Odfjfell Seachem A/S v Continentale des Petroles et d'Investissements and another
Jurisdiction | England & Wales |
Judge | Mr Nigel Teare QC,Nigel Teare QC |
Judgment Date | 15 December 2004 |
Neutral Citation | [2004] EWHC 2929 (Comm) |
Court | Queen's Bench Division (Commercial Court) |
Docket Number | Case No: 2003 Folio No.966 |
Date | 15 December 2004 |
[2004] EWHC 2929 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr. Nigel Teare QC
Case No: 2003 Folio No.966
Christopher Smith (instructed by Stepehenson Harwood) for the Claimants
Stewart Buckingham (instructed by Ince and Co.) for the Defendants
Hearing dates : 19 November 2004
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 an application by the Claimants for summary judgment pursuant to CPR Part 24 upon the grounds that the Defendants have no real prospect of successfully defending the claim.
The facts and the claim
The Claimants were the disponent owners of the vessel BOW CEDAR and on 20 August 2002 chartered her to the Defendants for the carriage of a cargo of 13,000 mt of jet fuel, 10,000 mt of gasoline and 10,000 mt of gas oil from Bahrain to Cotonou, Benin for a lump sum freight of US$825,000. The voyage charterparty was on the terms of an amended BPVOY4 form and provided for laycan dates of 27–29 August 200I shall refer to the Claimants as the Owners and to the Defendants as the Charterers.
On 27 August at 0130 the vessel tendered notice of readiness and free pratique was granted at 1030 on the same day. Laytime commenced to run on 27 August and expired on 30 August whereafter the vessel incurred demurrage. On 2 September the Charterers sent the Owners an e-mail which stated
"Charterers continued attempts to solve the problems on the purchase of the cargo have failed. Charterers therefore herewith cancel the c/p and release the vessel and ask owners to find alternative employment in order to minimise damages."
On 3 September the Owners accepted the Charterers' e-mail as a repudation of the charterparty and claimed a "cancelling fee" in the sum of US$677,500 made up of the lost freight and demurrage less saved port costs and bunkers. On 5 September 2002 the Owners chartered the vessel by way of mitigation of their losses for a voyage from Karachi to several European ports.
On 18 September 2002 the Owners' Defence Club sought confirmation from the Charterers that they would pay the cancellation fee. On 1 October 2002 the Charterers' solicitors Ince and Co. requested a copy of the charterparty and any other documents supporting the claim from the Club. On 3 October 2002 the Club provided Ince and Co. with a copy of the fixture note and copies of the exchanges between the parties on 2 and 3 September 2002. On 15 October 2002 Ince and Co. requested details of the mitigation fixture and proof that free pratique had been granted in Bahrain. The Club noted the request on 21 October 2002 but it was not until 15 July 2003 that the Club provided a revised damages claim (in the sum of US$551,777.29) which took into account the mitigation voyage.
On 7 August 2003 Ince and Co. said that they were awaiting instruction and added
"We are surprised, in view of the time it took you to present your claim (21 October 2002 until 15 July 2003) that you now require a response within days."
The Club replied on 8 August 2002 pointing out that the claim had been presented on 3 September 2002. On 25 August 2002 the Club further revised the claim (to $547,468.02) and provided voyage extracts and evidence of bunker prices. They enquired whether Ince and Co. had instructions to accept service of proceedings.
On 31 October 2003 the Owners issued their Claim Form and applied for and obtained permission to serve the proceedings out of the jurisdiction. After service was effected in Benin the Charterers acknowledged service on 5 April 2004. By their Defence dated 19 April 2004 the Charterers contended that the charterparty had been frustrated by reason of a cargo not being available. On 5 August 2004 the Owners issued their application for summary judgment and on 10 November 2004 the Charterers sought permission to amend their Defence by removing the defence of frustration and substituting a defence based upon the time barring provisions in the charterparty. Permission to amend was opposed but it was agreed on the hearing of the application for summary judgment that the Court should consider the new defence and then consider whether, and if so on what terms, permission to amend should be granted. In addition to the limitation defence the Charterers raised several points concerning the quantum of the claim for damages which, at the time of the hearing, was reduced to US$474,802.31 plus interest.
