Lord Justice Gross:
- The central issue before this Court concerns the true construction and application of a proviso to an off hire clause in a time charterparty, dealing with the capture, seizure, detention or arrest of the vessel. The issue thus raises the familiar question as to the allocation of risk of delay as between owners and time charterers.
- By a charterparty dated 11th September, 2008, on the NYPE form as amended ("the charterparty"), the (now) Respondents, NYK Bulkship (Atlantic) N.V. ("NYK"), as owners, chartered the vessel, "GLOBAL SANTOSH" ("the vessel"), to the (now) Appellants, Cargill International SA ("Cargill"), as charterers, for one time charter trip from Sweden to West Africa on the terms and conditions therein set out.
- Disputes arose under the charterparty and were duly referred to arbitration, pursuant to cl. 17 thereof. By an arbitration award dated 7th February, 2012 ("the award"), the arbitrators, by a majority, dismissed the claim brought by NYK against Cargill for hire withheld in circumstances to which I shall come.
- Pursuant to s.69 of the Arbitration Act 1996 ("the Act"), NYK appealed from the award to the Commercial Court. The matter came before Field J. I adopt, with respect, from his judgment dated 1st February, 2013 ("the judgment"), Field J's concise summary of the facts underlying the dispute between the parties (which are not or not significantly in dispute):
" 2. …..Cargill sub-chartered the vessel to Sigma Shipping Ltd ('Sigma') by way of a voyage charter. The cargo was one of six shipments of cement sold by Transclear SA ('Transclear') to IBG Investments Ltd ('IBG') on C&FFO terms under a contract of sale dated 14 December 2007. IBG were named as the notify party on the relevant bill of lading, which also specified the discharge port as 'Port Harcourt (Ibeto jerry)'. Pursuant to the 'FO' ('free out') part of the sale terms, IBG were responsible for the unloading of the cargo. IBG were also liable to pay Transclear demurrage if unloading of the cargo was delayed. It seems reasonably clear that Transclear were also a sub-charterer under a voyage charter but whether by way of charter from Sigma or by a more indirect route is not apparent.
3. The vessel arrived at Port Harcourt on 15 October 2008 but was held at anchor due to congestion caused in part by the breakdown of IBG's unloader. On 18 December 2008 she was called in to berth but she was sent back because, on the previous day, Transclear had obtained an Arrest Order made by the Federal High Court of Nigeria on the cargo to secure a claim for demurrage against IBG for $US1,560,000 for the period 24 October 2008 to 15 December 2008. Under this order, any interference with or attempt to remove the cargo from the vessel was prohibited. By an obvious mistake, the order also named the vessel as the object of the arrest. Following an agreement in respect of demurrage and a subsequent court order authorising the cargo's release, discharge of the cargo began on 15 January 2009 which was completed on 26 January 2009. "
- As is implicit from this summary, Cargill paid hire for the period 15th October – 17th December, 2008, in accordance with its obligations under the charterparty. The arrest instigated by Transclear, covered much of the same period but related to its claim against IBG for demurrage under the (separate) contract of sale ("the sale contract"). As appears from the award, Cargill withheld hire under clauses 49 and/or 15 of the charterparty in respect of the period for which (broadly) the vessel was under arrest, i.e., 14.00 hours on the 18th December 2008 and 07.03 hours on the 15th January, 2009.
- As will be explored in more detail, Field J remitted the award to the Tribunal for their consideration of a question of causation. Neither party was satisfied, or fully satisfied, with the judgment. In the event Cargill appeals to this Court and NYK cross-appeals. So far as concerns the proceedings before the Judge, Cargill submits that the appeal from the award should have been dismissed without more ado; if wrong, then Cargill submits that it would be wrong to interfere with the Judge's decision to remit the award. NYK contends that its success before Field J was such as not to have required a remission and that the Judge should simply have allowed the appeal on the facts found. Before turning to the award, the judgment and the rival cases before us, it is convenient to set out the clauses of the charterparty with which this appeal is principally concerned.
- The clause primarily in issue on this appeal is cl.49 of the charterparty. It provides as follows:
" Clause 49. Capture, Seizure, Arrest.
