Minerva Navigation Inc -v- Oceana Shipping AG [2013] 1 Lloyd's Rep 145 – (the "ATHENA")
The Commercial Court recently considered the meaning of the words 'loss of time' in clause 15 of the NYPE form: do the charterers have to show that the whole voyage/adventure has been extended or is it limited to the time lost during the period of the vessel's inefficiency?
The dispute related to the time lost while, on the owners' order, the vessel was drifting off Libya.
The vessel loaded a cargo of wheat at Novorossiysk for carriage to Syria and bills of lading were issued. At Syria, the cargo was rejected on the ground that it was contaminated - Syrian law prohibited re-export of the cargo to anywhere other than its country of origin. When the "ATHENA" eventually sailed from Syria, the charterers instructed the vessel to sail for Libya and anchor 'at road port Benghazi'. However, the owners instructed the master to proceed to international waters just outside Libya and wait for further instructions. The master stopped the vessel about 50 miles from Libya and drifted until problems with the returning of the original bills of lading were resolved and only then proceeded to Benghazi. There was further delay before the vessel berthed at Benghazi on 3 February 2010 and discharge of the cargo was completed on 18 February 2010.
It was accepted at arbitration that during the drifting period, the master's refusal to comply with an order to proceed to Benghazi amounted to 'default of master' which prevented the full working of the ship within the terms of Clause 15 of the charterparty:
'In the event of loss of time from default of master or by any other cause preventing the full working of the vessel, the payment of hire shall cease from the time thereby lost and all extra expenses directly incurred including bunkers consumed during period of suspended hire shall be for Owners' account'.
The majority of the arbitrators, relying on Wilford Time Charters, 6th edition, London: 2008 and various case law for support of their decision held that, in order to deduct from hire under clause 15, all that the charterers needed to demonstrate was:
(a) that there was a default on the part of the master; and
(b) that in consequence there was an immediate loss of time.
On appeal, the owners challenged the arbitrators' interpretation of the assertion in Wilford that: 'The ship must render the service immediately required of her, in which event, hire is payable continuously, but if she cannot, or does not, hire is not payable for the time so lost.' Submitting that any calculation of loss of time is not restricted to the period of inefficiency and that the charterers had to go on to demonstrate that there was delay to the progress of the adventure; what was required was loss of time in performing the chartered service overall, not simply for the immediate period of inefficiency. As the tribunal found as a matter of fact, that, had the vessel proceeded directly to Benghazi, it would not have berthed any earlier than it did - the owners argued that there was, in fact, no overall loss of time to the adventure.
The judge, Mr Justice Walker, identified two requirements for clause 15 to come into play:
1) whether the clause is engaged; and
2) what are the consequence if the clause is engaged?
He found that the first requirement was satisfied for the clause to bite, but that the wording of the clause was such that the charterers could not claim as off-hire any amounts in respect of delay arising after the vessel was fully efficient for the service immediately required under the charterparty. The crucial question was, therefore, the extent to which the clause identified a consequence in which the words 'loss of time' and 'the time thereby lost' were to be linked with pre-requisite event or action that engaged clause 15.
Dismissing much of the case law relied on by the arbitration panel, the judge decided that the ordinary meaning of the phrase 'time thereby lost' required there to be a net loss of time in the performance of the chartered service overall and that there must be a direct causal effect of the vessel not rendering the service then required.
The "ATHENA" once again demonstrates that in every case it is necessary to consider the specific wording of the off-hire clause and reinforces the premise that the burden is on the charterers to establish the facts which directly justify the non-payment of hire.
The Court of Appeal will soon have an opportunity to consider the decision when the charterers' appeal is heard.
This article first appeared in Hill Dickinson's marine, trade and energy summer 2013 newsletter which takes a topical look at marine, trade and energy news, issues and case studies from around the world, with expert comment and opinion from our team of marine law specialists.
HAMMERSMITH Marketing Ltd -- Grain Trading
-------------------------
Representation Office:
13+220 Quartier La Galine, St. Remy de Provence, France 13210
Phone: 33.9.7044.4881 Mobile: 33.6.8068.4564
Fax: 33.4.5774.7575 SKYPE:........bacon39A
WWW:.hammersmithltd.blogspot.com
Email:.. tradegroup@hammersmith.biz,
.......................................................
Corporate Office: Trident Serv., Kings Court, Bay St.,
PO Box N-3944, Nassau, Bahamas
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.