Pioneer Shipping Ltd v B.T.P. Tioxide Ltd (Nema)
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS |
| Judgment Date | 22 May 1980 |
| Judgment citation (vLex) | [1980] EWCA Civ J0522-1 |
| Docket Number | SJ/324/1979 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 May 1980 |
[1980] EWCA Civ J0522-1
The Master Of The Rolls
(Lord Denning)
Lord Justice Templemen
and
Lord Justice Watkins
In The Supreme Court of Judicature
Court of Appeal
On Appeal From The High Court Of Justice
Queen's Bench Division
Commercial Court
(Mr. Justice Robert Goff)
MR. A. E.. DIAMOND, Q. C. and MR. H. P.. EDER (instructed by Messrs. Holman, Fenwick & Willan) appeared on behalf of the Appellants
MR. B. RIX (instructed by Messrs. Sinclair Roche & Temperley) appeared on behalf of the Respondents.
This is the first case under the Arbitration Act 1979. It applies to arbitrations commenced on or after the 1st August, 1979. Henceforward no Case Stated. No alternative award. Simply a reasoned decision by the arbitrator. Only to be questioned if the judge gives leave. And then only on a point of law. Usually stopping at the judge, with no appeal to the Court of Appeal.
THE CHARTER OF 2nd NOVEMBER, 1978
The "Nema" flies the Greek flag. She was Liberian owned. On the 2nd November, 1978 the owners chartered the vessel to a British company on a consecutive voyage charter. Under it she was to proceed to Sorel. That is a port in Quebec on the River St. Lawrence. It handles mineral traffic. The port of Sorel is open for seagoing vessels during most of the year, but for three or four winter months only for ice-reinforced vessels. The "Nema" was not ice-reinforced. The "Nema" on each voyage was to load at Sorel 15,000 tons (5 per cent more or less) of titanium slag in bulk: and proceed across the Atlantic to Calais or Hartlepool and there deliver the same. She was to do six consecutive voyages to Sorel and back. Each voyage was to take a minimum of 30 days and a maximum of 50 days. On the return voyages from Europe she was allowed to carry cargo on three voyages but the rest were to be in ballast. The six voyages were to start in April 1979, and end in December 1979. But the charterers had an option to require a seventh voyage which they exercised. So it was for seven voyages.
THE STRIKE CLAUSES
By clause 5 the cargo was to be shipped at the rate of 5,000 tons a working day, except that time lost by the following causes should not be computed in loading or discharging time: These included "strikes, lockouts, stoppages of miners, workmen,lightermen, tugboatmen or other hands essential to the …discharge of the said cargo". By clause 27 in the event of any "general strike - which may prevent the shipment of Titanium Slag under this charter" the owners "… have the option of cancelling this charter".
THE ARBITRATION CLAUSE
The charter incorporated by Centrocon Arbitration Clause read:
"All disputes from time to time arising out of this contract shall, unless the parties agree forthwith on a single Arbitrator, be referred to the final arbitrament of two Arbitrators carrying on business in London, who shall be members of the Baltic and engaged in the shipping and/or mineral trades … with power to such Arbitrators to appoint an Umpire".
Looking ahead, I may say that in this case the parties agreed on a single arbitrator, Mr. Donald Davies. The dispute which arose was referred to him under that clause for "final arbitrament" Note the word "final".
THE FIRST VOYAGE
The "Nema" duly performed the first voyage. She crossed the Atlantic and arrived at Sorel on the 17th May, 1979. She was loaded with Titanium Slag in three days. She left on the 20th May, 1979 for Europe. She returned to Sorel arriving there on the 20th June, 1979, and gave notice of readiness for the second voyage.
But the charterers were unable to load her. They were prevented by a strike. It had started a fortnight earlier on the 6th June, 1979. There was a total shut-down of the Titanium plant at Sorel. No one could tell how long it would last. A previous strike had lasted for nine months.
In strict law the "Nema" should have waited there at Sorelqueueing up there — until the strike ended. This would be at the owner's expense: because the charterers were exempt from any liability for time lost by reason of the strike clause.
After waiting for two days, from the 20th to the 22nd June, 1979 the shipowners sought to cancel the second voyage. They relied on clause 27, suggesting that the strike was a "general strike" (a view which afterwards was seen to be untenable); There followed discussions. The upshot was that within a week they agreed on an important addendum to the original charter.
