QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
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TRANSPETROL MARITIME SERVICES LIMITED |
Claimant |
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- and - |
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SJB (MARINE ENERGY) BV |
Defendant |
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Mr Stephen Cogley (instructed by Andrew Jackson) for the Defendant
Hearing dates: 11th to 20th October 2010
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Crown Copyright ©
His Honour Judge Mackie QC:
Background
The Trial
Facts agreed or not much in dispute in the period leading up to the Charterparty
"Good afternoon Simen,
Cargo Quantity: Min 41,000MTS charterers option upto full cargo no D/F C/A PMQS Max SG 1.025 at loaded temp.
Grades: ½ grades FO and/or VGO
Pls add "If VGO, no cleaning required; vsl to load on top."
Segregation: Maximum two, within vessels natural segregation. Pls add "and always within vessel's stability capabilities".
- Itinerary: vsl ppt off Cyprus
- L3C: FO/FO/FO
- - Approvals:
To the best of Owners knowledge vessel is approved by:
Moh (exp 26/08/07), statoil (exp 02/01/2008), Lukoil (exp 27.03.2008), exxon exp 26.09.2007 (basis lukoil SIRE), BP (exp 19.03.2008)
- Turkish Straits Clause:
*notwithstanding anything elsewhere herein contained, if the vessel commences the ballast voyage in time to arrive at the loadport within the cancelling date but is delayed because of the traffic regulations through the turkish straits north-bound such that vessel may not arrive by the cancelling date charterer's option to cancel as provided
Elsewhere herein can not be exercised. Owners to notify charterers of the date and time that they expect the vessel to be ready to load based on the advisory position given by the traffic control.
*any delay in passing the turkish straits south bound in excess of 24 hours (including the actual transit time) to count as laytime or time on demurrage if vessel on demurrage. Supporting documents to follow.
- vessel to maintain loaded temperature but maximum 135 degrees fahrenheit, maximum loaded temperature 165 degrees fahrenheit."
"18. Oil companies approvals clause
Owner warrants that the vessel is approved by the following companies and will remain so throughout the duration of this Charterparty (owner(s) to advise, including inspection dates and expiry dates)".
"TBOOK VSL APPROVED BY: TBOOK VSL APPROVED BY: BP/EXXON/LUKOIL/STATOIL/MOH".
The terms of the Charterparty
"Approved"
"We will defer inspection of the vessel until approximately June 2007. If necessary, we will refer to Statoil ASA SIRE report dated 3 January 2007.
However please note that SIRE reports are used on a case-by-case basis only when required. Chevron does not issue approvals in advance. That is, each time a vessel is considered by us for charter or third party use, it must be cleared. Approval or disapproval at that time will be based on inspection information, as well as other information; such as, but not limited to, commercial alternatives, vast experience with the vessel and its operation, financial stability of the owner, age, the vessel, etc."
"We have now received sufficient information with regard to this vessel and will not normally require re-inspecting the vessel for a 12 month period from the date of the inspection.
Please note, however, that this letter does not constitute a blanket approval of the vessel for LUKOIL-LITASCO business or for visits to Lukoil terminals or facilities. The vessel will be screened by us on each occasion it is tended for Lukoil/Litasco business or intends to visit one of our terminals or facilities.
Amongst other criteria, our decision will be based on the continued satisfactory performance of the vessel and any feedback that we may receive." (Owners do not see the SIRE reports).
Tbook
Claims about approval before the date of the charterparty
Events at and after Antwerp
- there will be no impact on HSE;
- there will be no negative impact on vetting prospect of our potential USA customers."
The Crack
The evidence of Mr Vellenga
Marketing and Sale of the Cargo
"A. No that is over simplification. If I want to sell a cargo, the ship is cleared or vetted or however you want to call it, so the buying company will look at the vessel and check whether it's good or not good. The warranties that is an owner has by the periodic – the periodic approvals, if you call them that, erm, that is between owner and the form that gives it but in order to get a ship somewhere to get it cleared, you need a different thing which is the clearance itself and if a ship has good periodic approvals, it tells me – and from good companies – it tells me that the ship is in a good – the ship, the crew, the management, is in a good state so then it is more than likely, close to a certainty, that my potential buyer will clear that vessel and then the potential buyer can be in the Tbook or it can not be in the Tbook, that's basically irrelevant because if the ship is good, they will clear it. If the company that I sell it to is in the Tbook, they will still do the clearing. They will not fall back to the periodic approval that they are free from the effort of checking the ship.
