In the recent case of Seatrade Group N.V. v Hakan Agro D.M.C.C (The Aconcagua Bay), the English High Court clarified the scope of a warranty in a voyage charterparty that the berth shall be “always accessible”. Previous cases have considered what this phrase means in the context of a vessel entering a berth (see the Club’s previous article), however this case discussed whether this requires that the vessel is able not only to enter the berth, but to leave the berth too. The answer to this question was “yes”.
Background
The Aconcagua Bay (the “Vessel”) was chartered on an amended GENCON 1994 form for a voyage from the US Gulf to the Republic of Congo and Angola. The charterparty provided “Loading port or place: 1 good safe berth always afloat always accessible”.
The Vessel reached the loading berth without incident but during loading operations, a bridge and lock within the port channel were damaged. As a result, the vessel was unable to leave the berth until 14 days after loading was completed.
Owners commenced English arbitration proceedings against Charterers claiming damages for detention for the period of delay, arguing that Charterers had breached the “always accessible” warranty in the charterparty.
The Arbitration
The decision of the Tribunal was that the warranty was confined to entry to the berth and did not extend to departure from the berth. This was on the basis that “accessible” naturally means “reachable”. Therefore, there had been no breach by Charterers.
Owners appealed against the decision and were granted leave to appeal by the English High Court on the basis the question of law raised by the appeal was considered to be of general public importance.
The Appeal
On appeal, Knowles J found that the Tribunal had erred in law in finding that the parties had intended to confine the issue of accessibility of the berth to entry alone.
Knowles J noted that in interpreting a contract, the court must look to identify the intention of the parties by reference to “what a reasonable person having all the background knowledge that would have been available to the parties would have understood them to be using the language in the contract to mean”. He considered that a reasonable commercial party looking at the subject of berthing would bear all aspects in mind and not confine the term to a vessel getting into berth.
In reaching this conclusion, Knowles J observed that there are a number of judgments and awards which have examined the term “always accessible” in the context of a vessel’s arrival but have not needed to address the position on departure. Although the tribunal in London Arbitration 11/97 did address the position on departure, finding that the term “always accessible” did not extend to leaving the berth, the point was not decisive in that arbitration. Further, this 1997 arbitration award was not consistent with the authors of the Baltic Code 2003 (or its subsequent versions) which state that “Where the charterer undertakes the berth will be ‘always accessible’, he additionally undertakes that the vessel will be able to depart safely from the berth without delay or at any time during or on completion of loading or discharge”.
Knowles J considered that reference to dictionary definitions could not resolve the point of interpretation although he agreed there was force in Owners’ submission that the word “always” in the term “always accessible” conveyed a sense of continuity. This is consistent with “always afloat” which covers the whole period a vessel is in berth.
Knowles J noted that a number of textbooks treat the terms “always accessible” and “reachable on arrival” as synonymous, but in his view the two terms only have the same effect in the context of berth arrival (and not berth departure). He noted that there was a range of vocabulary from which parties can choose, if “always accessible” applies to departure as well as entry and if “reachable on arrival” applies to entry alone.
Finally, he considered that where commercial parties had addressed the question of accessibility of the berth, he could see no basis for a conclusion that they should be taken to have addressed entry alone. Importantly, in his view, the Umpire in the original arbitration had not provided an answer to this point.
In summary, Knowles J held that the term “always accessible” applied both to entry to a berth as well as to departure from it.
Comment
The case highlights two points of importance. First, there is a difference between a warranty that the berth will be “always accessible” and a warranty that the berth will be “reachable on arrival” and careful consideration should be given when choosing which phrase to use in a charterparty. Secondly, if the parties to a voyage charterparty wish to limit the “always accessible” warranty to the vessel’s arrival only and therefore exclude delays arising during the vessel’s departure from the berth, then additional wording will be required.
