Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd v FR8 Singapore Pte Ltd [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE DAVID STEEL,Mr Justice David Steel |
| Judgment Date | 21 October 2008 |
| Neutral Citation | [2008] EWHC 2480 (Comm) |
| Date | 21 October 2008 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2007 FOLIO 1414 |
[2008] EWHC 2480 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice David Steel
Case No: 2007 FOLIO 1414
Approved Judgment
Hearing dates: 12 September 2008
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 action concerns two cargoes, one of High Speed Diesel (“the Gasoil cargo”) and one of Mogas (“the Mogas cargo”) carried on the vessel ETERNITY from India and the UAE to South Africa in October 2006.
The voyage was performed pursuant to a charterparty dated 19 September 2006 between the Claimants as Charterers and the Defendants as disponent Owners.
The charterparty was on an amended BPVoy4 form. It provided as follows:-
“1. CONDITION OF VESSEL
Owners shall, before, at the commencement of, and throughout the voyage carried out hereunder, exercise due diligence to make and maintain the Vessel, her tanks, pumps, valves and pipelines tight, staunch, strong, in good order and condition, in every way fit for the voyage and fit to carry the cargo stated in Sections C and D of Part 1 with the Vessel's machinery, boilers and hull in a fully efficient state, and with a full complement of Master, officers and crew who are fully qualified (as evidenced by internationally recognised certification and, where applicable, endorsements), and are experienced and competent to serve in the capacity for which they are hired. Owners undertake that the vessel shall be operated in accordance with the recommendations set out in the 1996 Edition of ISGOTT, as amended form time to time.
7.1 LAYTIME/DEMURRAGE
Charterers shall be allowed the number of hours stated in Section 1 of PART 1 [84 hours], together with any period of additional laytime arising under Clause 7.3.1, as laytime for loading and discharging and for any other purposes of Charterers in accordance with the provisions of the Charter.
7.4 Charterers shall pay demurrage at the rate stated in Section J of PART 1 per running day [$28,500], and pro rata for part of a running day, for all time that loading and discharging and any other time counting as laytime exceeds laytime under this Clause 7. If, however, demurrage is incurred by reason of the causes specified in Clause 17, the rate of demurrage shall be reduced to one-half of the rate stated in Section J of PART 1 per running day, or pro rata for part of a running day, for demurrage so incurred.
9. DOCUMENTATION
9.1 Owners undertake that for the duration of this Charter the Vessel shall have on board all such valid documentation as may, from time to time, be required to enable the Vessel to enter, carry out all required operations at, and leave, without let or hindrance, all ports to which the Vessel may be directed under the terms this Charter….
10. DRUGS AND ALCOHOL POLICY
10.1 Owners undertake that they have, and shall maintain for the duration of this Charter a policy on Drugs and Alcohol Abuse applicable to the Vessel (the “D & A Policy”) that meets or exceeds the standards in the OCIMF Guidelines for the Control of Drugs and Alcohol Onboard Ship 1995 as amended from time to time.
10.2 Owners shall exercise due diligence to ensure that the D & A Policy is understood and complied with on and about the Vessel. An actual impairment, or any test finding of impairment, shall not in and of itself mean that Owners have failed to exercise due diligence…..
12. INERT GAS SYSTEM (“IGS”)
12.1 Owners undertake that the Vessel is equipped with a fully functional IGS which is in full working order, and is or is capable of being fully operational on the date hereof and that they shall so maintain the IGS for the duration of the Charter, and that the Master, officers and crew are properly qualified (as evidenced by appropriate certification) and experienced in, the operation of the IGS. Owners further undertake that the Vessel shall arrive at the loading port with her cargo tanks fully inerted and that such tanks shall remain so inerted throughout the voyage and the subsequent discharging of the cargo. Any time lost owing to deficient or improper operation of the IGS shall not count as laytime or, if the vessel is on demurrage, as demurrage.
12.2 The Vessel's IGS shall fully comply with Regulation 62, Chapter 11–2 of the SOLAS Convention 1974 as modified by its protocol of 1978 and any subsequent amendments and Owners undertake that the IGS shall be operated by the Master, officers and crew in accordance with the operational procedures as set out in the IMO publication entitled “Inert Gas Systems” (IMO 860E) as amended from time to time…..
