Promet Engineering (Singapore) PTE Ltd v Sturge and Others (The Nukila)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE HOBHOUSE,LORD JUSTICE WARD,THE PRESIDENT |
| Judgment Date | 26 March 1997 |
| Judgment citation (vLex) | [1997] EWCA Civ J0326-27 |
| Docket Number | QBCMF 95/1688/B |
| Court | Court of Appeal (Civil Division) |
| Date | 26 March 1997 |
[1997] EWCA Civ J0326-27
The President
(Sir Stephen Brown)
Lord Justice Hobhouse
and
Lord Justice Ward
QBCMF 95/1688/B
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
COMMERCIAL COURT
(Mr Justice Tucker)
Royal Courts of Justice
The Strand
London
MR STEPHEN RUTTLE (instructed by Messrs Norton Rose, London EC3 appeared of behalf of THE APPELLANT
MR D MILDON and MR NIGEL EATON (instructed by Messrs Clyde & Co, London EC3) appeared on behalf of THE RESPONDENTS
Wednesday 26 March 1997
In September 1983 the platform "Nukila" went into service in the Ardjuna Field in the Java Sea. She had just been built by a yard in Singapore. She was a mobile self-elevating accommodation and work platform measuring about 136 feet by 122 feet supported on three tubular leg columns. Each leg had an overall length of 208 feet with a diameter of 8 feet. The sea bed in the Ardjuna Field is soft. To stop the legs sinking into the silt there was connected to the bottom end of each leg a 28ft square spudcan having a depth of 4ft. Each spudcan was effectively a large steel box strengthened with internal bulkheads and brackets. They were accessible through manhole covers on the upper side. Piping systems in the legs and the spudcans enable them to be ballasted.
The platform was mobile because, when the legs were raised, the platform was effectively a large barge or pontoon with sufficient buoyancy to float. Once it had been towed to and positioned at its working location the legs would be lowered so as to rest upon the sea bed and the body of the platform then jacked up on the legs so as to stand clear of the water. The three legs were arranged in a triangle, one at the front of the platform, one at the port side aft and one at the starboard side aft of the platform. The legs passed through apertures in the platform where there are jacks for raising and lowering then and for raising and lowering the body of the platform on the legs. To move the platform or take it back to port the platform body would be lowered into the water and the legs raised. In operation the platform was used as a working platform but it also provided accommodation for some 100 people.
The legs were steel tubes or cylinders made of steel 1 1/4;" thick. The spudcan were constructed around the outside of the foot of the legs so that the legs were continuous through the spudcans. The circular apertures in the top and bottom plating of each spudcan (also 1 1/4" thick) was welded circumferentially to the steel of the leg. The internal bulkheads of the spudcan were themselves welded to the top and bottom plating and, if they abutted onto the leg, to the steel of the leg as well leaving scallops (apertures to relieve stress) at the top and the bottom. Inside the tube of the legs corresponding structures were welded to provide internal support and continuity.
The spudcans and the legs were liable to be subjected to quite major stresses. The sea bed would not be uniform. There might be movement. The effects of the wind and the sea and currents on the upper parts of the structure would also create stresses on the spudcans and where they joined the legs. The design of and specification for the legs and spudcans took account of these stresses. But the actual construction was not in all respects carried out in accordance with the specification.
The circumferential welds attaching the top plates of the spudcans to the legs were not properly profiled. The classification society under whose supervision the platform was built was ABS and all the relevant welding was required to be in accordance with their rules. In fact the welds were not properly profiled that is to say, to quote the report of Dr Timothy Baker dated 27 September 1995, which was the evidence accepted by the trial judge Mr Justice Tuckey, "the profile on the weld between the leg column and the underside of the spudcan top-plate was poor in that there was an abrupt change between the surface of the weld and the parent metal". (p.5) The weld profile should have been controlled and the weld-toes should have been ground. The weld was in a location where there was already a high stress concentration and an inadequately profiled weld would increase this concentration excessively and be likely to shorten the fatigue life of the structure and lead to fatigue cracking. (ib.)
