Stolt Tankers Inc. v Landmark Chemicals SA
| Jurisdiction | England & Wales |
| Judge | Andrew Smith J |
| Judgment Date | 21 December 2001 |
| Judgment citation (vLex) | [2001] EWHC J1221-11 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Folio No: 2001/515 |
| Date | 21 December 2001 |
[2001] EWHC J1221-11
IN THE MATTER OF AN ARBITRATION APPLICATION
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
IN THE HIGH COURT OF JUSTICE
The Honourable Mr Justice andrew Smith
Folio No: 2001/515
Mr T Houghton (solicitor of Holmes Hardingham for the Applicants)
Mr A Baker (counsel instructed by Clyde & Co for the Respondents)
JUDGMENT: APPROVED BY THE COURT FOR HANDING DOWN (SUBJECT TO EDITORIAL CORRECTIONS)
Mr Justice Andrew Smith:
This is an appeal with leave of the Court under section 69 of the Arbitration Act 1996. The award under appeal is a final award dated 5 April 2001 given by Messrs Colin Peerless, William Robertson and Bruce McKenzie, in which they awarded Stolt Tankers Inc. the sum of US$146,580.38 in respect of a demurrage claim. The question of law for decision has been formulated as follows: "whether (in the absence of any relevant provision in the governing voyage charterparty) laytime or time on demurrage is interrupted because, while the vessel is waiting for charterers' berth to become available, she engages in operations in respect of cargo carried under another charterparty". Although questions have been raised by the respondents about the precise formulation of this point of law in the course of argument, it suffices for present purposes.
The appellants are Stolt Tankers Inc., the owners of the vessel the "Stolt Spur". The Respondents are Landmark Chemicals SA, the charterers. The Stolt Spur is a parcel tanker, that is, a tanker vessel designed or adapted to carry several liquid cargoes at the same time. The owners entered into a charterparty of the vessel with the charterers on an amended Asbatankvoy form dated 9 July 1996 for the carriage of a minimum of 4,000 metric tonnes of paraxylene (5% more or less at the charterer's option). The contractual voyage was from Rotterdam to "one safe anchorage Bombay (Mumbai) or one safe berth Pirpau jetty, Bombay at Charterer's option". Demurrage was payable at the rate of US$18,500 per day for any period that loading, discharging and used laytime exceeded the laytime of 80 hours allowed to the charterers. However, the Asbtankvoy form provided that "The Charterer shall not be liable for any demurrage for delay caused by strike, lockout, stoppage or restraint of labor for Master, officers and crew of vessel or tugboat or pilots" and also provided for demurrage at half rate in specified circumstances which do not arise in this case. As to the commencement of laytime when the vessel arrives at a discharge port, the Asbatankvoy form provides that it runs from six hours after receipt by the charterers or their agent of Notice of Readiness or, if earlier, from the vessel's arrival in berth. It continues until the hoses have been disconnected. This charterparty also included various "Landmark Additional clauses", but it is not suggested in the Award or in the submissions made to me that they deal with the question which I have to decide.
The dispute concerns the calculation of laytime and demurrage after notice of readiness was given at Mumbai. The essential facts are as follows:
a) The vessel arrived off Mumbai and tendered notice of readiness at 09.30 on 3 September 1996. That notice of readiness was, as the Arbitrators held, effective.
b) The vessel's intended berth, Pirpau Jetty, could not be reached on arrival because of congestion. Shortly after the vessel's arrival, the agents informed the owners that the berth would not be free for about fifteen days. In the event, it was not available until 20 September 1996.
c) The vessel left her anchorage (which was designated "anchorage B") at 08.18 on 4 September 1996. She shifted to what was designated "anchorage C-2" in order to discharge cargo carried under other concurrent charterparties. After completion of discharge of that cargo on 7 September 1996, the vessel proceeded out to sea for tank cleaning. She returned to anchorage B at 10.06 on 10 September 1996. This period from 08.18 on 4 September to 10.06 on 10 September 1996 has been referred to as the "first period".
d) At 12.18 on 16 September 1996, the vessel again left anchorage B and shifted to an inner anchorage position designated TA-1, in order to load a cargo of rape acid oil for other charterers. She returned to anchorage B at 12.00 on 17 September 1996. This period from 12.18 on 16 September 1996 to 12.00 on 17 September 1996 has been referred to as the "second period".
e) The vessel commenced shifting to Pirpau Jetty to discharge the charterer's cargo at 11.45 on 20 September 1996 and disconnected hoses after completion of discharge at 09.00 on 21 September 1996.
