Interbulk Ltd (Appellants) Aiden Shipping Company Ltd (Respondents) I.C.C.O. International Corn Company N.v (Respondents) Interbulk Ltd (Appellants)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ACKNER,LORD JUSTICE ROBERT GOFF |
| Judgment Date | 22 March 1984 |
| Judgment citation (vLex) | [1984] EWCA Civ J0322-3 |
| Docket Number | 84/0129 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 March 1984 |
and
[1984] EWCA Civ J0322-3
Lord Justice Ackner
Lord Justice Robert Goff
84/0129
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION COMMERCIAL COURT
(MR. JUSTICE LLOYD)
Royal Courts of Justice
MR. B. A. RIX Q.C. and MR. S. A. G. L. GAULT (instructed by Messrs. William A. Crump) appeared for the Appellant Charterers (Interbulk Ltd.).
MR. K. S. ROKISON Q.C. and MR. A. M. D. HAVELOCK-ALLEN (instructed by Messrs. Richards Butler & Co.) appeared for the Respondent Sub-charterers (I.C.C.O. International Corn Co. N.V.).
MR. D. R. N. HUNT (instructed by Messrs. Ingledew Botterell Roche & Pybus) appeared for the Respondent Owners (Aiden Shipping Co. Ltd.).
I will ask Lord Justice Goff to be kind enough to give the first judgment.
There are before the court two applications by Interbulk Limited for leave to appeal against orders made by Mr. Justice Lloyd in relation to related arbitrations. The matter arises in the following way. Interbulk Limited were the charterers from Aiden Shipping Company Limited of a ship called The Vimeira. I shall refer to Interbulk as "the charterers" and to Aiden Shipping Company Limited, who are the respondents to the first of the charterers' two applications for leave to appeal, as "the owners". The ship was chartered under a time charter dated 11th April 1979, which contained a "safe port" warranty, the precise terms of which are not material to the applications before this court.
By a voyage charterparty dated 8th November 1979 the charterers sub-chartered the ship to ICCO International Corn Co. N.V. for a voyage from the Mississippi to "one or two safe berths one safe port out of Antwerp Rotterdam or Ghent". So the voyage charter also contained a "safe port" warranty. The vessel loaded a cargo of grain in the Mississippi under the sub-charter and, in due course, was ordered by ICCO International Corn Co. N.V. (whom I shall refer to as the sub-charterers), who are the respondents to the charterers' second application for leave to appeal, to discharge her cargo at a dock in Ghent called the Rodenhuizedok. She duly docked in the Rodenhuizedok on 23rd December 1979 but, after her discharge, it was found that she had suffered serious damage to her rudder. In due course, that damage was repaired and the total cost of the repairs, coupled with other expenses, amounted in all to nearly U.S. $1 million.
Both the head charter and the sub-charter contained arbitration clauses. Arbitration proceedings were commenced by the owners against the charterers, and consequently also by the charterers against the sub-charterers, claiming damages on the grounds of breach of the "safe port" warranty in the relevant charter. The issues in both the arbitrations were the same.
In circumstances such as these, it is very desirable that, if possible, both arbitrations should be dealt with by the same arbitrators and should be heard either at the same time, or with one arbitration hearing proceeding immediately after the other, to avoid any danger of conflicting awards. Here, the first of these objectives was achieved in the sense that the same three gentlemen formed the tribunal in respect of each arbitration, though in slightly differing capacities. But, unfortunately, the second objective was not achieved. The hearing of the first arbitration (which I shall call "the head arbitration")—the arbitration between the owners and the charterers—was fixed for 16th August 1982. The sub-charterers informed the charterers that, unfortunately, they were unable to obtain suitable representation at that time. As a result, the charterers applied for an adjournment of the head arbitration. The owners opposed their application and the application was refused by the arbitrators. Further applications for an adjournment were made by the charterers to the tribunal on no less than three occasions but on each occasion the application was refused. The charterers sought an injunction from the vacation judge to restrain the arbitrators from proceeding at that time with the hearing of the head arbitration, but the judge declined to intervene. So the hearing of the head arbitration proceeded on 16th August 1982 independently of what I shall call "the sub-arbitration", i.e. the arbitration between the charterers and the sub-charterers.
