'Hill Harmony'

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Case No. DMC/ST/01/01

Kawasaki Kisen Kaisha Ltd v. Whistler International Ltd. - The 'Hill Harmony'   [2001] 1 Lloyd's Rep. 147: 
English House of Lords: December 2000. 

1 Where a ship is chartered on terms that require the master to prosecute voyages with the utmost despatch and to follow the orders of the charterers as to the employment of the ship, the ship is bound to obey charterers’ orders regarding the route to be followed, unless owners can show sound reasons – such as danger to the ship – for following a different course.

2 If the master does not follow orders validly given by the charterers, the owners will not be able to rely on the exception of ‘error in navigation’ set out in Article IV Rule 2(a) of the Hague Rules.

Lessons to be learnt
Where time-charterers exercise their right to order the ship to follow a given course, owners should require the master to obey that order, unless they can discharge the burden of showing that a different course should have been followed for reasons such as the safety of the ship.

DMC Rating:  Confirmatory


The Parties
Whistler International, the disponent owners of the Hill Harmony    
Kawasaki Kisen Kaisha (‘KKK’), the time-charterers of the Hill Harmony 

The Facts

  1. The Hill Harmony was a bulk carrier, built in 1985 
  2. She was chartered on the New York Produce Exchange form 1946 with amendments, for a period of 7/9 months

  3. The relevant terms of the charterparty were the following:

  • the master was to prosecute his voyages with the utmost despatch and was to be under the orders of the charterers as regards employment (cl.8)
  • the charterers were to furnish the master with all requisite instructions and sailing directions (cl.11)
  • the owners were to remain responsible for the navigation of the ship, as when trading for their own account (cl.26)
  • it incorporated the Hague Rules and, in particular, the provisions of Article IV Rule 2(a), under which the owners were not liable for the act, neglect or default of the master in the navigation of the ship
  • it was subject to English law and arbitration in London.                   
  1. Under the charterparty, the ship made two voyages from Vancouver to Japan in January/February and April/May 1994, respectively.                 

  2. Prior to the commencement of these voyages, the charterers had instructed the master to sail by the Great Circle route, which was the most direct route.

  3. Because the ship had, on a previous occasion, suffered structural damage from bad weather encountered on the Great Circle route, the master sailed by a more southerly route. 

  4. The more southerly route was a longer route than the Great Circle route. As a result, the voyages took more time and more bunkers were consumed. The loss to the charterers was in the region of USD90,000.

The Issues                             
The charterers claimed that:

  1. the master had failed to prosecute the voyages with the utmost despatch, contrary to clause 8 of the charterparty 
  2. the master had failed to comply with their instruction to sail by the Great Circle route, contrary to clauses 8 and 11 of the charterparty

The owners replied that:
   1.    the charterers’ orders and choice of route did not relate to the ‘employment’ of the ship
          but to its ‘navigation;

   2.    all matters of navigation were for the master to decide, and
   3.    if the master were at fault, then owners’ liability was excluded under Article IV Rule
          2(a) of the Hague Rules incorporated in the charterparty

The Previous History of the Case
  1. At the arbitration, a majority of the panel had found for the charterers. They found that the master’s decision to sail by the southerly route in preference to the Great Circle route was unjustifiable. Their decision was based in part on uncontradicted evidence from Ocean Routes that all ships advised by them during the period March to May 1994 crossing from the Pacific north west to northern China, Korea or Japan had followed the Great Circle route. The owners were in breach therefore of their obligation to prosecute the voyages with the utmost despatch and to follow the charterers’ orders regarding the employment of the ship. The defence of ‘error in navigation’ under Article IV Rule 2(a) of the Hague Rules was not applicable, since the planning of the voyage – as opposed to the way in which it was carried out – was not a matter of navigation.
  2. In the High Court, the judge held that the dispute related to the ship’s navigation and not to her employment. The order to sail by the Great Circle route was not one that the charterers were entitled to give and the decision which route to follow was for the master alone. He found accordingly for the owners.
  3. The Court of Appeal upheld this decision and also found for the owners. The ocean route to be followed was a matter of navigation for the master to determine. Provided that he acted in good faith, it did not matter whether he acted reasonably, since the owners would be protected by the exception of ‘error in navigation’ under Article IV Rule 2(a) of the Hague Rules.

The decision of the House of Lords

The Result:
The House of Lords found for the charterers and therefore overruled the decisions in the High Court and the Court of Appeal and restored the decision of the arbitrators

The Reasoning:

  1.  The ‘utmost despatch’ clause is a merchant’s clause, the object of which is to give effect to the mercantile policy of saving time. It requires the ship to take the route which is the shortest and therefore quickest, unless there is some other route which is usual or there is some other maritime reason for not taking the shortest and quickest route. A voyage will not have been prosecuted with the utmost despatch if the owners or master unnecessarily choose a longer route, which delays the arrival of the ship at her destination. In this case, there were no factors which justified the ship taking the longer route. The Great Circle route was the shortest route and the usual route. The ship was fit to follow it and should have done so.
  2. Although - on this reasoning - the question whether the charterers’orders to take the Great Circle route related to the employment of the ship rather than to her navigation becomes academic, the orders did in fact relate to her employment. The choice of ocean route was, in the absence of some over-riding factor, a matter of the employment of the ship.It related to her scheduling and trading and therefore to the exploitation of her earning capacity.
  3. The exception under Article IV Rule 2(a) of the Hague Rules did not provide a defence to owners. It did not excuse a breach of owners’ obligations under the charterparty to prosecute voyages with the utmost despatch and to comply with the charterers’ directions as to the employment of the ship. Any error that the master may have made in this regard was not an error in the navigation of the ship; it did not concern any matter of seamanship. The owners failed to discharge the burden of proof which lay upon them to bring themselves within the exception.
  4. Cases followed:
    Regarding 1: Suzuki & Co. Ltd. v. J. Benyon & Co. Ltd (1926) 42 TLR 269 
    Regarding 2: Larrinaga SS Co. v. The King [1945] AC 246; Suzuki v. Benyon, above; The Renee Hyaffil 42 TLR 660; S.S Lord (Owners) v. Newsum Sons & Co. Ltd [1920] KB 846; The Erechthion [1987] 2 Lloyd’s Rep. 180;  
    Regarding 3: Suzuki v. Benyon, above; Knutsford Steamship Co. v. Tillmanns & Co. [1908] AC 406      


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