High Seas Venture v Sinom (Hong Kong)

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DMC/SandT/07/19
High Seas Venture Limited Partnership v Sinom (Hong Kong) Limited
English High Court: Commercial Court: HHJ Mackie QC: [2007] EWHC 673 (Comm): 29 March 2007
Edmund King (instructed by Ince & Co) for the Claimant owners, High Seas
David Lewis (instructed by Holman Fenwick & Willan) for the Defendant charterers, Sinom
VOYAGE CHARTERPARTY: LAYTIME AND DEMURRAGE: STATEMENT OF FACTS: DELAY IN LIGHTENING OPERATIONS: REASONS FOR SUSPENSION OF DISCHARGE OF VESSEL: MEANING OF "ON THE BASIS OF": MEANING O F "MUTUALLY CONFIRMED": SUPPORTING EVIDENCE: WEIGHT TO BE ATTRIBUTED TO CONTEMPORANEOUS EVIDENCE, COMPARED WITH LATER RECOLLECTION OF FACTS IN WITNESS STATEMENTS
Summary
Where a charterparty required demurrage to be calculated "on the basis of" the statement of facts "mutually confirmed by the Master and the … Port Authorities", the court held a) that the words "on the basis of" were insufficiently strong to make the statement of facts final and binding on the parties and b) that "mutually confirmed" meant at or around the same time – and not some eight months later, as happened in this case. However, the court found largely for the charterer on the facts of the case, since it gave greater weight to the statement of facts, which the Master had signed at the time without protest, than to statements made in witness statements prepared after the event.

DMC Category Rating: Confirmed

This case note is based on an Article in the April 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.

Background
In a voyage charter dated 7 December 2004, Clause 11 provided:
"Demurrage and dispatch shall be calculated on the basis of the statement of facts made by Agents at loading and discharging port(s) entrusted by Owners and mutually confirmed by Master and LOADING PORT AUTHORITIES or DISCHARGING PORT AUTHORITIES." Clause 11.B. went on to provide that stoppage caused by bad weather would not count as laytime. 

The vessel arrived at Yantai on 21 February 2005, tendered notice of readiness and needed to be lightened before berthing. Mobile cranes were carried out to the vessel on lighters and installed alongside so that lightening could commence. After several hours, it was suspended due to bad weather. There followed a stop-start lightening and discharging operation that gave rise to five separate disputed periods.

On 3 March, the local agents issued a statement of facts, which was confirmed by the master the following day and later endorsed with the port authority's "chop", but not until November 2006.

Judgment
Reviewing the status of the statement of facts, the judge did not consider that it was final and binding on the parties because the words "on the basis of" in Clause 11 of the charter were insufficiently clear to make it so. The judge also considered the word "mutually" in Clause 11 to mean, at least, around the same time. On that point, the shipowner had argued that the statement of facts was not mutually agreed because by the time it was stamped by the port authority, the shipowner had withdrawn its agreement to its contents. In spite of both these observations, however, the judge felt that the evidential value of the statement of facts was substantial and could not be outweighed by possibly self-serving recollection of the facts two years later.

Comment
His Honour Judge Mackie QC reminded the parties that contemporaneous written evidence, largely in a form agreed by the parties, will be given greater evidential weight than witness evidence prepared several years down the line by those with an interest in the result of the case. It is worth bearing in mind that those who were called by the shipowner did not in fact include the master of the vessel at the time of the incident. In those circumstances, it would have been harsh on the charterer for the contemporary statement of facts to be ignored, particularly where no relevant letter of protest had been lodged by the master at the time. Only one such letter had been lodged and it referred to "improper discharging of cargo ... due to strong wind and swell."

The case should serve as a reminder to shipowners that if they do have concerns about aspects of the port or the discharge operations they should (i), via the master, lodge an appropriate letter of protest at the time; and/or (ii) not sign off on the statement of facts if they do not agree with it; and/or (iii), if the matter does proceed to a hearing, make sure they are able to call reliable evidence from the master that supports their version of events.

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