England and Wales High Court (Commercial Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		4th February 2005

Mrs Justice Gloster, DBE:

1. This is an application under sections 68 and 69 of the Arbitration Act 1996 ("the 1996 Act") to challenge an award ("the Award") dated 10^th May 2004 made by Mr Alan Oakley and Mr William Packard as arbitrators in arbitration proceedings brought by Cosco Qingdao Ocean Shipping Company ("Owners") against Bottiglieri di Navigazione SpA ("Charterers"). The arbitration was on documents alone. The dispute arose under a time charter ("the Charterparty") concluded on 25^th November 2002 in the NYPE form with amendments.
2. The factual background to the dispute is as follows. The Bunga Saga Lima ("the Vessel") is a 73,144 tonne deadweight bulk carrier built in 1998 and constructed with seven cargo holds. By the Charterparty, Owners, who were disponent owners under a head charterparty, chartered the vessel to Charterers for a short time charter period comprising two or three laden legs. In the arbitration Owners claimed the sum of US$ 86,630.57 in respect of hire. Charterers' defence to that claim related to the time lost and expenses incurred in connection with cleaning of the holds at the second loadport, Rostock, Germany, following the first voyage under the charter. On 22^nd October 2002, Owners had taken delivery of the Vessel from her head owners in China under the head Charterparty. Her previous cargo had been soya beans. Owners then loaded a cargo of coking coal for Sepetiba, Brazil, in all seven holds. After discharge of this pre-delivery cargo of coal at Sepetiba, the Vessel was delivered to Charterers at Sepetiba anchorage on 8^th December 2002.
3. It was common ground that, when the Vessel was delivered on 8^th December, the holds were dirty with coal residues from the pre-delivery cargo which would have prevented grain having been loaded in the holds. This was clear from delivery surveys. However, the coal residues did not prevent Charterers from loading their first cargo, which was iron ore. That was loaded in holds 1, 3, 5 and 7 of the Vessel, and carried to Swinoujscie, Poland. However, the coal residues did have to be removed before the Vessel could load her second cargo, rapeseed in bulk, at Rostock, for carriage to Bin Qasim, Pakistan. After discharge of the iron ore in Poland, the Vessel ballasted the short distance to Rostock. The Vessel failed cargo hold cleanliness inspections at Rostock on both 6^th and 8^th January 2003. The Vessel was delayed at Rostock while her holds were cleaned to a standard suitable to load grain. Holds 3, 5 and 7 were passed on 9^th January 2003; holds 1, 4 and 2 were passed in the period 11^th to 14^th January. When she had eventually been satisfactorily cleaned, the rapeseed cargo was loaded in six of her seven holds, hold 6 being left empty. The Vessel was eventually redelivered to Owners on 16^th March 2003. Charterers alleged that Owners were in breach of the cleanliness warranties under the charter and that they (Charterers) were entitled to place the Vessel off-hire at Rostock until the holds were passed "grain clean". Owners argued that they were not responsible for the cleanliness of the holds once Charterers had loaded the iron ore cargo at Sepetiba. Charterers contended that, other than their responsibility for intermediate hold cleaning under clause 92 of the Charterparty, it was Owners' responsibility to clean the holds to a grain clean standard at Rostock.
4. There was evidence both from Charterers' surveyors and from Owners' surveyors that, when the Vessel delivered at Sepetiba, holds 2, 4 and 6 were not even sufficiently clean to receive the iron ore cargo because of the coal residues. The evidence also demonstrated that both Charterers and Owners knew at the time of delivery at Sepetiba that the holds were dirty and did not comply with the "grain clean" requirement. In response to Owners' claim for outstanding hire and expenses, Charterers contended that they were entitled to deduct US$ 82,779.19 as off-hire plus expenses at Rostock under clause 13 of the fixture note, or clause 15 of the Charterparty or, alternatively, that they were entitled to recover the same amount as damages in respect of Owners' breach of their delivery obligations, under line 21, clause 13 of the fixture note and clause 46, amendment 5.
5. The Tribunal rejected both claims of Charterers. In effect, the Tribunal decided that, because Charterers had not insisted on cleaning being done at the first loadport, Sepetiba, even though the iron ore could be loaded without it, Charterers had lost the right to claim for the loss of time and expense when cleaning to the relevant grain standard was done at the second loadport, Rostock. In those circumstances, Charterers now:

i) seek leave to appeal the Tribunal's conclusion on the off-hire claim (under section 69 of the 1996 Act); and

ii) challenge the Tribunal's conclusion on the damages claim for serious irregularity under section 68 of the 1996 Act, alternatively seek leave to appeal under section 69.

