Shipping Developments Corporation v V/O Sojuzneftexport (Delian Spirit)
| Jurisdiction | England & Wales |
| Judge | THE MASTER of THE ROLLS,LORD JUSTICE FENTON ATKINSON,Sir GORDON WILLMER |
| Judgment Date | 01 April 1971 |
| Judgment citation (vLex) | [1971] EWCA Civ J0401-4 |
| Court | Court of Appeal (Civil Division) |
| Date | 01 April 1971 |
[1971] EWCA Civ J0401-4
In The Supreme Court of Judicature
Court of Appeal
Appeal by V/O Sujuzneftexport from judgment and order of Mr. Justice Donaldson on 15th December, 1970.
The Master of The Rolls (Lord Denning),
Lord Justice Fenton Atkinson and
Sir Gordon Willmer.
In the Matter of The Arbitration Act 1950
and
In the Matter of An Arbitration
Mr. MARK SAVILLE (instructed by Messrs. Middleton, Lewis & Co.) appeared on behalf of the Appellants, V/O Sujuzneftexport.
Mr. ANTHONY COLMAN (instructed by Messrs. Thomas Cooper & Co.) appeared on behalf of the Respondents, Shipping Developments Corporation.
We need not trouble you, Mr. Seville.
The "Delian Spirit" is an oil tanker having a capacity of 23,000 tons. On the 20th December, 1963, a voyage charterparty was entered into whereby the ship owners chartered the "Delian Spirit" to the charterers, a Russian concern. It was a port charterparty whereby the "Delian Spirit" was to sail to one or two safe ports in the Black Sea at charterer' option, load a cargo of crude oil, and, having loaded it, to proceed, one or two safe ports in Japan. The charterers ordered the vessel to a port in the Black Sea called Tuapse. It was quite a small port. We have a chart of it. There is a breakwater or mole. Inside the breakwater there is a jetty with berths for four tankers. If the berths are all occupied, oil tankers are not allowed to wait inside the breakwater: they have to remain outside at an anchorage place within the roads.
The "Delian Spirit" arrived at Tuapse soon after midnight of the 18th-19th February 1964 at 0100 hours. There was no berth available. There were four other tankers already lying at the jetty. So she anchored at the anchorage place outside the breakwater but within the bounds of the outer roads. It was the place where tankers in waiting always have to lie. It was 11/4 miles away from the jetty.
On the morning of her arrival on 19th February 1964 at 0800hours, she gave notice of readiness. It was a 6-hours notice which expired at 1400 hours on that day, the 19th February. At that time she was still outside in the roads. She could not get in for 4$ days. It was not until the 24th February of 1964, at 0800 hours that the charterers were able to provide a berthfor her, She berthed alongside the jetty at 1320 hours on that day. The medical officers vent on board. She got free pratique - that is a clean bill of health - at 1600 hours on that day. Then loading started late at night at 2150 hours on the 24th February and was completed within 22 hours, namely, on the 25th February at 1910 hours.
In the first place the ship owners claimed demurrage only. They treated the lay days as starting when she gave notice of readiness on the 19th February. Even though she waited for 4 1/2 days, she afterwards loaded so quickly and made up time so well that after expiry of the lay time, there was only a few hours that she was in demurrage. The ship owners claimed some £1,200 demurrage. The charterers said this was too much. The parties went to arbitration on quantum and nothing else - at that time.
Before the dispute was resolved, there was a decision of Mr. Justice Megaw which induced the ship owners to put their claim differently and to make it much higher. It was the case of ( "The Angelos Lusis" 1964, 2 Lloyds List Reports 28). It concerned the same form of charterparty as this. Mr. Justice Megaw held that, under clause 6 the charterers were bound to provide a berth as soon as the ship arrived off the port. Even though she had not arrived within the commercial area of the port, so as to be an "arrived ship", nevertheless the charterer were bound to provide a berth. If the charterers did not provide a berth, they were liable to pay damages for detention. Having seen that case, the owners amended their claim. Instead of claiming a few hours of demurrage, they claimed that the 4 1/2 days (when she was waiting in the roads at Tuapse) was waiting time caused by the default of thecharterers, because they had not provided a berth for her. They claimed damages accordingly in the sum of £4,365. 8s.10d.
The two arbitrators did not agree. So the case went to the umpire, Mr. Mustill, Q. C., who stated his award in the form of a special case. He found that the vessel was not an "arrived ship" when she was outside anchored in the roads (so the lay time did not begin to run until she got to her berth and no demurrage was payable): but that, following the decision of Mr. Justice Hegaw, the charterers were liable in damages for breach of clause 6 in £4,363. 8s.10d, On appeal Mr. Justice Donaldson differed. He held that the "Delian Spirit" was an "arrived ship" when she was anchored in the roads and gave notice of readiness on the 19th February. The Judge held that the lay time started at that time: and so demurrage was payable for the hours after the lay time expired. But in addition - I emphasise "in addition" - he held that, under Mr. Justice Megaw's decision, the ship owners were entitled to damages for breach of clause 6 in the sum of £4,365. 8s.10d. The charterers appeal to this Court
The relevant clauses are these. Clause 5 gives the lay time: "120 running hours (Sundays and Holidays excepted), weather permitting, shall be allowed the Charterers for loading and discharging, the Charterers having the right of loading and discharging during the night, paying all extra expenses at shore only."
Stopping there, I would say the lay time of 120 running hours was time which was paid for as part of the freight. As Lord Justice Scrutton said in Inverkip Steamship Co. Limited. v. Bunge, 1917 2 K. B. at page 200:
"The sum agreed for freight in a charter covers the use of the ship for an agreed time for loading or discharging, known as the 'lay days' and for the voyage."