Should the vessel be captured or seizured or detained or arrested by any authority or by any legal process during the currency of this Charter Party, the payment of hire shall be suspended until the time of her release, unless such capture or seizure or detention or arrest is occasioned by any personal act or omission or default of the Charterers or their agents.
Any extra expenses incurred by and/or during the above capture or seizure or detention or arrest shall be for Owners' account. "
- Cl. 49 cannot of course be considered in isolation. Other clauses of the charterparty to which reference should be made are as follows:
" lines 31-33
Charterers shall have liberty to sublet the vessel for all or any part of the time covered by this Charter, but Charterers shall remain responsible for the fulfilment of this Charter.
8…..The Captain (although appointed by the Owners) shall be under the orders and directions of the Charterers as regards employment and agency; and Charterers are to perform all cargo handling at their expense under the supervision of the Captain, who is to sign the bills of lading for cargo as presented in conformity with mate's or tally clerk's receipts….
15. In the event of any loss of time from deficiency and/or default and/or strike or sabotage by officers or crew or deficiency of stores, fire, breakdown of, or damages to, hull, machinery or equipment, grounding, detention by average accidents to ship or cargo unless resulting from inherent vice, quality or defect of the cargo, drydocking for the purpose of examination or painting bottom, or by any other similar cause whatosoever preventing the full working of the vessel, the payment of hire and overtime, if any, shall cease for the time thereby lost…..
Clause 50. Smuggling.
Any delay, expenses and/or fine incurred on account of smuggling shall be for Owners' account if caused by the Officers and/or Crew, or shall be for Charterers' account if caused by the Charterers' supercargo and/or their staff or agents.
Clause 66. Off-Hire for 30 Consecutive Days
Should the vessel be placed off-hire more than 30 consecutive days, the Charterers have the right to cancel the balance period of this Charter by giving notice to the Owners without prejudice to any other right the Charterers may have under this Charter."
- The majority arbitrators summarised the issue before them: namely, whether Cargill was entitled to put the vessel off hire while the cargo was under arrest at the instance of Transclear. The majority went on to conclude that the vessel was detained by the arrest order because she was kept from proceeding with her discharge and sent out to the anchorage. The majority further concluded that the vessel was herself arrested, albeit by mistake. A mistaken arrest was still an arrest for the purposes of cl.49 and, accordingly, by reason of both the detention and arrest, the vessel was prima facie off hire.
- The majority then turned to consider the proviso to cl.49. It was not contended that the detention or arrest had been caused by any personal act or omission or default of Cargill. There remained, on the majority's reasons, the question of whether the detention or arrest of the vessel had been caused by the personal act or omission or default of Transclear as Cargill's agent. If the answer was "yes", then the proviso applied and Cargill had not been entitled to put the vessel off hire under cl. 49. The majority, however, concluded that the answer was "no", so that the proviso did not apply and Cargill had been entitled to put the vessel off-hire for the period in question. The core reasoning of the majority appears from the following passage in the award:
" There is no evidence that Transclear was performing Cargill's obligation to load or discharge …[the vessel]… If it was, we do not think that it was doing so as Cargill's agent rather than its sub-contractor or sub-sub-contractor. Even if it was, it is clear that whether Transclear arrested ….[the vessel]…or her cargo, it was not doing so as agent for Cargill. Transclear had a claim against IBG for demurrage but Cargill had not. Cargill had no interest in an arrest of either ship or cargo. Transclear was therefore acting on its own behalf to secure Transclear's claim against IBG for demurrage."
- In the event, the majority did not deal with NYK's case that IBG was to be characterised as Cargill's agent for the purposes of cl. 49 – in addition or in the alternative to Transclear - and that the vessel's detention and/or arrest had been occasioned by the personal act or omission or default of IBG.
- The dissenting arbitrator agreed with the majority as to the facts of the case. He focused, however, on the "division of risk" between owners and charterers where arrests were concerned. Here the problem arose from the activity of Charterers "or those added by them"; by contrast, owners "had no control whatsoever". He concluded that Transclear and/or IBG must be deemed to be the agents of Cargill "for the purposes of any activity which falls within the Charterers' sphere of responsibility under the charter". Under the charterparty, Cargill was responsible for all matters relating to the discharge of the cargo. Accordingly, the proviso applied and the vessel was not off hire.