6. The relevant provisions of sections 69 and 68 are as follows:

"69 Appeal on point of law

(1) Unless otherwise agreed by the parties, a party to arbitral proceedings may (upon notice to the other parties and to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings. An agreement to dispense with reasons for the tribunal's award shall be considered an agreement to exclude the court's jurisdiction under this section.

(2) An appeal shall not be brought under this section except-

(a) with the agreement of all the other parties to the proceedings, or

(b) with the leave of the court.

The right to appeal is also subject to the restrictions in section 70(2) and (3).

(3) Leave to appeal shall be given only if the court is satisfied-

(a) that the determination of the question will substantially affect the rights of one or more of the parties,

(b) that the question is one which the tribunal was asked to determine,

(c) that, on the basis of the findings of fact in the award-

(i) the decision of the tribunal on the question is obviously wrong, or

(ii) the question is one of general public importance and the decision of the tribunal is at least open to serious doubt, and

(d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question.

68 Challenging the award: serious irregularity

(1) A party to arbitral proceedings may (upon notice to the other parties and the tribunal) apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings or the award.

A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in section 70(2) and (3).

(2) Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant-

(a) failure by the tribunal to comply with section 33 (general duty of the tribunal);

(b) the tribunal exceeding its powers (otherwise than by exceeding its substantive jurisdiction: see section 67);

(c) failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the parties;

(d) failure by the tribunal to deal with all the issues that were put to it;

(e) any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award exceeding its powers;

(f) uncertainty or ambiguity as to the effect of the award;

(g) the award being obtained by fraud or the award or the way in which it was procured being contrary to public policy;

(h) failure to comply with the requirements as to the form of the award; or

(i) any irregularity in the conduct of the proceedings or in the award which is admitted by the tribunal or by any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award.

(3) If there is shown to be serious irregularity affecting the tribunal, the proceedings or the award, the court may-

(a) remit the award to the tribunal, in whole or in part, for reconsideration,

(b) set the award aside in whole or in part,

(c) declare the award to be of no effect, in whole or in part.

The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration.

(4) The leave of the court is required for any appeal from a decision of the court under this section."

7. The relevant provisions in the Charterparty were as follows:

Line 21:

"Vessel on her delivery to be ready to receive cargo with clean swept holds and tight, staunch and in every way fitted for the cargo as per clause 29 having water ballast …"

Clause 15:

"that in the event of the loss of time from deficiency strikes and/or default of men or stores … machinery or equipment … or by any other cause preventing the full working of the Vessel, the payment of hire shall cease for the time thereby lost; … and the cost of any extra fuel consumed in consequence thereof, and all extra expenses shall be deducted from the hire."

Clause 29 - cargo exclusion clause:

"The vessel is employed on carrying lawful harmless merchandise in bulk excluding sulphur … petcoke … all dangerous cargos and all cargos that require more than grain clean condition. Charterers have the right to load maximum one cargo of non-oily petcoke in this charter period."

Clause 33:

"On and off-hire surveys for vessel's full condition and bunkers remaining on board shall be held jointly between Charterers and Owners by one single surveyor to be mutually agreed. On-hire survey to be held in Owners' time provided time actually lost by Charterers at first loadport or delivery port and off-hire survey to be held in Charterers' time at last discharge port before redelivery. Expenses for on/off-hire survey to be equally shared between Owners and Charterers."

Clause 46 - Cleaning clause:

"On arrival at the first loadport Vessel's holds to be clean and suitable to load Charterers' intended cargo to Shippers' surveyor's satisfaction."

Amendment 5: Clause 46:

"Cleaning clause, add at end: it is understood that on dely or upon arrvl 1^st loading port, vsel to be clean per grain standard up to independent surveyor's satisfaction."

Clause 92 - Intermediate Hold Cleaning:

"Upon completion of discharge of each cargo, the crew shall render customary assistance in cleaning cargo holds in preparation of next loading … such cleaning shall be performed while the vessel is en route … Charterers shall pay the crew US$ … lump sum each time such cleaning is performed. The crew will endeavour to affect [sic] such cleaning as best as possible … the Owners shall not be responsible for any consequences arising from the fact that the crew has been employed in the cleaning and the Vessel shall always remains on hire."

