The Commercial Court has allowed a Charterer to rely on an exclusion in a berth charter where the vessel’s unloading was delayed by congestion after a strike.
The Appellant Charterers had entered into a berth charter with the Respondent Owners on an amended AmWelsh voyage charterparty form. The charterparty provided for the transport of coal by four vessels from Indonesia to Spain.
Under clause 40 of the charterparty, time was to run from 12 hours after the vessel’s arrival at berth once notice of readiness had been tendered. If a berth was not available at that time, provided that this was not due to any fault on Charterers’ part, laytime commenced 12 hours after the first permissible tide, whether the vessel was in berth or not.
Clause 9 of the charterparty contained the following exceptions clause:
“In case of strikes, lockouts, civil commotions or any other causes included but not limited to breakdown of shore equipment or accidents beyond the control of the Charterers consignee which prevent or delay the discharging, such time is not to count unless the vessel is already on demurrage.”
After the vessels arrived at the discharge port and tendered notices of readiness, discharge was delayed by around two weeks due to port congestion. This congestion was caused by a nationwide Spanish haulage strike. The strike ended before each of the vessels berthed, and did not cause any interruption in the actual discharge process.
Owners commenced arbitration, claiming demurrage from Charterers. They submitted that the effect of the “whether in berth or not” provision in clause 40 was that Charterers bore the risk of delay due to congestion. Charterers argued that this provision had no effect on the construction of the exceptions in clause 9. The tribunal found that Charterers could not rely on the exception in clause 9, as the strike had ended by the time the vessels berthed. Charterers appealed.
COURT’S FINDINGS ON APPEAL
The Commercial Court allowed Charterers’ appeal. In doing so, they found that the “whether in berth or not” provision did no more than start the laytime clock ticking. The exceptions clause was to be construed as a freestanding provision.
Further, the ordinary meaning of the words in clause 9 covered delay in discharging caused by congestion due to the after-effects of a strike that had ended. They also covered delay in discharging caused by congestion due to a strike where the vessel arrived after the strike had ended.
The Court therefore found that the tribunal had been wrong to conclude that Charterers did not have the protection of the exceptions in clause 9 of the charterparty.
In this case, the Court found that Charterers could use an exceptions clause as a defence to a demurrage claim, even though the relevant delays were not directly caused by one of the exceptions listed. Rather, strikes caused the congestion which was the immediate cause of the delay.
It is important to note that, in spite of this finding, the courts will still interpret exceptions clauses strictly. It must be possible to show a causal link between the exceptions listed in the clause and the delay in question. This will depend very much on the facts and circumstances of the case in question. As such, advice should be taken before deciding whether or not a particular set of circumstances falls within an exceptions clause.
The Commercial Court granted leave to appeal in this case, so these issues will be further considered by the Court of Appeal.