AIC v. Marine Pilot
Note: the Court of Appeal has now heard the appeal in this case. It upheld the judgment at first instance on the 'safe berth' point but reversed it on the 'deadfreight' point, holding that, on the facts of the case, the shipowner was entitled to deadfreight. To access the note on the Court of Appeal decision, click here. Editor, 19 June 2008
Available on BAILII @ http://www.bailii.org/ew/cases/EWHC/Comm/2007/1182.html
Steven Berry QC and Edmund King (instructed by Holman Fenwick & Willan) for the Claimant, AIC
Timothy Young QC (instructed by Eversheds LLP) for the Defendant, Marine Pilot
VOYAGE CHARTERPARTY: SAFE PORT WARRANTY: NAMED SINGLE LOADPORT: DEADFREIGHT: TENDER OF FULL CARGO LOAD: SILTING IN LOADPORT: VESSEL UNABLE TO LOAD FULL CARGO: POSSIBILITY OF SHIP-TO-SHIP TRANSFER OUTSIDE LOADPORT: RIGHT TO CLAIM DEADFREIGHT FOR SHORTFALL
A charterparty that provided for loading at "1 safe port Ventspils" did contain a warranty by the charterer as to the safety of the named port. On a separate point, the charterer had formally tendered for loading a quantity of 93,410 mt, but the master only loaded around 67,000 mt due to excessive silting which rendered safe loading of a full cargo impossible due to draft restrictions. It would probably have been possible to load the remainder by ship-to-ship transfer once the vessel had departed the port but the charterer, as was its right, chose not to do so. The court held that, in those circumstances, the shipowner was not entitled to deadfreight because the charterer had not failed to supply a full cargo. But does the shipowner have a claim in damages for the equivalent amount, by reason of charterer’s breach of the safe port warranty?
DMC Category Rating: Confirmed and Developed
This case note is based on an Article in the June 2007 Edition of the ‘Shipping Offshore and Transport Bulletin’, published by the international firm of lawyers,DLA Piper. DLA Piper is an International Contributor to this website.
The vessel duly arrived at Ventspils to load the cargo, only to find that, due to previous bad weather conditions, the dredged channel had silted up significantly. The master served notice of readiness stating that he expected to load a cargo of around 67,000 mt.
At or around the same time, the charterer formally tendered for loading a cargo of around 93,000 mt, i.e. just over the minimum contracted cargo of 90,000 mt. The vessel loaded just over 67,000 mt and proceeded away from the port without loading the balance of the minimum cargo quantity by ship-to-ship transfer, as was possible.
Where a single loadport is named in the charter, there is no need for additional orders and so, the charterer argued, the obligation to go there is definite from the date of the charter and there is not the uncertainty attached to orders being given directly by the charterer to the master once the voyage is underway. The charterer concluded that the provision in the charter was no more than a mutual agreement between the parties that the port was in fact safe.
The balance of the cargo could have been loaded by ship-to-ship transfer but the charterer was not obliged to arrange that and the fact that it did not happen did not mean that the charterer should have to pay deadfreight.
As is usually the case, the court heard some ingenious arguments from leading counsel in both directions and, on those points, applied common sense and an emphasis on the wording of the provisions in the contract that the parties had agreed between them.
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