Universal Bulk Carriers Pte Ltd v Andre et Cie SA
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE POTTER,LORD JUSTICE CLARKE,MR JUSTICE BENNETT |
| Judgment Date | 10 April 2001 |
| Neutral Citation | [2001] EWCA Civ 588 |
| Docket Number | A3/2000/0148 |
| Court | Court of Appeal (Civil Division) |
| Date | 10 April 2001 |
In the Matter of the Arbitration Acts 1950-1979 and
In the Matter of an Arbitration
[2001] EWCA Civ 588
Lord Justice Potter
Lord Justice Clarke and
Mr Justice Bennett
A3/2000/0148
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM COMMERCIAL COURT
(MR JUSTICE LONGMORE)
Royal Courts of Justice
Strand
London WC2
MR R MAWREY QC (instructed by Duval Vassiliades, London EC3 1LT) appeared on behalf of the Appellant
MR M DAVEY (instructed by Ince & Co, London EC3 1LT) appeared on behalf of the Respondent
Lord Justice Clarke will give the first judgment.
Introduction
1. Universal Bulk carriers Private Limited (“the owners”) were the unsuccessful respondents to arbitration proceedings brought by Andre et Cie SA (“the charterers”) arising out of a charterparty made on 3rd October 1996 between the owners “as disponent owners” and the charterers whereby the charterers chartered a vessel to be nominated for the carriage of a cargo of heavy grain, soyas or sorghums (“HSS”) from the US Gulf Mississippi River to West Malaysia. By their award made and published on 11th May 1999, the arbitrators awarded and directed that the owners should pay the charterers the sum of US$304,425 together with interest and costs. The award was for damages for repudiatory breach of the charterparty on the part of the owners which was accepted by the charterers. The breach was a refusal to nominate a vessel in accordance with the charterparty.
2. The owners appealed against the award with the permission of Aikens J on three issues. On 18th January 2000 Longmore J (“the judge”) dismissed the appeal: see [2000] 1 Lloyd's Rep 459. He granted the owners permission to appeal to this court on the following question which he certified to be of general public importance, namely whether a clause narrowing laycan in a voyage charterparty is, in the absence of words to the contrary, always a condition precedent to an obligation to nominate a vessel.
3. The two other issues argued at the hearing before the judge pursuant to the permission granted by Aikens J were not the subject of permission to appeal to this court and have not been pursued in this appeal. Although the certified question is formulated in general terms, the issue which arises between the parties on this appeal depends on the true construction of clause 42 of the charterparty.
The charterparty
4. The charterparty, which was dated 3rd October 1996, was for a vessel to be nominated and was on an amended Baltimore berth grain Form C of 1913. Clauses 8 to 42 were additional typed clauses. The relevant terms were as follows:
Ie lines 7 to 10.
“That the vessel shall with all convenient speed sail and proceed to 1/2 safe berth(s), 1 safe port [US Gulf excluding Brownsville] or Charterers' option 1/2 safe berth(s) Mississippi River and there load a full and complete cargo of bulk HSS.
Clause 8:
PERFORMING VESSEL TO BE NOMINATED 13 DAYS PRIOR ETA LOADPORT DURING EUROPEAN WORKING HOURS, TOGETHER WITH FULL ITINERARY AND APPROXIMATE LOADABLE CARGO QUANTITY.
Clause 9:
The Owners to give the Charterers ten (10) days' notice of the vessel's expected readiness at the loading port and the approximate quantity of cargo required.
Clause 20:
The Master to make wireless application for the loading port orders to the Charterers 96 hours prior to the vessel's expected readiness, and the Charterers are to wireless the Master the loading-port-orders within 48 hours of receipt of the Master's application.
Clause 40:
On above mentioned cargo Charterers to have the option to ‘Wash Out’ the nominated voyage, which is to be declared by Charterers latest on the day when narrowing of laycan is due. In case of such occurrence, settlement to be made without penalties for both parties, and a commission of 1.25% on 55,000 metric ton to be paid to broker and equally shared between both parties.
Clause 42:
Laycan on first half December to be narrowed to 10 days spread 32 days prior of the first layday.”