The limitation defence
This defence is said to arise under clause 20 of the charterparty which provides as follows:
"20 Claims Time Bar
20.1 Charterers shall be discharged and released from all liability in respect of any claim for demurrage, deviation or detention which Owners may have under this Charter unless a claim in writing has been presented to Charterers, together with all supporting documentation substantiating each and every constituent part of the claim within ninety (90) days of the completion of discharge of the cargo carried hereunder.
20.2 Any other claim against Charterers for any and all other amounts which are alleged to be for Charterers' account under this Charter shall be extinguished, and Charterers shall be discharged from all liability whatsoever in respect thereof, unless such claim is presented to Charterers, together with full supporting documentation substantiating each and every constituent part of the claim, within one hundred and eighty (180) days of the completion of discharge of the cargo carried hereunder."
The Owners' claim is pleaded as a claim for damages flowing from a breach of the Defendants' implied obligation to furnish a cargo and from their repudiation of the charterparty.
On behalf of the Charterers Mr.Stewart Buckingham submitted that the Owners' claim for damages was within clause 20.2 and that where no cargo was discharged there should be implied into clause 20 a term that for the purposes of clauses 20.1 and 20.2 the charterers would be discharged and released from liability unless the claim was presented with the required documentation within 90 days and 180 days respectively "of the date on which the cargo should have been delivered." It was further submitted that the Owners had not done so and therefore that the Charterers were discharged from liability.
On behalf of the Owners Mr.Christopher Smith submitted that no such term should be implied, that the Owners' claim was not within the class of claims to which clause 20 applied, that the Charterers were estopped from relying upon the suggested limitation defence and that the Owners had in any event complied with the requirements of clause 20.
The submissions of Counsel raise two questions as to the construction of a standard form of charterparty which are related.
The first question of construction is whether the Owners' claim for damages is "any other claim against Charterers for any and all other amounts which are alleged to be for Charterers' account under this Charter".
Counsel for the Charterers emphasised the words "any other claim" and "any and all other amounts" which he suggested were words of wide import which covered all claims not within clause 20.1. On the other hand counsel for the Owners emphasised the words "for Charterers' account" which he suggested denoted claims for sums which pursuant to the terms of the charterparty were expressly for the account of the charterers and did not encompass claims for damages.
The second question of construction is whether a term can be implied in to clause 20 to provide a start date for the limitation periods of 90 and 180 days in those cases where the cargo was not discharged, namely, the date on which the goods should have been discharged.
Counsel for the Charterers submitted that such a term should be implied to make the contract work and to give effect to the obvious but unexpressed intention of the parties. Counsel for the Owners submitted that it was not possible to imply such a term. Had such a term been intended it would have been expressed; in the shipping world there is a very good example of it being done, namely, the time bar provision contained in Article III rule 6 of the Hague and Hague-Visby Rules.
Clause 20 is entitled "Claims Time Bar". Whilst the precise scope of clauses of this nature will depend upon the language used in each case the commercial intention underlying such clauses is to ensure that claims are made by the owners within a short period of final discharge so that claims can be investigated and if possible resolved while the facts are still fresh; see Babanaft International Co. SA v Avant Petroleum Inc. [1982] 1 Ll.Rep.448 at p.453 per Bingham J. Although this may well be a desirable objective with regard to all claims by owners against charterers the question whether a limitation clause is intended to apply to all such claims or only some will very much depend upon the language used in the particular case.
Clause 20.2 does not simply refer to "any other claim against Charterers" but to any other claim against Charterers "for all other amounts which are alleged to be for Charterers' account under this Charter". These words clearly encompass claims for sums which pursuant to the terms of the charterparty are expressly for the account of the charterers. This charter contains several such sums eg clause 5.2 —the expenses of loading or discharging at more than one berth, clause 8.1 – the cost of equipment for ship to ship transfers, clause 22.3 – the...
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