos. 1 and 2, which mark the route out to sea from the fairway on a north easterly course. The seaward end of the fairway had been dredged to a depth of 24 m. and the inward end had been dredged to a depth of 22m. The width of the fairway between the 20m. depth contours either side of the line of the leading lights marked on the chart was between 2 and 3.5 cables.

7

Pilotage is not compulsory but pilots are available. The pilot boarding ground for inbound vessels is some 2.5 miles north- east of the head of the breakwater. The Guide to Port Entry notes that the presence of swell very often hampers the manoeuvre of the tugboat carrying the pilot and so a convenient lee is required to enable the pilot to board. Pilots may also be taken by outbound vessels but it was common ground that they typically disembarked near the pilot's office at the southern end of the breakwater (in the vicinity of buoy no.6) and so did not usually pilot outbound vessels along the Kashima Fairway.

8

The Admiralty Pilot Book states that entering and leaving the port at night is only permitted in exceptional cases. It also notes that in the outer part of the fairway there is frequently a heavy swell and that in bad weather breaking seas overrunning the breakwater may cause it to be totally obscured on radar screens. The Guide to Port Entry notes that during periods of northerly swell the entry channel is fully exposed and that vessels at low speed generally have difficulty in steering.

The weather on 24 October 2006

9

The conditions which were experienced in the Kashima Fairway on 24 October 2006 have been considered by meteorological and wave experts. Their findings may be summarised as follows.

i) The fairway was exposed to north to north-north-westerly winds of about Beaufort scale 9 caused by a low pressure system. Although there was a difference of view as to how likely it was that the wind reached force 10, it was common ground that there were gusts of up to about 52 knots, that is, about force 10 (although it is strictly inaccurate, I was told, to refer to "gusts of force 10").

ii) The prevailing swell from the north east penetrated the breakwater by diffraction and by reflection from the coastline. There would also have been a component due to overtopping of the breakwater.

iii) At the inward end of the breakwater the significant wave height (that is, the average height of the highest one third of the waves) would have been about 1.5–2m.

iv) As the vessel passed the seaward end of the breakwater she was likely to have encountered a significant wave height of 5.5–6.5m. with a period of around 11 seconds.

10

The circumstances in which the vessel came to leave her berth for the open sea are the subject of some controversy and so the same experts, together with experts on ship movement, have considered the conditions which were probably experienced by the vessel as she lay alongside the Raw Materials Quay, starboard side to. They concluded that the wind could potentially have been from directions both abeam and astern due to distortions caused by structures and topography...

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1 cases
  • Gard Marine & Energy Ltd v China National Chartering Company Ltd
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 22 January 2015
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2 firm's commentaries
  • 'Ocean Victory': Court Of Appeal Reverses First Instance Decision
    • United Kingdom
    • Mondaq UK
    • 28 January 2015
    ...we commented on the High Court's decision in Gard Marine & Energy Ltd v China National Chartering Co Ltd (The "Ocean Victory") [2013] EWHC 2199 (Comm), which dealt with an alleged breach of a safe port The Court of Appeal has now reversed the High Court's decision. A summary of the Cour......
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    • United Kingdom
    • Mondaq United Kingdom
    • 14 August 2013
    ...Gard Marine & Energy Ltd v China National Chartering Co Ltd (The "Ocean Victory") [2013] EWHC 2199 (Comm), the Claimant Underwriters claimed damages from the Defendant Time Charterers where the vessel was lost on departing Kashima Charterers ordered the vessel, a Capesize bulk carrier, ......

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