…

Clause 13 - Fixture Note:

"Owners warrant that vsl's holds on delivery or arrival first load port to be cleaned, swept washed down with freshwater, dried up free from rust leaks, scale, free from salt and free from residue of previous cargo and in every respects ready to load up to the satisfaction of the local surveyor. Should Vessel fail to pass hold inspection Owners to arrange cleaning at their time and expense and the Vessel to be off-hire from the time of failure until survey passed in all holds and any extra or directly related expenses incurred to be for Owners acct."

8. The applications made to this court by Charterers were as follows:

i) Off-hire

An application for leave to appeal on the basis that the Award was obviously wrong or open to serious doubt (in circumstances of alleged public importance) with regard to two questions of law, which questions I summarise as follows:

a) Whether on the true construction of the Charterparty, the express provisions of clause 13 of the fixture note prevailed over clause 15 so as to prevent Charterers putting the Vessel off-hire at the second loadport because of the dirtiness of the holds upon delivery/arrival at the first loadport (in breach of clause 13), in circumstances where Charterers had not earlier, at the first loadport, exercised the right under clause 13 either to reject delivery of the Vessel or to place the vessel off-hire at the first loadport until the holds were brought up to the correct grain standard.

b) Whether, by accepting delivery of the Vessel without reservation, Charterers waived their right to grain clean holds upon arrival at the second loadport (Rostock) and thereby lost their entitlement to place the vessel off-hire at Rostock.

ii) Damages

a) An order remitting the Award to the Tribunal for reconsideration on the basis that the Tribunal were guilty of a serious irregularity in that Charterers allege:

i) The Tribunal concluded that clause 46 (amendment 5) of the Charterparty must be read together with clause 13, with the result that a failure to exercise the right to insist upon cleaning to a grain standard at the first loadport under clause 13 prevented a subsequent complaint that the holds were not grain clean under clause 46 (amendment 5).

ii) The Tribunal also concluded that Charterers waived the right to grain clean holds at the first loadport and thereby any right to damages for any failure of the holds to be so clean, the basis for that conclusion being Charterers' awareness of the actual condition of the holds at the first loadport and their failure nevertheless to exercise the right to place the vessel off-hire under clause 13.

iii) The Tribunal's conclusions in these respects were not founded upon any argument raised by Owners (who, with regard to (i) above, had not contended that clause 13 cut down any right to damages for a breach of clause 46 (amendment 5), and who, with regard to (ii) above, had alleged estoppel/waiver on the basis of representation, reliance and inequity but not on the basis set out by the Tribunal.

b) In the alternative, and in the event that the Tribunal's conclusions were founded upon arguments which were advanced before it, permission to appeal on the basis that the Award was obviously wrong or open to serious doubt (in circumstances of alleged public importance) with regard to two questions of law, namely:

i) Were the claimants disentitled from claiming damages in respect of loss of time and expenses at the second loadport caused by the Vessel's holds not being grain clean at Sepetiba, in breach of amendment 5 to clause 46 on the ground that under clause 13 of the Fixture Note the claimants were entitled to insist that the holds were thoroughly cleaned to a grain clean standard at the first loadport before accepting delivery but chose not to clean to such a high standard and therefore could not insist at a later stage of the Charterparty that the Defendants comply with the grain clean requirement?

ii) Did the fact that the Claimants knew that the Vessel's holds were dirty at the time of delivery and that they had available the remedy under clause 13 of the Fixture Note of placing the Vessel off-hire at the first loadport, Sepetiba, until the holds were cleaned to a grain clean standard but chose not to exercise that remedy mean that Claimants (i) were precluded from complaining that the holds were not sufficiently clean to load the rapeseed cargo at the second loadport, Rostock, as a result of the holds not being grain clean upon delivery or arrival at the first loadport and/or (ii) waived their right to insist that the holds were grain clean so as to be unable to recover damages for breach of amendment 5 to clause 46 of the Charterparty for loss of time and expenses caused by the Vessel's holds being insufficiently clean to load the second cargo?

