Hyundai Merchant Marine Company Ltd (Claimant) Daelim Corporation (Defendant) Daelim Corporation (Part 20 Claimant) Trafigura Beheer BV (Part 20 Defendant)
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE TEARE,Mr. Justice Teare |
| Judgment Date | 21 June 2012 |
| Neutral Citation | [2012] EWHC 1686 (Comm) |
| Docket Number | Case No: 2010 FOLIO NO.1209 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 21 June 2012 |
[2012] EWHC 1686 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr. Justice Teare
Case No: 2010 FOLIO NO.1209
Stephen Kenny QC (instructed by MFB Solicitors) for the Claimant
David Semark (instructed by Reed Smith LLP) for the Part 20 Defendant
Hearing dates: 25 May 2012
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.
This is the second judgment of the Commercial Court in respect of a speed and consumption claim by Hyundai Merchant Marine ("HMM") as "Charterers" and Trafigura as "Owners". In the first judgment, [2011] EWHC 3108 (Comm), Flaux J. set out the charterparty chain at paragraphs 2 and 3. As Flaux J. explained there was in fact another charterer between HMM and Trafigura, namely, Daelim, but Daelim has taken no active part in the argument. The two charterparties were essentially back to back.
Flaux J. determined a preliminary issue, namely, whether the charterparties contained an all weather warranty as to speed and consumption or a warranty applying only in weather conditions up to a maximum of Force 4. He determined that the charterparties contained an all weather warranty.
The parties have now identified further questions of construction regarding clause 24 of the Shelltime 3 form (as amended) and additional clause 42 which the court has determined should be decided as further preliminary points. Those two clauses provide as follows:
"24. Owners warrant that at the date of delivery under this charter the vessel shall be of the description set out in Gas Form C attached hereto and signed by them and undertake to use their best endeavours so as to maintain the vessel during the period of her service hereunder. Further but otherwise without prejudice to the generality of this clause Owners guarantee that the average speed of the vessel will be not less than knots in ballast and knots fully laden, with a maximum bunker consumption of tons diesel oil/ tons fuel oil per day for all purposes excluding cargo heating and tank cleaning. See Additional Clause 42 attached which also overrides any references to overperformance herein.
…
If during any year from the commencement of the charter period the vessel falls below or exceeds the performance guaranteed in this clause then
…
(b) If such shortfall or excess results respectively from an increase or a decrease in the vessel's average daily bunker consumption, as herein defined, in relation to the average daily consumption guaranteed hereunder, hire shall be reduced or increased as may be appropriate by an amount equivalent to the value of the excess or saving in bunkers involved based on the average price paid by Charterers for the vessel's bunkers in this period." [emphasis per original]
42. Speed/Consumption
Speed about 15 knots average
Consumption about 40mt IFO…..
Otherwise as per Gas Form C
Charterers will not be liable for any over performance of the vessel during the course of this charter party. However, any overperformance will be credited against any underperformance due charterers for the purposes of calculation."
The further questions of construction are:
Whether the Defendant Owners are entitled to a credit for bunkers saved during the first period of the charter. Specifically:
(i) Whether, in circumstances where the vessel has performed within the consumption warranty of about 40 MT IFO ie a daily consumption of IFO of between 38 and 42 metric tons to include a 5% tolerance for the word "about", there has been a saving of bunkers and whether the saving is to be calculated by reference to the lower figure of 38 metric tons or the higher figure of 42 metric tons; and
(ii) If so, whether the Defendant Owners are entitled to credit such a saving of bunkers in the first period of the charter against the agreed underperformance by the vessel in the second period of the charter.
The first period referred to in that further question of construction is the year from delivery at 0845 on 14 January 2006 and the second period is from 0845 on 14 January 2007 until redelivery later the same year.
The parties have helpfully agreed the following figures:
i) If savings are to be calculated by reference to a daily consumption of 42 mt it is agreed there was a saving in the first period of 653.42 mt valued at US$ 206,023.33.
ii) If savings are to be calculated by reference to a daily consumption of 38 mt it is agreed there was no saving.
A saving of US$206,023.33 would exceed the Charterers' speed and consumption claim for the first period and so the Owners wish to offset the excess against the Charterers' speed and consumption claim for the second period.
The first issue
In essence the argument of Mr. Kenny QC, for HMM, on the first point is that, in circumstances where the warranted consumption of IFO is "about 40 mt" ie between 42 and 38 mt per day the Owners can only claim that they have "over performed" in that regard if the consumption is less than 38 mt per day. If consumption is between 42 and 38 mt per day the Owners will simply have performed in accordance with their warranty.
In essence the argument of Mr. Semark, for Trafigura, on the first point is that, in circumstances where the Owners guarantee a maximum consumption of "about 40 mt" per day the maximum consumption inherent in such warranty is 42 mt per day. It follows that there has been overperformance if the consumption is less than 42 mt per day.
Clause 24 provides for the hire to be increased in the event of the...
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