Ocean Pride Maritime Ltd Partnership v Qingdao Ocean Shipping Company [QBD (Comm)]

JurisdictionEngland & Wales
CourtQueen's Bench Division (Commercial Court)
JudgeRichard Siberry
Judgment Date27 Nov 2007

Queen's Bench Division (Commercial Court).

Richard Siberry QC (sitting as a deputy High Court judge).

Ocean Pride Maritime Limited Partnership
Qingdao Ocean Shipping Co.

Michael Coburn (instructed by Homan Fenwick & Willan) for the claimant.

Rebecca Sabben-Clare (instructed by Middleton Potts) for the defendant.

The following cases were referred to in the judgment:

Bulk Transport Group Shipping Co Ltd v Seacrystal Shipping Ltd (The Kyzikos)ELR [1989] AC 1264.

Glencore Grain Ltd v Flacker Shipping Ltd (The Happy Day) [2003] 1 CLC 537.

Inca Co Naviera SA v Mofinol (The President Brand)UNK [1967] 2 Ll Rep 338.

Motor Oil Hellas (Corinth) Refineries SA v Shipping Corp of India (The Kanchenjunga)UNK [1990] 1 Ll Rep 391.

Shipping Developments Corp v V/O Sojuzneftexport (The Delian Spirit)ELR [1972] 1 QB 103.

Surrey Shipping Co v Compagnie Continentale (France) SA (The Shackleford)WLR [1978] 1 WLR 1080.

Transgrain Shipping BV v Global Transporte Oceanico SA (The Mexico 1)UNK [1990] 1 Ll Rep 507.

Shipping — Voyage charterparty — Laytime — Demurrage — Notice of readiness — Validity — Waiver — Voyage charter fixture concluded through brokers — What terms agreed with regard to commencement of laytime — Whether NOR could validly be tendered at outer anchorage off terminal only when vessel compelled to wait because of congestion at inner anchorage — Whether charterers waived any defect in NOR — Terminal as intended recipient of NOR had implied authority to waive condition as to commencement of laytime — Whether owners entitled to claim damages for breach of “always accessible” provision.

This was a claim by disponent owners against voyage charterers for demurrage, alternatively damages for detention, alleged to have become payable by charterers in respect of the call of the vessel at Guaiba Island Terminal, Sepetiba, Brazil, in November 2005, to load a cargo of iron ore.

The vessel arrived and anchored at the outer anchorage off the Terminal, and tendered notice of readiness (“NOR”), at 0550 on 17 November 2005. Owners contended that laytime commenced, after the expiry of a 12-hour notice period, at 1750 the same day. As a result of congestion at the Terminal, the vessel was unable to berth until 0935 on 27 November 2005. Charterers contended that laytime commenced at 1155 that day, when the vessel commenced loading.

If laytime did commence at 1750 on 17 November 2005, as owners contended, it was common ground that it expired before the vessel berthed, and that demurrage for 8.179861 days, in the sum of US$449,892.35, became payable by charterers.

The voyage charter fixture was concluded through brokers. Although various drafts of a charterparty were prepared and circulated by the brokers after the fixture had been concluded, no charterparty was ever signed by charterers. It was owners” case that, having regard to what they described as the “main terms” of the charter, which allowed for the tender of NOR “Whether in berth or not, whether in port or not, whether customs clearance or not, whether in free pratique or not” (respectively WIBON, WIPON, WCCON, and WIFPON), NOR could validly be tendered at the outer anchorage off the Terminal, as the Master had done; and that time counted from the expiry of the prescribed 12-hour notice period after tender of such NOR. They contended that clause 6B of the charter was agreed in terms which did not conflict with that; alternatively, that clause 6B had to yield to the WIBON, WIPON, WCCON, WIFPON provisions of the “main terms” of the charter.

Charterers contended that clause 6B was agreed in terms which made clear that NOR could only be tendered at the outer anchorage if (no loading berth then being available) the vessel was compelled to wait for a berth at the outer anchorage due to unavailability of space at the inner anchorage. It was common ground that in the present case, it would have been possible, though more costly for owners, for the vessel to have waited at the inner anchorage. Accordingly, so charterers submitted, the NOR tendered at the outer anchorage was a nullity, and time only commenced to count when the vessel berthed and loading commenced some 10 days later.

In the alternative to their primary case that the NOR tendered when the vessel arrived at the outer anchorage was valid, owners contended that charterers must be taken to have waived any defect in the NOR and/or were estopped from contending that it was invalid, by reason of its having been accepted by the Terminal upon tender.