The off-hire claim

9. In relation to the questions of law that arise in relation to the off-hire claim, as set out above, the Tribunal answered both questions "Yes".
10. In paragraph 40 of the Award, the Tribunal found:

i) clause 13 required only that the Vessel's holds be clean upon arrival/delivery at the first loadport and not at any subsequent loadport;

ii) in the event that the Vessel's holds were not clean upon arrival/delivery at the first loadport, clause 13 provided for the right to place the Vessel off-hire only at the first loadport;

iii) accordingly, clause 13 did not permit Charterers to place the Vessel off-hire at the second loadport by reason of a failure to be clean at the first loadport.

11. Accordingly, the Tribunal concluded that Charterers had no "right" to require clean holds at the second loadport - that right only applied with regard to the first loadport. The Tribunal found expressly to this effect by reference to clause 92 (see paragraph 53 of the Award).
12. Thus at paragraph 52, the Tribunal said:

"52. Similarly, we found that Charterers' reliance on clause 15 was unsuccessful because the express provision of clause 13 of the fixture note prevails and because Charterers had the remedy at the time of either rejecting delivery of the Vessel or placing her off-hire until the holds had been brought up to the required grain clean standard."

13. Mr Edmund Broadbent for Charterers submits that the Tribunal's conclusion on this issue of construction was "obviously wrong". He submits that clauses 13 and 15 provide two separate remedies and can operate in two different situations. He submitted that, if Charterers do not reject delivery or require cleaning under clause 13 at the first loadport, that does not mean that clause 15 cannot operate at the second loadport if the dirtiness of the holds at the first loadport means that cleaning is subsequently required before the second cargo can be loaded. He further submitted that there is no conflict between the two clauses which needs to be resolved by the principle that a typed clause prevails over a printed clause. He said that Charterers were not seeking to construe clause 15 in isolation, but rather as part of the entire contractual document. He contended that, on the contrary, it was the Tribunal's approach which offends the well-established principle of contractual construction that, as far as possible, each clause in a contract should be given effect: see Chitty on Contracts, 29^th Edition Volume 1, paragraph 12-078.
14. Contrary to these submissions, in my judgment the Tribunal were correct in the conclusion which they reached. Clause 13 of the fixture note made it clear that the warranty was only that the Vessel would have clean holds upon delivery or arrival at first loadport. Likewise amendment 5 to clause 46 imposed the obligation to be clean as per grain standard only on delivery or upon arrival at the first loadport. Moreover, clause 92 makes it clear that the commercial intention of the parties was that intermediate hold cleaning, after the discharge of the first and each subsequent cargo, was to be done by the crew but that Owners were not to be responsible for any consequences arising from the fact that the crew had been employed in the cleaning and that, in effect, whatever the inadequacies of such cleaning by the crew, the Vessel was always to remain on hire.
15. Thus, in effect, at any subsequent port after the first loadport there was no guarantee of clean holds. The only entitlement to place the Vessel off-hire provided by clause 13 was to do so in the event that the holds were not clean upon delivery or arrival at the first loadport. No other right was given to Charterers to place off-hire at a subsequent loadport. If Charterers were correct in their submission that clause 15 applied to any loss of time resulting from the failure of the Vessel to present with clean holds at the first loadport, there would in effect be no need for clause 13, which was itself a typed clause, since clause 15 could be invoked by Charterers at any time. It seems to me that the words "by any other cause preventing the full working of the Vessel" cannot be construed as, for example, relating to a cause that was attributable to the crew's failure to carry out an intermediate hold cleaning under clause 92, although in one sense, a failure of the crew to carry out such cleaning could be said to prevent "the full working of the Vessel". In my judgment, those words cannot be taken to apply to a situation concerned with the failure to present with clean holds on delivery or at the first loadport which was expressly addressed by clause 13.
16. Thus I concur with the conclusion reached by the Arbitrators that, unless the Vessel was placed off-hire at the first loadport under clause 13, Charterers could not rely upon the absence of clean holds at the first loadport subsequently to place the Vessel off-hire. Even if, as here, the Vessel's holds were not clean upon arrival at the second loadport, there was no default on the part of Owners nor any other off-hire trigger within the meaning of clause 15. The Vessel was able to function; the allocation of responsibility for presenting with clean holds was fairly and squarely addressed by clause 13 as was the entitlement to place off-hire. Accordingly, on the first point of law I rule against Charterers.

