Surrey Shipping Company Ltd v Cie Continentale (France) SA (Shackleford)

JurisdictionEngland & Wales
JudgeLORD JUSTICE BUCKLEY,SIR DAVID CAIRNS,LORD JUSTICE BRIDGE
Judgment Date12 May 1978
Judgment citation (vLex)[1978] EWCA Civ J0512-8
Docket Number1977 SJ No. 198A
CourtCourt of Appeal (Civil Division)
Date12 May 1978

In the Matter of the Arbitration Act 1950

and

In the Matter of an Arbitration

Between:
Surrey Shipping Company Limited
Claimant Owners (Respondents)
and
Compagnie Continentale (France) SA
Respondent Charterers (Appellants)

[1978] EWCA Civ J0512-8

Before:

Lord Justice Buckley

Lord Justice Bridge

and

Sir David Cairns

1977 SJ No. 198A

In The Supreme Court of Judicature

Court of Appeal

On Appeal from the High Court of Justice

Queen's Bench Division

(Commercial Court)

(Mr. Justice Donaldson)

MR. B.A. RIX (instructed by Messrs. Richards, Butler & Co., Solicitors, London) appeared on behalf of the Charterers(Appellants).

MR. A. DIAMOND Q.C. and MR. IAN HUNTER (instructed by Messrs. Holman, Fenwick & Willan, Solicitors, London) appeared on behalf of the Owners (Respondents).

LORD JUSTICE BUCKLEY
1

I have asked Sir David Cairns to read the first judgment in this case.

SIR DAVID CAIRNS
2

This is an appeal from Mr. Justice Donaldson's decision on a Special Case arising from a charterparty arbitration. It relates to laytime.

3

The award in the form of a Special Case was made by a commercial Arbitrator, Mr. Donald Davies, and raised two questions. The first was when laytime began to run. The second was whether shifting from one berth to another on three occasions interrupted laytime. The first issue was by far the more important financially. It affects the damages payable to the extent of about $160,000. The second issue involves only about $1000 but is important in principle because shifts in the circumstances in which they took place in this case are of frequent occurrence.

4

The arbitrator's tentative conclusion was in favour of the claimant shipowners on the first point but in favour of the respondent charterers on the second one. The learned judge's decision was in favour of the shipowners on both points. The charterers appeal on both points and the shipowners by a respondent's notice rely, in addition to the grounds on which the judge decided in their favour, on some alternative grounds.

5

The charter was a Baltimore Form C Grain Charter for the Motor Vessel Shackleford chartered for the carriage of grain from U.S. Gulf to Constanza. It contained this clause, numbered 13: "Notification of the vessel's readiness at port of discharge must be delivered at the office of 'AGROEXPORT BUCHAREST/CONSTANZA' or their Agents 'NAVLOMAR CONSTANZA', at or before 4 p.m. (or at or before 12 noon if on Saturday) on official working days, vessel also having been entered at the Custom House and the laydays willthen commence at 8 a.m. on the next business day, whether in berth or not, whether in port or not, whether in free pratique or not".

6

The following facts were found in the Award except that certain documents were not set out in the Award but by agreement were placed before the judge. Discharging laytime calculated in accordance with the charterparty was 11 days 4 hours 50 minutes.

7

The vessel arrived at Constanza roads and anchored at 0826 hours on Friday, 15th October, 1976. Notice of readiness was immediately given by the Master by cable while the vessel was still in the roads. The notice was accepted at the same time (i.e. 0826 hrs. on 15th October, 1976) by Agroexport, the Receivers. Subsequently a formal notice of readiness was completed on the printed form of the Shipowners. This was addressed to Agroexport c/o Navlomar and read: "I hereby tender you the m.v. 'Shackleford' as being ready in all respects to commence discharging cargo at 0826 hrs on 15th day 10 month 76 year". It was signed by the Master. It was returned to the Master signed and stamped by Agroexport against the rubric "Time accepted on 15th Oct. 1976 at 0826 hrs".

8

On arrival at Constanza roads the vessel was at the usual waiting anchorage at the port of Constanza and was at the immediate and effective disposition of the charterers. However, she was unable to proceed straight to a discharging berth on account of congestion.

9

Free pratique and Customs entry could not be obtained from the authorities at Constanza in accordance with the port regulations in force at this time until the vessel had berthed. Customs entry was obtained automatically as soon as Customs clearance hadbeen obtained. In order to obtain Customs clearance the vessel was required to supply a copy of the cargo manifest and a list of bonded stores.

