Herculito Maritime Ltd and Others v Gunvor International BV and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Males,Sir Patrick Elias,Lord Justice Peter Jackson |
| Judgment Date | 01 December 2021 |
| Neutral Citation | [2021] EWCA Civ 1828 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A4/2021/0213 |
[2021] EWCA Civ 1828
Lord Justice Peter Jackson
Lord Justice Males
and
Sir Patrick Elias
Case No: A4/2021/0213
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Sir Nigel Teare (sitting as a Judge of the High Court)
Royal Courts of Justice
Strand, London, WC2A 2LL
Stephen Hofmeyr QC & Mark Jones (instructed by Tatham & Co) for the Appellants
Guy Blackwood QC & Oliver Caplin (instructed by Holman Fenwick Willan LLP) for the Respondents
Hearing dates: 17 th & 18 th November 2021
Approved Judgment
This is a claim by the owner of the mv POLAR to recover cargo's proportion of general average expenditure, the expenditure in question consisting of a ransom payment to pirates who had detained the vessel in the Gulf of Aden. The claim is defended by the cargo owners on the ground that the shipowner's only remedy in the event of having to pay a ransom to pirates was to recover under the terms of insurance policies, the premium for which had been paid by the voyage charterer. Whether that is a good defence depends on the construction of the contract contained in or evidenced by the bill of lading, which incorporated the terms of the charterparty.
An arbitration tribunal (Mr Timothy Young QC, Mr Dominic Kendrick QC and Mr Simon Gault) held that the cargo owners were not liable to contribute in general average. On an appeal to the Commercial Court under section 69 of the Arbitration Act 1996 Sir Nigel Teare reached the opposite conclusion but gave leave to appeal to this court.
The charterparty
By a charterparty dated 20 th September 2010 the shipowner chartered the vessel to Clearlake Shipping Pte Ltd (“the charterer”) for a voyage from one or two safe port(s) Tallin/St Petersburg range to one safe port Fujairah or, in charterer's option, one or two safe port(s) or STS transfers in the Singapore area with a cargo of maximum two grades of fuel oil. No charterparty was drawn up, the terms of the contract being contained in a fixture recap which incorporated with some amendments the BPVOY 4 standard form together with some further additional claims. The fixture recap provided: “All above via Suez with Suez costs to be for Owners' account”.
Clause 30.2 of the BPVOY 4 form provided for all bills of lading issued under the charter to be deemed to contain War Risks, Both-to-Blame Collision and New Jason clauses.
Clause 39 of the BPVOY 4 form was a detailed and lengthy war risks clause. It defined “War Risks” as including, among other things, “acts of piracy”. The clause was set out by the judge as an appendix to his judgment, but it was common ground that he summarised it fairly and accurately at [9] as follows:
(1) Pursuant to clause 39.2 the owner was entitled to cancel the charter if, at any time before the vessel commenced loading, it was considered that performance of the contract of carriage might expose the vessel to war risks.
(2) Pursuant to clause 39.3, the owner was not required to continue to load or to sign bills of lading or to proceed or continue on a voyage where it appeared that the vessel might be exposed to war risks. If it should so appear, the owner was entitled to request the charterer to nominate a safe port for the discharge of the cargo. If within 48 hours the charterer failed to nominate such a port, the owner was entitled to discharge the cargo at any safe port of its choice in complete fulfilment of its obligations under the charter. The extra expenses of such discharge were payable by the charterer.
(3) Pursuant to clause 39.4, if, at any stage of the voyage, it appeared that the vessel might be exposed to war risks on any part of the route and there was another longer route to the discharge port, the owner was entitled to give notice to the charterer that this route should be taken. The extra expenses of such route, if the extra distance exceeded 100 miles, were payable by the charterer. An amendment to the standard form stated that these extra expenses included extra time taken and additional bunkers consumed.
(4) Pursuant to clause 39.5, the owner was at liberty to comply with the orders of identified third parties, including governmental authorities and war risks underwriters.
(5) Pursuant to clause 39.6, anything done or not done in compliance with the clause was not to be a deviation.
