Transgrain Shipping B.v v Global Transporte Oceanico S.A. (Mexico I)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE MUSTILL,LORD JUSTICE FARQUHARSON,SIR DENYS BUCKLEY
Judgment Date31 Jan 1990
Judgment citation (vLex)[1990] EWCA Civ J0131-6
Docket Number90/0070

[1990] EWCA Civ J0131-6

IN THE SUPREME COURT 0F JUDICATURE

COURT OF APPEAL. (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

MR JUSTICE EVANS

Royal Courts of Justice

Before:

Lord Justice Mustill

Lord Justice Farquharson

Sir Denys Buckley

90/0070

1987 T. No. AC 122/87

Transgrain Shipping B.V.
Plaintiffs/Appellant
and
Global Transporte Oceanico S.A.
Defendants/Respondent.

MR JEREMY COOKE (instructed by Messrs More Fisher Brown) appeared on behalf of the appellants.

MR DAVID HUNT Q.C. and MISS GERALDINE ANDREWS (instructed by Messrs Middleton Lewis Lawrence & Graham) appeared on behalf of the respondents.

LORD JUSTICE MUSTILL
1

This dispute concerns the running of laytime for the discharge of a part—cargo of maize carried on board "MEXICO 1" from Necochea to Luanda during 1984. The following two questions arise for decision, each concerned with the effect of a notice of readiness:

2

1. Where a charterparty expressly relates the commencement of laytime to the giving of a notice of readiness, and where a notice is given at a time when the vessel is not in fact ready to discharge the cargo in question, when does laytime begin?

3

2. Where two part cargoes are carried on the same vessel to the same port for the same charterer, but under contractual arrangements made on separate occasions, is it permissible to regard them as constituting a single cargo, so that a notice of readiness can properly be given as soon as the whole of one part is available, even if part of. the other is not yet available?

4

Logically, the second question should be taken before the first, but all concerned have preferred to proceed in the opposite order and I will follow suit.

5

The facts in outline.

6

The reasons of the two arbitrators from whose joint award these proceedings arise, and the judgment of Mr. Justice Evans who heard the appeal from that award, contain full and clear statements of the facts, and I am glad to adopt what is there written. For present purposes I need do no more than summarise the course of events, as follows:—

7

1. On 27th July 1984 the vessel was chartered by Transgrain Shipping B.V., to carry 5,000 metric tons of bagged maize from Argentina to Lobito. Laytime was calculated at a stipulated tonnage rate per day. The charterparty provided:

  • "Cl. 24 At loading and discharging ports Notice of Readiness shall be delivered in writing at the office of the shippers/receivers or their Agents, unless the vessel has to wait outside the commercial port when the Master has the liberty to cable Notice of Readiness, during normal office hours, whether in berth or not, whether in port or not, whether in free practique or not, and whether custom's cleared or not

  • Cl. 28 Owners have the right to complete the vessel with other lawful merchandise and such merchandise to be absolute harmless and free from any odour. The number of bags signed for on Bill/s of Lading to be binding on vessel and Owners. All cargo on board to be delivered. All holds to be clean and dry and free of smell to Charterers' Inspector satisfaction when tendering Notice of Readiness to load. Cargo battens to be fitted.

  • Cl. 31 Demurrage at loading/discharging port to be paid by Charterers after having received the N.O.R. resp. S.O.F. and further the time sheet issued by Owners or their Agents signed by Shippers/Receivers respectively and Owners or their Agents. If the vessel is despatched earlier than provided for in this Charter Party, despatch money at half demurrage rate is payable by Owners to Charterers on all working time saved both ends.

  • Cl. 44 At loading port, Charterers Agents to be utilized, Owners paying current agency fees and also having the right to appoint their own protecting agents, and at discharge port, Owners agents to be utilized".

8

2. The vessel completed the loading of the maize cargo at Necochea on 20th November 1984 and sailed for her second loading port. On 26th and 27th November there was an exchange of telexes leading to the conclusion of a contract for the carriage on the same vessel of 500 tons of alubia beans from Buenos Aires to Lobito; and at the same time it was agreed that the charterers should have an option to change the discharging port to Luanda.

9

3. The charterers shipped the beans at Buenos Aires. The owners also loaded various cargoes for their own account.

10

4. The charterers exercised their option to have both their cargoes discharged at Luanda rather than Lobito. The vessel arrived at the latter port on 20th January 1985, and on the following day the Master sent a telex to the receivers as follows:

"PLEASE BE ADVISED OP THE ARRIVAL OF THE ABOVENAMED VESSEL IN THE PORT OF LUANDA AT 1200 HOURS 20/1/85.

