Time bar – Inter Club Agreement 1996 and Centrocon arbitration clause

Charter on an amended NYPE 1946 form provided that all cargo claims to be settled as per ICA 96. Time bar provision in ICA 96 bars recovery unless written notification of the cargo claim is given within 24 months of the date of delivery. Clause 39 of charter (an amended Centrocon arbitration clause) provided for all disputes to be dealt with by arbitration and arbitrator to be appointed within 12 months of final discharge. Issue arose as to which time bar applied.

Held:

The time bar in ICA 96 applied. Reading the terms of the ICA 96 and charter as a whole, there was conflict between the two time bar provisions. The ICA 96 dealt with such conflict in clause 2 by providing that its time bar provision shall apply notwithstanding any provision of the charter or rule of law to the contrary.

(MH Progress Lines SA v Orient Shipping Rotterdam BV: Orient Shipping Rotterdam BV v Nordana Project & Chartering, Commercial Court, [2011] EWHC 3083)

Deck cargo – application of Hague-Visby Rules

Loss of part of cargo of sand filter tanks. Issue between cargo interests and carrier as to whether the cargo was deck cargo and whether it was subject to the Hague-Visby Rules.

Held:

The cargo was carried on deck and the master's remark on the bill of lading about the tanks being carried on deck should be interpreted as a statement (within the Rules) that the cargo would be so carried. Previous dealings between the parties also justified this interpretation. The cargo was therefore deck cargo falling within the exception to the application of the Hague-Visby Rules.

(Sideridraulic Systems SpA and anor v BBC Chartering & Logistic GmbH & Co KG, Commercial Court, [2011] EWHC 3106)

FOB sale – delivery period extension

Appeal from decision of GAFTA Board of Appeal in relation to FOB contract for sale of rice. Buyers failed to provide a vessel to lift the goods during the original delivery period and claimed that sellers were in anticipatory breach of the contract in failing to confirm load readiness of cargo.

Issue on appeal was whether buyers had given valid notice to extend the original delivery period. Board of Appeal had concluded that they had not.

Held:

It was unclear from the relevant messages whether an extension was being claimed for various reasons:

  • One message claimed an intention to extend depending on the sellers' response, not an actual extension.
  • The messages imposed different response requirements.
  • The messages referred to different contracts and extension periods.

The Board of Appeal had not erred in law and the appeal was dismissed.

(PEC Ltd v Thai Maparn Trading Co Ltd, Commercial Court, [2011] EWHC 3306)

P&I insurance cover – denial of cover – estoppel

Dispute between M and third party following an incident. The defendant Club confirmed that M was covered by the Club, which would provide security for M. The Club subsequently concluded that M was not covered but agreed to continue the cover under reservation of rights and to assist with defending the third party's claim. Settlement was agreed and the Club now sought to recover from M the amounts paid to the third party and legal costs incurred.

The issue was whether the Club were estopped from denying cover given their earlier representation as to cover. This was an appeal from an arbitration award which held there was no estoppel.

Held:

  1. There had been no error of law by the arbitrators, nor any serious irregularity leading to substantial injustice.
  2. The arbitrators were entitled to find that although there had been an unequivocal representation of cover, there had been no reliance on it by M.

(Micoperi SRL v Shipowners' Mutual Protection & Indemnity Association (Luxembourg), Commercial Court, [2011] EWHC 2686)

Demurrage claim – documents only arbitration - duty of fairness between parties

Appeal from arbitration award alleging serious irregularity by arbitrators in that they failed to act fairly between the parties. Alleged that when dealing with a demurrage claim on documents alone, the arbitrators failed to enquire whether the claimant was advancing an argument based on a reported decision of which the arbitrators knew the claimant was unaware.

Held:

  1.  In light of the written submissions it was impossible to suggest that the arbitrators failed to give the charterers a reasonable opportunity of putting their case.
  2. The duty of fairness in section 33 Arbitration Act 1996 does not require the arbitrators to alert charterers to an argument they had missed.
  3. As there was no breach of section 33 there was no serious irregularity or substantial injustice.

(ED & F Man Sugar Ltd v Belmont Shipping Ltd, Commercial Court, [2011] EWHC 2992)

Refund guarantees – construction – on demand

Refund guarantees provided to claimant buyers in respect of contracts for building of tankers. Contracts terminated and refunds claimed under the guarantees. Payment in part only made. Claim for full payment, and counterclaim by defendants for return of payments as made under a mistake of fact or law.