- For completeness, the arbitrators were unanimous that cl. 15 of the charterparty did not apply to the arrest or detention of the vessel. For my part, I agree and do not propose to say anything further as to cl. 15.
- Having recounted the facts and the arguments deployed before him, Field J's analysis of the proviso to cl.49 commenced at  of the judgment. This paragraph contained two important passages, the first favouring NYK and the second Cargill. In the first passage, Field J held as follows:
" In my judgment, construed in the context of the Charterparty as a whole, including the many provisions that contemplate the charter being operated by each of the parties through 'agents', the proviso is not limited to cases where parties who are specifically instructed by the charterers to carry out functions that are the charterers' responsibility 'occasion' a capture, seizure, detention or arrest of the vessel. In short, I accept Mr. Young's submission [for NYK] that parties such as sub-charterers or sub-sub-charterers or receivers to whom Cargill, by subletting the vessel, had delegated or sub-delegated the performance of its responsibilities under the Charterparty can be Cargill's agents for the purposes of the proviso, irrespective of the precise contractual relationship existing between the delegate and the party above him in the contractual chain. "
- The second passage in the judgment (ibid) was as follows:
" However, I also accept Mr. Baker's submission [for Cargill] that the proviso will only apply where the act or omission or default of such a delegate occurs in the course of the performance by the delegate of the delegated task. Mr. Young argued that it was enough for there to have been an act, omission or default by a delegate of the charterer which is causally linked to the capture, seizure, detention or arrest of the vessel. ….I reject this submission and accept that of Mr. Baker because the object of the proviso is to attribute to the charterers responsibility for the acts, omissions, or defaults of others and I think that in adopting the word 'agent' the draftsman intended that there should be a closer causal relationship between the act, omission etc and the charterer than that contended for by Mr. Young. "
- Thereafter, Field J (at ) summarily rejected the NYK claim based on Transclear having been Cargill's agent. In reaching his conclusion, the Judge disagreed with the reasoning of the majority arbitrators insofar as based upon Transclear acting as a subcontractor rather than an agent. However, the majority had not erred "in rejecting this claim on the ground there was no evidence that Transclear was performing Cargill's obligation to discharge."
- Field J next turned to the NYK claim based on IBG having been Cargill's agent. In this connection, NYK relied on IBG's failure to unload the cargo within the lay days stipulated in the sale contract and its subsequent failure to pay demurrage and/or to provide security. Cargill resisted this manner of putting NYK's claim, contending that none of the alleged acts, omissions or defaults relied on occurred in the course of "cargo handling" within cl.8 of the charterparty; accordingly, none occurred in the course of performance of the delegated task of cargo handling. Charterers' obligation under cl. 8 to meet the expense of cargo handling did not extend to ensuring that a third party did not prevent cargo handling from being performed.
- Field J found himself unable to accede to this Cargill submission (judgment, at ):
" IBG became Cargill's delegate of the obligation to unload under clause 8 by reason of the sale contract, including its demurrage provisions and….. for the purposes of the Clause 49 proviso, the failure to unload within the lay days was an act, omission or default that occurred in the course of performing the obligation to discharge as delegated to it by Cargill. It was Cargill after all who set in train the process of delegation and gave delegating parties a free hand to agree terms with delegates….. "
- What remained was the question of whether IBG's failures to unload within the lay days and to pay the resulting demurrage or furnish security "occasioned" the arrest of the vessel (judgment, at  et seq). In this regard, Field J held that the words "occasioned by" imported a notion of causation:
" ….which is broader than the concept of 'the effective cause' (as contended for by Mr. Baker) but is not so broad as to include 'but for' causation. Instead, the causal relationship between the act, omission or default with the postulated clause 49 event….has to be such that it can be said as a matter of commercial common sense that the latter was caused by or brought about by the former. "
- Field J went on to conclude that it was "plainly arguable" that IBG's failures had occasioned the mistaken arrest of the vessel. In the exercise of his discretion under s.69(7)(c) of the Act, the Judge then ruled in favour of remitting the question of causation to the arbitrators:
" I have come to this view because I have held that causation in this case is a matter of commercial common sense and the Tribunal, being three commercial men conversant with shipping matters, are very well placed to determine it."
