Seagate Shipping Ltd v Glencore International AG [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE DAVID STEEL,Mr Justice David Steel |
| Judgment Date | 31 July 2008 |
| Neutral Citation | [2008] EWHC 1904 (Comm) |
| Docket Number | Case No: 2008 FOLIO 363 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 31 July 2008 |
[2008] EWHC 1904 (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: 2008 FOLIO 363
Case No: 2008 FOLIO 388
Bernard Eder Q.C. & Michael Ashcroft (instructed by Hill Dickinson) for the Claimant (Seagate)
Timothy Hill (instructed by Elborne Mitchell) for the Defendant/Claimant (Glencore)
Timothy Young Q.C. (instructed by Holman Fenwick & Willan) for the Defendant (Swissmarine)
Approved Judgment
Hearing date: 8 and 9 July 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.
The court is concerned with back-to-back appeals brought with the leave of Aikens J on questions of law arising out of two arbitration awards in a headcharter reference and in a subcharter reference both dated 19 March 2008 and both made by Messrs. Michael Baker-Harber, Colin Sheppard and Patrick O'Donovan.
The vessel concerned was SILVER CONSTELLATION (formerly ORIENT BRILLIANCE) (“the vessel”). She is a Capesize gearless single deck self-trimming bulk carrier of 146,351 m.t. built in 1986. At the time of the arbitration references, which were heard together (as are these appeals), the owners were Seagate Shipping Ltd (“Seagate”), the charterers were Glencore International AG (“Glencore”) and the sub-charterers were Swissmarine Services SA (“Swissmarine”).
Chartering history
The chartering history as found by the tribunal, and which has some pertinence to the issues that have arisen, was as follows:
i) On 23 June 2003, Orient Brilliance Inc. (“Orient”) purchased the vessel from Swissmarine but chartered her back to Swissmarine for 24 months.
ii) On 24 November 2003, Orient chartered the vessel ahead to Glencore for 24 months plus/minus 2 months with an option to Glencore to extend for a further year.
iii) The terms of these two charters were in effect the same. Delivery to Glencore was to occur on redelivery by Swissmarine then expected between 15 May and 15 September 2005.
iv) However, before delivery to Glencore, the vessel incurred substantial damage in a grounding incident. As a result she was not redelivered by Swissmarine until 4 May 2006.
v) Thereupon, on 8 May 2006, Swissmarine took a subcharter from Glencore on essentially the same terms for a minimum of 18 months up to 24 months.
vi) On 8 August 2006, following completion of permanent repairs, the vessel was delivered by Orient to Glencore under the November 2003 charter and by Glencore to Swissmarine under the May 2006 Charter.
vii) On 19 August 2006 Orient sold the vessel to Seagate and, by a novation agreement, Seagate took all the rights and liabilities of Orient under the head charter.
viii) Subject to off hire periods, Swissmarine is due to redeliver the vessel to Glencore in October / November 2008 and Glencore is due to redeliver the vessel to Seagate in August 2009.
Charterparty terms
These back to back charters were on the NYPE form. The relevant terms (with amendments and additional clauses in bold) were as follows:
“ Time Charter
….That the said Owners agree to let and the said Charterers agree to hire the said vessel, from the time of delivery for about See Clause 34 within below mentioned trading limits. Charterers to have liberty to sublet the vessel for all or any part of the time covered by this charter but Charterers remaining responsible for the fulfilment of this charter Party.
Vessel to be placed at the disposal of the charterers at See Clause 33…
Vessel on her delivery to be ready as per Clause 36 and tight, staunch, strong and in every way fitted for the service… to be employed in carrying lawful merchandise… See Clause 35 in such lawful trades between safe port and/or ports See Clause 35a as the Charterers or their Agents shall direct on the following conditions:
1. That whilst on hire the Owners shall …and maintain her class and seaworthiness and keep the vessel in a thoroughly efficient state in hull, holds and hatch covers machinery and equipment with all certificates necessary to comply with current requirements of all ports of call and canals for the service and at all times during the currency of this Charter, also see Rider Clauses [Line 38]
6. That the cargo or cargoes be laden and/or discharged in any dock or at any wharf or anchorage or place that Charterers or their Agents may direct….
