COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE HONOURABLE MR JUSTICE CHRISTOPHER CLARKE
Strand, London, WC2A 2LL
B e f o r e :
THE RIGHT HONOURABLE LORD JUSTICE LONGMORE
THE RIGHT HONOURABLE LORD JUSTICE AIKENS
| GARNAT TRADING & SHIPPING (Singapore) PTE LTD & ANR
|- and -
|BAOMINH INSURANCE CORPORATION
Mr Michael Ashcroft QC (instructed by Thomas Cooper) for the Respondent
Hearing dates : 10th, 11th, 12th & 13th May 2011
Crown Copyright ©
Judgment of the court given by Lord Justice Longmore and Lord Justice Aikens:
"139 That which was disclosed to Baominh included the following
a) The existence of the Towage Plan.
This was apparent from the Towage Contract and draft MOA provided on 16th May 2006. It was discussed and its nature explained at the meeting of 18th May. It was the subject of a warranty in all of Baominh's drafts of the policy (save for its temporary accidental omission for 80 minutes on 9th June) until it was removed at the last moment on the basis that the Plan had been approved.
b) The title pages of the list of design documents, of the Assessment, the Explanatory Note, and of both sets of Instructions, together with the last page of the Assessment and the seventh page of the Explanatory Note, all of which were handed over by Mr Sashkin on 19th May.
The last page of the Assessment contained its conclusion and the specific details about wave height limitations. The seventh page of the Explanatory Note also contained these details.
c) Ms Mai's presentation of Vung Tau's version of the Towage Plan at the meeting of 31st May referring to the Assessment, the Explanatory Note, and the Instruction, and explaining what they were in Vietnamese. Mr Sashkin and Mr Hai offered to provide any translation required.
d) The documents enclosed with the fax of 10th June which included the Instructions. Mr Dang took copies of those instructions on 12th June and asked for a Vietnamese translation which Mr Hai said he would provide and which he did provide on 12th June in an e-mail of that date.
The Instructions to the Tugboat Master, which are only 2 or 2½ pages long set out (see para 3.2) the wave height limitation. The instructions to the Dock Master referred (see para 3.4) to the Assessment under the description "Calculation of strength and stability during towage".
140. The disclosure made constituted, in my judgment, a fair presentation of the risk, and included the wave height limit, upon the alleged non-disclosure of which Baominh relies."
It is these findings of fact which the insurers wish to overturn.
The Assessment; 1760-901-307
"The design maximum wave height during towage hd =5.58 m, which corresponds to scale 6 wave height of 3% probability."
The final part was headed "Conclusion" and included this:-
"6.1.3. In accordance with data in the present document, with consideration for the design ultimate bending moment, the maximum scale for waves is 6 at a wave height of h3%=5.77 m.
Considering the practice of towing such docks, the designer considers it possible to allow dock PD-7 (pier 1760) for oceanic tugging, limiting the maximum permissible wave scale to: 5 at a wave height of h3% = 2.0 … 3.5 m."
"6.2.2. In conformity with design documentation, the seaworthiness of the dock in sea waves on condition of lack of slamming is ensured in the range dtow = 2.4 …. 3.75 m. The present tugging is carried out with a draught of dtow = 2.79 m which ensures fulfilment of the necessary requirements."
The Explanatory Note
"3.1.3. Towing of the dock according to its navigable qualities is permitted to be carried out where sea disturbance is no higher than 5 points.
3.2.3. Considering the towing practice of similar docks, the designer considers it possible to permit the dock (pr. 1760) for oceanic towing, limiting the maximum wave disturbance to 5 with a wave height of h3% =2.0 … 3.5 m. To decrease the bend moment at calm water, the dock must be ballasted in accordance with 1760-901-307RR."
Instructions to the Masters of the Tugs
"3.2 According to stability calculations in Regulations 1760-901-307, allowed bending moment must be taken into account, allowed marine wave grade is 6 with the wave height h3% =5.77 m.
In consideration of the dock of the same type in practice, floating dock N7 could be towed with the allowed wave grade is 5 (sic) when the wave height is h3% - 2.0-3.5 m."
Instructions to the Master of the Dock
The first three meetings
"Warranted Dock classed with and remain in the register of Global Marine Bureau Inc. and all rules and requirements of the classification society complied with.
Warranted the towage plan must be inspected and approved by Global Marine Inc. or equivalence."
The meeting of 31 May 2006
"It is not clear (a) what exactly were the contents of the copy of the Towage Plan in Vung Tau's possession at this stage; and (b) whether the file which Ms Mai had constituted Vung Tau's entire copy of the Towage Plan or extracts from it. As to (a) different descriptions of the total contents of the Towage Plan have been given by the claimants' solicitors at different times. As to (b) Mr Sashkin's evidence referred at different stages to Ms Mai having a selection of documents and to her putting on the table a file with "the whole of the towage plan". The likelihood is that it was a substantial proportion, but probably not the whole of the file, being, as was said, about 500 pages long and weighing about 5-6 kilos. The documents were loose in a file, which was not a lever arch file."
