QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
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Claimants/ Charterers |
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- and - |
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(1) A (2) I |
Defendants/ Owners |
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Nicholas Hamblen QC (instructed by Middleton Potts) for the Defendants / Owners
Hearing dates: 5 June 2008
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Crown Copyright ©
Mr Justice David Steel :
"Vessel to be of highest Lloyds or equivalent Class, valid ISM code, no tween hatches, max 20 years of age.
Vessel to have unobstructed holds and be suitable for grab discharge.
Charterers to give 30 days notice with 10 days notice laycan spread and Owners to nominate the vessel latest 10 days prior first day with complete itinerary of the vessel including previous port(s) agents' contacts details.
Vessel nomination to be confirmed by the Charterers latest 24 hours after nomination Saturday, Sunday excluded.
Please advise detailed itinerary, vessels present position, where and what the vessel is discharging, agents name and contact details at the time of the nomination."
"3. Vessel to give 7/5/3/2/1 day(s) notice to Agents at load port …… as well as to Shippers and Receivers, Owners are to notify Charterers immediately if there is a change in the readiness of more that 24 hours.
4. The cargo to be loaded into vessel as per clause 26 weather working days of 24 consecutive hours. Any time lost through …. any cause whatsoever beyond the control of the Charterer affecting mining, transportation, delivery and/or loading of the coal, not to be computed as part of the loading time (unless any cargo actually loaded during such time). In the event of any stoppage or stoppages arising from any of these causes continuing for the period of six running days from the time of the vessel's being ready to load, this charter shall become null and void; provided however that no cargo shall have been shipped on board previous to such stoppage or stoppages…
15. Vessel not to tender before 9am on see Clause 23 and if vessel be not ready at loading port as ordered before 9am see Clause 23, or if any wilful misrepresentation be made respecting the size, position or state of the vessel, Charterer to have the option of cancelling this Charter, such option to be declared on notice of readiness being given.
26. LOADING RATE:
20,000 metric tons per weather working day of 24 consecutive hours, Sundays and Holidays included basis Quebec, 30,000 metric tons per weather working day of 24 consecutive hours, Sundays and Holidays included basis Baltimore.
NOTICE OF READINESS:
Vessel not to tender N.O.R. prior commencement of laycan.
Notice of Readiness to be tendered at any time day or night, Sundays and Holiday included whether in port or not, whether in berth or not, whether in free pratique or not, whether entered Customs cleared or not.
LAYTIME:
A) Laytime for loading shall commence twelve (12) hours after the Notice of Readiness is tendered unless sooner commenced.
B) In case Supplier can arrange to load before laytime commences, then time actually used in loading shall count as laytime.
…..."
i) Pursuant clause 23, the charterers sent a message to the owners on 6 September 2007 giving the laycan for Baltimore/Constanza "shipment #5 under the subject COA as 5/14 Oct".
ii) On 13 September 2007, a further message was sent to the owners to the effect that the charterers ".. would like to move the laycan for shipment #5 to 21/30 Oct." The owners declined this proposal in a message on 13 September 2007.
iii) On 17 September 2007 the charterers sent a message to the owners stating:
"Actually the stem 5/14 has been moved to 21/30 by the shippers because of cargo availability in this port. Therefore requesting owners for this amendment."
iv) That same day, the owners replied declining to change the dates and offering to cancel voyage 5 and to perform voyage 6 on the new dates proposed by the charterers. This proposal was no doubt prompted in part by the fact that market had risen substantially above the freight rate specified in the COA.
v) On 20 September 2007, the charterers sent a message via an intermediary as follows:
"…..5TH SHIPMENT - BALTIMORE/CONSTANZA 5-14 OCT 2007
FURTHER OUR PREVIOUS EXCHANGE AND DUE CHRS IMPOSSIBILITY TO PROVIDE THE ABOVE STEM DUE SHIPPERS HAD TO POSTOPONE DATES TO 21-30 OCT 2007, CHRS CAN PROPOSE BELOW STEM TO REPLACE THE ABOVE NOMINATED STEM WITH SAME DATES ON WHICH OWNERS WILL HAVE TO APPLY THE EQUIVALENT TC RATE COMING OUT FROM EXISTING FREIGHT AGREED IN THE ABOVEMENTIONED COA, PLEASE FIND BELOW TERMS OF CARGO TO REPLACE BALTIMORE/CONSTANZA ASFS:
60000/10 PCT COAL
NEWPORT LOAD RATE MTS SHINC
NIKOLAEV (WHERE UNDERSTAND THERE IS DRAFT RESTRICTION 10.3 mt fw wog)
….."