8. That the Captain shall prosecute his voyages with the utmost despatch, and shall render all customary assistance with ship's crew and boats. The Captain (although appointed by the Owners) shall be under the orders and directions of the Charterers as regards employment….
11. That the Charterers shall furnish the Captain from time to time with all requisite instructions and sailing directions, in writing and/or telecommunications and…. The Captain to properly fill in and return all forms furnished by Charterers.
ADDITIONAL CLAUSES TO M.V. “ORIENT BRILLIANCE CHARTER PARTY DATED 24 TH NOVEMBER 2003
29. Detailed description of vessel
MV Orient Brilliance
Panama flag – Built 1986
• Vessel is to be a gearless/singledeck/self-trimming bulk carrier.
• Vessel has clear and unobstructed holds for the loading and discharging of all bulk cargoes allowed under this charterparty
• Vessel is fitted ITF/WWF/AHL in order
• Owners warrant that the vessel is suitable for alternative hold loading for heavy cargoes at time of delivery, in accordance with IMO regulations and its latest amendment applicable.
• Owners warrant that the vessel has a valid certificate of financial responsibility (water pollution) issued by USCG during this Charter period which should apply OPA 90….
30. P. and I. Club Clause and Classification
It is a condition of this Charter that the vessel is and will remain during the currency of charter classed highest class with a full member of the International Association of Classification Societies insured with a P and I Club which is a full member of the International Group of P and I Clubs.
31. Certificates, Laws and Regulations
a) It is a condition of this Charter that the vessel is and will remain in all respects eligible for trading to the ports, places or countries specified or not excluded in this Charter and that at all necessary times vessel and/or Owners shall have all valid certificates records and other documents required for such trade. Furthermore, it is a condition of this Charter that the vessel complies and will continue to comply with all applicable laws and regulations of the ports, places and countries specified or not excluded in this Charter.
b) It is a condition of this Charter that the vessel is and will remain during the currency of this Charter in possession of the necessary valid equipment and all certificates, records and documents necessary to comply with safety and health regulations, international regulations and all current requirements at all ports of call, Suez Canals included.
c) BIMCO ISM Clause
From the date of coming into force of the International Safety Management (ISM) Code in relation to the vessel and thereafter during the currency if this Charter Party the Owners shall procure both the vessel and “the Company” (as defined by the ISM Code) shall comply with the requirements of the ISM Code. Upon request the Owners shall provide a copy of the relevant Document of Compliance (DOC) and Safety Management Certificate (SMC) to the Charterers. Except as otherwise provided in this Charter, loss damage or expense, or delay caused by failure on the part of the Owners or “the Company” to comply with the ISM Code shall be for Owners' account.
e) It is a condition of this Charter that the vessel carries and will carry on board at all times during the currency of this Charter a Certificate of Financial Responsibility acceptable to the United States Coast Guard and all individual States which exercise jurisdiction over the load and discharge port(s) in the ranges and areas specified in this Charter. The Master, upon Charterers request shall make such certificate available for inspection to the charterers or its representative.
35. Lawful trades, non-lawful merchandize (breaking) IWL
a….Trading to be world wide between safe port(s), safe anchorage(s), safe berth(s) always safely afloat, always within IWL.
Subject to Owners approval, case by case, Charters may be allowed to break IWL, …
b. Cargo exclusion…
Cargo to be coal or iron ore, all cargo to be stored and carried in accordance with latest IMO regulations:
The following cargo exclusions are mutually agreed upon:
Asphalt, livestock, hides, acids, and other dangerous, inflammable and injurious cargo, ammonium nitrate, tar in bulk, logs, scrap, motorblocks, turnings, pitch in bulk, arms, ammunitions, explosives, nuclear and radioactive materials, petroleum or its products, sulphur, fishmeal, calcium carbide, reduced iron ore pellets, fines, cement in bulk, sodium sulphate, ammonium, sulphate, calcium hydrochloride, bonemeal, creosoted goods, charcoal, mobile homes, grain expellers, resin in bulk, turpentine, granit, ferrosilicon, soda ash, borax, seedcakes, oil cakes, car and motor vehicles, motor spirits, chilian nitrate, copra and copra products, quicklime, pond coal, pyrites, cement clinker, grain and any other grain products.
36. Crew assistance
Timecharter hire to include rendering all customary assistance by the crew
46. Eligibility
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