Mauritius Oil Refineries Ltd v Stolt Nielsen Nederland BV ('The Stolt Sydness') [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Rix J. |
| Judgment Date | 13 November 1996 |
| Date | 13 November 1996 |
| Court | Queen's Bench Division (Commercial Court) |
Queen's Bench Division (Commercial Court)
Rix J.
Siobhan Healy (instructed by Richards Butler) for the plaintiff.
Steven Berry (instructed by Holmes Hardingham) for the defendant.
The following cases were referred to in the judgment:
Amin Rasheed Shipping Corporation v Kuwait Insurance CoELR [1984] AC 50.
Antclizo Shipping Corporation v Food Corporation of India (“The Antclizo No. 2”)UNK [1992] 1 Ll Rep 558.
Comdel Commodities Ltd v Siporex Trade SA (No. 2)ELR [1991] 1 AC 148.
Dobell (GE) & Co v Steamship Rossmore Co LtdELR [1895] 2 QB 408.
Goulandris Brothers Ltd v B Goldman & Sons LtdELR [1958] 1 QB 74; [1957] 2 Ll Rep 207.
Henriksens Rederi AIS v THZ Rolimpex (“The Brede”)ELR [1974] QB 233.
Interbulk Ltd v Ponte dei Sospiri Shipping Co (“The Standard Ardour”)UNK [1988] 2 Ll Rep 159.
Irish Agricultural Wholesale Society Ltd v Partenreederei (MS Eurotrader)UNK [1987] 1 Ll Rep 418.
Luckenbach Steamship Co v United States (1930) 280 US 173.
Merak, TheELR [1965] P 223 (CA).
Navigazione Alta Italia SpA v Concordia Maritime Chartering AB (“The Stena Pacifica”)UNK [1990] 2 Ll Rep 234.
Noranda Inc v Barton (Time Charter) Ltd (“The Marinor”) [1996] CLC 337.
River Gurara (Owners of Cargo Lately Laden on Board the Ship) v Nigerian National Shipping Line Ltd [1996] CLC 927.
Son Shipping Co v DeFosse & Tanghe (1952) 199 F 2d 687.
Stafford Allen & Sons v Pacific Steam Navigation CoUNK [1956] 1 Ll Rep 104; [1956] 1 WLR 629; [1956] 1 Ll Rep 495 (CA).
Stolt Loyalty, TheUNK [1993] 2 Ll Rep 281.
Vita Food Products v Unus Shipping Co LtdELR [1939] AC 277.
Charterparty — English proper law — US clause paramount — English law charterparty incorporated us clause paramount — Whether arbitration time barred under Hague Rules — Whether US law applied as rules incorporated under, US clause paramount — Materiality of different decisions on rules in different jurisdictions — Whether claim was in respect of goods carried on vessel — Whether court should extend time for commencement of arbitration — Hague Rules, art. III, r. 6 — United States Carriage of Goods By Sea Act 1936, S. 3(6) — Arbitration Act 1950, S. 27.
This was an action raising the issue whether where an English law charterparty incorporated a USA Clause Paramount, a question of construction under the Hague Rules as so incorporated fell to be decided according to English law as the proper law or US law, as the law to which English law would refer.
Under a voyage charter dated 31 January1992 the defendants as time chartered owners of the' stolt Sydness” (“owners”), chartered her to the plaintiffs (“charterers”) for the carriage of a cargo from Argentina to Mauritius. The charter expressly provided for London arbitration and English law. The USA Clause Paramount provided that the Bill of Lading and/or Contract of Affreightment was subject to the Carriage of Goods by Sea Act of the United States and had effect subject to the effect of said Act, which was deemed incorporated therein.
In the event the vessel was delayed both before and after loading by engine trouble. The owners subsequently claimed $16,409.72 demurrage. The charterers made a claim based on an allegation of failure to exercise due diligence to make the vessel seaworthy for her voyage, and wrote to the owners” US agents enclosing a debit note for $69,963.18 in respect of the difference in costs of buying in replacement cargo to satisfy their receivers prior to the arrival of the vessel in Mauritius.
In March 1993 the agents met the charterparty manager of the owners” US agents. They discussed the various claims that the parties had against one another since the owners had three demurrage claims including the one in respect of the “Stolt Sydness”. Neither party did anything for another two and a half years to advance their respective claims. Shortly after that meeting, the one year Hague Rules time bar expired in respect of the “Stolt Sydness” on 7 April 1993. On 18 April 1996 the charterers informed owners that they had appointed an arbitrator in respect of all disputes arising under the “Stolt Sydness” charter.