Q. So it does not really matter who is in the Tbook?
A. It does, because if you have only MOH and some small – smaller refineries in, they have a lower standard of the approval letter whereas the BPs, Exxons, Chevrons, they have higher standards.
Q. The reality is that your approach to the Tbook warranty is you just wanted to see some decent names and that gave you a general reassurance?
A. That's for the general reassurance. I also wanted a specific reassurance that those approvals would remain in place with the result that that implies that the ship remains – the ship itself remains good, because if it doesn't remain good then the periodic approvals get lost."
Quality
Mr Allcard and Ms Jago
Sale of the cargo
Conclusions - Liability
Mitigation of Damage
"Where the sufferer from a breach of contract finds himself in consequence of that breach placed in position of embarrassment, the measures which he may be driven to adopt in order to extricate himself ought not to be weighed in nice scales at the instance of the party whose breach of contract has occasioned the difficulty. It is often easy after an emergency has passed to criticise the steps which have been taken to meet it, but such criticism does not come well from those who have themselves created the emergency. The law is satisfied if the party placed in a difficult position by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures and he will not be held disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken".
Demurrage – the claim in the action
Other matters.
Conclusion
1. Post Script- Unfortunately Counsel's commitments caused the first appointment for handing down this judgment to be postponed. A problem for one Counsel caused by very bad weather in December 2010 turned the second appointment into a brief and unsatisfactory telephone conference. At the request of Counsel I therefore postponed the hand down. Following further exchanges between the parties and the Court a hearing was arranged for 18 February 2011 to finalise all outstanding matters. To ensure that matters would not be left open I made directions for an agreed agenda and short notes from each side to be circulated before that hearing. Counsel have helpfully cooperated in that exercise. I also decided to hand down judgment after dealing with consequential matters so that the outcome was clearer. At that hearing I dealt, in addition to the usual matters set out in the Order, with the following.
2. Estoppel- In the course of deciding pre trial applications made by both sides very late and trying to do broad justice, I permitted SJB to amend to withdraw most of the admissions about the quantification of demurrage which it had made in August 2007. I refused to allow SJB to withdraw what I understood to be those admissions for which Transpetrol could not prepare in time for the trial. I made that order on a procedural application to amend but Mr Raphael made it clear that he would maintain his position that his client had a defence of estoppel. He argues that the Defence was a representation on which his clients acted and relied in their conduct of the action and have suffered detriment in proceeding to trial without, until the amendment was made, any evidence to assist them. The claim is not in Transpetrol's pleading because it arose as an issue only after I permitted SJB's amendment but it was raised briefly in its skeleton for the trial and, again briefly, in its oral but not its written closing submissions.
3. While an admission in legal proceedings may well be a representation giving rise to potential estoppel the essential ingredients are not present in this case. In permitting the amendment I had regard to the facts that there was a real prospect of success, that the matters were capable of being fairly tried and that the Court's powers to award costs could remedy any waste of resources caused to Transpetrol by the late change. Reliance on an admission in pleadings must be in the knowledge that there may be a change and an amendment before or at a trial to the extent to which the Court permits it. I see no relevant detriment given the terms which the Court can impose on the costs of an amendment and the absence of any suggestion that some significant relevant evidence has become unavailable following the admission. Further I have stood over for argument and evidence the demurrage issues which Transpetrol argues that it was not ready for at trial and done so on terms which should protect its position on costs
4. Title to Sue/Loss not suffered by the Defendant – This point is not pleaded and was not raised by Transpetrol in its trial skeleton because the issue did not emerge until late disclosure before the trial. As an issue it has changed with time. Transpetrol says that since SJB sold the cargo to an affiliate on 1 August 2007 it suffered little loss because most if it had not occurred by then. Further most of the expenses incurred were not by SJB but by affiliates. SJB cannot recover because there is no evidence of inter company indemnities in terms which might enable SJB to recover damages for this loss.
5. Mr Cogley responds that his clients have given Transpetrol credit for the price at which the cargo was sold out of the SJB Group not the price at which it was sold to the affiliate and his claim could well have been higher. SJB was going to sell to STUSCO. As I see it Mr Raphael's approach is artificial and I have already rejected it. In substance SJB suffered the loss. Further, as regards expenses I have accepted the evidence of Mr Vallenga, for reasons I have given, about the relationship of indemnity within the SJB Group.
6. Demurrage- In the draft judgment I calculated the demurrage claim without reference to the Counterclaim. I apologise to the parties for failing to notice a point that was noted in Mr Cogley's closing submissions and which should have been clear to me anyway. The consequences of that oversight have now been worked through into the Order.