Acceptance of delivery and waiver

17. In paragraph 54 of the Award, the Tribunal held that Charterers' unqualified acceptance of the Vessel at the first loadport had the effect that they had waived any right to place the Vessel off-hire at the second loadport under clause 15. Strictly this issue only arises in circumstances where I am wrong in the previous conclusion which I have reached as to the construction of clauses 13 and 15. If I am right in my conclusion that, as a matter of construction of the Charterparty, Charterers had no entitlement under clause 15 in the circumstances of this case, to place the Vessel off-hire at the second loadport by reason of the prior failure of Owners to present the Vessel with clean holds on delivery or at the first loadport, no question of the loss of any such entitlement by waiver or otherwise can arise. Thus, because I have concluded that, as a matter of construction, Charterers had no contractual entitlement to place the Vessel off-hire at the second loadport, this second question of law does not arise in relation to the off-hire claim. In my judgment, therefore, on the off-hire claim the Tribunal's conclusions are correct.
18. Moreover, in my view, the highest at which Charterers could possibly put their claim is that the Tribunal were arguably wrong. Accordingly their challenge does not satisfy the requirements of subsection 3(c) of section 69 of the 1996 Act that the Tribunal's conclusions were "obviously wrong" or "open to serious doubt". It is not therefore strictly necessary for me to go on to consider whether, even if the Tribunal's conclusions were "open to serious doubt", the questions raised are ones of public importance. There was no evidence before me to suggest that the market required a resolution of the issues of construction which arose in the context of this particular charterparty. It was suggested by Charterers that it was "common" for time charterparties to contain clauses which they contended were similar to those in the present case. However, no indication was given as to how commonly such clauses occur and whether this problem is one which has arisen in other cases. For these reasons, even if I had been of the view that the arbitrators' conclusions were "open to serious doubt", I would not have regarded the questions of construction raised as ones of public importance. Accordingly, in relation to the off-hire claim I dismiss the application for permission to appeal under section 69.

Damages

19. Mr Broadbent, on behalf of Charterers, submitted that there is a breach by arbitrators of their duty under section 33 of the 1996, if a tribunal decides against a party on grounds not raised by the other party and which were not in issue between the parties, without giving that party any reasonable opportunity to put forward arguments in answer to those grounds: see Gbangola -v- Smith & Sherriff Limited [1938] 3 All ER 730 at 740 and Pacol Limited -v- Joint Stock Co Rossakhar [2000] 1 Lloyd's Rep 109 at 114-115. This principle, which is well established, is not disputed as a matter of law by Mr Nevil Phillips, counsel for Owners. What he does dispute, however, is that there was any such irregularity in this case.
20. Mr Broadbent, on the other hand, submitted that there was indeed in this case a breach by the Tribunal of such duty. The Tribunal found that Owners were in breach of amendment 5 of clause 46, because the Vessel was not grain clean upon arrival at Sepetiba. However, the Tribunal nevertheless went on to conclude that Charterers were not entitled to damages for the reasons set out in paragraphs 44 and 45 of the Award.

"44. We accept from the evidence of both surveyors at Sepitiba that the Owners did not comply with the warranty provided in Amendment no.5 of clause 46, which was that the holds should be grain clean upon arrival at Sepitiba. However, since Charterers were the party which knew what cargoes it intended to load during the currency of the Charter, it seems to us that Amendment no.5 must be read in conjunction with clause 13 of the Fixture Note. Under clause 13 we have found that Charterers were free to place the Vessel off-hire if they (or their surveyor) were not satisfied that the holds were sufficiently clean. As we have stated, it was for Charterers to set the standard of cleanliness they required since they were the only ones who knew what cargoes they intended to load. It was therefore open to them to insist that the holds were thoroughly cleaned to a grain clean standard at Sepitiba before delivery. Nonetheless, although we accept that they may not have known about the rapeseed cargo at the time of delivery, they chose not to clean to such a high standard and therefore cannot insist at a later stage of the Charter that the Owners comply with the grain clean requirement. This view is clearly supported by the fact that a remedy of placing the Vessel off-hire was available to Charterers at the first load port, which we have found to be Sepitiba. Furthermore, this remedy was not available to Charterers at a subsequent port. The Charterers' case effectively suggested that they were entitled to accept the Vessel's holds in a dirty condition (for example, where they anticipated loading only dirty cargoes throughout the Charter). However, if they subsequently found an opportunity to load a grain cargo they could later insist that the Owners cleaned the holds to a grain standard. This, on any view, could not have been the intention of the parties when they agreed the terms of the Charter. [Tribunal's underlining]

