Osmium Shipping Corporation v Cargill International SA
| Jurisdiction | England & Wales |
| Judge | Mr Justice Cooke |
| Judgment Date | 13 March 2012 |
| Neutral Citation | [2012] EWHC 571 (Comm) |
| Docket Number | Case No: 2011 FOLIO 1008 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 13 March 2012 |
[2012] EWHC 571 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon Mr Justice Cooke
Case No: 2011 FOLIO 1008
David Bailey QC and Peter MacDonald Eggers QC (instructed by Holman Fenwick Willan) for the Claimant
John Russell (instructed by Clyde & Co) for the Defendant
Hearing dates: 23 February 2012
Introduction
This is an appeal from an arbitration award dated 27 July 2011 issued by two well known commercial arbitrators with a commercial silk, Stephen Males QC, as the third arbitrator. It raises a point of construction of a charter party on an amended NYPE (1946) form dated 28 August 2008, which was determined as a preliminary point by the Tribunal on an agreed statement of facts.
The agreed statement of facts was as follows:—
1. Osmium Shipping Corporation ("Owners") and Cargill International SA ("Charterers") entered into a charterparty on an amended NYPE (1946) form dated 28 August 2011 ("the Charterparty") in respect of a Panamax bulk carrier "Captain Stefanos" (the " Vessel"). The Vessel was to undertake a laden voyage from South Africa to continent/Mediterranean (intention Italy).
2. On or about 29 August 2008, Charterers sent voyage orders to owners, ordering the Vessel to carry a cargo of coal from Richards Bay, South Africa to Brindisi, Italy and stating "…Suez Canal. Vessel will be routed via Suez Canal…".
3. On 2 September 2008, the Vessel was delivered into Charterers' time chartered service.
4. On 13 September 2008, the Vessel arrived at Richards Bay, loaded a bulk cargo of 61,292 MT of coal and subsequently departed on 14 September 2008, proceeding as instructed by Charterers to her destination via the Suez Canal. In order to transit the Suez Canal, the vessel had to sail through the Indian Ocean and thus off the eastern coast of Somalia. (The Charterers contend that for the avoidance of doubt, Charterers' instructions did not require the Vessel to sail at any particular distance off the eastern coast of Somalia).
5. On or about 21 September 2008, the Vessel was hijacked by pirates off the coast of Somalia. No concession is made by either Owners or Charterers as to the legal nature of the hijacking for the purpose of this Statement of Facts and Preliminary Issue.
6. On or about 6 December 2008, the Vessel was released by the pirates after Owners paid a substantial ransom to the pirates.
7. The Vessel thereafter proceeded initially (by agreement) to Bakar (Croatia), arriving on 25 December 2008 and completing discharge on 28 December 2008, and then to Porto Marghera (Italy), arriving 29 December and completing discharge on 2 January 2009.
8. On 5 January 2009, the Vessel was re-delivered by Charterers to Owners at Malta Bunkering Anchorage.
The preliminary question which the Tribunal were asked to decide was whether or not, on these agreed facts, the Vessel was off-hire between 21 September 2008 and 6 December 2008 whilst subject to the hijacking.
The Charter party
The relevant off-hire provision is clause 56 which provides:—
"Clause 56- Off-hire
Should the vessel put back whilst on voyage by reason of any accident or breakdown, or in the event of loss of time either in port or at sea or deviation upon the course of the voyage caused by sickness of or accident to the crew or any person onboard the vessel (other than supercargo travelling by request of the Charterers) or by reason of the refusal of the Master or crew to perform their duties, or oil pollution even if alleged, or capture/seizure, or detention or threatened detention by any authority including arrest, the hire shall be suspended from the time of the inefficiency until the vessel is again efficient in the same or equidistant position in Charterers' option, and voyage resumed therefrom. All extra directly related expenses incurred including bunkers consumed during period of suspended hire shall be for Owners' account."
It was not contended, and in view of The Saldanha [2011] 1 Lloyd's Rep 187, could not be contended, that the vessel was off-hire pursuant to the standard clause 15 of the NYPE form. In essence, therefore, the point in dispute turned on the construction of the words "capture/seizure" in clause 56, in the context of the clause and the charter as a whole. The Owners submitted that those words were qualified by the further words "by any authority" and that pirates did not constitute such an authority, whereas the Charterers said that the words were unqualified and a seizure by pirates was an off-hire event.
