Poseidon Schiffahrt GmbH v Nomadic Navigation Company Ltd (Trade Nomad)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE HIRST,LORD JUSTICE MUMMERY,LORD JUSTICE BUXTON |
| Judgment Date | 18 February 1999 |
| Judgment citation (vLex) | [1999] EWCA Civ J0218-5 |
| Docket Number | QBCMF 97/1217/3 |
| Court | Court of Appeal (Civil Division) |
| Date | 18 February 1999 |
[1999] EWCA Civ J0218-5
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(MR JUSTICE COLMAN))
Royal Courts of Justice
Strand
London WC2
Lord Justice Hirst
Lord Justice Mummery
Lord Justice Buxton
QBCMF 97/1217/3
MR M COLLINS QC (Instructed by Messrs Lawrence Graham, London, EC3) appeared on behalf of the Appellant
MR A BAKER (Instructed by Messrs Middleton Potts, London, EC1) appeared on behalf of the Respondent
Thursday 18 February 1999
This is an appeal with the leave of the judge against the judgment of Colman J in the Commercial Court dated 1 August 1997, [1998] 1 Lloyds Law Reports 57, whereby he dismissed the appellant charterers' appeal from the final arbitration award of Mr Bruce Harris dated 31 January 1997, on a point identified in the Notice of Motion as the "Clause 3(i) point".
The question of law which was certified by the judge to be of general public importance pursuant to section 1(7) of the Arbitration Act 1979 was as follows:—
Whether Clause 3(i) of the Shelltime 4 form of time charter has any application to defects in the vessel existing as at the time of her delivery as distinct from defects which came into existence after her delivery.
The relevant facts as found by the arbitrator can be summarised as follows:—
"a. The vessel (TRADE NOMAD) was chartered by Trade & Transport inc., as agents for the Respondent Owners, to the Appellant Charterers on the `Shelltime 4' form of time charter party, dated 17 May 1989.
b. She was delivered into the charter on 4 June 1989.
c. In August 1989, on the occasion of a call of the vessel to Wilhelmshaven, the Charterers inspected the vessel and found her crude oil washing system to be in an unsatisfactory condition.
d. On 30 August 1989 the Charterers gave notice to the Owners under Clause 3(iii) of the charterparty, calling on them to remedy specific defects in her crude oil washing system.
e. The defects of which the Charterers complained existed as at the date of delivery of the vessel into the charterparty.
f. 30 days passed following the receipt by the Owners of that notice by the expiry of which the Owners had failed to demonstrate to the Charterers' reasonable satisfaction that they were exercising due diligence as required by Clause 3(i) to remedy those defects.
g. The Owners only demonstrated the exercise of due diligence in that regard on 10 October 1989."
The relevant charterparty provisions, including of course the critical clause 3(i), are as follows:—
"1. At the date of delivery of the vessel under this charter
(a) she shall be classed: A.B.S.
(b) she shall be in every way fit to carry coal or crude oil or crude condensates or dpp, but not inerted.
(c) she shall be tight, staunch, strong, in good order and condition, and in every way fit for the service, with her machinery, boilers, hull and other equipment (including but not limited to hull stress calculator and radar) in a good and efficient state.
(d) her tanks, valves and pipelines shall be oil-tight.
(e) see description clause'.
(f) she shall comply with the regulations in force so as to enable her to pass through the Suez and Panama Canals without delay.
(g) she shall have on board all certificates, documents and equipment required from time to time by any applicable law to enable her to perform the charter service without delay.
(h) she shall comply with the description appended hereto.
2. (a) At the date of delivery of the vessel under this charter
(i) she shall have a full and efficient complement of..crew …
3. (i) Throughout the charter service Owners shall, whenever the passage of time, wear and tear or any event (whether or not coming within Clause 27 hereof) requires steps to be taken to maintain or restore the conditions stipulated in Clauses 1 and 2(a), exercise due diligence so to maintain or restore the vessel.
(ii) If at any time whilst the vessel is on hire under this charter the vessel fails to comply with the requirements of Clauses 1, 2(a) …. then hire shall be reduced to the extent necessary to indemnify Charterers for such failure. If and to the extent that such failure affects the time taken by the vessel to perform any services under this charter, hire shall be reduced by an amount equal to the value, calculated at the rate of hire, of the time so lost.
Any reduction of hire under this sub-Clause (ii) shall be without prejudice to any other remedy available to Charterers, but where the reduction of hire is in respect of time lost, such time shall be excluded from any calculation under Clause 24. [Detailed description and performance]
(iii) If Owners are in breach of their obligation under Clause 3(i) Charterers may so notify Owners in writing; and if, after the expiry of 30 days following the receipt by Owners of any such notice, Owners have failed to demonstrate to Charterers' reasonable satisfaction the exercise of due diligence as required in Clause 3(i), the vessel shall be off-hire, and no further hire payments shall be due, until Owners have so demonstrated that they are exercising such due diligence.
Furthermore, at any time while the vessel is off-hire under this Clause 3 Charterers have the option to terminate this charter by giving notice in writing with effect from the date on which such notice of termination is received by Owners or from any later date stated in such notice. This sub-Clause (iii) is without prejudice to any rights of Charterers or obligations of Owners under this charter or otherwise …."
The description referred to in Clause 1(h) included a requirement for the provision of crude oil washing facilities to defined standards.
Clause 27, which is referred to in Clause 3(i), provided for a large number of exceptions to Owner's liability unless otherwise expressly provided in the charter for any loss or damage etc. arising from a large number of specified circumstances, including fire, collision or stranding, accidents at sea, explosions, and several other instances all of which would constitute external occurrences.
Clause 3(ii) of this selfsame form of time charter had been considered previously by Colman J and by the Court of Appeal in an earlier case called The Fina Samco [1994] 1 Lloyds Law Reports 153 (Colman J) and [1995] 2 Lloyds Law Reports 344 (CA).
At first instance in that case Colman J also considered the construction of Clause 3(i) obiter, and came to a conclusion similar to that which he reached in the present case; it was this obiter dictum which led the arbitrator, contrary to his apparent preference, to rule against the charterers.
When the case went to the Court of Appeal this decision...
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