THE VESSEL IS IN EVERY RESPECT READY TO COMMENCE DISCHARGING CARGO OF

1100 JUTE BAGS ARGENTINE WHITE ALUBIA BEANS (FEIJAO BRANCO) B/L 2 BUENOS AIRIE3/LUANDA

4850 JUTE BAGS ARGENTINE WHITE ALUBIA BEANS (FEIJAO BRANCO) B/L 3 BUSONOS AIRES/LUANDA

98834 NEW JUTE BAGS MILHO PLATA ARGENTINO NR 2 OU MELHOR B/L 1 NECOCHEA/LUANDA

ACCORDING TO CHARTER PARTY DATED 27/7/1984

PLEASE ACKNOWLEDGE RECEIPT OF THIS NOTICE OF READINESS".

11

5. At the time when this telex was sent the cargo of maize was partially overstowed with beans and with cargo carried forthe owners' account.

12

6. It was not until 6th February 1985 that the whole of the maize cargo was cleared of overstowed cargo.

13

7. At 1130 hours on 19th February the removal of the owners' overstowed cargo made the cargo of beans accessible.

14

8. Discharge was not then begun, because the vessel was put out of berth to give priority to another vessel. After a delay of eight days the vessel re-berthed, and discharge of the maize finally began on 19th February at 14.35 hours. It continued very slowly until 25th April 1985.

15

The Notice of Readiness.

16

On these facts, the arbitrators held that the notice of readiness was invalid when given, and ineffective to commence laytime upon the expiry of the stipulated period of notice. This decision was not questioned in argument before us. Rightly so, for it was amply supported by authorities such as Leonis v. Rank [1908] 1 K.B. 499, 517–8; Akt. Nordiska Lloyds v. Brownlie & Co. [1925] 30 Com. Cas. 307; Christensen v. Hindustani Steel [1971] 1 Lloyd's Rep. 395, 399. It is also in accordance with the plain meaning of the chatterparty, for the laytime clause cannot be understood as entitling the owners to advance the running of time by delivering a message unrelated to the true facts.

17

Thus, unless something happened after the notice was sent to make the laytime start, it never started at all, with the consequence not only that the owners have earned no demurrage, but also that they are obliged to pay the charterers dispatch money for the whole of the laytime. Given that the discharge of the maize cargo kept the ship at the port for more than two months this proposition was unlikely to be well received by the arbitrators, and counsel for the charterers prudently did not advance it, conceding that laytime began to run when the discharge of the maize actually commenced. Whilst this makes good sense, it is not easy to work out precisely how the conclusion should be reached. The arbitrators, who had many live issues to discuss, contented themselves with saying that by commencing discharge the charterers plainly waived any entitlement they may have had to a fresh notice of readiness. I confess to some difficulty in finding the necessary elements of a waiver in the bare fact that a discharge was carried out. For example, in Pteroti v. National Coal Board [1958] 1 Q.B. 469, where the charter provided that time would commence 24 hours after the vessel was ready to unload and written notice given, and where discharge began before the vessel had given notice of readiness it was held that laytime did not run until the expiry of 24 hours from the notice. The owners argued that—

"…the charterers by requiring delivery earlier are waiving their right to notice of readiness before they start to unload" (see page 472 of the report);

18

and alternatively that an agreement was to be implied that lay-time was to start from the time at which loading in fact commenced. Each argument was summarily rejected. Since, however, counsel in the present case are at one in stating that Pteroti sheds no light on the problem now before us I say no more about it, and I am content to accept the charterers' concession without further scrutiny, reserving the point for detailed exploration if it should arise in the future.

19

The feal question is whether, as the owners contend, the laytime began to run, notwithstanding the absence of a valid notice of readiness, when the ship actually became ready to discharge the maize on 6th February; and to this question is annexed a subsidiary issue, on whether (if so) the charterers are entitled to the benefit of the interval between the giving of notice and the running of time, stipulated by the last sentence of clause 24. Both the arbitrators and the judge answered this question in the affirmative, but they did so by quite different routes, which I now turn to examine.

20

The arbitrators' solution is set out so clearly in the reasons for their award that it would be wrong to attempt a paraphrase, and I will set out the relevant passage in full:

"We reject that argument and prefer to treat the orginal Notice of Readiness as inchoate becoming complete and effective when the maize cargo became fully accessible. This was an 'f.i.o.s.' charterparty and hence the charterers (in reality the receivers) were responsible for arranging and performing the discharge of the maize. By Clause 5 the cargo was to be 'taken from the holds and...

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