45. Given the provisions of clause 13 of the Fixture Note, Charterers' remedy lay at the first load port. They could simply place the Vessel off-hire until the holds were cleaned to a grain clean standard. Since they did not avail themselves of this remedy, they waived their right to insist that the holds were grain clean. We refer to The "DEMOCRITAS" [sic] [1975] 1 Lloyds Rep 386 which supports the view that the question of whether or not a waiver of any claim for damages applies is a question of mixed fact [sic] but, predominantly, one to be decided by inference of [sic] the facts. Given that Charterers knew that the holds were dirty at the time of delivery and that they had available the remedy of placing the Vessel off-hire at Sepitiba but chose not to exercise that remedy, we agree with the Owners that Charterers cannot complain later that the holds were not sufficiently clean to load the rapeseed cargo."

21. Mr Broadbent submitted that these reasons had not been advanced by Owners as reasons for disallowing the claim for damages and they were not matters which were in issue between the parties in relation to the claim for damages.
22. I remind myself that, in interpreting the findings of a tribunal consisting of experienced commercial and professional men, as opposed to lawyers, one should look at the substance of such findings, rather than their form, and that one should approach a reading of the award in a fair, and not in an unduly literal way. In other words, it is not necessary that an award should contain express findings of fact, provided that the necessary findings may be "spelled out"; see per Brandon J in Toepfer -v- Warinco AG [1978] 2 Lloyd's Rep 569 at 576. In my judgment, on a fair and not unduly literal reading of the Award it is wrong to suggest that such arguments were not before the Tribunal.
23. Thus, as Mr Phillips for Owners submitted before me, the following submissions, in particular, were clearly before the Tribunal and taken into consideration by them:

i) Owners' submission to the effect that, given that there was no indication to suggest that Charterers took delivery of the Vessel on condition that the holds should later be cleaned at Owners' expense, Charterers had waived the right to put the Vessel off-hire under clause 13;

ii) Owners' submission to the effect that it would be inequitable for Charterers to take delivery of the Vessel without qualification and subsequently require the Owners to present with a higher standard of hold cleanliness;

iii) Charterers' submission to the effect that, had they insisted upon hold cleaning to a grain standard at the first loadport, the Owners could not have completed that prior to the cancelling date;

iv) Owners' submission to the effect that Charterers were estopped from contending and/or waived the right to contend that the Vessel's holds were unfit by reason of the fact that:

a) they were aware of the actual condition of the holds;

b) they accepted the Vessel without qualification;

c) Owners relied upon Charterers' conduct in that respect by failing to clean the holds prior to loading at the second loadport; and thus

d) it would be inequitable for Charterers to resile from their conduct in this regard;

(In this context, I interpose to say that I accept Mr Phillips' contention that Owners' submission under this head is of far broader scope (encompassing any consequence of any alleged breach of the requirement as to grain cleanliness, including any right to claim damages) than suggested by Charterers in argument before me.)

e) Charterers' submission to the effect that Owners had not acted to their detriment as a consequence of Charterers' conduct and could not, accordingly, advance an argument of estoppel;

f) Charterers' submission to the effect that; in order to advance an estoppel argument, Owners would need to demonstrate that Charterers "positively represented" that they would not raise any objection or claim with regard to the Vessel's condition at the first loadport and that Owners acted to their detriment in reliance upon such representation; but (it was said) there was no representation at all by Charterers, and "by not cleaning the vessel as required by the charter party before delivery into the charter service" the Owners saved time and money and, accordingly, suffered no detriment;

g) Charterers' submission that Owners had no sustainable case of waiver.

h) Owners' submission to the effect that:

i) by reference to paragraph 8.37 of Wilford et al, Time Charters, 5th ed., the right to damages for non-compliance of a vessel with the condition required on delivery will not be lost simply by virtue of acceptance of the vessel "if the deficiency which constitutes the breach is not reasonably apparent on delivery".

ii) by accepting the Vessel without qualification in circumstances where they knew of the condition of the Vessel's holds, and in circumstances where they had failed to insist upon cleaning to a grain standard and had failed to exercise the right to place the Vessel off hire at the first loadport, Charterers were precluded thereafter from complaining about that condition and are to be taken to have waived their rights in that regard.

