Whistler International Ltd v Kawasaki Kisen Kaisha Ltd (Hill Harmony)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Potter,Lord Justice Thorpe,Lord Justice Nourse |
| Judgment Date | 20 May 1999 |
| Judgment citation (vLex) | [1999] EWCA Civ J0520-9 |
| Docket Number | QBCMI 1998/0371/3 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 May 1999 |
[1999] EWCA Civ J0520-9
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(Mr Justice Clarke)
Royal Courts of Justice
Strand, London WC2
Lord Justice Nourse
Lord Justice Thorpe
and
Lord Justice Potter
QBCMI 1998/0371/3
Mr T Young QC (instructed by Messrs More Fisher Brown, London EC1) appeared on behalf of the Appellant Defendant.
Mr N Hamblen QC (instructed by Messrs Holman Fenwick Willan, London EC3) appeared on behalf of the Respondent Plaintiff.
Thursday, 20th May 1999
INTRODUCTION
The appellants, Kawasaki Kisen Kaisha Limited ("charterers") appeal from the decision of Clarke J, reported at [1998] 3 WLR 184, by which he allowed an appeal against an award of maritime arbitrators (by a majority of 2 to 1) on a question or questions of law of some importance in the operation of time-charterparties.
The appeal concerns whether the respondents, Whistler International Limited ("owners"), the disponent owners of the vessel "Hill Harmony" (which they had in turn chartered from COSCO of Beijing) are liable in damages for breach of their time-charterparty with charterers in respect of loss and damage caused to the charterers as a consequence of the Master of the vessel refusing to comply with the instructions of charterers that the vessels should proceed on two trans-Pacific voyages from Canada to Japan by the Great Circle (i.e. direct) route, and, instead proceeding by the more southerly rhumb line route. As a result, both voyages took considerably longer than they would have done had the charterers instructions been followed, the first voyage by approximately 7.7 days and thirteen hundred-odd miles and the second by some 4.6 days and eight hundred and sixty-odd miles. The charterers deducted hire in respect of the additional days at sea and the cost of extra bunkers consumed on the grounds that they represented damages for breach by the Master/Owners of the Master's obligation to follow the charterers orders and directions as to employment and to prosecute the voyages with the utmost despatch.
The charterparty in question was in an amended New York Produce Exchange 1946 form dated Tokyo, 21 st October 1993, under which owners chartered the vessel to charterers for a period minimum 7/maximum 9 months. On two trans-Pacific voyages from Vancouver, one to Yokkaichi and the other to Shiogama, the charterers ordered the vessel by a voyage routing instruction to cross the Pacific by the Great Circle route, that order being based on advice from Ocean Routes, a professional weather routing service. On each occasion, the Master refused to obey, his reason being that he had experienced bad weather, including typhoons, which caused substantial damage to the ship on a previous voyage when travelling the northerly Great Circle route.
THE TERMS OF THE CHARTERPARTY
The charterparty included the following clauses:
"8. That the captain shall prosecute his voyages with the utmost despatch, and shall render all customary assistance with ship's crew and equipment. The captain (although appointed by the owners) shall be under the orders and directions of the charterers as regards employment and agency …
15. That in the event of the loss of time from deficiency of men … including strike, default of master, owners and crew … the payment of hire shall cease for the time thereby lost …
16. … errors of navigation throughout this charter party always mutually excepted.
26. Nothing herein stated is to be construed as a demise of the vessel to the time charterers. The owners remain responsible for the navigation of the vessel, insurance, crew and all other matters same as when trading for own account.
50. The new both-to-blame collision clause, new Jason clause, new S.A., U.K., Canadian and general paramount clause (as applicable) are deemed to be incorporated in this charter party and in all bills of lading issued under this charter party where applicable.
