Glencore Grain Ltd v Goldbeam Shipping Inc. (The “Mass Glory”) ; Goldbeam Shipping Inc. v Navios International Inc.
| Jurisdiction | England & Wales |
| Judge | Mr Justice Moore-Bick |
| Judgment Date | 25 January 2002 |
| Neutral Citation | [2002] EWHC 27 (Comm) |
| Docket Number | Case No: 2001 Folio 411 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 25 January 2002 |
[2002] EWHC 27 (Comm)
QUEENS BENCH DIVISION
COMMERCIAL COURT
IN THE HIGH COURT OF JUSTICE
The Honourable Mr Justice Moore-Bick
Case No: 2001 Folio 411
Case No: 2001 Folio 486
Miss Siobán Healy (instructed by Richards Butler) for the appellant
Mr. Simon Croall (instructed by Bird & Bird) for the appellant
Miss Clare Ambrose (instructed by Rayfield Mills) for the respondent
JUDGMENT: APPROVED BY THE COURT FOR HANDING DOWN (SUBJECT TO EDITORIAL CORRECTIONS)
Mr Justice Moore-Bick
On 24 th November 1997 Glencore Shipping Ltd ("Glencore") entered into a contract of affreightment with Goldbeam Shipping Inc. ("Goldbeam") on the Synacomex form with amendments for the carriage of between three and five cargoes of heavy grain, soyabeans, sorghums, soyapellets or soyabeanmeal in bulk from a range of River Plate and other South American ports to a range of ports in South East Asia and the Far East. In due course Goldbeam nominated the vessel Mass Glory to perform one of the voyages under the contract. Goldbeam was not the owner of the Mass Glory, but had itself chartered the vessel on 25 th March 1998 on substantially the same terms from Navios International Inc. ("Navios"). Navios was not the owner of the vessel either, having taken her on hire from her owners, Bonusnauta Shipping Corp., under a charterparty dated 3 rd July 1997 for a period of 11/13 months with an option in favour of the charterers for a further period of 11/13 months.
On 9 th May 1998 the Mass Glory completed loading a cargo of soyapellets at Rio Grande and shortly afterwards Glencore declared Xiamen in the People's Republic of China as the first discharging port. The vessel entered the port of Xiamen on Sunday 14 th June and passed the normal inward inspection later that day. She was then ready to berth and a berth was available for her, but she was unable to occupy it because the cargo documents were not in order and because the sellers of the cargo ordered the vessel not to allow anyone to have access to the vessel without production of an original bill of lading. The master gave notice of readiness at 0800 hours on Monday 15 th June, but it was common ground that both voyage charters were berth charters and that since the vessel was not prevented by congestion from reaching her berth the notice of readiness was invalid. The problems with the cargo documents were not resolved until Sunday 9 th August 1998 when the vessel was at last able to shift to a berth, having been kept waiting nearly two months. Discharging began later that day, but no further notice of readiness was given then or at any time after she reached the berth. Discharge of that part of the cargo destined for Xiamen was completed on 19 th August and the vessel then left for Nantong to discharge the remainder.
In due course the owners under each of the voyage charters claimed damages for detention from the charterers in respect of the time lost while the vessel was kept waiting at Xiamen. The disputes between them were referred to arbitration and the parties sensibly ensured that the same tribunal was appointed in each case in order to enable the disputes under the two charters to be heard together, thereby reducing costs and eliminating the risk of inconsistent decisions. The arbitrators published separate awards, but for the most part they are in identical terms and except where otherwise necessary I shall only refer to the award in the arbitration between Goldbeam and Glencore. The expressions "the charterers" and "the owners" must therefore be understood as referring to the parties in the capacities in which they entered into the relevant contracts. The arbitrators held that the delay to the vessel at Xiamen was caused by the charterers' breach of contract, a conclusion that has not been challenged before me. However, in reaching their award as to the amount that the owners were entitled to recover by way of damages the arbitrators made decisions which have given rise to these two appeals under section 69 of the Arbitration Act 1996.