The facts
5. Like the judge, I can take the facts essentially as they are set out in the award in tabular form.
“(1) The charterparty was negotiated and concluded by Mr Alberto Molaschi, the chartering broker employed by the charterers in Switzerland, and Mr Andrea Molaschi, his brother, a broker employed by the ship brokers Pacific Dragon Co Ltd in Hong Kong (“Pacific Dragon”) and Mr Raza Taqi, the chief executive of the shipowners in Singapore. It was made for the charterers to fulfil obligations undertaken by them under a sale contract dated 14th December 1995 which was for shipments of cargo during the period 1st -31st December 1996
(2) Charterers sent a telex to Pacific Dragon narrowing the laycan to 1st 10th December 1996 on 24th October 1996 but Pacific Dragon failed to pass the message on due to some technical problem, perhaps with the owners' telex machine. Whatever the explanation, however, it was common ground that no laycan narrowing notice was received by the owners at that time, or indeed by 12 noon 4th November 1996, the last possible day.
(3) On 20th November 1996 Mr Alberto Molaschi telephoned his brother Andrea Molaschi at Pacific Dragon to ask when the charterers could expect to receive the owners' nomination for vessel and what its estimated time of arrival was. Andrea Molaschi then telephoned Mr Raza Taqi and apparently informed him that the laydays was 1st -10th December and asked that the owners nominate a vessel to perform the fixture. The owners refused to accept the notice of narrowing and contended that they were no longer obliged to nominate a vessel because the charterers had failed to comply with the contractual laycan narrowing provision. That was followed up by a telex from the owners in these terms:
‘Received today charterers’ verbal notice of narrowing of laydays to 1/10 December. Please note as per charterparty: “Laycan first half December to be narrowed to 10 days spread 32 prior first layday.' Regret this is not acceptable to owners. Therefore charterers' notice is rejected.
(4) Pacific Dragon replied the same day on the charterers' behalf:
‘Charterers note owners’ last. Dates verbally mentioned this afternoon over the phone were not intended as an official notice of narrowing. On behalf of charterers we must insist that laycan was agreed as first half December to be narrowed to a 10 day spread within that period and that agreement is still valid and in place. If charterers' narrowing option is not exercised, the laycan becomes entirely open within the 15 days spread as fixed, and charterers therefore await owners' nomination within that laycan spread as per charterparty, i.e. latest 13 days prior ETA of the vessel.'
(5) The owners relied on 22nd November noting that the dates mentioned on the telephone were not dates for narrowing laycan and rejecting the charterers' contention as to the continuing 15 days spread. The charterers replied the same day that if the owners were not willing to comply with the charterers' request for the nomination of the vessel with a laycan of 1st -10th December the owners were nevertheless bound to nominate a vessel within a laycan of 1st to 15th December and they requested confirmation that the owners would perform accordingly, failing which they would consider the owners to be in breach of the charterparty.
(6) On 25th November 1996 the owners maintained their position and contended that the giving of the notice of narrowing of laydays was a condition precedent to the requirement that they nominate a vessel.”
Like the judge I can omit certain exchanges which take the matter no further.
“(7) On 29th November 1996 the charterers purported to remind the owners that they had not yet received the nomination of the vessel and warning them that they had until latest midnight on 2nd December in which to nominate, failing which they would be in repudiatory breach. They again asked the owners to confirm that they intended to comply with their obligations.
(8) On 2nd December the owners replied, maintaining that it was the charterers who were in breach of the charterparty in failing to give the owners the required contractual notice to enable the owners to nominate a suitable vessel under the charterparty. They purported to accept that repudiation.
(9) On 3rd December 1996 the charterers replied saying: -
(a) that it was clear that the owners had no intention of nominating a vessel and performing their obligations under the charterparty;
(b) that the owners were wrongfully claiming that the charterers were in repudiatory breach of charterparty; and
(c) that the owners had without any grounds unilaterally terminated the contract and that this itself was a repudiatory breach which the charterers accepted.”
As the judge put it, battle lines were thus drawn.
“(10) On the same day, 3rd December, the charterers chartered the vessel ‘MARIA BOTTIGLIERI’ to carry the cargo in question at a higher rate of freight with a laycan of 10th – 15th December 1996. She completed loading on 29th December, at which point freight was payable under the charterparty for that vessel. The charterers claim the loss of $304,425, which the majority of the tribunal awarded to them.”
It will be apparent that the market was rising.
6. It was not argued before the arbitrators that the charterers at any stage gave a notice narrowing the laycan spread under clause 42.
The Decisions of the Arbitrators and the Judge
7. In the form in which it was before the arbitrators and the judge, the question which gives rise to this appeal...
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