55. In the event of loss of time either in port or at sea, deviation from the course of the voyage or putting back whilst on voyage, caused by sickness of or an accident to or misconduct by master/officers/crew … or by reason of the refusal of master or officers or crew to perform their duties or of an accident or breakdown to vessel.. the hire shall be suspended from the time of inefficiency in port or at sea, deviation, or putting back until vessel is again in the same position or equidistant position from the destination, and voyage resumed therefrom, and direct expenses incurred including bunkers consumed during such period of suspension shall be the owners' account."
Article IV of the Hague Rules and of the Hague-Visby Rules (incorporated into the charterparty by virtue of Clause 50) provides inter alia:
"2. Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from—(a) Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship…
4. Any deviation in saving or attempting to save life or property at sea or any reasonable deviation shall not be deemed to be an infringement or breach of these Rules or of the contract of carriage, and the carrier shall not be liable for any loss or damage resulting therefrom."
It is to be noted that the charterparty did not include a clause requiring the owners to follow the routing advice of Ocean Routes.
THE ARBITRATION
Owners having claimed from charterers the amount of the extra hire and bunkers deducted, both claims were referred to arbitration by the same tribunal, namely Mr Graham Clarke, Mr Christopher Moss and Mr William Robertson. The claims were heard together. There was no oral hearing, the arbitrators admitting a brief statement in somewhat general terms from the master which they plainly regarded as inadequate. (Owners had raised questions as to the master's competence with COSCO but had not commenced arbitration proceedings against them and had been unable to obtain and disclose additional documents which might have been relevant).
There was, however, available a telex sent by the master to Owners prior to commencement of the first voyage, in which he gave as his reason for taking the southerly route his experience on an earlier voyage on a northerly Trans-Pacific route, prior to the charter in question, in which the vessel had suffered serious damage in bad weather, while experiencing much better weather on a more southerly course sailed subsequently. The arbitrators concluded that the master
"was not prepared to risk repeating the experience which the vessel had suffered…by taking the more northerly route recommended by Ocean Routes. We did not consider that this amounted to a satisfactory reason in itself for disregarding the charterers' instructions."
In relation to the second voyage, the arbitrators rejected the contemporaneous reason advanced for refusing to follow the charterers' instructions, namely the master's concern over the state of the vessels' auxiliary boiler and stated:
"We suspected in any event that the real reason for this choice of course had been precisely the same as that given for the earlier disputed voyage, namely the vessel's unfortunate experience on the voyage No. 9. In the case of the second disputed voyage, if the Master's decision had indeed been based on the experience of voyage No. 9 as before, it was even more difficult to justify than the decision in relation to the first disputed voyage given the fact that the voyage commenced in late April when the weather could be expected to have been significantly better on the recommended route."
They went on to refer to evidence that during the period 1 st March to 31 st May 1994 Ocean Routes had provided advice to some 360 vessels routed from the Pacific Northwest to northerly China, Korea or Japan and which had all sailed the northern route without apparently encountering any particular difficulty.
Nonetheless the arbitrators recorded elsewhere in their award that:
"There was little doubt in our minds that on the evidence before us the experience which the vessel had had on this voyage was decisive in determining the master's choice of route….."
The judge recorded in his judgment (p.190H), as was accepted by counsel for the parties, that the arbitrators in effect held that the reason why the master refused to follow Ocean Routes' recommendation was the vessel's experience on voyage No. 9.
The charterers asserted before the arbitrators that, by reason of the master's decisions, owners were in breach of their obligation under Clause 8 to follow charterers' orders and directions as to employment, or alternatively in breach of their obligation to prosecute the two voyages with the utmost despatch. Owners on the other hand argued that, whilst the employment of the vessel was a matter for charterers, the question of how the charterers' instructions were to be executed in terms of navigation remained the responsibility of the master, whose decision to take the route(s) which he did was a navigational decision.. Further or alternatively the owners claimed to be protected from liability by the exception in Article IV rule 2(a) of the Hague Rules (quoted above) as protecting owners from a decision of or action by the master which was an act, neglect or default in the navigation of the ship.
So far as the allegation of breach in failing to follow charterer's orders as to employment is concerned, the decision of the majority...
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