I feel that it would be wrong for me to make any comment on this decision because we have not heard the arguments which were advanced either before the arbitrators on the application for the adjournment or before the vacation judge, but the danger of inconsistent decisions was inherent in the split procedure which was, in consequence, adopted.
The hearing of the head arbitration occupied five days from 16th to 20th August 1982. Following the hearing of 30th September 1982 the arbitrators made an interim award on liability, holding the charterers liable to the owners for the damage suffered by the ship. At the request of the owners the arbitrators provided written reasons with their award. In order to understand those reasons it is necessary to refer in a little detail to the rival contentions advanced by the parties in the head arbitration.
The Rodenhuizedok is situated off a canal. The ship had the assistance of a pilot to enter the dock. The ship entered the dock stern first. She had, therefore, to execute a manoeuvre under which her stern was swung round to port before she entered the dock, and this turning manoeuvre was carried out at the entrance to the dock. There seems to have been no dispute between the parties that the damage suffered by the ship's rudder occurred at some time when the ship was proceeding to enter the dock or to proceed to her berth within the dock. But the parties were at issue about the precise place on the ground, so to speak, where this damage occurred. Two theories were advanced by the owners. The first theory was that the point of impact was at some shoaling which had developed off the north west facing chamfered edge at the entrance to the dock. This point became known as "the bump". The second theory advanced by the owners was that the point of impact was at a ridge which had developed in the bottom of the dock, not far from the place where the ship was berthed. This point came to be known as "the ridge".
The owners' case was that the damage occurred at one or other or both of these two points. Furthermore, they relied on the fact that neither of these two points—the bump or the ridge—was shown on the sounding plan available at the time when the vessel entered the Rodenhuizedok and so neither was known to the pilot who was navigating the ship at the time. They therefore submitted that the casualty could not be attributed to negligence on the part of the pilot. The charterers, on the other hand, advanced the case that the point of impact was not on shoaling but actually on the bottom of the chamfered edge of the north west facing entrance to the dock, about 175 metres in towards the dock from the bump. This point upon which the charterers relied, came to be known as "the inner knuckle". There was, of course, no question of this point not being known to the pilot, and the charterers alleged that the cause of the casualty was negligent navigation on the part of the pilot in the course of turning the ship for the purpose of entering the dock so that, as the stern of the vessel swung round to port, her rudder came into contact with the inner knuckle.
From their reasons it appears that, although all three arbitrators agreed that the Rodenhuizedok was not a safe place for the ship, nevertheless they were not in agreement about the point of impact. Two of them, Mr. Bischoff and Captain Baskerville, considered that the damage was caused by the ship striking the foot of the inner knuckle as the charterers had contended, while the other, Mr. Mabbs, thought that the damage had been caused by the ridge. However, all three arbitrators held nevertheless that the Rodenhuizedok was not safe for the ship. They expressed their reasons for so holding as follows:
"…the room in which to turn a vessel of the size of the 'VIMEIRA.', assuming maximum permissible drafts, was very tight. It was so tight that we are all of the opinion that if the rudder was indeed damaged by contact with the footing of the 'inner knuckle' then there had been no pilot error but that the dock was insufficiently wide at that point for a safe turning manoeuvre."
Subsequently, on 10th November 1982, the arbitrators made their final award on quantum. It will be seen, therefore, that the crucial finding of the arbitrators was that the dock was insufficiently wide at the point of the inner knuckle for a safe turning manoeuvre for the ship. It is the charterers' contention that this point never became an issue in the arbitration and that there had either been technical misconduct by the arbitrators in so deciding the case without giving the charterers an opportunity of dealing with it before them or, alternatively, that there had been what has come to be known as a procedural mishap. They therefore applied to Mr. Justice Lloyd for an order that, for either of these reasons, the award be set aside or remitted to the arbitrators.
Before turning to the judgment of the learned judge I shall complete the narrative. The head arbitration having been decided against the charterers on the ground I have indicated, the charterers, not surprisingly, amended their points of claim in the...
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