In the further alternative, if the NOR was invalid and charterers were not precluded from so contending, owners claimed damages for detention on the basis that charterers were in breach of another of the “main terms” of the charter, whereby charterers had undertaken that a berth at the Terminal would be “always accessible”.

Held giving judgment for owners on their demurrage claim:

1. There was no inconsistency between WIBON, WIPON and the other provisions of clause 6B as set out in the charterparty. The provisions of clause 6B, with the addition of WIPON, made clear that the vessel was permitted to tender NOR at the outer anchorage (assuming that was, as in this case, a usual waiting place, and irrespective of whether it was within or outside port limits), provided she was compelled to wait there for a berth because of congestion at the inner anchorage (and, of course, at the Terminal itself). But clause 6B as agreed made it clear that NOR could not validly be tendered at the outer anchorage if there was space at the inner anchorage, as it was common ground there was in the present case. Since there was no inconsistency between the WIBON, WIPON “main terms” and the rest of clause 6B, owners” submission that precedence should be given to those main terms did not arise.

2. Accordingly, owners were not entitled to tender NOR when the vessel arrived at the outer anchorage, because the vessel had not been compelled to wait at the outer anchorage on arrival due to unavailability of space at the inner anchorage: on the contrary, she could have proceeded to and waited for a berth at the inner anchorage. Accordingly, on the true construction of the charterparty terms, the NOR tendered on 17 November 2005 was invalid.

3 None of the versions of clause 6B identified the intended recipient of NORs at the loadport or the discharge port. The usual requirement would be for such NORs to be given to charterers, or charterers' agents on their behalf, charterers obviously being owners' contractual counterparties, who would usually be obliged to make the necessary arrangements for the loading and discharge of the cargo. The question was whether in this case, having regard (among other things) to the terms of clause 6A (notices of arrivals), it was contemplated that the recipient, or at least the primary recipient, of the NOR would be the seller; and whether, in this case, that meant or included the Terminal.

4. On its true construction the charter contemplated the tender of NOR to the Terminal, as well, no doubt, as to charterers and/or charterers' agents, and indicated that it was the notification to the Terminal of the vessel's arrival and readiness to load that was important. A NOR communicated to the Terminal, whether by owners/the Master, or by charterers' agents (having received such NOR themselves from the Master/owners), would (if otherwise valid, and subject to any waiver or estoppel) be good NOR for the purposes of the charter. The Terminal, as the intended recipient (or at least the intended primary recipient) of NOR under the charter, must have been impliedly authorised by charterers to waive any defect in the NOR. As a matter of commercial practicality, such an intended recipient of the NOR must have implied authority to waive a condition as to the commencement of laytime. (Surrey Shipping Co v Compagnie Continentale (France) SA (The Shackleford)WLR[1978] 1 WLR 1080andGlencore Grain Ltd v Flacker Shipping Ltd(The Happy Day)[2003] 1 CLC 537applied.)

5. A waiver of a defect in a NOR would be ineffective unless the recipient knew of the facts which made the NOR defective. It could, however, safely be inferred that the Terminal knew that the vessel was at the outer anchorage. There was no evidence that the Terminal was aware of the charterparty terms, but charterers of course were so aware. Some charters allowed for tender of NOR at the outer anchorage, whilst other did not. In the circumstances, if charterers did not communicate the terms of the charter to the Terminal and/or give specific instructions that NOR was not to be accepted from the outer anchorage unless the vessel was compelled to wait there because the inner anchorage was congested, they took the risk that the Terminal would accept a NOR that could have been rejected under the charter, and thereby waive charterers' right to invoke the invalidity of that NOR.

6. It followed that, by reason of the Terminal's acceptance of NOR, as communicated and confirmed by charterers' agents, charterers were to be taken to have waived, and were therefore not entitled to invoke, the invalidity thereof by reason of its tender when the vessel was at the outer anchorage, though not compelled to wait there by reason of congestion at the inner anchorage. Thus owners' demurrage claim succeeded in full.

7. On the true construction of the charter, owners would not, if charterers had not been precluded from invoking the invalidity of the NOR, have been entitled to claim damages for breach of the “always accessible” provision. Where, as here, a vessel was in a position to become an arrived ship, and to tender a valid NOR, so as to start laytime running, but owners for their own reasons choose to instruct the vessel not to proceed to the point where she would become an arrived ship, it could not have been intended that owners should be entitled to sue for damages for breach of a “reachable on...

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