THE RIVAL CASES
- As already foreshadowed, Cargill appealed from the judgment and NYK cross-appealed.
- For Cargill, Mr. Baker QC submitted that the proviso to cl. 49 applied only when the "agent" concerned was carrying out a delegated obligation of the charterer. This construction gave meaning to the word "agents"; unless the proviso was limited in this way, sub-charterers, receivers and others would not be "agents" of the charterers at all. However, it followed that the proviso only applied when the act (or omission, etc.) of the "agent" under the separate contract could be matched with an obligation of Cargill under the charterparty. There the Judge had fallen into error. Cargill's obligation under cl. 8 of the charterparty was to "perform all cargo handling" at its expense; Cargill was not under any obligation – as IBG appeared to have been under the sale contract – to discharge the cargo within any particular time period. Indeed, as noted earlier, Cargill had paid hire under the charterparty for essentially the (October-December) period for which Transclear claimed demurrage from IBG – and, during that period, Cargill had no obligation to discharge the cargo, given the vessel was not at a berth. There was thus a mis-match between Cargill's obligation under the charterparty and IBG's obligation under the sale contract. Furthermore, Cargill was not obliged to ensure that a third party did not prevent cargo handling from being performed. Accordingly, on the Judge's (correct) construction limiting the ambit of the proviso, he was wrong to conclude that the proviso applied. Neither Transclear nor IBG in any relevant respect had been performing a delegated obligation of Cargill's.
- If Mr. Baker was right in his primary submission, then the question of remission fell away. If wrong, then Mr. Baker submitted that we should not interfere with the Judge's discretionary decision to remit the award to the Tribunal. On this footing a question arose as to whether the chain of causation had been broken – in particular, with regard to the mistaken arrest of the vessel. There had been no decision by the arbitrators on this question of causation and the parties were entitled to such a decision, whether or not any new facts emerged.
- For NYK, Mr. Young QC submitted that the liberty to sub-let provision was central to the commercial scheme of time charterparties. In that context, the word "agents" in the proviso to cl. 49 was to be broadly construed. There was no basis for reading into the proviso the words "in the course of the performance by the delegate of the delegated task" (judgment, at ) and the Judge had been wrong to do so. Both in that passage of his judgment and elsewhere, the Judge had fallen into error by analysing the matter in terms of vicarious liability rather than whether the proviso applied to stop time running. Such confusion was betrayed by the language of the judgment, for instance, the Judge's reference (also at ) as to the object of the proviso being to "attribute to the charterers responsibility for the acts….. [etc.]… of others". All that was required was, as Mr. Young had submitted to the Judge, an act (etc.) by a delegate of Cargill causally linked to the capture, seizure, detention or arrest of the vessel. Approached in such a way, the proviso matched the broad and familiar risk allocation between owners and (time) charterers in respect of delay; where an arrest had been occasioned by the act of a party on Cargill's side of the line, the proviso applied and the vessel remained on hire. In general, ship arrests gave rise to problems concerning the running of hire and off hire. The scheme of this charterparty was that, prima facie, an arrest resulted in the vessel being off hire. The proviso to cl. 49 created a "carve-out" from that scheme, reflecting the essential division between owners' and charterers' spheres.
- For his part, Mr. Young contended that if right thus far, then there was no need for remission to the arbitrators. "Occasioned" was a word of considerable width, meaning essentially "brought about as a result of". IBG's failures had brought about the commencement of legal process ultimately resulting in the arrest of the vessel. Further, as Mr. Young put it in his skeleton argument:
"…..since all arrests are effected on the basis of allegations made by the arresting party as to relevant acts, omissions or defaults being adduced before the appropriate court, the question should be regarded as whether the arrest was based upon allegations about the acts, omissions or defaults of the relevant 'agent'. Once that is established as a fact, there is a sufficient 'occasioning' to operate the proviso….."
- We were grateful to both Mr. Baker and Mr. Young for their cogent submissions, both in writing and orally.
- It is convenient to deal with the matter under the following headings:
i) The legal framework;
ii) The construction of the "carve-out" (as explained below);
iii) The Judge's decision to remit the question of causation.