vi) The award records a specific finding that this message meant as follows:
a) The shippers of the coal had postponed the dates for the stem of coal to 21/30 October.
b) The original dates for the stem had been 5/14 October.
c) It was this postponement which gave rise to the impossibility of providing the cargo for the "above stem" namely 5/14 October.
d) In place of the 5th voyage, charterers were proposing a replacement voyage from Newport News to Nikolaev at the COA freight rate.
vii) By a message dated 24 September 2007 the owners maintained their position that a substitute voyage was not acceptable. The owners' contention was that the notice given on 6 September was a binding nomination which could not be withdrawn and repeated their proposal to cancel the 5th voyage and perform the 6th voyage on the new 21/30 laycan.
viii) The reply from the charterers was as follows:
"re [I/P] - coa cp dd 2nd april 2007 5th shipment
Chrs are hereby to express their disagreement on Owners interpretation and position about nomination cls and actually their disappointment for their uncooperation to assist them.
CHRS feel have rights, in case Owners haven't nominated yet the performing vessel, to move dates/laycan in the event of unforeseen events like in this particular case. Shippers need to move the dates about two weeks later and again view Owners have not provided their performing vessel this should not effect Owners.
Furthermore Chrs have also given the option to Owners in order to maintain the nominated laycan 5-14 oct 2007 and not affecting their schedules with cargo loading from same area to same destination, simply applying the same equivalent tc rate in the existing coa on this shipment Newport news/nikolaev."
ix) On 24 September 2007, the owners sent a message saying that they were treating the charterers as acting in repudiatory breach in failing to perform the 5/14 shipment "despite you having irrevocably nominated the latter as laycan for the 5th shipment". They made it plain that they would only waive their claim in respect of the repudiation if the 21/30 October shipment was treated as the 6th and final shipment. This message was found to be an acceptance of the repudiation contained in the charterers' message of 20 September 2007 (as in effect repeated on 24 September).
i) Whilst nomination of the loading port and/or discharge port and/or cargo would indeed be irrevocable, the same does not apply to the laycan spread.
ii) Only if the owners had nominated a vessel and the same had been duly confirmed by the charterers would the laycan dates (and the vessel) be irrevocable since the charterers would then be estopped from changing the spread.
iii) There is no obligation to provide cargo within the laycan spread. Absent any ensuing frustrating period of delay, the failure to provide the cargo within the specified period would not be repudiatory.
iv) All that the charterers were doing was making it plain that there was going to be a delay in the provision of the cargo and implicitly that they would not exercise their option to cancel pending the delivery of cargo under the new stem.
v) Clause 4 was not engaged absent a finding that the delay in the provision of cargo was attributable to some event outside the control of the charterers. In any event the clause could only operate ex post facto once it was established that i. there has been such delay and ii. It occurred before any part of the cargo was laden. In any event, any annulment under the clause would not constitute a repudiatory breach.
i) The nomination of the vessel was as irrevocable as the nomination of the loading port: the requirement for confirmation did not constitute a right of rejection but merely an opportunity for assessing compliance with the express specifications.
ii) These nominations were both inextricably entwined with the laycan period: the charterers' laycan notice set the timing of the voyage together with the load port and cargo: it was then an obligation of the owners to nominate a vessel "latest" 10 days prior to the specified laycan period.
iii) Such nominations accordingly became "written" into the contract for the 5th voyage as essential terms.
iv) The charterers were not simply giving notice of a delay in the provision of the cargo and/or an intention not to cancel pending the new cargo stem: they were purporting to move the laycan stem.
v) It was clearly within the permissible conclusions of the arbitrators' as a matter of mixed fact and law that charterers were contending that they were not bound by an essential term of the COA.
vi) The engagement or otherwise of Clause 4 was not an essential part of reasoning.
i) they would not have a cargo to load at Baltimore on 5 October;
ii) they were entitled to move the laycan;
iii) they wanted to substitute another voyage in place of the 5th voyage under the COA.
These findings of fact are completely inconsistent with the charterers' submission. It is simply not open to the charterers to say that in light of the delay in loading they were only proposing an extension of the cancelling date.
"There are, however, some charter provisions under which the notice is intended to be definitive of the parties rights' and where the approach adopted in the time charter cases would be appropriate. For example, a notice served pursuant to a provision which requires one of the parties to give a post-contractual notice defining or narrowing the lay-can period would no doubt be held to have the effect of defining the period conclusively."