There were several additional clauses, including a Gulf of Aden clause (expressed to be “for this CP only”) and a further war risks clause. The Gulf of Aden clause provided that half of any time awaiting an escort or protection team or other protective measures would count against used laytime or (if applicable) as time on demurrage and that any additional costs of such measures (including time and bunkers) would be shared equally between the owner and the charterer. It continued:
“Any additional insurance premia (including, but not limited to, those in respect of H&M, crew, P&I kidnap risks and ransoms), crew bonuses (which to be in accordance with the international standard) shall be for chrtrs account. Max USD 40,000 for charterer's account for any additional insurance premium except for crew bonus which to be max USD 20,000 for charterers account.”
The additional war risks clause provided that any additional premiums payable by the owner in respect of war risks were for the charterer's account. Such premiums were payable by the charterer together with the freight against the owner's invoice supported by appropriate documents.
It was common ground that the effect of these clauses was that the charterer would pay for the additional war risks and K&R cover up to a maximum of US $40,000. If the cover cost more than that, the shipowner would pay the balance.
The bills of lading
A cargo of 69,493.28 mt of fuel oil was loaded at St Petersburg between 29 th September and 2 nd October 2010. Six bills of lading were issued. The shipper in each case was Warley International Ltd, part of the Rosneft group, and the consignee was “to the order of BNP Paribas (Suisse) SA”. The arbitrators found that the lawful holder of all six bills of lading throughout the voyage was Gunvor International BV, the receiver of the cargo in Singapore. As the arbitrators pointed out, however, that need not have been so, given that the six bills of lading were separately negotiable. It appears also that Clearlake and Gunvor were connected companies although, again, that need not have been so and cannot affect the construction of the bills of lading.
The port/place of discharge was stated as “Singapore for orders”. Five of the bills were on the INTANKBILL 78 form. The sixth bill had the face of that form, but the reverse of the Congenbill form. Bills of lading 1 to 5 contained these words of incorporation on their face:
“… pursuant and subject to all terms and conditions as per TANKER VOYAGE CHARTER PARTY indicated hereunder, including provisions overleaf.”
Bill of lading 6 provided, on its reverse side:
“All terms and conditions, liberties and exceptions of the Charter Party, dated as overleaf, including the Law and Arbitration Clause are herein incorporated.”
It was not suggested that there was any material distinction for the purpose of this appeal between these two formulations.
In fact none of the bills of lading identified which charterparty was intended to be incorporated, but it was common ground that the material charterparty was that between the shipowner and Clearlake referred to above.
Each of the bills contained express general average clauses providing for general average to be settled in accordance with the York-Antwerp Rules 1974 (or 1994 in the case of bill of lading 6).
Bills of lading 1 to 5, but not bill of lading 6, had a vertical marginal note on the reverse reading:
“For the purpose of the Bill of Lading, ‘SHIPPER’ means the person consigning the cargo for the carriage on Charterer's behalf. ‘CHARTERER’ means the person entering the Charter Party contract with the Carrier. Carrier is equivalent to terms like Shipowner …, whichever is used in the Charter Party in this Bill of Lading to define a person undertaking the carriage.”
Each of the bills contained on its face a statement that “By taking delivery of the cargo the Consignee shall make himself liable for unpaid freight, deadfreight, demurrage and other charges”.
The insurances
The arbitrators found that the cargo was insured by cargo underwriters on what they described as “familiar terms”. They did not explain what they meant by this, but said that these terms were irrelevant for their purposes. However, it was common ground that the cargo was insured on the Institute Cargo Clauses (A) terms. These cover all risks of loss or damage to the cargo, with certain exclusions, one of which is war risks. However, the exclusion of war risks is itself subject to an exception for “piracy”. Accordingly, although in general war risks are excluded from the cover, loss or damage caused by piracy and its consequences was covered. It was common ground also that this is a standard term of marine cargo insurance.
The shipowner had annual hull & machinery and war risks insurance but, as with all such insurance, there were certain excluded or Additional Premium areas, one of which was the Gulf of Aden. By an endorsement to their war risks cover...
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