Suisse Atlantique Société d'Armement Maritime S.A. v N.v Rotterdamsche Kolen Centrale (Silvretta.)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SELLERS,LORD JUSTICE DIPLOCK |
| Judgment Date | 11 March 1965 |
| Judgment citation (vLex) | [1965] EWCA Civ J0311-1 |
| Court | Court of Appeal |
| Date | 11 March 1965 |
In the Matter of the Arbitration Act 1950
and
In the Matter of an Arbitration
[1965] EWCA Civ J0311-1
Lord Justice Sellers
Lord Justice Harman and
Lord Justice Diplock
In The Supreme Court of Judicature
Court of Appeal
(From: Mr. Justice Mocatta — Middlesex)
Mr. R. A. MacCRINDLE. Q. C. and Mr. ANTHONY EVANS (instructed by Messrs. Richards, Butler & Co.) appeared on behalf of the Appellants (Claimants; Owners).
Mr. J. F. DONALDSON, Q. C. and Mr. C. S. STAUGHTON (instructed by Messrs. William A. Crump & Son) appeared on behalf of the Respondents (Respondents; Charterers).
By this Consultative Case the Court has been asked to answer altogether three questions but the learned judge's answer to the second one is now accepted, the third was not raised before him, and the matter on which in a this Court a different answer is sought from that given by the learned judge below relates to the first question of law submitted by the two arbitrators: "Whether upon the facts found and upon the true construction of the charter-party dated the 21st December, 1956, and the agreement dated the 8th October, 1957, (A) (i) The Claimants are entitled to recover (subject to giving credit for the demurrage payments received by them) any damages suffered by them by reason of the Respondents having failed to load and discharge the vessel within the lay-days whereby the charter-party was (if so proved) rendered less profitable to the Claimants by consequent loss of voyages or voyage time"; and it has been conceded that the last three words add nothing to the question.
These questions arose in the course of an arbitration between the claimants, Swiss owners of a newly-built vessel called the "General Guisan", and the respondents, a Dutch company of Rotterdam, as charters. The precise position is some what more involved but the question now before us has to be considered on that relationship of the parties under the charter-party dated 21st December, 1956. The detailed facts and the relevant terms of the charter-party are to be found in the documents produced, the charter-party itself and the Case Stated. They are sufficiently extracted in the judgment of Mr. Justice Mocatta, from whom this appeal comes, and I do not repeat them. Shortly stated, the charter-party was for consecutive voyages during a period of two years, for the carriage on each voyage of "a full and complete cargo of coal not exceeding 11,000 tons, nor less than 9,000 tons, quantity at vessel's option, and not exceeding what she can reasonably stow and carry", from some named ports in the United States of America to one safe port in Belgium or Holland or at charters' option one safe German NorthSea port, to which she had to proceed when loaded with all possible dispatch. The return journey was to be in ballast. Loading and discharging ports were to be ordered by the charters. The freight rate was high, probably under the influence of the closing at that time of the Suez Canal; but the demurrage rate possibly had not been relatively increased and remained relatively low. When freight rates fell, as they did soon after the charter-party, it no doubt proved an expensive way of carrying coal across the Atlantic. On the first loading at Norfolk, Virginia, the charterers earned dispatch money, but from then onwards, both in relation to loading and discharging, they invariably exceeded the lay-days, and eight voyages were all that the vessel performed during the two years. The charterers paid over the period nearly 150,000 dollars demurrage, and by reason of the delay far exceeding the lay-days, which were to be calculated at a stipulated rate of loading and discharge, possibly six fewer voyages were in fact performed than the vessel would have performed if the loading and discharging had been completed in the lay times. In those circumstances the owners are not satisfied with the demurrage and claim that they are entitled as damages to the freight which would have been earned on the voyages which could have been fulfilled but were not, within the two years period. Against this claim for freight they are willing to give credit for the demurrage which has been paid.
