Suisse Atlantique Société d'Armement Maritime S.A. v N.v Rotterdamsche Kolen Centrale (Silvretta.)

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeViscount Dilhorne,Lord Reid,Lord Hodson,Lord Upjohn,Lord Wilberforce
Judgment Date31 Mar 1966
Judgment citation (vLex)[1966] UKHL J0331-4

[1966] UKHL J0331-4

House of Lords

Viscount Dilhorne

Lord Reid

Lord Hodson

Lord Upjohn

Lord Wilberforce

Suisse Atlantique Societe d'Armement Maritime S.A.
and
N.V. Rotterdamsche Kolen Centrale

After hearing Counsel, as well on Tuesday the 2d and Wednesday the 3d, days of November last (on which days the Cause was heard by the Appellate Committee), as on Tuesday the 11th, Wednesday the 12th, Thursday the 13th, Monday the 17th, Tuesday the 18th and Wednesday the 19th, days of January last, upon the Petition and Appeal of Suisse Atlantique Societé d'Armement Maritime S.A. of 7 Chemin Messidor, Lausanne, in the Federal Republic of Switzerland, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 11th of March 1965, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Case of N.V. Rotterdamsche Kolen Centrale lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, in the name of the House of Lords, by the Lords of Appeal sitting in the House of Lords during the Dissolution of Parliament, by virtue of a Writing by Her Majesty the Queen under Her Sign Manual, dated the 10th day of March 1966, pursuant to the provisions of the Appellate Jurisdiction Act 1876, That the said Order of Her Majesty's Court of Appeal, of the 11th day of March 1965, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.

Viscount Dilhorne

My Lords,

1

This appeal is from a decision of the Court of Appeal (Sellers, Harman and Diplock L.JJ.) dismissing an appeal by the Appellants from a decision by Mocatta J. on a Consultative Case in relation to a dispute between the parties which has arisen in connection with the charter of a vessel from the Appellants.

2

On the 21st December, 1956, the Respondents agreed to charter a vessel from the Appellants for the carriage of coal from the United States to Europe. That charter was to remain in force "for a total of two years consecutive voyages" (Clause 23 of the charterparty). The vessel had "with all possible dispatch" to "sail and proceed" to a port in the United States and there load on each voyage a cargo of coal "and being so loaded, shall therewith proceed with all possible dispatch" to a port in Europe (Clause 1). She had to be loaded at a specified rate per running day and, if she was detained beyond the loading time, the charterers were to pay $1,000 a day demurrage. In computing the loading time, detention of the vessel in consequence of the happening of certain events was to be disregarded (Clause 3). Similarly if she was detained longer than was required to unload her at the stipulated rate per day and that was not due to strikes, etc., or other causes beyond the control of the charterers, the charterers who were to discharge the cargo were to pay demurrage at the rate of $1,000 a day.

3

On the 16th September, 1957, the Appellants regarded themselves as entitled to treat the charterparty as repudiated by reason of the Respondents delays in loading and discharging the vessel. This was not accepted by the Respondents and on the 8th October, 1957, it was agreed, without prejudice to this dispute, that from thenceforward the charterparty would be carried out.

4

Between the 16th October, 1957, and the end of the charter the vessel made eight round voyages. The Appellants contended that she ought reasonably to have completed each round voyage in 30 or 37 days including loading and unloading. On this basis eight voyages would have taken 240 or 296 days. In fact they took 511 and the difference, the Appellants alleged, was due to delays in loading and unloading for which the Respondents were responsible. The result was, so the Appellants alleged, that the vessel did not make as many voyages as she should have done with the result that they were deprived of the freights they would have earned on 9 or alternatively 6 voyages. On this basis, after giving credit for the demurrage payments received by them, they claimed $772,866·92 and alternatively $476,490·92 from the Respondents.

5

This claim went to arbitration and, at the request of the Appellants, the Arbitrators stated the following questions in the form of a Consultative Case:—

"(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 laydays whereby the Charterparty was (if so proved) rendered less profitable to the Claimants by consequent loss of voyages or voyage time.