ADDENDUM NO. 2 DATED 28th JUNE, 1979
Note that this addendum was made eight months after the original charter of the 2nd November, 1978. These were the principal terms:
(1) The second voyage from Sorel was to be postponed. The owners were to be at liberty to take her — for. their own benefit on an intermediate voyage. She was to be at liberty to lift a cargo of iron are from the St. Lawrence to Glasgow. The "Nema" was then to return in ballast to load her next cargo to Sorel. That intermediate voyage was expected to take 30—50 days. But, if the strike ended during her absence — and the charterers had to charter another vessel to lift the titanium slag — the owners had to perform a replacement voyage at a later date (in lieu of the second voyage).
(2) On completion of that intermediate voyage, the "Nema" was to return to Sorel to perform the remaining voyages in 1979, i. e.. voyages 2—7 under the charterparty dated the 2nd November, 1978: and the charterers were to pay an increased freight rate — increased by £1.00 a ton.
(3) The shipowners agreed to lift seven further cargoes in the 1980 season. Commencing laydays 1st April, 1980,cancelling date 30th April, 1980, with freight rate increased by a further £3.50 a ton.
(4) If the strike at Sorel was still in existence when the "Nema" had discharged her cargo of iron are at Glasgow (on the intermediate voyage) "the situation to be discussed without B
obligation".
ADDENDUM NO.3
It so happened, however, that the owners were unable to carry out that proposed intermediate voyage. They were unable to secure a cargo of iron are at that time. So the "Nema" remained at Sorel from the 20th June, 1979 until the 11th July, 1979. The strike was still on — and looked like going on indefinitely. So the parties agreed to an addendum No. 3, under which the charterers agreed to pay the owners compensation at the rate of 02,000 a day from the 1st July, 1979 until the vessel could get an intermediate voyage.
THE INTERMEDIATE VOYAGE
Three weeks later — with the strike still on — the owners did manage to fix the "Nema" for an intermediate voyage. On the 20th July the "Nema" sailed from the St. Lawrence with a cargo of iron ore. She carried it to Glasgow and completed discharging there on the 10th August, 1979. This intermediate voyage was done, of course, by the owners for their own account. But even when she had discharged at Glasgow, the strike at Sorel was still on. So the question at once arose: Was she to go back across the Atlantic to Sorel? That seemed to the owners to be of doubtful value — as there were still no signs of the strike ending. So they asked the charterers for permission to carry out a round voyage for 22 days for the British Steel Corporation. The charterers refused. The utmost they would agree to was for the "Nema" to carry a return cargo across the Atlantic to Sorel — ifshe could get it. The owners felt this was not good enough — as the strike still looked like going on indefinitely. So on the 16th August they fixed the "Nema" for another intermediate voyage. She was to go out to Brazil, pick up a cargo there, and carry it back to Spain. This voyage was expected to last for 45—50 days.
The charterers, however, wanted to get the "Nema" to go back to Sorel — in case the strike ended. So on the 17th August, 1979 they went, ex parte to Mr. Justice Mars—Jones and got an injunction: but on the next day, the 18th August, 1979, inter partes the judge lifted that injunction. He only did so, however, on the owners giving an undertaking that — pending an arbitration — they would not fix the vessel for any other voyages — other than that one already fixed on the 16th August. So on the 16th August, 1979 the "Nema" sailed on her second intermediate voyage — to Brazil and back to Spain. It was not expected to be completed before the end of September 1979.
THE ARBITRATION
Meanwhile, both parties were anxious to know where they stood, The strike at Sorel was still on and showed no sign of finishing. So the parties agreed to an early arbitration, before a single arbitrator — Mr. Donald Davies. They did not make any exclusion agreement under section 4 of the 1979 Act. The arbitration was arranged for the earliest date that could be arranged. It was on Wednesday, 26th September, 1979. It so happened that by that time the "Nema" on her intermediate voyage had done better than expected. She had completed the voyage and discharged her cargo in Spain on the 23rd September, 1979. She was poised to move westwards depending upon the outcome of the arbitration. There was still no prospect of the strike ending. The most optimistic put it as going on for several more weeks.
The hearing took all day on Wednesday, 26th September, 1979 —both sides being represented by counsel — and not finishing until 8.50 p. m.. Bach side asked for a reasoned award.
On Friday, 28th September, 1979 the arbitrator sent a telex to both parties giving his decision:
"The whole of the charterparty contract is now frustrated. I intend to publish a reasoned award in respect of the above matter. Also the other contentions previously before me, about the middle of next week".
That decision meant that the owners were free to fix...
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