Held:

The claim for full payment succeeded:

  1. There was no variation to the shipbuilding contract to allow separate refund guarantees for the individual instalments, rather than one guarantee for all instalments.
  2. On their true construction, the refund guarantees were demand guarantees and the defendants' liability was not conditional on the builder being liable under the shipbuilding contracts.
  3. Each guarantee provided for the amount payable on demand to automatically increase as each instalment of the contract price was received by the builder.
  4. The shipbuilding contract was not terminated prematurely.
  5. The claimants did not have a duty of disclosure to the defendants. 6 Other defences put forward in relation to rectification, estoppel and the Statute of Frauds also failed.

(WS Tankship II BV v (1) The Kwangju Bank Ltd (2) Seoul Guarantee Insurance Company, Commercial Court, [2011] EWHC 3013)

Collision case – costs – offer to settle

Decision in collision case that both parties equally to blame. Parties unable to agree costs. Offer made by defendant alleged not to comply with the requirements of CPR 61. Claimant also alleged that the defendant had not made an effective counterclaim and so claimant was entitled to all its costs prior to the date of any successful offer. Defendant asserted that it was too late to raise a time bar point in respect of its counterclaim.

Held:

  1. Although offer did not comply with two of the elements of a valid Part 61 offer, it was the third offer of three. The previous two had set out all elements and this offer referred back to the previous chain of correspondence. Offer was therefore valid and successful and the defendant was entitled to all his costs from 21 days after the offer was made.
  2. Although the defendant had not issued its own claim form, its counterclaim was set out in its Statement of Case. Any time bar point should have been taken promptly after service of the Statement of Case. As it was not, the appropriate costs order was for each party to pay 50% of the other's costs incurred prior to the expiry of the offer.

(MIOM 1 Ltd and Isle of Man Steampacket Company Ltd v Sea Echo E.N.E, Admiralty Court, [2011] EWHC 2715)

Amoco Claims Clause – whether applicable to port expenses

A VLCC was chartered for a voyage to Caofeidian, China, freight to be payable at WS160. Worldscale rates usually include port costs, but Worldscale did not have an established rate for Caofeidian. Post-fixture correspondence from charterers stated that "We agree port expenses to be for charterers' account ... Charterers' account to be invoiced separately with relevant supporting documents". The C/P incorporated the Amoco Claims Clause, which stated:

"Owners agree to invoice charterers for all charges and claims ... within 60 90 days from the completion of discharge. Charterers will not be responsible for any charges or claims not submitted within the time specified."

Owners submitted an invoice for port costs 155 days after discharge. Charterers claimed it was time-barred.

Held:

Claim for port costs time-barred:

  1. The post-fixture correspondence was not a separate agreement: it was an amendment to or variation of the C/P.
  2. The Amoco Claims Clause should be construed restrictively against charterers. However, the clause had to be given its natural meaning and it clearly applied to the claim for port costs.

(London Arbitration 10/11 (2011) 836 LMLN 3)

Personal injury – cruise ship - negligence

The claimant suffered injury after slipping on some liquid in a ship's restaurant. The first instance judge dismissed the claim and held that the carrier had discharged their duty of care by having an effective system in place, which meant that the liquid could not have been on the floor for a significant length of time.

Held:

The appeal succeeded:

  • Claim was governed by the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1974.
  • The burden of proof was on the claimant to show on the balance of probability that the accident was caused by the carrier's negligence. In all the circumstances, there was a prima facie case of the carrier's negligence.
  • The evidence of a usually good system of inspection and observation was insufficient to displace the prima facie case. There was no evidence of the actual implementation of the system at the time of the accident, nor of how long the liquid had been on the floor. The first instance judge had therefore not been entitled to infer that the spillage occurred only a short time before the accident.

(Janet Dawkins v Carnival PLC (T/A P&O Cruises), Court of Appeal, [2011] EWCA Civ 1237)

Non-payment of hire – waiver – valid termination

Bareboat charter on BARECON 2001 for 60 months. Purported termination of charterparty by owners for non-payment of hire. Tribunal held that termination was valid and owners were entitled to compensation. Charterers appealed.

Held:

Appeal dismissed:

  1.  Owners were entitled to terminate the charterparty on the basis of non-payment of hire for the period 1-15 June 2009, pursuant to a demand made on 2 June 2009.
  2. A further demand made on 8 June 2009 for hire for the period of 16-30 June 2009 did not amount to a waiver of the right to terminate. The time for compliance with the 2 June demand had not expired by 8 June and therefore the right to terminate had not arisen. It could not therefore have been waived.
  3. The judge also stated (obiter) that (a) there was no binding authority that an unambiguous demand for rent operated as an automatic waiver of the right of forfeiture, and (b) even if such a principle applied in landlord and tenant law, it was questionable whether it extended beyond that field.

(Parbulk II AS v Heritage Maritime Ltd SA, Commercial Court, [2011] EWHC 2917)