The issue was whether the plaintiff Was time barred under, the one year time limit contained in s. 3(6) of the United States Carriage of Goods by Sea Act 1936 which reproduced art. III, r. 6 of the Hague Rules. The plaintiffs submitted that s. 3(6) did not apply because the claim in question was a claim not in connection with the cargo carried on the chartered vessel, the “Stolt Sydness”, but in connection with another cargo carried on another vessel, which cargo had by reason of the delay to the chartered vessel to be bought in and carried to the plaintiffs” receivers.
The plaintiff further argued that the plaintiffs claim was not time barred because under US law “suit” in s. 3(6) was confined to litigation with the effect that the whole paragraph had been held not to apply to a claim brought in arbitration: Son Shipping Co v DeFosse & Tanghe (1952) 199 F 2d 687. Under English law, however, “suit” embraced arbitration, so that any. form of proceedings would stop time running: The MerakELR[1965] P 223.
If the plaintiff failed on both those points, it invoked the jurisdiction of the court to extend time for the commencement of arbitration under s. 27 of the Arbitration Act 1950.
Held, dismissing the charterers” application:
1. The charterers” claim was in respect of financial loss caused to them by the late delivery of the cargo carried on board the vessel. The delay was ascribed to the owners” failure to exercise due diligence to provide a seaworthy vessel. That failure did not damage the cargo on board physically, but it was alleged in effect that it made it A less valuable. To mitigate their loss, the charterers bought in cargo and quantified their loss in terms of that substitution. There might be many difficulties in principle or in fact in the path of that claim, but it was a claim in respect of the cargo carried.
2. In the present case the unusual feature was that English and US law had thrown up conflicting decisions on the meaning of art. III, r. 6. The question of construction had to be answered as a matter of the proper law of the contract. English law might have to refer to foreign law, to assist it in discovering the parties” presumed intentions. Indeed, in some cases the English law answer might be profoundly affected by the guidance which foreign law provided. Where, however, the English and foreign law differed as to the meaning to be given to the identical wording of an international rule enacted in both England and the foreign country, it was hard to think that there are any circumstances in which the foreign law's view could prevail over that of the proper law. Whatever might have been the position if the US decision had stood alone, it can hardly be said, in the light of The Merak, that the parties, in choosing English law and the incorporation of US COGSA, must have intended to give precedence to the US decision in Son v DeFosse. The parties had deliberately chosen not only English law, but also London arbitration. Therefore the parties must have intended that failure to arbitrate within the year was a bar within s. 3(6). (The MerakELR[1965] P 223 applied.)
3. In the circumstances there had been a total delay of over three years since time expired, in respect of a claim of uncertain merit but no great size, where the charterers had been seriously at fault, and where the owners had not contributed to the delay but would suffer serious prejudice in seeking to meet the burden of proof with in adequate documentation. The charterers would not suffer undue hardship if the court declined to extend time for the appointment of their arbitrator.
Rix J: If an English law charterparty incorporates an USA Clause Paramount, does a question of construction under the Hague Rules as so incorporated fall to be decided according to English law as the proper law or US law as the law to which English law will refer? The question would appear to have been settled for over 100 years by a remark by Lord Esher MR in G E Dobell & Co v Steamship Rossmore Co LtdELR[1895] 2 QB 408. It has, however, been put into issue in these proceedings. Upon that issue turns in part the question whether the plaintiffs, Mauritius Oil Refineries Ltd, are time barred under the one year time limit contained in s. 3(6) of the US Carriage of Goods by Sea Act 1936 (“US COGSA” or the “Act”) which reproduces art. III, r. 6 of the Hague Rules.
Section 3(6) of the Act provides:
“In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered.”
It is common ground that the “loss or damage” in respect of which the carrier is discharged from all liability is not every kind of loss or damage but must be loss of or damage to or in connection with “the goods” carried or at any rate intended to be carried on the vessel: see Goulandris Brothers Ltd v B Goldman & Sons LtdELR[1958] 1 QB 74; [1957] 2 Ll Rep 207 at p. 222, Interbulk Ltd v Ponte dei Sospiri Shipping Co (“The Standard Ardour”)UNK[1988] 2 Ll Rep 159, Navigazione Alta Italia SpA v Concordia Maritime Chartering AB (“The Stena Pacifica”)UNK[1990] 2 Ll Rep 234, and Noranda Inc v Barton (Time Charter) Ltd (“The Marinor”)[1996] CLC 337. In the present case Miss Healy on behalf of the plaintiffs submits that the claim in question is a claim not in connection with the cargo carried on the chartered vessel, the “Stolt Sydness”, but in connection with another cargo carried on another vessel, which cargo had by reason of the delay to the chartered vessel to be bought in and carried to the plaintiffs” receivers.
So far there is no invocation of US law, and indeed I have no idea whether US law...
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