Mariana Islands Steamship Corporation v Marimpex Mineraloel-Handelsgesellschaft m.b.H. & Company K.G. (Medusa)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE NEILL,LORD JUSTICE NICHOLLS |
| Judgment Date | 17 June 1986 |
| Judgment citation (vLex) | [1986] EWCA Civ J0617-9 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 86/0574 |
| Date | 17 June 1986 |
[1986] EWCA Civ J0617-9
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 HOBHOUSE)
Royal Courts of Justice
Lord Justice Neill
Lord Justice Nicholls
86/0574
MR. DAVID OWEN (instructed by Messrs. Turner & Co.) appeared for the Appellants.
MR. CHARLES PRIDAY (instructed by Messrs. Holman, Fenwick & Willan) appeared for the Respondents.
This is an appeal by leave of the judge against the order of Mr. Justice Hobhouse dated 24 January 1986 whereby he dismissed applications by the plaintiff shipowners for a declaration or alternatively for an order under section 27 of the Arbitration Act 1950. The relief sought related to a limitation clause in a voyage charterparty dated 15 January 1985 between the plaintiffs and the defendant charterers which provided for the carriage of a cargo of crude oil from Kharg Island to a number of stated destinations.
The charterparty was on the 1983 BP form with amendments and additions incorporating the October 1984 Marimpex/Hampetrol terms. The contract was governed by English law, but by an amendment to clause 48 the provision as to the exclusive jurisdiction of the High Court in London was deleted and an arbitration clause in substantially the Centrocon form was added.
On 19 February 1985 the chartered vessel "Medusa" was instructed to proceed to Sirri Island where it is usual for vessels to wait pending further instructions to proceed to Kharg Island to lift crude oil from the National Iranian Oil Corporation. The vessel arrived at Sirri Island at 2345 hours on 20 February and Notice of Readiness was tendered at 0001 hours on 21 February. In accordance with clause 18 of the charterparty laytime commenced at 0600 hours on 21 February and the commencement of laytime was confirmed by the charterers' brokers,Hamburger Lloyd, by telex. There then followed a period of delay. The charterers had difficulty in finding a buyer for the cargo. During this period there were frequent telephone conversations between Mr. Reimers, who worked in the operations department of Hamburger Lloyd, and Mr. Protopapas, the chartering manager of the owners' London agents. I shall return later to deal with these conversations and also with some contemporary telexes. At this stage it is sufficient to notice that the vessel was delayed at Sirri Island for nearly two weeks, during which time, at the request of the charterers, a further Notice of Readiness was tendered at 0001 hours on 28 February, and that loading at Kharg Island was not completed until 8 March. Thereafter, the vessel sailed to Ain Sukhna in Egypt, where the cargo was discharged. The discharge was completed on 1 April 1985.
It will be seen at once that the delay at Sirri Island was likely to give rise to a substantial claim by the owners. So it turned out. On 31 July 1985 the owners' London agents sent Hamburger Lloyd a letter enclosing a debit note dated 29 July claiming the sum of US $306,556 odd, which was described as demurrage incurred under the charterparty. The debit note was accompanied by a Laytime Statement, copies of the Notices of Readiness dated 20 February and 23 March, Statements of Facts for Kharg Island and Ain Sukhna and some supporting time sheets. On 22 August, however, Hamburger Lloyd replied as follows (at page 66 of the bundle of documents):
"Charterers have returned to us Owners' claim for demurrage under reference to Clause 54 of the relevant Charter Party. According to this clause the claim should have been presented within 3 months from completion of discharge, fully documented.
Charterers advise that they refuse any demurrage as this claim is timebarred.
On behalf of Charterers we are returning the demurrage claim enclosed to this letter."
Three weeks later, on 10 September 1985, the owners issued an originating summons claiming the relief to which I have earlier referred.
Before I turn to consider the relief which the owners now seek in the notice of appeal, which is not the same as that claimed in the originating summons, I should set out the relevant provisions of the charterparty and refer in more detail to the communications between Mr. Reimers and Mr. Protopapas at the end of February 1985. Clause 17 provided:
"72 running hours, weather permitting, Sundays and holidays included, unless loading or discharging on the Sunday or holiday in question is prohibited by law or regulation at the port of loading or discharge, shall be allowed Charterers for loading and discharging, Charterers having the right of loading and discharging during the night, paying all extra expenses incurred ashore."