The Arbitrators found that laytime was interrupted during the first period, and the vessel being on demurrage from 01.08 hours on 12 September 1996, the time on demurrage was interrupted during the second period. The effect of their decision on these points was to disallow the owners' demurrage claim as to US$124,123.
The Arbitrators express their reason for this decision as follows. (Although the drafting has gone slightly awry, the thrust of their thinking is, I think, clear.) "We found for the Charterers on this point since it is clearly wrong that laytime can count against them when the vessel was engaged in cargo operations for third parties elsewhere. In fact, the laytime against the charterers ceased at 12.18 hours on 16 September when the vessel left the outer anchorage and proceed to TA-1 inner anchorage for the purposes of loading the rape acid oil. Nor could laytime resume until the vessel had reached Mumbai anchorage "B" at 10.06 hours on 10 September because, in the intervening period, she has proceeded out to sea and engaged in tank cleaning. During that period, it is clear that she was not available to Charterers for discharging the subject cargo".
The owners' complaint is that, the Arbitrators, having held that the vessel's intended berth was unavailable because of congestion during the first and second periods, erred in law when they held that, because the vessel was unavailable for discharge during the first and second period, those periods do not count for the purpose of laytime and time on demurrage. They say that the Tribunal paid no proper regard to the cause of the vessel's delay. Their case is that the relevant principles of law are accurately stated in Cooke on Voyage Charters (1998) at p.328: "If delay is caused by a breach of charter by the shipowner, then clearly liability for demurrage does not accrue. The same is true even where an exceptions clause would relieve the shipowner from liability in damages for that breach: Blue Anchor Line v Alfred C. Toepfer International (The Union Amsterdam) [1982] 2 Lloyd's Rep. 432. For this principle to apply, there must be both wrongful conduct by the shipowner, or by someone for whom he is responsible, and that conduct must be the effective cause of the delay. If either element is lacking, demurrage continues to accrue, even if the charterer has been prevented from performing his part of the loading or discharging process…Where the shipowner's conduct does not amount to a breach (whether excepted or not) but it is not justifiable as a necessary part of the safe and lawful execution of the loading or unloading process (cf. Houlder v Weir [1905] 2 KB 267– shifting ballast) and it has the effect of causing the vessel not to be at the disposition of the charterer, demurrage stops accruing for that period, save, it is submitted, insofar as the shipowner can show that no loading or unloading (as the case may be) would have taken place during that period: see Ropner Shipping v Cleeves Western Valley Anthracite Collieries [1927] 1 KB 879…"
Schofield in Laytime and Demurrage (4 th Edition) is to broadly similar effect: "It is well established that while a charterer's obligation to complete loading or discharging within the prescribed lay times is unconditional, nevertheless lay time will not run whilst there is a delay caused by the fault of the ship owners or those for whom they are responsible. In other words, the delay and the cause of the delay must be contemporaneous…" (at para 4.17). Again, when discussing the decision of the Court of Appeal in Ropner Shipping Company Limited v Cleeves Western Valleys Anthracite Collieries Limited [1927] KB 879, (1927) 27 Lloyd's Law Rep. 317 (which I shall consider below), Schofield suggests that laytime or time on demurrage would continue to run if, the charterers not having cargo available to load, the owners removed the vessel from a waiting berth to bunker, "provided, of course, she was an Arrived ship and providing her removal did not result in a loss of turn" (para 4.34).
The charterers, on the other hand, do not accept these passages in Cooke and Schofield. They contend that the law is correctly stated in Scrutton on Charter Parties (20 th Edition) in the following passage (italics added): "Demurrage becomes payable when the lay-days allowed for loading or unloading have expired. Such lay-days begin when the ship arrives at the place agreed upon in the charter for the commencement of lay-days, and is there ready to proceed to her loading or discharging berth and prepared to load or discharge when she gets there. They run continuously in the absence of express agreement or custom of the port to the contrary from that date. When the lay-days have expired, demurrage in the absence of express agreement runs continuously from the end of the lay-days until the loading or discharging is completed. Nor is the charterer or bill of lading holder excused by the absence of the ship from the port of loading or by the inability of the ship to load or discharge, e.g. if she is damaged by collision or by any other cause, unless due to the default of the shipowner or covered by an express exception; for the charterer is, on the...
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