The fax of 10 June – was it sent?
"Sub: Seaworthiness Survey Report No GMB RU 005 dated 10th June 2006 and other official documents of floating dock and workshop required for insurance"
and stated that a copy was being sent to Mr Hai of Vung Tau. It then said that Garnat was forwarding the Seaworthiness Survey Report as numbered (which was in English) and also the Instructions for the tug vessel Master and the Floating Dock Master mentioned in that report, in respect of which (although they were in Russian) it was said that a Vietnamese translation could be received from Vung Tau. Various other documents were also forwarded including an Interim International Tonnage Certificate issued by GMB on that day also in English. The number of pages of each of these documents was also given as well as for the other documents (which we do not need to specify). No copy of the Assessment or the Explanatory Note was included in the batch of documents thus supposedly attached.
i) it was never disclosed by the Owners' solicitors. What was disclosed was the copy received by Vung Tau. Normally that would not matter very much since the supposed "original" and the Vung Tau copy are the same document. They are not, however, identical since the copy received by Vung Tau has at the top the rubric:-"From: Garnat Trading Singapore. Phone No. … June 10th 2006 12.38 a.m."But the disclosure of the copy rather than the "original" mattered very much once it became clear that insurers were saying not only that they had not received the fax and were thus putting the Owners to proof of the fact that they had sent it but were also saying that the fax was fabricated well after its purported date. In his witness statement of 30 July 2009 Mr Sashkin said that he had sent the fax to insurers but the insurers' solicitors never asked for permission to inspect the "original" at that (or indeed any later) stage, because in response to an earlier request for inspection, they had been told by the Owners' solicitors on 15 May 2009 that the document had been given to the insurers at a meeting of 12 June 2006. It was, however, incorporated into its chronological place in and was thus before the court in that form. Mr Isaacs said that it had been "slipped" into the trial bundle seeking to imply some nefarious act on the part of Mr Sashkin and/or the Owners' solicitors. Even then the insurers' solicitors did not ask to see the original in the Owners' solicitors' possession and the aspersion suggested by Mr Isaacs is, in our view, unfair, despite Mr Sashkin's slightly muddled subsequent oral evidence (T4/28 lines 6-17) as to whether he had given the original fax to his solicitors in mid 2007 or at some later date;
ii) Mr Sashkin's witness statement volunteered that he had sent the fax not (as all other faxes were) to insurers' main fax number (8294185) but to the underwriting division's fax number (8210444);
iii) The version of the International Tonnage Certificate sent to Vung Tau has a header showing that it had come in as a fax from GMB's offices in Russia while the comparable International Tonnage Certificate attached to the supposedly "original" fax has no such header.
"was sent to the party to whom it was expressed to be copied but not to the primary addressee."
Mr Isaacs pointed out that the enclosures to the supposed "original" fax and the copy received by Vung Tau were not the same in as much as the Instructions to the Masters were not sent to Vung Tau and the International Towage Certificates were different in the way identified as oddity (iii) above. As to the first it was unnecessary to send the Instructions to Vung Tau because as the judge recorded (para 99) Vung Tau already had them.
"Prima facie expect the same documentation to be faxed to Baominh and Vung Tau or, at the least, that there would not be only a single page which was different."
He said, however, that this oddity did not lead him to conclude that nothing was faxed to the insurers at all. We agree with that, since it is by no means impossible that Mr Sashkin when gathering the documents for attachment to the fax to insurers gathered up an e-mail copy of the International Tonnage Certificate and when gathering the documents for attachment to the copy to Vung Tau gathered up a fax copy of the same document. Insurers' solicitors could always have asked for disclosure of any document showing e-mail receipt of the Tonnage Certificate and, if it turned out that there was no such document, the argument might have had some force. In the absence of any such request, it does not.
"have been sent to you by fax now"
and that good copies would be handed over when they met the next morning. The judge regarded that as confirmation of the genuineness of the fax of 10 June which had indeed attached Statements of Compliance for Towing (in English) dated 10 June.
Fax 10 June – was it received?
Events of Monday 12 June
Ms Mai's e-mail of 12 June
"the e-mail is one which could be expected to have been sent."
"it would have been an expensive and futile exercise to have conducted any further investigations, the outcome of which could not have been put to any of the claimants' witnesses."
The signing of the policy
Conclusion on non-disclosure
Unseaworthiness: the legal principles and the allegations made by the insurers.
