Bottiglieri v. Cosco Qingdao
Bottiglieri Di Navigazione Spa v. Cosco Qingdao Ocean Shipping Co
English Commercial Court: Gloster J.:  EWHC 244 (Comm): 4 February 2005
Edmund Broadbent, instructed by Swinnerton Moore, for the claimant charterers
Nevil Phillips, instructed by Birketts, for the respondent shipowners
TIMECHARTERPARTY: OBLIGATION TO PRESENT GRAIN CLEAN HOLDS ON DELIVERY: BREACH: RIGHT TO PLACE VESSEL OFF-HIRE: WHETHER FAILURE TO INSIST ON CLEANING AND PLACE VESSEL OFF-HIRE WHILST CLEANING CARRIED OUT AMOUNTED TO WAIVER OF RIGHT TO PLACE VESSEL OFF-HIRE WHEN HOLDS FOUND UNFIT FOR A SUBSEQUENT CARGO: WHETHER WAIVER EXTENDED TO RIGHT TO CLAIM DAMAGES FOR FAILURE TO DELIVER WITH CLEAN HOLDS
The Court dismissed applications for leave to appeal under s.69 of the Arbitration Act 1996 and for remission to the tribunal on the grounds of serious irregularity under s.68 of the Act in a case where the tribunal had held that where a charterer had not insisted upon the holds of a vessel being cleaned to the charterparty standard upon delivery, notwithstanding that it was well aware that the holds were dirty, it had precluded itself from placing the vessel off-hire or claiming damages for breach of the obligation to clean the vessel, in respect of time lost and expense incurred in cleaning the holds at the load port for the second cargo carried.
DMC Category Rating: Confirmed
In the arbitration, Cosco had claimed US$86,631 in respect of hire. Charterers’ defence to that claim related to the time lost and expenses incurred in connection with the cleaning of the holds at the second load port, Rostock, following the first voyage under the charter. It was common ground that when the vessel was delivered into charterers’ service at Sepetiba, Brazil on 8 December 2002, her holds were dirty with the residues of her previous cargo of coal. The residues did not, however, prevent Bottiglieri from loading its first cargo, iron ore to Poland [not in all holds], but the residues had to be removed before the second cargo, rapeseed in bulk from Rostock to Pakistan, could be loaded, delaying the vessel while her holds were cleaned to a suitable standard. In consequence, Bottiglieri claimed that it should be entitled to deduct a sum as off-hire plus expenses under the charterparty or clause 13 of the fixture note and, alternatively, it was entitled to recover the same amount as damages in respect of Cosco's breach of its delivery obligations under clause 13.
Clause 13 of the fixture note read;
Clause 15 of the charterparty read:
Clause 46 of the charterparty read:
Amendment 5: Clause 46 read:
The arbitration tribunal held that as Bottiglieri had not insisted on the cleaning being done on delivery of the vessel, it had lost its right to claim for the loss of time and expense when the cleaning was done before the second cargo was loaded.
Bottliglieri sought leave to appeal under s.69 of the
Arbitration Act 1996 on the questions whether:
The Charterers also sought an order under s.68 of the Act,
remitting the award to the arbitrators for reconsideration on the basis that the
Tribunal had been guilty of a serious irregularity, in that
This finding also dealt with the second point on the off-hire claim. "If I am right," the judge said, "in my conclusion that, as a matter of construction… Charterers had no entitlement under cl.15 in the circumstances of this case, to place the vessel off-hire at the second load port by reason of the prior failure of Qwners to present the vessel with clean holds on delivery or at the first load port, no question of the loss of any such entitlement by waiver or otherwise can arise." On this point too, the tribunal’s conclusions were correct.
Further, the highest at which the Charterers’ could put their
challenge was that the tribunal was "arguably wrong". This did not
satisfy the requirements of ss.3(c)
Accordingly, the application to appeal on the off-hire claim was dismissed.
As regard the damages claim, the Charterers’ principal contention was that the Tribunal had decided against them on grounds not raised by either party and which they had been given no reasonable opportunity to answer – in particular, that the Charterers had waived the right to grain clean holds at the first load port and thereby any right to claim damages for the holds not being in that condition. In approaching this issue, the judge reminded herself that, "in interpreting the findings of a tribunal consisting of experienced commercial and professional men, as opposed to lawyers, one should look at the substance of such findings, rather than their form, and that one should approach a reading of the award in a fair, and not in an unduly literal, way. In other words, it is not necessary that an award should contain express findings of fact, provided that the necessary findings may be "spelled out". In her view, it was wrong to suggest that the arguments about waiver were not before the tribunal.
Having examined in detail the various submissions made to the tribunal and the wording of the award, the judge concluded that there was no basis for a challenge to the award on the asserted grounds of irregularity. "The arguments that the right to complain about the breach of cl.46 (Amendment 5)," she said, " and the right to claim damages as a result of such breach had indeed been waived by Charterers or in the circumstances they were estopped from doing so were matters which the Tribunal clearly considered. Further, in my reading of the award, there is no basis for saying that the tribunal decided the claim for damages against the Charterers on points not argued by owners or not in issue between them."
The judge also rejected the Charterers’ further application that they be allowed leave to appeal under s.69 of the Act against the tribunal’s findings on the waiver issue, on the grounds that the award was "obviously wrong" or "open to serious doubt in relation to a question of "general public importance". The judge stated that, in her view, the decision of the tribunal on these issues was not obviously wrong and even if she had come to that conclusion, she did not believe the questions involved to be ones of general public importance, given the relatively small amount of money involved and the fact that the outcome essentially depended on the circumstances of the particular case. "I have no doubt," she said, " that these experienced commercial arbitrators were rightly influenced by the practicalities of Charterers’ failure to insist that the holds were cleaned to the requisite standard at the first load port…where the cleaning would have been a much easier task to have accomplished than at Rostock".
The Charterers’ applications were dismissed accordingly.
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