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England and Wales High Court (Commercial Court) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> St Shipping And Transport Pte Ltd v Space Shipping Ltd, Re CV Stealth [2016] EWHC 880 (Comm) (20 April 2016) URL: http://www.bailii.org/ew/cases/EWHC/Comm/2016/880.html Cite as: [2016] WLR(D) 205, [2016] Bus LR 703, [2016] EWHC 880 (Comm) |
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Fetter Lane, London, EC4A 1NL |
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B e f o r e :
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ST SHIPPING AND TRANSPORT PTE LTD |
Claimant (Respondent in the arbitration) |
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- and - |
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SPACE SHIPPING LTD |
Defendant (Claimant in the arbitration) |
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"CV STEALTH" |
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Mr Sean O'Sullivan QC and Mr James Hatt (instructed by Lax & Co LLP) for the Defendant
Hearing dates: 13 April 2016
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Crown Copyright ©
The Hon. Mr Justice Popplewell :
Introduction
The facts
"13.(a) The master (although appointed by Owners) shall be under the orders and directions of Charterers as regards employment of the vessel, agency and other arrangements…
Charterers hereby indemnify Owners against all consequences or liabilities that may arise
(i) from signing bills of lading in accordance with the directions of Charterers, or their agents, … or … from the Master otherwise complying with Charterers or their agent's orders
(ii) from any irregularities in papers supplied by Charterers or their agents."
"21.(a) On each and every occasion that there is loss of time for more than 6 (six) hours…
…
(v) due to the detention of the vessel by authorities at home or abroad attributable to legal action against… the vessel, the vessel's owners or Owners (unless brought about by the act or neglect of Charterers)
… the vessel shall be off-hire…"
"27.(a)… Further, neither the vessel, her master or Owners, nor Charterers shall, unless otherwise in this charter expressly provided, be liable for any loss or damage or delay or failure in performance hereunder arising or resulting from… arrest or restraint of princes, rulers or people"
"28. … No voyage shall be undertaken, nor any goods or cargoes loaded, that would expose the vessel to capture or seizure by rulers or governments."
"The parties hereby agree that either party may –
(a) appeal to the High Court on any question of law arising out of an award;"
"Vessel: MT CV Stealth
Charterers: AS Capital LTD
…
Load port: Guaraguao Terminal, PLC, Venezuela
LAYCAN: 4-5 Sep 2014
…
Cargo: Mesa Crude-no heating required. Total cargo up to 400 kbbls or as limited by draft at the discharge port.
Surveyors: SGS
Loadport Agents: Atlantic Marine Services SA
…
Vessel to arrive load port in all respects ready to load the nominated cargo.
…
Anticipated discharge destination is TBN Terminal in Houston Ship Channel; complete information to follow"
The Claims and Issues before the Arbitrator
(1) under the express indemnity in clause 13(a)(i) of the Charterparty ("against all consequences or liabilities that may arise… from the Master otherwise complying with Charterers or their agent's orders");
(2) under the express indemnity in clause 13(a)(ii) of the Charterparty ("against all consequences or liabilities that may arise… from any irregularities in papers supplied by Charterers or their agents");
(3) as damages for the Charterers' breach of Clause 28 of the Charterparty.
(1) the Owners were entitled to an indemnity under clause 13(a)(i) because the detention arose from compliance with the orders of the Charterers or their agents;
(2) the Owners were entitled to an indemnity under clause 13(a)(ii) because the detention arose from irregularities in the Authorisation supplied by the Charterers or their agents;
(3) the Charterers were in breach of clause 28 in that the voyage involved the increased risk of detention resulting from Mr Barbosa's intention to export cargo unlawfully;
(4) clause 27(a) provided no answer to these liabilities because they fell within the proviso "unless otherwise in this charter expressly provided";
(5) the Vessel was not off-hire under clause 21(a)(v) because the detention was "brought about by the act or neglect of Charterers" in breaching clause 28 and/or giving the orders and supplying the Authorisation which triggered the obligation to indemnify under clause 13.
Clause 28
(1) The question whether the voyage exposes the vessel to capture or seizure is to be answered prospectively at the time that the voyage order is given by the Charterers, in this case on 4 September 2014.
(2) Clause 28 is only engaged if at the relevant time there are factors which, as a matter of objective fact, materially increase the risk of capture or seizure beyond what is inherent in normal employment of the vessel.
(3) Although the Arbitrator purported to apply a prospective test, his conclusion that clause 28 was breached, expressed in compressed reasoning at paragraphs 100 and 101 of the Award, must have involved an error in one or more of three ways:
(a) In giving a retrospective interpretation to the clause, in spite of saying that he did not; and/or:
(b) in reversing the burden of proof of a risk existing at that date; or
(c) in treating the risk as sufficient merely because at that stage there was no authorised cargo for sale/export by PDVSA.
(1) "the charterers ordered the Vessel to proceed to Guaraguao Terminal, Puerto La Cruz, Venezuela to load the AS Capital cargo at the PDVSA Terminal;"
(2) "that cargo was not authorised by PDVSA for sale and was not scheduled to be loaded, and hence the cargo was not one which could lawfully be shipped from Venezuela;"
(3) "as an incidence of [the order of 4 September 2014] the charterers ordered the master [on 6 September 2014] to communicate directly with AS Capital's agents, "GAMS;"
(4) "as a result of and as an incidence of the above orders the Vessel received the unauthentic PDVSA authorisation;"
(5) "it was this forged document, which when raised with PDVSA, led on 12 September to the detention of Barbosa on suspicion of trafficking crude oil etc;"
(6) "it was the link between the Vessel, AS Capital's cargo and this forged document which raised the particular interests of the National Guard when they boarded the Vessel on 13 September;"
(7) "it was the fact that the Vessel was the intended means to carry the unauthorised AS Capital cargo, and the consequent possibility that the Owners might have been involved in the crimes, which led to the detention of the Vessel on 19 September 2014."; "had [the Charterers not supplied the Authorisation] the ship would not have been detained" (para 92); "the orders were at least an effective cause [of the detention]" (para 75).
(8) "that detention is the cause of all subsequent delay".
(1) the Charterers' order of 4 September was not merely to proceed to a load port to await orders, but rather to proceed to the terminal for the purposes of loading the AS Capital cargo when presented at the Vessel's manifolds; that there was at that time a cargo which AS Capital intended to export unlawfully from Venezuela; and that it was such an unlawful cargo which the Vessel had been ordered to proceed to the terminal to load. If there were any doubt about that, it is dispelled by the finding in paragraph 69 of the Award that AS Capital always intended to load a cargo of Mesa crude from the terminal; the finding in paragraph 75 of the Award that AS Capital believed on 4 September that there was a cargo to be loaded pursuant to the Charterers' orders; and the finding in paragraph 100 of the Award that there was an intended cargo as at 4 September.
(2) The Charterers had ordered the master to communicate with GAMS, as a direct consequence of the order of 4 September, and it was as a result of that latter order that the Vessel received the Authorisation, without which the interest of those who boarded the Vessel on 13 September would not have been aroused and without which the Vessel would not have been detained.
(3) There was therefore the necessary causative link between the order of 4 September 2014 and the detention of the Vessel. The former was an effective cause of the latter.
"Even if [the Charterers] are right on the prospective nature of the clause (which I do not need to decide), however, I refer back to paragraphs 74 and 75 above, and I accept – as Mr Croall argued – that there is no reason to suppose that as at 4 September the intended cargo was any more authorised than it was later, e.g. as at 11 September or 13 September. Thus the risk existed at the earlier date as much as it did later."
The Procedural Issue
Conclusion