No. 6 is the clause which is said to put an obligation on the charterers to provide a berth or place for the vessel to discharge:
"The vessel shall load and discharge at a place or at a dock or alongside lighters reachable on her arrival, which shall be indicated by Charterers, and where she can always lie afloat, any lighterage being at the expense, risk and peril of the Charterers. Charterers have the right of shifting the vessel at port(s) of loading and/or discharge from one loading or discharging berth to another on payment of all expenses incurred.
That clause puts an obligation on the charterers (on arrival of the vessel) to "indicate" a place which the vessel can reach so as to discharge her cargo. The words "on her arrival" at the port do not mean that she is to be an "arrived ship" in the technical sense of being within the commercial area of the port. All that is necessary is that she should have arrived off the port ready to proceed to a berth. The clause is put in so as to protect the owner when the ship arrives off the port - when she is ready to come in to discharge - and save him from having to wait outside to his loss.
Clause 7: "The laying days shall commence from the time the vessel is ready to receive or discharge her cargo, the Captain giving six hours" notice to the Charterers' Agents, berth or no berth, during official office hours."
Due notice of readiness was given here on the 19th February.
Clause 8: "The demurrage shall be payable at the rate of A £985 per running day or pro rata for part of a day."
I propose to consider first when the "Delian Spirit" became an "arrived ship" in the technical sense. We have been referred to the two leading cases, Leonis Steamship Co. Limited. v. Rank Limited. ( 1908 1 K. B. 499), and ( "The Aello" 1971 A. C. 135). Their facts are illuminating. The Leonis arrived at Bahia Blanca. She could not get to the jetty; she had to wait a few ships' lengths off, because there were other vessels alongside. It was held by the Court of Appeal that, although she was not actually at the berth, she was nevertheless an "arrived ship", having arrived within the commercial area of the port. In contrast, the "Aello" was due to go to Buenos Aires, but the nearest she could get was 22 miles away down the River Plate. She had to wait her turn there because she was not allowed to go up the river to Buenos Aires as there was no cargo ready for her. There was only one channel up the river. The House of Lords held that she was not an "arrived ship". She had not got within the commercial area of the port.
The present case seems to me to fall within the "Leonis" and not the "Aello". The "Delian Spirit" had put down anchor as near as she possibly could get to the jetty where she had to go. The only reason she could not get in was because the berths were all occupied by other tankers at the time. She waited at the allotted customary and usual place for tankers waiting to get in. It was the only place. She was not allowed to wait inside the breakwater. She waited within a distance of 1$ miles from the jetty. She herself gave notice of readiness. Applying the classic test of Lord Justice Kennedy in the case of Leonis Steamship Co. Limited. v. Rank, at page 321, the Master had effectively placed "his ship at the disposal of the charterers, the vessel herself being then, so far as she is concerned, ready to load, and as near as circumstances permitted to the actual loading "spot" and in a place where ships waiting for access usually lie." Agreeing with the Judge, I would hold that she was an "arrived ship" on the 19th February when she gave notice of readiness.
But even so, it is plain that the charterers did not indicate a berth reachable on her arrival. So they were in breach of their obligation under clause 6. They did not indicate it for 4$ days. So it is said the charterers are liable in damages amounting to £4,365. 8s.10d.; and are also...
To continue reading
Request your trial
-
Antclizo Shipping Corporation v Food Corporation of India (No. 2)
...135 in which it was held that the absence of a police permit did not prevent a vessel being legally ready to load and The Delian Spirit [1972] 1 QB 103 in which the absence of free pratique also did not prevent the vessel being legally ready to load. He sought comfort however from the judg......
-
The R D (No 1& 2)
... ... must comply with the regulations for shipping on the western Scheldt ... 8 ... ...
-
Oldendorff (E. L.) & Company G.m.b.H. v Tradax Export S.A. (Johanna Oldendorff)
...and umpires and indeed to Judges." 34Further difficulty has been caused by the decision of the Court of Appeal in the Delian Spirit [1971] 1 Lloyd's Rep. 506. The small Black Sea port of Tuapse consists of an inner area enclosed by a breakwater and an outer open area where waiting ships li......
-
Kodros Shipping Corporation v Empresa Cubana de Fletes (No. 2) (Evia)
...charterparty—and not under the "safe port" warranty: as in the Vancouver Strike case (1962) 1 Queen's Bench 42; The Delian Spirit (1972) 1 Queen's Bench 103; The Hermine 1 Lloyd's Law Reports 212; and The Laura Prima (in the House of Lords—and only just reported in Lloyd's Law Reports). Ex......
-
Shipping Update - Court of Appeal Considers Notice of Readiness Under Shellvoy 5
...formality and the need for free pratique will not, at common law, prevent a notice of readiness from being given (see The "Delian Spirit" [1972] 1QB 103). However, the parties are of course free to make other arrangements in their contract, an example being the Additional Clauses attached t......
-
Is The Meaning Of Laytime 'Always Accessible'?
...items that are intended to be interruptions to laytime, and items which are intended to be exceptions. Footnotes 1 The "DELIAN SPIRIT" [1972] 1 QB 103 2 The "LAURA PRIMA" [1982] 1 Lloyd's Rep 1 3 The "FJORDAAS" [1988] 1 Lloyd's Rep 336, The "SEA QUEEN" [1988] 1 Lloyd's Rep 500 but cf The "K......