24. I accept Mr Phillips' submission that it was clear that the submissions that Owners were making were to the effect that Charterers were to be taken to have waived all rights relating to any complaint with regard to the condition of the holds; that is to say not merely any right with regard to claiming off-hire, but also any right to claim damages. In my judgment it is simply unreal on a fair reading of the Award, and of the submissions that were made to the Tribunal, to contend, as Mr Broadbent seeks to do, that either the relevant submissions as to the waiver of the claim to damages and the estoppel argument were not made to the Tribunal, or that the Tribunal failed to take such submissions into their consideration. The manner in which the Tribunal recorded those submissions is apparent from paragraphs 10-28 of the Award.
25. I reject Mr Broadbent's argument that the Tribunal's observations in paragraph 44 in relation to Charterers' failure to place the Vessel off-hire at the first loadport under clause 13 meant that the Tribunal were not directing their minds to the claim for damages or had decided it against Charterers on points not argued by Owners or in issue before them. The Tribunal's reference to clause 13 simply formed the background to, and the basis for, their conclusion as to waiver in paragraph 45. Nor do I think that in paragraph 44 the Tribunal in any way expressed the view that clause 13, the off-hire provision, cut down or limited the effect of clause 46 (amendment 5), namely the warranty for the holds to be clean as per grain standard on delivery of the Vessel or upon arrival at the first loadport. All that the Tribunal were doing in that paragraph was to observe that, in circumstances where Owners were in breach of clause 46 (amendment 5), and where Charterers at the same time had the right to put the Vessel off-hire under clause 13, the failure of Charterers to exercise that right under clause 13 (and consequently their failure to insist upon the holds being made grain clean at the first loadport) was indeed evidence capable of supporting an inference of waiver and not merely waiver of the entitlement to put the Vessel off-hire, but also a waiver of the breach itself.
26. I do not read the Tribunal's Award as in any way ignoring the fact that clause 13 and clause 46 (amendment 5) do indeed give rise to separate remedies, nor do I read the Award as indicating a conclusion on the part of the Tribunal that one clause over-rode or restricted the operation of the other. I do not think that, when referring to Charterers' right to put the Vessel off-hire under clause 13 and stating in paragraph 5 that "since they did not avail themselves of this remedy, they waived their right to insist that the holds were grain clean", the Tribunal were intending to confuse the remedies available under clause 45 (amendment 5) and clause 13; nor do I believe that the Tribunal were purporting to conclude that, as a matter of law, that failure to place the Vessel off-hire automatically barred a claim for damages for breach of clause 46 (amendment 5). I agree with Mr Phillips' submission that what, on a fair reading, the Tribunal were doing was relying upon the failure as evidence which, together with the other matters referred to later in the same paragraph, would indeed support an inference of waiver of the breach by Owners to present the Vessel on delivery or at the first loadport "clean as per grain standard up to independent surveyor's satisfaction".
27. In my judgment there was more than enough material for the Tribunal to conclude that, in circumstances where Charterers had not insisted upon cleaning of the holds, notwithstanding that they were well aware that the holds were dirty, they had indeed precluded themselves from complaining of, or relying upon, the breach. I agree with Mr Phillips' submission that if this approach to paragraph 45 of the Award is adopted, it is easy to understand the Tribunal's reference to "The Democritos" Marbienes Compania Naviera SA -v- Ferrostahl AG [1975] 1 Lloyd's Rep 386. In my judgment, it was clearly open to them to infer a waiver of the breach and thus the right to claim damages from the surrounding facts, Charterers' knowledge of the condition of the holds at the first loadport and their failure to place the Vessel off-hire.
28. Accordingly, in my judgment there is no basis for a challenge to the Award on the asserted grounds of irregularity. The arguments that the right to complain about the breach of clause 46 (amendment 5) and the right to claim damages as a result of such breach had indeed been waived by Charterers or in the circumstances they were estopped from doing so were matters which the Tribunal clearly considered. Further, in my reading of the Award there is no basis for saying that the Tribunal decided the claim for damages against Charterers on points not argued by Owners or not in issue between them.
29. The alternative argument put forward by Charterers is, as I have stated above, a claim for leave to appeal under section 69 on the basis that the Award was obviously wrong or open to serious doubt in circumstances of alleged public importance with regard to the two questions of law which I have identified above. Here also I reject Charterers' submissions. As I have already held, I reject Charterers' submission that the Tribunal concluded that as a matter of construction clause 13 cut down the rights arising under clause 46 (amendment). I do not believe that the Tribunal came to that conclusion. I agree with counsel for Owners that in this respect one can fairly read the Award of the Tribunal as finding the following facts:

