Triad Shipping Company v Stellar Chartering & Brokerage Inc. (Island Archon)
| Jurisdiction | England & Wales |
| Judge | Sir Donald Nicholls V-C,Mann,Evans L JJ |
| Judgment Date | 15 June 1994 |
| Court | Court of Appeal (Civil Division) |
| Date | 15 June 1994 |
Court of Appeal
Before Sir Donald Nicholls, Vice-Chancellor, Lord Justice Mann and Lord Justice Evans
Shipping - charterparty - implied right of indemnity
Shipowners had an implied right of indemnity against time-charterers in respect of a loss caused by the charterers' orders as to the employment of the ship, notwithstanding that the orders given were within the terms of the charterparty, provided that the loss was not one which, on a fair reading of the charterparty, the shipowners could be taken to have accepted.
Where, therefore, charterers instructed the master of a ship to discharge cargo at a safe port within the terms of the charterparty and the shipowners in consequence incurred unforeseen liability for spurious claims relating to the cargo, the charterers were bound to indemnify the shipowners against the losses so incurred.
The Court of Appeal so held in a reserved judgment dismissing an appeal by the defendant charterers, Stellar Chartering and Brokerage Inc, against the judgment of Mr Justice Cresswell delivered on March 1, 1993 in the Commercial Court, allowing an appeal by the plaintiff shipowners, Triad Shipping Co, against the arbitration decision on January 21, 1992 of Mr Bruce Anthony Harris that the indemnity claim was not part of the pleaded claim and was in any event time-barred.
Mr Angus Glennie, QC, for the charterers; Mr Timothy Young for the shipowners.
LORD JUSTICE EVANS said that the only issue raised by the appeal was whether the shipowners were entitled to succeed in their claim for an indemnity, which in the absence of any express undertaking in the charterparty had to be based on an implied term.
There was, however, a complicated procedural history. The dispute had been referred to arbitration. The claim for an indemnity had been objected to on the grounds, inter alia, that it had not been pleaded and that in any event it was time-barred. In the result, the arbitrator had rejected it on the latter basis. It had been held that that was wrong as a matter of law.The procedural history was set out in the judgment of Mr Justice Cresswell ((1993) 2 Lloyd's Rep 388).
Mr Glennie had demonstrated, in his Lordship's judgment, that there was no authority which explicitly supported the implied right to an indemnity in a case where the charterparty entitled the charterer to act as he did and the shipowner was bound to obey...
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