- (1) The legal framework: The legal framework was not (or not realistically) in dispute:
i) Under a time charterparty, hire continues to run unless the charterer can bring himself within the plain words of an off-hire provision; the risk of delay is thus essentially on the time charterer (rather than the owners). See, per Rix LJ in The Doric Pride  EWCA Civ 599;  2 All ER (Comm), esp. at .
ii) Whether an arrest or detention results in a vessel being off-hire depends on the circumstances and the terms of any relevant off-hire clause.
iii) The position here is clear: by virtue of the plain wording of cl. 49, if the vessel is arrested or detained, she is prima facie off-hire.
iv) That prima facie conclusion is only displaced if the matter comes within the proviso to cl.49, the burden being on NYK to show that the arrest or detention "…is occasioned by any personal act or omission or default of the Charterers or their agents". In short, the proviso operates as a "carve-out" ("the carve-out") from the general scheme of cl.49.
- (2) Construction of the proviso: As foreshadowed, it follows that the central question concerns the true construction of the proviso to cl. 49 and thus the ambit of the carve-out. In construing the proviso, such guidance as is necessary is to be found in the following passages from the judgment of Lord Clarke of Stone-cum-Ebony in Rainy Sky SA v Kookmin Bank  UKSC 50;  1 WLR 2900:
" 21. The language used by the parties will often have more than one potential meaning. …..the exercise of construction is essentially one unitary exercise in which the court must consider the language used and ascertain what a reasonable person, that is a person who has all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract, would have understood the parties to have meant. In doing so, the court must have regard to all the relevant surrounding circumstances. If there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other.
28. …..the resolution of an issue of interpretation in a case like the present ….[is]… an iterative process, involving checking each of the rival meanings against other provisions of the document and investigating its commercial consequences.
30. …..where a term of a contract is open to more than one interpretation, it is generally appropriate to adopt the interpretation which is most consistent with business common sense….."
Applying this approach, I go first to the language of the proviso and thereafter consider it in the light of the charterparty as a whole and the commercial context.
- The wording of the proviso: Certain matters can be disposed of at the outset. First, it was not in dispute before us that if the "detention or arrest" otherwise fell within the proviso, the act, omission or default was properly to be regarded as "personal". I therefore say no more of this point. Secondly, there was no challenge to the Judge's conclusion, at  of the judgment, that "agents" were not to be limited to agents strictly so called; thus, delegates of Cargill could be its agents for the purposes of the proviso "…irrespective of the precise contractual relationship existing between the delegate and the party above him in the contractual chain". The word "agents" was accordingly capable of extending to sub-charterers, sub-sub-charterers and receivers. For my part, the Judge's conclusion – and its acceptance by the parties – was realistic.
- As a matter of language, first, the proviso identifies the relevant actors, namely, Cargill or its delegates (as already explained).
- Secondly, so far as concerns the relevant act, omission or default, the proviso says no more than that it must be such as occasioned the detention or arrest (etc.) of the vessel.
- Thirdly, the terms of the proviso confine its operation. On any view, it is not open-ended. It applies and only applies to the actors and acts outlined above.
- Fourthly, the proviso says nothing expressly as to restricting the acts (etc) in question to those occurring "in the course of the performance by the delegate of the delegated task". It follows that the approach of the Judge and the contention of Mr. Baker would require that wording to be read into the carve-out. As will be recollected, Mr. Baker submitted that such a construction or implication was indeed necessary to give meaning to the proviso; if the proviso was not limited in this way, sub-charterers, receivers and others would not be "agents" of Cargill at all.
- With respect, I am unable to agree. The submission is right thus far: sub-charterers, receivers and others are not, in general, agents of time charterers; they will only be agents when entrusted by time charterers with the performance of an obligation of charterers under the charterparty: see, The "Mediolanum"  1 Lloyd's Rep. 136, esp. at p.140; The "Goodpal"  1 Lloyd's Rep. 638, esp. at 642 – 643. Here, however, once, as is not in dispute, "agents" can be read as "delegates", the ambit of the proviso is necessarily widened. Many a "delegate" will manifestly not be an "agent", stricto sensu (as defined in Bowstead & Reynolds on Agency, 19th ed.,2010, at para.1-001). If a party (e.g., a sub-charterer) is a delegate of Cargill flowing from the sub-letting of the vessel, that party remains a delegate for the purposes of the proviso regardless of the legal nature of the act or omission (etc.). Not every act or omission of the delegate will or need be in the course of performance of the delegated task. As a matter of language, I would therefore decline to read into the proviso the words contended for by Mr. Baker.