Clause 18, so far as material, provided:
"Subject only to Clause 19 hereof
(i) laytime shall at each loading and each discharge port commence at the expiry of 6 hours after Notice of Readiness to load or discharge,…has been received from the Master or his agent by Charterers or their agents, berth or no berth, or when the vessel commences to load or discharge at the berth or other loading or discharging place, whichever first occurs;…"
I need not read clause 19. Clause 20, so far as material, provided:
"Charterers shall pay demurrage at the rate of U.S.$16,500 per running day and pro rata for part of a running day for all time that loading and discharging and any other time counting as laytime exceeds the allowed laytime specified in Clause 17 hereof.…"
So much for the printed clauses with their typed insertions.
I come now to the two additional clauses around which most of the argument before us revolved. Clause 54 provided:
"Demurrage as well as other expenses for Charterers' account are payable after receipt of Owners' Invoice supported by copy of notice of readiness, statement of facts and time sheets from load and discharge port(s) duly signed by shippers respectively receivers or agents and master. Claims to be received by Charterers within 3 months from completion of discharge otherwise such claims are timebarred."
Clause 59, which has the heading "Arbitration Clause", provided:
"Any dispute arising during execution of this Charter Party shall be settled in London. Owners and Charters each appointing an arbitrator—merchant or broker—and the two thus chosen, if they cannot agree, shall nominate a third arbitrator—merchant or broker—whose decision shall be final. Should one of the parties neglect or refuse to appoint an arbitrator within twenty-one days after receipt of request from the other party, the single arbitrator appointed shall be binding on both parties. For the purpose of enforcing awards this agreement shall be made a rule of court.
"Any claim must be in writing and claimants arbitrator appointed within 12 (twelve) months of final discharge and where this provision is not complied with the claim shall be deemed to be waived and absolutely barred. No award shall be questioned or invalidated on the ground that any of the arbitrators is not qualified as above, unless objection to his acting be taken before the award is made."
I must now return to the events at the end of February 1985 when the vessel was at anchor off Sirri Island awaiting instructions. For this purpose it is sufficient to refer to the affidavit of Mr. Protopapas sworn on 25 October 1985, whose factual account of what took place has not been challenged, and also to one or two contemporary telexes. I propose to quote a number of passages from his affidavit, beginning at paragraph 10:
"10. I learnt from Mr. Reimers that the Defendants were experiencing difficulties in finding a buyer for the cargo.…
"11. However, Mr. Reimers assured me that there was no need to worry as the Defendants realised that it was costing them $16,500 a day to keep the vessel waiting. The figure of $16,500 was a reference to the demurrage rate agreed in Clause 20 of the charter-party. He stated that there was every incentive for the Defendants to resolve the delay as quickly as possible.
"12. The vessel remained waiting on standby, on Charterers' instructions. This meant that bunker consumption was higher than if the vessel was simply waiting normally. Therefore the Defendants were informed on 26th February that the Plaintiffs expected extra compensation above the normal demurrage rate in respect of excessive bunker consumption…Mr. Reimers informed me subsequently that the point was difficult and he would need to consider it with the defendants."
It is convenient to break off at this point to refer to the answer which was in fact given by the charterers in respect of the excessive bunker consumption. in the course of a telex sent on 14 March 1985, having dealt with certain other matters, they said:
"However, with all due consideration we find ourselves unable to accept owners demand and we have to point out that any bunker consumption is an owners matter. Responsibility is fully covered by the demurrage earned by the vessel and that no extra charges over and above the demurrage rate can be for our account."
Returning to the affidavit I read paragraph 13:
"On 27th February Mr. Reimers informed me by telephone that the Defendants recognised the Notice of Readiness of 21st February as valid, but wanted a second Notice of Readiness effective from 0001 hours on 28th February which could be used in any demurrage claims by the Defendants against their sub-charterers. Mr. Reimers said that he accepted fully that the Defendants were responsible for waiting time from 0001 hours on 21st February to 0001 hours on 28th February, ie. the 7 days of...
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