The charter-party is an adaptation of a printed form of a voyage charter-party entitled "Americanised Welsh Coal Charter", with a number of clauses appended on a typed sheet. It makes no reference to the number of voyages or even a minimum of voyages, and certainly contains no provision such as was indicated by Mr. Donaldson during the course of the argument, which would have made this case very different — an express clause to the effect that the vessel should be allowed so many days on demurrage on each voyage throughout the charter-party. If that had been done then I think the problem with which wehave to deal here would not have arisen. The express stipulation is no other than two years' consecutive voyages. The vessel's voyages were in fact consecutive and she performed them for the stipulated period of two years. In the event of delay provision was made for demurrage. Provision was also made for dispatch.
The entitlement to damages in these circumstances for freight lost on the unfulfilled voyages is based as follows, in the submission of learned counsel for the owners. First, that to exceed lay time is a breach of contract. I think that is well established. The contrary view was considered and rejected by this court in the case of Reidar v. Arcos Ltd. to which further reference will have to be made.
Second, that the charter-party is one complete contract for consecutive voyages and is not to be construed as if it were a series of separate contracts for a single voyage. With that I would agree, and if authority is required to support it it was so decided in Compagnie Primera etc. v. Compania Arrendataria etc. (1940 1 King's Bench page 362).
The third proposition was that demurrage is not an exclusive remedy for a breach of the lay-time provisions: it is so only where the claim is for what was described as "mere detention". That proposition requires further consideration, which I will postpone until later.
The fourth proposition was, that in a consecutive voyage charter-party where there are culpable delays — that is, where in breach of the charter-party there are failures to load or discharge in the lay time — the aggrieved party can aggregate the loss of time for the purpose of computing the loss. If there is liability, that might well be so here, if the total delays were such that at least one extra voyage could have been performed.
Broadly speaking the owners are complaining that not enough voyages have been packed into the two-year period. It must, I think, have been in the contemplation of the parties that the duration of the voyages might, and probably would, vary. Thelay-days might sometimes prove adequate, and indeed more than enough, but more probably demurrage would arise, as delays in loading or discharging would not always be covered by an exception. The frequency of such delays has long resulted in provision for a rate of demurrage, which is an agreed sum to be paid for the detention of vessels over the lay-days. No doubt demurrage is based on a rough and agreed estimation of the owner's loss through the vessel not being able to earn freight elsewhere. There is a passage to that effect in the judgment of Lord Devlin (then Mr. Justice Devlin) which has been cited from Chandris v. Isbrandtsen-Moller (1951 1 King's Bench page 240).
In the circumstances, complete round voyages of varying duration were to be expected in the period of two years. Some might be short and within the lay time. Some might be just in the lay time period. In the majority, it might be assumed, there would be periods of demurrage days to be added on to the sea journey, which itself might vary in duration. Time was not the essence of the contract. There is no stipulation made in the charter-party in respect of the number of voyages to be achieved. It cannot, I think, be said that any breach of contract has been established except the failure on all but the first occasion to load and discharge within the lay time. I can find no other contractual obligation expressed or to be implied. That means that there was delay only and that the vessel was detained. The remedy for that delay is the liquidated damages which had been agreed and fixed by the demurrage rate.
It might be said that that is all there is to this case. But great reliance was placed in the argument by learned counsel on the decision in Reidar v. Arcos, reported (in the Court of Appeal) in 1927 1 King's Bench at page 352. Reliance was placed particularly on the judgment of Lord Justice Bankes. That was indeed a very different case. The difference I think demonstrates the fallacy, I would say, of the submission which has been made to us on behalf of the owners. There a chartered vessel had been sent to Archangel, a White Sea port, to load acargo of timber. She went there in plenty of time within the lay-days to have loaded a full and complete cargo according to the summer trade and the summer marks and the summer carrying capacity of the vessel. But there was delay in loading. The number of lay-days was exceeded in order to load the quantity which was in fact loaded. In the result the vessel sailed with 306 standards short of the 850 standards of timber which she could have loaded because the delay had gone on so long that by the time the vessel sailed she could not reach an English port (in that case Manchester) before the winter regulations came into force. Therefore she could only load, in order to comply with the law here and not infringe it, down to her winter marks, and to that extent she did load a "full and complete...
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