The Owners also relied on other clauses as relevant:—
Clause 16:
"…The act of God, enemies, fire, restraint of Princes, Rulers and People, and all dangers and accidents of the Seas, Rivers, Machinery, Boilers and Steam Navigation, and errors of Navigation throughout this Charter Party, always mutually excepted."
Clause 26:
"Nothing herein stated is to be construed as a demise of the vessel to the Time Charterers. The owners to remain responsible for the navigation of the vessel, her seaworthiness, insurance, crew, acts of pilot and tugboats and all other matters, same as when trading for their own account.
The Conwartime 2004 clause was, despite some unhappy wording, accepted by the parties as incorporated into the charter. This provided:—
(a) For the purpose of this Clause, the words:…(ii) "War Risks" shall include any actual, threatened or reported…acts of piracy…
(b) The Vessel, unless the written consent of the Owners be first obtained, shall not be ordered to or required to continue to or through, any port, place, area or zone (whether of land or sea), or any waterway or canal, where it appears that the Vessel, her cargo, crew or other persons onboard the Vessel, in the reasonable judgement of the Master and/or the Owners, may be, or are likely to be, exposed to War Risks. Should the Vessel be within any such place as aforesaid, which only becomes dangerous, or is likely to be or to become dangerous, after her entry into it, she shall be at liberty to leave it.
(c) The Vessel shall not be required to load contraband cargo, or to pass through any blockade, whether such blockade be imposed on all vessels, or is imposed selectively in any way whatsoever against vessels of certain flags or ownership, or against certain cargos or crews or otherwise howsoever, or to proceed to an area where she shall be subject, or is likely to be subject to a belligerent's right of such and/or confiscation.
(d) (i) The Owners may effect war risks insurance in respect of the Hull and Machinery of the Vessel and their other interests (including, but not limited to, loss of earnings and detention, the crew and their protection and indemnity Risks), and the premiums and/or calls there for shall be for their account.
(ii) If the Underwriters of such insurance should require payment of premiums and/or calls because, pursuant to the Charterers' orders, the Vessel is within, or is due to enter and remain within, or pass through any area or areas which are specified by such Underwriters as being subject to additional premiums because of War Risks, then the actual premiums and/or calls paid shall be reimbursed by the Charterers to the Owners at the same time as the next payment of hire is due, or upon redelivery, whichever occurs first.
(e) If the Owners become liable under the terms of employment to pay to the crew any bonus or additional wages in respect of sailing into an area which is dangerous in the manner defined by the said terms, then the actual bonus or additional wages paid shall be reimbursed to the Owners by the Charterers at the same time as the next payment of hire is due, or upon redelivery, whichever occurs first.
(f) The Vessel shall have liberty:
(i) To comply with all orders, directions, recommendations or advice as to departure, arrival, routes, sailing in convoy, ports of call, stoppages, destinations, discharge of cargo, delivery, or in any way whatsoever, which are given by the Government of the Nation under whose flag the vessel sails, or other Government to whose laws the Owners are subject, or any other Government, body or group whatsoever acting with the power to compel compliance with their orders or directions;
(ii) To comply with the order, directions all recommendations of any war risk underwriters who have the authority to give the same under the terms of the war risks insurance;
(iii) To comply with the terms of any resolution of the Security Council of the United Nations, the effective orders of any other Supranational body which has the right to issue and give the same, and with national laws aimed at enforcing the same to which the Owners are subject, and to obey the orders and directions of those who are charged with their enforcement;
(iv) To discharge at any other port any cargo or part thereof which may render the Vessel liable to confiscation as a contraband carrier;
(v) To call at any other port to change the crew or any part thereof or other persons on board the Vessel when there is a reason to believe that they may be subject to internment, imprisonment or other sanctions.
(g) If in accordance with their rights under the foregoing provisions of this Clause, the Owners shall refuse to proceed to the loading or discharging ports, or any one or more of them, they shall immediately inform the Charterers. No cargo shall be discharged at any alternative port without first giving the Charterers notice of the Owners' intention to do so and requesting them to nominate a safe port for such discharge....
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