37. UNITED STATES COAST GUARD (“USCG”) CERTIFICATE OF FINANCIAL RESPONSIBILITY / UNITED STATES COAST GUARD REGULATIONS
37.1 Owners undertake that the vessel shall carry on board a valid USCG Certificate of Financial Responsibility (“COFR”) as required under the US Federal Oil Pollution Act 1990 and that for the duration of this Charter the said COFR shall be maintained in all respects valid for trading to ports in the USA.
37.2 Owners undertake that the Vessel shall for the duration of this Charter either comply with all applicable USCG Regulations or carry on board appropriate waivers from the USCG if in any respect whatsoever the Vessel does not so comply.
38. EXCEPTIONS
38.1 The provisions of Articles III (other than Rule 8) IV, IV bis and VIII of the Schedule to the Carriage of Goods by Sea Act, 1971 of the United Kingdom shall apply to this Charter and shall be deemed to be inserted in extenso herein. This Charter shall be deemed to be a contract for the carriage of goods by sea to which the said Articles apply, and Owners shall be entitled to the protection of the said Articles in respect of any claim made hereunder.”
The IMO publication referred to in clause 12.2 of the charterparty provides as follows;
“ 3.12 Isolation of cargo tanks from the inert gas deck main ( regulation 62.11)
3.12.1 For gas-freeing and tank entry some valve or blanking arrangement is always fitted to isolate individual cargo tanks from the inert gas main.
3.12.2 The following factors should be considered in choosing a suitable arrangement:
.1 protection against gas leakage or incorrect operation during tank entry;
.2 ease and safety of use;
.3 facility to use the inert gas main for routine gas-freeing operations;
.4 facility to isolate tanks for short periods for the regulation of tank pressures and manual ullaging;
.5 protection against structural damage due to cargo pumping and ballasting operations when a cargo tank is inadvertently isolated form the inert gas main.
3.12.3 In no case should the arrangement prevent the proper venting of the tank
5.1 Inerting of tanks
5.1.3 When all tanks have been inerted, they should be kept common with the inert gas main and maintained at a positive pressure in excess of 100 mm water gauge during the rest of the cycle of operation.
6.2 Product contamination by other cargoes
Contamination of a product may affect its odour, acidity or flashpoint specifications, and may occur in several ways: those relevant to ships with an inert gas main (or other gas line) interconnecting all cargo tanks are:
…..
.2 Vapour contamination through the inert gas main. This is largely a problem of preventing vapour from low flashpoint cargoes, typically gasolines, contaminating the various high flashpoint cargoes listed in 6.1.1, plus aviation gasolines and most hydrocarbon solvents. This problem can be overcome by:
.2.1 removing vapours from low flashpoint cargoes prior to loading; and
.2.2 preventing ingress of vapours of low flashpoint cargoes during loading and during the loaded voyage.
When carrying hydrocarbon solvents where quality specifications are stringent and where it is necessary to keep individual tanks positively isolated from the inert gas main after a cargo has been loaded, pressure sensors should be fitted so that the pressure in each such tank can be monitored. When it is necessary to top up the relevant tanks, the inert gas main should first be purged of cargo vapour. ”
Following the vessel's arrival at her intended discharge port, Mossel Bay, the Charterers contend that (a) the Gasoil cargo was found to be damaged in that its flashpoint was significantly lower than upon loading and (b) the Mogas cargo was found to be damaged in that it had suffered an increase in its density and/or a deterioration in its octane rating and/or had diminished in quantity.
Whilst in any event relying on the fact of the damage as sufficient evidence of the Owners' actionable breach, the Charterers contend that the damage was caused by contamination of the Gasoil cargo with vapour phase low boiling point gasoline components from the Mogas cargo which resulted from the Owners' failure adequately to separate the vapour phases of the two cargoes from the common Inert Gas (IG) line. The Charterers submit that this resulted from the unsatisfactory state of the vessel's IG isolation valves and/or control mechanisms and/or from the crew's inexperience and/or incompetence in handling two disparate cargoes.
Thus, the Charterers contend that the Owners were in breach of their duties as bailees and/or carriers for reward and/or to deliver the cargoes in the same good order and condition as they were in when shipped and/or in breach of the allegedly strict obligations imposed pursuant to clause 12.1 and/or 12.2 (and the provisions of the IMO Guidelines...
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