AIC LIMITED v MARINE PILOT LIMITED (The Archimidis) [2008] EWCA Civ 175

The Court of Appeal has handed down a helpful decision for those who still felt there was uncertainty as to whether the naming of a port in conjunction with an express warranty of safety in a time charter might relieve a charterer of responsibility for the safety of that port.

The matter is still one of construction. However, the decision asserts that there is no conceptual difficulty in reading an express warranty of safety in conjunction with the naming of a port / berth as an assumption of responsibility for the safety of that port /berth by the charterer.

The MT Archimidis was voyage chartered for three voyages in succession to “load one safe port Ventspils” and one of the issues before the Tribunal was whether this constituted a warranty as to the safety of this port by the Charterers or whether it recorded an agreement between both Owners and Charterers that the port was safe. The Tribunal of experienced LMAA arbitrators found that the former was correct. On appeal to the High Court, Gloster J agreed, dismissing the appeal. Now, the Court of Appeal has also agreed and dismissed the appeal.

In reaching its decision, the Court of Appeal expressly agreed with the decision of Langley J in The Livanita [2007] 1 LLR 97 that “there is no inherent inconsistency between a safe port warranty and a named loading or discharging port”. The judgment of Sir Anthony Clarke MR, with which Longmore LJ and Sir William Aldous concurred, was reached on two main grounds:

1) the parties did not dispute that there was a warranty of safety by the Charterers in respect of the discharge ports by virtue of the terms “Discharge 1/2 safe ports United Kingdom Continent Bordeaux/Hamburg range” and it would be odd to construe “load one safe port Ventspils” in the same clause differently.

2) the Charterers’ argument that the inclusion of “safe” recorded the parties’ agreement that Ventspils was safe did not seem to be the natural construction. Its inclusion must have some meaning and a separate provision that the vessel was to “load and discharge at any safe place or wharf” leant further support to the natural meaning being that Charterers had warranted the safety of the port.

It is notable that Sir Anthony Clarke MR made clear in his reasons that he had not relied upon a presumption against surplussage in reaching the decision: he had “simply sought to construe the language of the charterparty”.

The judgment should put an end to the uncertainty in this area, as illustrated by the arbitration reported in 18/86 LMLN 181 in which the arbitrators concluded that “via safe port or ports and safe berths, including Castellammare” meant that Charterers gave no warranty regarding the safety of the port/ berth at Castellammare.