Within the past 40 years metal fatigue has become a well understood process. It arises from repeated cycles of stress exceeding a certain value. It is important to design marine structures so that the stresses in any given location are not unnecessarily raised or (which is the same thing) concentrated. A badly designed or made weld may lead to a concentration of stress which will then over a period of time cause the condition of metal fatigue to arise. Metal fatigue starts with microscopic changes in the structure of the metal which lead to the formation of minute cracks which then grow in size. As they develop over time these fatigue cracks progressively become more detectable, initially by scientific investigation and eventually by the naked eye. Assuming that the cycles of stress continue and that the process of cracking does not itself relieve the stress, the fatigue crack will continue to grow until the metal shears or some other failure of the structure occurs. It will be appreciated that the presence of a fatigue crack will itself concentrate stresses at its tip and thereby lead to an extension of that crack unless and until those stresses are relieved. Similarly the presence of a fatigue crack will weaken the structure and therefore tend to cause other fractures or failures of the structure.
From 1983 to February 1987 the Nukila operated without any untoward incident. But in February 1987, whilst a routine inspection of the legs and spudcans was being carried out by divers, they observed serious cracks in the top-plates of all three of the spudcans. Closer examination revealed that the metal of the legs themselves also contained serious cracks as did some of the internal bulkheads of the spudcans. The condition revealed was dangerous and threatened the whole safety of the Nukila. The platform body was lowered and the legs raised. The state of the legs and the spudcans was fully investigated both at the site and thereafter once she had been towed back to Singapore. The results of the investigation are contained in various reports of the marine technology consultants Veritec, in particular in their report No.87050 dated 7th April 1987.
The findings of that report were not disputed at the trial and were accepted by Tuckey J. The report which includes numerous drawings and photographs details what can only be described as damage to the legs and spudcans. There were circumferential full width cracks having a gap of between 10mm and 16mm in the metal of the legs themselves. In one leg only 30% of the circumference remained intact; in another it was 20%; and in the third only 10% remained. These cracks had themselves led to other large cracks which branched out in different directions through the steel of the legs and the top-plating of the spudcans. There were also cracks, some of them major, in the bulkheads of the spudcans and in the vicinity of some of the piping holes. Some of these fractures were attributed by the report to mechanical stresses created by the weakening of other parts. Some cracks were described as shear fractures, that is to say fractures which resulted from stresses which exceeded the tensile or torsional strength of the metal.
Extensive repairs had to be carried out. It was agreed that they cost S$903,148. At the material time the Nukila was owned by Promet Engineering Singapore PTE Ltd. The owners had insured the Nukila on the London market under time policies for the 12 months from 9th September 1986. The Defendant in the action, Mr Sturge, is the representative underwriter. The time policies were hull and machinery policies of marine insurance; the interest insured is described as "Hull and Materials, Engines and Machinery etc, and everything connected therewith". The Institute Time Clauses Hull (1/10/83) were incorporated with immaterial amendments. These clauses extend the ordinary marine cover so as to include risks which would not otherwise be covered. ( Thames and Mersey Marine Insurance Co v Hamilton Fraser and Co, 1887, 12 App Cas 484.) Thus, in the clause known as the "Inchmaree" clause:
"6.2. This insurance covers damage to the subject matter insured caused by …
6.2.2. Bursting of boilers breakage of shafts or any latent defect in the machinery or hull
…. "
The policies also incorporated the Institute Additional Perils Clauses—Hulls (1/10/83) which in consideration of an additional premium extended the insurance to cover -
"1.1. The cost of repairing or replacing
1.1.1. Any boiler which bursts or shaft which breaks
1.1.2. Any defective part which has caused loss or damage to the vessel covered by clause 6.2.2 of the Institute Time Clauses Hulls 1/10/83,
….
2. Except as provided in 1.1.1. and 1.1.2 nothing in these additional perils clauses shall allow any claim for the cost of repairing or replacing any part found to be defective as a result of a fault or error in design or construction and which has not caused loss of or damage to the vessel."
The owners claimed under the policy for the cost of repairing the legs and spudcans. Their primary claim was made under the Inchmaree clause. They put it very...
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