Slebent Shipping v. Associated Transport

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Slebent Shipping Company Ltd v. Associated Transport Line LLC, the "Star B"
Award of the Society of Maritime Arbitrators of New York; Messrs Manfred W Arnold, Thomas F Fox and John F Ring, Chairman; 19 November 2003
Healy & Baillie, LLP, by Richard V Singleton and Thomas H Belknap, Jr. as Counsel for Slebent Shipping
Nourse & Bowles, LLP, by Armand M Pare, Jr. and Lawrence J Bowles, as Counsel for Associated Transport

Where a vessel had grounded as a consequence of both the unsafe condition of the port and the negligent navigation of the Master/Pilot, a majority of the arbitration panel found that the negligent navigation severed the connection between the accident and the charterers’ order to proceed to the unsafe port. Accordingly, responsibility for the accident remained with the owners. In a dissenting award, one arbitrator held that in such a case under US law, responsibility for the accident should be shared between owners and charterers in accordance with their respective degrees of fault.

DMC Category Rating: Confirmed

By an amended New York Produce Exchange form of timecharter dated 27 October 1999, Slebent Shipping, as owners, fixed the m/v "Star B" to Associated Transport Line, as charterers. While operating under this charterparty in late November 1999, the vessel performed a voyage with timber and general cargo from Brazil for discharge in San Juan, Puerto Rico, Rio Haina (Dominican Republic) and Kingston, Jamaica. As a result of congestion at Rio Haina, the charterers ordered the vessel to discharge her Rio Haina cargo at the nearby port of Boca Chica. While attempting to enter the channel to Boca Chica on November 29, under pilotage, the vessel ran aground and was not refloated until the following day. Thereafter, she entered the port, discharged her cargo and departed without further incident.

Slebent Shipping claimed that the grounding had caused substantial damage to the vessel’s hull, stern tube and controllable pitch propeller and accordingly brought arbitration proceedings against the charterers, on the basis that the latter, in ordering the vessel to Boca Chica, were in breach of the safe port warranty contained in the charterparty. The tribunal decided to deal first with the question of liability and to leave the issue of damages, if relevant, to a later hearing.

The Award
The tribunal unanimously found that there was evidence to support the owners’ contention that at Boca Chica, there were deficiencies in the entrance buoys, the range markers, the charts, the navigation guides and with the pilot sufficient to render the port unsafe at the time in question. On the other hand, the tribunal found that there was also sufficient evidence to support the charterers’ argument that the grounding could have been averted by the exercise of good seamanship.

The tribunal quoted a passage from Scrutton "On Charterparties" to the effect that:
"where a ship is ordered to an unsafe port and the Master acts negligently in entering or remaining in the port, the Charterer will be free from liability, if, but only if, the negligence is sufficiently serious to sever the causal connection between the order and the damage to the vessel."

A majority of the panel then found that "the actions of the master on the passage [to Boca Chica] and in attempting to enter Boca Chica on that date were so egregiously negligent and unseamanlike that they overcame any safe port deficiencies and led directly to the vessel’s grounding." In consequence, the majority denied the owners’ claim.

In a separate opinion, Mr. Arnold dissented from the majority award on the grounds that it failed to reflect that a contributing cause of the grounding was a breach of the charterparty warranties of a safe port. Whilst accepting that the majority award had been based on the principles set out in the relevant English jurisprudence, he drew attention to a footnote in Scrutton on Charterparties to the effect that:
"In the United States a more equitable rule prevails that liability can be divided between the parties according to the degree of fault but this result does not appear to be open in England on the case as they stand at present." [Scrutton; 18th Edition, at p.124], a comment based on the decision in Ore Carriers of Liberia Inc. v. Navigen Corp. [1971] AMC 513.

In these circumstances, he believed that American case law should be applied in arbitrations conducted under US law. "If,", he said, "one has concluded that both parties were at fault, one cannot automatically and totally absolve one party from all liability because the other party was irresponsible or imprudent. If you are wrong by having committed a breach, then you are liable; the degree of which is to be determined by the trier of facts. If one finds both parties at fault, then it becomes a question of degree…..To hold otherwise would ignore one’s own finding of fault on both sides."

On this basis, Mr Arnold concluded that responsibility for the grounding should be shared between the parties, but he did not indicate in what percentage.


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