The effect of the laytime provisions on the assessment of damages
The first issue concerns the running of laytime at Xiamen and its effect on the assessment of damages for detention. The arbitrators held that since the notice of readiness given on 15 th June was invalid, time did not start to count, and the laytime exceptions did not apply, while the vessel was waiting at the anchorage. The whole of that time was therefore to be taken into account in calculating damages for detention. However, despite the fact that no notice of readiness was tendered after the vessel reached the berth, the arbitrators held, by a majority, that laytime began to count at the commencement of discharge. They did so on the grounds that but for the charterers' breach of contract the vessel would have gone straight to berth on 14 th June with the consequence that the notice of readiness given on 15 th June would then have been valid. On that basis they held that the charterers' breach of contract caused the notice of readiness given on 15 th June to be invalid, that they could not benefit from their own breach of contract and could not therefore rely on the absence of a valid notice of readiness to claim despatch.
On behalf of Glencore Miss Healy submitted that the Mass Glory was fully at the charterers' disposal from the moment she passed the inward inspection at Xiamen, even though she was not at a berth. Accordingly, when assessing damages for detention the arbitrators should have asked themselves how long the charterers were entitled to take discharging the vessel at Xiamen and should have assumed that they would have used the whole of the time available to them for that purpose. They should then have found how long the vessel actually spent at the port and assessed damages for detention taking into account the laytime notice periods and exceptions as well as the period by which the laytime had ultimately been exceeded. In support of that approach she relied on the decisions in Shipping Development Corporation v V/O Sojuzneftexport (The 'Delian Spirit') [1972] 1 Q.B. 103 and Kurt A. Becher G.m.b.H. & Co. K.G. v Roplak Enterprises (The 'World Navigator') [1991] 2 Lloyd's Rep. 23 and upon a passage in Commencement of Laytime (3 rd ed., 1998) by the well known maritime arbitrator, Mr. Donald Davies. The practical effect of this submission, as Miss Healy recognised, would be to apply the laytime code from the time the vessel reached Xiamen, even though she was not then technically an arrived ship.
Miss Healy's alternative submission was that the arbitrators erred in holding that laytime began to run when the vessel commenced discharging at Xiamen. She submitted that in the absence of a valid notice of readiness time did not begin to run at all and that the charterers should therefore be credited with despatch for the whole of the allowed laytime.
These submissions were adopted by Mr. Croall on behalf of Goldbeam for the purposes of its appeal against the award in favour of Navios. In resisting the appeal by Glencore against the award in favour of Goldbeam Mr. Croall adopted the submissions of Miss Ambrose on behalf of Navios in support of the tribunal's decision.
The argument that the charterers were entitled, by one means or another, to obtain the benefit of the laytime provisions as from the moment the vessel passed her inward inspection at Xiamen is one which I am unable to accept. It is helpful to begin by reminding oneself of the essential nature of the adventure contemplated by a voyage charter. In E.L. Oldendorff & Co. G.m.b.H. v Tradax Export S.A. (The 'Johanna Oldendorff') [1974] A.C. 479 Lord Diplock at page 556 identified four successive stages, namely, the loading voyage, the loading operation, the carrying voyage and the discharging operation, and pointed out that each must be completed before the next can begin. Although the claim in the present case is for damages for detention, it raises questions about the point at which the carrying voyage ends and the discharging operation begins and the manner in which the parties have allocated the risk of delay to the vessel during these different stages of the adventure.
The carrying voyage ends and the discharging operation begins only when the vessel reaches her agreed destination. It was common ground that the charters in the present case were berth charters so the vessel's destination for these purposes was the berth at the port of discharge. In the absence of some provision to the contrary, therefore, the owners could not give notice of readiness, and laytime could not begin to run, until the vessel had entered a berth at Xiamen. Although clause 6 of the charter provided that laytime was to commence following the giving of notice of readiness "whether vessel be in berth or not", it was accepted that the owners could not rely on these words to enable them to give notice of readiness when the vessel was at the anchorage. The explanation can be found partly in the decision of the House of Lords in Bulk Transport Group Shipping Co. Ltd v Seacrystal Shipping Ltd (The 'Kyzikos') [1989] A.C. 1264 and partly in clause 37 of the charter which made it clear that notice of readiness could only be given before the vessel reached the berth if the berth was unavailable due to congestion. In the present case a berth was available for the vessel from the moment she arrived at Xiamen.
Since the carrying voyage had not ended when the vessel reached the anchorage and the owners were not entitled to give notice of readiness under clauses 6...
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