" The allegations of seaworthiness, as summarised by Baominh, are as follows: (1) the pontoon stowed at the forward end of the dock was inadequately secured; (2) the dock's fire and ballast pumping systems were in a poor state of repair and could only operate at a significantly reduced capacity; (3) the watertight sub-division between the ballast tanks was compromised. In particular, the connecting elements in the port side ballast tanks and starboard side towers were corroded and valves intended to isolate the various compartments from each other were leaking; (4) the manhole covers on the dock's deck and the deck itself were leaking in several places; (5) instead of departing Vladivostok with an even keel draught of 2·79 metres as stipulated in para 6.2.2 of the assessment, the dock's even keel draught on departure was 4·4 metres and (if relevant) was never reduced to 2·79 metres. As a result of the reduced freeboard, shipping seas on deck were a problem throughout the tow and neither the bow breakwater nor the securing arrangements were sufficient to prevent waves from making the pontoon buoyant, thereby breaking the cargo sea fastenings.
The departure draft
The bow pontoon securing arrangements on departure
The ballast pumps
Alleged defects in manhole covers and watertight sub-divisions
" 5. Walls and framing of towers and pontoon externally and internally inspected. No cracks and damage to joint found.
6. Item 18 – ingress of seawater into ballast compartments Nos. 3, 4, 18. Cause of ingress – weak slide valves of de-watering and ballast pumps. Perform continuous check of water level and pumping out as necessary.
7. Stormy weather conditions, sea water on pontoon-deck, leakage of seawater into ballast compartments Nos. 9, 10. Probably through manholes of ballast compartments located under floating workshop. "
"1 … Early in the morning on July 10th 2006 I have actually reported to the Chief of Expedition that the divergence with a typhoon EVENIAR has passed as a whole safely, and the small damages received as a result of a storm will be eliminated. The permanent monitoring of water in the tanks through sounding pipes and trial test pumping out of water from the tanks by bilge pumps during July 9–10 have shown that ingress of seawater in ballast tanks and dry compartments were not occurred. Ballast pumps during this period were not used at all."
Moreover it could not be any discussion of the flow of water in tanks 10–12 July when the weather was normal and the crew safely removes the consequences of storm on July 9 (paragraph 6 of the telex of Mr Parshintsev dated 12.07.2006). But I really had been stated to the Chief of expedition about my suspicion for small leaks through glands of the sluice valves of the ballast system or bulkhead glands, and also intentions to check up all suspicions after the storm. Duties of crew include check of a condition of all systems of the dock after a storm.
2. Between 10–11 July dock crew had completed work on the restoration of the bow pontoon's fastening which were damaged by waves, additional cable brace of the pontoon has been provided on the recommendation of the Chief of the expedition, other damages or defects identified after the storm were eliminated. It was removed several flaws in the fire main57 , scuppers were cleaned, we have started checking of the glands of sluice valves and bulkhead glands in the tanks58 that to remove the suspicion of possible leakage of water through these glands. The gland's nuts and studs were pressed out where it is need.
At the same time I declare that no any sealing glands59 of the ballast pumps, cooling pumps of diesel generator and compressors were not replaced, as specified in the telex of the chief of expedition Mr Parshintsev on the 12.07.2006. All pumps were in good condition, any flaws in scuppers of the ship-way deck have been not eliminating also. I have reported to the Chief of expedition by radio in the evening on July 11 about the executed works and that next day on July 12 we shall continue checking of some elements of ballast bilge system of the dock and carry out repair and maintenance works as required.
According to the instruction of the ship-owner, provided before departure dock from Vladivostok, the crew continued the concreting of dents on the surface of ship-way deck that were made at the time of the dock's repair in Vladivostok or during of its previous operation …
3 During the 12 July crew dock surveyed several tanks and sluice valves of the ballast system and the piping of ballast-bilge system, glands of the sluice valves and bulkhead valves were pressed out, flange couplings of piping were tightened. No serious damages have been detected.
We have carried out test of the ballast-bilge system once again with taking up of the ballast into the tanks and pumping it out, tank's stripping – all equipment worked in normal mode. Any cross-flows or leaking of water in the sluice valves and bulkhead glands were not found. Results of the tests were reported to the Chief of Expedition on evening of July 13. The necessary records about all operations and actions of the crew were made in the ship; log of the dock.
4 As to reports and the information of the Chief of Expedition, basically they correspond to the taken place facts during the specified period on July 9–12 2006 but in view of my amendments and remarks made in this note.' (Bold emphasis added.)"
57 The translation attached to Mr Barker's supplementary report uses the expression 'flute cracks' which Mr Barker interpreted as pinhole or flute hole-like cracks.
58 This appears to be a reference to a gland of some sort tightening up the steel pipe as it goes through the bulkhead.
59 In the Barker report translation the reference is to 'stuffing boxes', a form of gland which works by keeping grease under pressure to stop water coming out."
Conclusion on unseaworthiness