Mediterranean Salvage & Towage Limited v Seamar Trading & Commerce Inc “The Reborn” [2008] EWHC 1875 (Comm)
This was the hearing of an appeal to the Commercial Court under section 69 of the Arbitration Act 1996 on a point of law arising out of an arbitration award of three very experienced LMAA arbitrators. Just one of the four issues identified by arbitrators was the subject of appeal. That issue was formulated by Mr Justice Aikens as:
“If a specific load port is named in a voyage charterparty and there are several possible berths within that port to which a vessel could be directed to load by the Charterers and there is no express warranty in the charterparty for the “safety” of either the port or the berth to which the vessel is to be directed by the Charterers, is the charterparty subject to an implied term that the Charterers must nominate a “safe” berth at the load port?”
Owners had chartered the vessel to charterers on an amended Gencon 1994 form, for the carriage of cement from Lebanon to Algiers. Whilst at the loading berth, the vessel contacted with an underwater projection and the vessel’s hull was damaged. Owners claimed against charterers on the ground that charterers were obliged to nominate a safe berth at the loadport despite there being no express warranty as to safety. The Tribunal ruled against owners and owners appealed that decision.
The charter terms provided, inter alia, as follows:
Box 10: “Loadport port or place (Cl.1) 1 Berth Chekka – 27 FT SW permissible draft”
Clause 1: The said vessel shall…proceed to the loading port(s) or place(s) stated in Box 10 or so near thereto as she may safely get and lie always afloat….
Clause 20: Owners guarantee and warrant that upon arrival of the vessel to and/or prior its departure from, loading or discharging ports….the vessel, including inter alia, the vessel’s draft, shall fully comply with all restrictions whatsoever of the said ports...including their anchorages, berths and approaches and that they have satisfied themselves to their full satisfaction with an about the ports specifications and restrictions prior to entering into this Charter Party”
Aikens J held that in the absence of an express warranty as to the safety of either the port of any berth nominated within the port, owners must demonstrate that business efficacy required such a warranty to be implied into the charter. He found there was no such need for several reasons.
Owners had agreed to load at the named port of Chekka and they knew the vessel had to go to one of the berths capable of accommodating the vessels draft. Further by way of clause 20, owners had guaranteed and warranted they would satisfy themselves as to restrictions and specifications of the port. Owners thereby agreed either to investigate or to take the risks of danger themselves.
When charterers nominate a specific berth that is an election rather than a selection and as such is treated as if written into the charter originally and cannot be subject to change without owner’s agreement. Charterers only choice here was to elect a berth at the identified load port and to ensure that the vessel’s draft restriction was met within that choice.
The combination of the warranty within the first limb of clause 20 and the deletion of the word safely from clause 1 was of considerable import. These meant owners had agreed that the vessel would proceed to the nominated berth at Chekka, or so near as she could get and lie afloat and load cargo but that obligation was not contingent upon the vessel’s safety.
In light of all the above the Judge held that an implied warranty as to safety would be plainly inconsistent with the express terms. Charterers only obligation was not to nominate an impossible berth for the vessel given her draft restriction.
Interestingly, there has been no previous direct authority on this point. However the charter wording, the deletion of “safely” from clause 1 and the warranty at clause 20 was central to the decision in this instance.