(ii) Upon the assumption that such loss of profitability resulted from the Respondents having deliberately (i.e. with the wilful intention of limiting the number of contractual voyages) failed to load and/or discharge the vessel:

( a) With such ordinary despatch as the circumstances permitted

or

( b) within the laydays

the Claimants are entitled to recover any damages suffered by the Claimants through the Charterparty having been rendered less profitable as aforesaid subject to giving credit for the demurrage payments received by them and for any such despatch money as would have been earned by the Respondents.

(B) If the answer to any of the questions under ('A') be 'Yes', the payment by the Respondents and acceptance by the Claimants of demurrage in respect of those periods when the laydays were exceeded preclude the Claimants from recovering any damages otherwise recoverable by them in accordance with such answer or answers."

6

Before Mocatta J. it was agreed that he should confine his decision to answering questions A(i) and (ii) and that the words "or voyage time" at the end of A(i) added nothing.

7

Mr. MacCrindle for the Appellants submitted to your Lordships, as he had in the Courts below, that the Appellants had under the charterparty a contractual right to the number of voyages which would be performed if both parties complied with their obligations; and, secondly, that the Appellants' claim for the loss of freight on the voyages which should have been performed was not limited to the demurrage payments.

8

In my opinion, no such contractual right is to be implied either on the construction of the charterparty or by operation of law. The charterparty might have provided that not less than a certain number of voyages should be accomplished. It did not do so.

9

In support of their second contention the Appellants relied on Reidar v. Arcos Ltd. [1927] 1 K.B. 352 C.A. and, in particular, on the judgment of Bankes L.J. Although he came to the same conclusion as Atkin L.J. and Sargant L.J. he did so on somewhat different grounds. I do not consider that this decision affords any basis for the contention that, where demurrage provisions apply, it is possible to obtain more than the demurrage payments for the detention of a vessel.

10

On these issues I agree with, and do not think that it is necessary to add to, the judgments of the Court of Appeal and Mocatta J.

11

If in this case the Appellants had been able to establish a breach of the charterparty other than by the detention of the vessel, then Reidar v. Arcos is authority for saying that the damages obtainable would not be limited to the demurrage payments. In my opinion, they have not done so.

12

Towards the conclusion of his argument, Mr. MacCrindle sought to put forward a new argument, not advanced in the Courts below nor in the Appellants' Case, to the effect that if the delays for which the Respondents were responsible were such as to entitle the Appellants to treat the charter-party as repudiated, the demurrage provisions did not apply and they were entitled to recover the full loss they had suffered.

13

While ordinarily this would not be permitted, as the result of refusing to allow it in the present case might be that the question would come before the courts on another Consultative Case, involving delay and expense, their Lordships decided to allow the argument to be advanced on condition that Supplemental Cases should be filed, the hearing adjourned and on the Appellants undertaking to pay the costs involved.

14

At the resumed hearing Mr. Brandon sought to sustain this contention. He cited a large number of cases in which it had been held that where there had been deviation of a vessel, the owners of the ship were not entitled to rely on provisions in a charterparty or bill of lading protecting them from liability or limiting their liability for the loss of the kind that had occurred It is not, I think, necessary to refer to all the cases cited. The principle is well established

15

In Hain Steamship Co. Ltd. v. Tate and Lyle Ltd. (1936) 41 Com. Cas. 350 Lord Atkin with whose opinions Lord Thankerton and Lord Macmillan agreed, said at p. 354

"The effect of a deviation upon a contract of carriage by sea has been stated in a variety of cases but not in uniform language … Occassionally language has been used which suggests that the occurrence of a deviation automatically displaces the contract as by the now accepted doctrine does an event which 'frustrates' a contract. In other cases where the effect of deviation upon the exceptions in the contract had to be considered language is used which … shows that the sole effect is, as...

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