10

In the ordinary way Customs entry at Constanza is a pure formality which has no bearing upon the date or order in which the vessel berths at a discharging berth or the speed at which she discharges and will not otherwise cause delay. Port regulations provide that Customs entry cannot be obtained until the vessel has berthed and may be obtained at any time up to 24 hours after berthing without delay to the vessel. The order of berthing at a discharging berth is governed primarily by the date of arrival of the vessel at Constanza roads.

11

On 23rd October Navlomar, the Receivers' agents at Constanza and the person to whom notice of readiness had to be given, cabled the Master stating: "RECEIVERS CONTACTED YOUR TIME SHOULD COUNTS AS PER CH/PARTY TERMS FROM ARRIVAL STOP BERTHING UNDECIDED REVERTING ON 26TH". This was followed on 28th October by a further cable from Navlomar addressed to the Owners' London Agents stating: "SHACKLEFORD ALL FORMALITIES INCLUDING ENTRANCE CUSTOM HOUSE AFTER BERTHING TIME COUNTING FROM ARRIVAL ON ROADS ACCORDING TO THE C/P REVERTING REGARDS".

12

Subject to an excursion to sea in order to ride out very heavy weather, the vessel remained at anchor in the roads until 26th November, 1976. Had the vessel been at a discharging berth during this period, she could have been worked except during the periods of rain specified on the Owners' time sheet.

13

At 1514 hours on 26th November the vessel left her anchorage in the roads and proceeded to berth No. 31 for bunkers. She was at this berth when free pratique and customs clearance wereobtained at 1820 hours and customs entry was effected at the same time.

14

At 0957 hours on 27th November, bunkering having been completed, the vessel moved to a layby berth alongside another vessel. There she remained until 0849 hours on 30th November when she moved to her discharging berth.

15

Discharging began at 1400 hours on Thursday, 2nd December, 1976, and continued until 0620 hours on Tuesday, 28th December, 1976.

16

During the period from 15th October to 2nd December, 1976, the Receivers took a number of vessels out of turn for the purposes of discharging.

17

The Arbitrator's finding contained in paragraph 20 of the Award was as follows:- "The Owners and/or Master relied upon the Receivers' acceptance of the Notice of Readiness and/or Navlomar's cables of 23rd October to the Master and of 28th October to the Owners' agents, in as much as they made no attempt to procure an earlier berth, for example, a bunkering or watering berth so that Customs entry might be obtained at an earlier date. At the above times Navlomar was acting as agents for the Receivers".

18

The learned judge held that the clear meaning of clause 13 was that notice of readiness could not be given until the vessel had been entered at the custom house and that laytime would not begin to run until 8 a.m. on the next business day. But he went on to hold that because the notice given on the 15th October was accepted on behalf of the charterers on not less than three occasions and that acceptance was relied on by the ship owners in the manner set out in paragraph 20 of the Award, the charterers were estopped from contending that laytime did not begin to run until customs entry had been obtained. It was on that ground thathe held in favour of the shipowners that laytime began to count on 16th October.

19

As to the shifts, on the basis that laytime had begun to run on 16th October, all the shifts occurred during laytime or demurrage. It is well established that laytime, once begun, is not interrupted except in accordance with exceptions contained in the charterparty or custom of the port unless the shift is for the owner's own purposes or due to his fault. Here there was no provision of the charterparty and no established custom of the port under which the time of the shifts fell to be excluded, the first shift did not deny the charterers the use of the vessel and neither of the later ones was for the shipowners' own purposes. For those reasons the learned judge held that the time of none of the shifts was to be excluded from laytime or demurrage.

20

In this court neither side accepts the judge's construction of clause 13. For the owners it is contended that the words "vessel also having been entered at the custom house" are over-ridden by the words "whether in berth or not, whether in port or not, whether in free pratique or not". I do not see how that could possibly be so. The latter words do not conflict with the earlier words, but make it clear that laydays are to commence at the time specified notwithstanding that certain events, which might in some circumstances delay the commencement of laytime, had not taken place. If at Constanza it was to be expected that all these events would have taken place before customs entry it merely means that the later part of the clause has no effect.

21

Mr. Diamond told us that a decision in his favour on this point of construction was of much greater importance to his clients than a decision on the estoppel issue. Similar clauses appear inmany charter parties but the facts which give rise to the allegation of estoppel are peculiar to this case. Mr. Diamond said further that arbitrators in this country and in the United States have considered the clause and have differed in their interpretation of it. Like Mr. Justice Donaldson, I quite fail to see how any reasonable construction of the clause could fail to give effect to the words relating to customs entry.

22

For the charterers, Mr. Rix's...

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