Trafigura Beheer BV v Ravennavi SpA (The “Port Russel”) [2013] EWHC 490 (Comm) 1 March 2013
This matter came before the Commercial Court on appeal under s.69 Arbitration Act 1996 from an arbitration award in favour of the owners. Somewhat unusually, the owners consented to the charterers having permission to appeal, but elected not to participate in the appeal.
By a voyage charter on an amended BPVOY 3 form with additional clauses, the owners chartered the vessel “Port Russel” to the charterers. Disputes arose in relation to demurrage and were referred to arbitration.
A preliminary issue was posed by the parties: “Was email a contractually permissible method of serving notices of readiness under this charterparty?” In its award the tribunal held by a majority that email was a contractually permissible method of serving notices of readiness under the charterparty.
The charterparty provided as follows:
Clause 19:
“… (a) laytime or, if the Vessel is on demurrage, demurrage shall at each loading and each discharge port or place commence at the expiry of 6 hours after Notice of Readiness to load or discharge has been received from the Master or his agents by Charterers or their agents, berth or no berth, or when the Vessel commences to load or discharge at the berth or other loading or discharging place, whichever first occurs. Such Notice of Readiness may be given either by letter, facsimile transmission, telegram, telex, radio or telephone (and if given by radio or telephone shall subsequently be confirmed in writing and if given by facsimile transmission confirmed by telex) but Notice of Readiness shall not be given without Charterers’ sanction, before the commencement of laydays … “
The tribunal held that the original authors of Clause 19 intended that NoRs might be tendered in a wide variety of ways and did not accept that the authors intended their list to be exhaustive or exclusive.
The court was referred to a number of authorities citing that the use of the word “may” can denote a clause which is permissive or a clause which is obligatory. As such, each clause will fall to be construed within its own particular factual and commercial context.
In this instance, Mr Justice Popplewell found that the language of clause 19(a) was prescriptive and defined the form in which a valid Notice of Readiness must be given. It was obligatory, not permissive. The word “may” prescribed what was permissible. This was supported by the use of the words “either” and “or”. These naturally denoted alternatives which made an exclusive group. There would be scant reason in denoting six specific alternative methods of giving notice if any method of giving notice were permissible.
In the Judge’s view, the giving of an NoR had important consequences. It starts the running of laytime and those involved both in the giving and receiving of such notices are assisted by certainty as to whether the notice had been validly given. If clause 19(a) was prescriptive, it conferred certainty. If it was permissive, it left uncertainty over whether an NoR which was given by a method not listed had been validly given. There was an imperative for treating the listed methods as the exclusive list of permitted methods.
He further considered that there was a common feature in the listed methods, which was missing in the case of service of an NoR by email. The listed methods allowed for a hard copy document to be received. That allowed the document to be signed for receipt or marked by the recipient as rejected or claused. It gave an opportunity for the recipient to comment upon the NoR. Such comments might be of significance when a dispute arose as to the validity of the NoR. In contrast an email will only exist in soft copy form unless printed out by the recipient. Whilst a recipient may print the email and sign for receipt or clause it with comments, if so desired, he was not bound to do so.
This was not, Popplewell J held, one of those cases where the plain language of the clause led to such an absurd result that it must yield to some unnatural meaning. Ultimately the Judge’s view was that what mattered was not what would have been in the minds of those drafting the clause in the 1990s; what mattered was the intention to be derived from the words used by these parties, at a time when these parties were well aware of the existence of email as a common method of communication and chose not to refer to it in clause 19(a).
Article by Sian Morris