i) By accepting the Vessel without qualification or demur and by failing to exercise the right to insist upon the cleaning to a grain standard or place the Vessel off hire at the first loadport under clause 13, in circumstances where they were fully aware of the condition of the Vessel, Charterers represented unequivocally that there was no need for the Owners to comply with the grain clean requirement under clause 46 (amendment 5).

ii) Given that that requirement applied only in relation to the first loadport, it was impossible for the Owners to comply with the requirement once the Vessel had left that port.

iii) However, had Charterers not relieved the Owners of compliance with that requirement, the Vessel could have been rendered grain clean prior to the cancelling date while at the first loadport.

iv) In the face of Charterers' representation to the effect that compliance with the requirement was not being insisted upon, the Owners conducted themselves accordingly (by failing to clean to a grain standard at the material time).

v) In the circumstances, it would be inequitable to permit Charterers at any time after departure from the first loadport to contend that the Vessel should have been grain clean.

30. Accordingly, in my judgment, the Tribunal were entitled to infer a waiver of the need for the Vessel to be clean to a grain standard and/or to find that Charterers were estopped from contending that the Vessel was required to be clean to such a standard. The Tribunal were also entitled to find that any right to claim damages in respect of a breach of the grain clean requirement had been lost by Charterers because their findings on the facts justified a conclusion to the effect that there had been a waiver of a term of the charterparty inserted for Charterers' own benefit (i.e. the grain clean requirement under clause 46 (amendment 5)); see Chitty on Contracts, 29th ed., paragraphs. 22-045 and 24-009.
31. Although a waiver of this kind may be retracted at any time with reasonable notice, no revocation can be retrospective; thus a waiver may have permanent effect where it would be inequitable to permit retraction (for example, because the representee can no longer resume his former position: see Benjamin's Sale of Goods, 6th ed., paragraphs 12-035 and 12-036; and Toepfer). In this regard, a failure to act by the representee may be sufficient to give rise to a waiver (see Avimex SA v Dewulf & Cie [1979] 2 Lloyd's Rep. 57 at 67); it is unnecessary that the conduct of the representee should be to his detriment provided that there is some conduct which differs from that which would have occurred in the absence of the representation (see Benjamin's Sale of Goods, 6th ed., paragraphs 12-036; implicit in The Kanchenjunga [1990] 1 Lloyd's Rep. 391 at 399).
32. Likewise, in my judgment, the Tribunal's finding that, in effect, there had been an irrevocable representation that compliance with the "grain clean standard" should not be required, justified a conclusion to the effect that there had been a "total waiver": that is to say a complete excusing of the breach of clause 46 (amendment 5) and the forfeiting of any right which would accompany that breach (see Chitty on Contracts, 29th ed., paragraphs 22-046 and 24-009; Toepfer).
33. I also conclude that the Tribunal's findings also justified a conclusion to the effect that there had been a waiver by estoppel (or a simple promissory estoppel) precluding a claim for damages (see Chitty on Contracts, 29th ed., paragaphs 24-007 and 24-008).
34. Accordingly, in my judgment, I cannot conclude that the decision of the Tribunal on the stated questions of law is obviously wrong. Even if I had come to that conclusion, or I am wrong in the conclusion which I have reached, the questions cannot be regarded as ones of general public importance given the relatively small amount of money involved and the fact that the outcome essentially depends upon the particular circumstances of the case. I have no doubt that these experienced commercial arbitrators were rightly influenced by the practicalities of Charterers' failure to insist that the holds were cleaned to the requisite standard at the first loadport (notwithstanding their knowledge of the breach of the "grain clean" requirement), where the cleaning would have been a much easier task to have accomplished than at Rostock. Accordingly, I refuse Charterers' application for leave to appeal.
35. Finally, I should express my appreciation of counsel's helpful written submissions and oral presentations.