- The charterparty as a whole: I turn next to the charterparty as a whole to see whether it sheds any light on the need for the acts (etc.) of "Charterers or their agents" in cl. 49 to be confined to those occurring "in the course of the performance by the delegate of the delegated task". For the reasons which follow, the charterparty as a whole reinforces, if to a somewhat limited extent, the view to which I am attracted based simply on the language of the proviso.
- Mr. Baker correctly underlined that the wording "Charterers or their agents" appears in a number of clauses: see cll. 5, 6, 10, 11, 14, 18, 42, 50, 59 and 74. As it seems to me, however, a number of these clauses are, by their nature, concerned with a particular topic – so that the acts in question are bound to involve performance of the delegated task. See, for examples, cll. 5 (cash advances), 6 (directing to berths etc.), 10 (victualling), 11 (furnishing of logs to charterers or their agents), 14 (cancellation) and 59 (signature of bills of lading). I am not persuaded that cll. 42 (agency matters generally) and 74 (agents at port of call) advance the argument one way or another. In the light of such submissions as there were on cl. 18 (liens), it is unnecessary to say more of it.
- Cl. 50 (set out above), to which Gloster LJ drew attention in the course of argument, might be thought to point in favour of NYK's contentions. It must be implausible that the wording "Charterers or their agents" has a different meaning in cl. 49 from that which it has in cl. 50 – and I did not understand Mr. Baker to press any such suggestion. However, in the context of smuggling (cl. 50), no question realistically arises as to the performance of a delegated task. The question, as it seems to me, goes simply to the identity of the actor engaged in the smuggling: namely, whether that person is an agent (i.e., delegate) of Cargill's. If yes, then delays, expenses or fines are for Cargill's account, rather than NYK's. Mr. Baker's response that cl. 50 produced a different outcome depending whether the smuggling was that of Cargill or a sub-charterer did not, with respect, carry conviction.
- Mr. Young, for his part, drew our attention to cl. 66 (set out above). Too much should not be made of it; charterparties do not invariably yield a coherent whole. However, if Mr. Baker is right, then had the dispute in this case between Transclear and IBG resulted in the vessel going off-hire for more than 30 consecutive days, Cargill would have been entitled to cancel the balance period of the charterparty. That too seems implausible.
- The commercial context: The rival constructions part company on whether or not to read into the proviso the words "in the course of the performance by the delegate of the delegated task". Provisionally at least and proceeding iteratively, I am not minded to read those words into the proviso. Guided by The Rainy Sky (supra), I turn to the commercial consequences of the construction which I thus far prefer; they are threefold:
i) First, it avoids the somewhat artificial exercise required by Field J's judgment and Mr. Baker's submissions, of seeking to establish a correspondence between obligations under very different sub-contracts (e.g., the sale contract) and the charterparty – to determine whether the act in question occurred in the course of the performance of the delegated task. To my mind, obviating the need for such an exercise is a decided plus.
ii) Secondly, the only limits to the width of the proviso relate to the categories of actors and acts indicated above. For the purposes of determining this appeal that occasions no difficulty and it is unnecessary to resolve whether some additional limits might need to be discerned in the event of markedly different factual circumstances. For my part, I would leave for decision, until or if it arises, the question of whether (for example) some act (etc.) of a Cargill delegate wholly extraneous or unrelated to sub-letting under the charterparty or inconsistent with its scheme would fall outside the ambit of the carve-out – even if it occasioned the detention or arrest of the vessel. Any such limit would, however, fall far short of requiring the precise correspondence between obligations for which Mr. Baker argued.
iii) Thirdly, it achieves a broad division of responsibility under the clause. Although, in general under cl. 49 of the charterparty, the vessel will be off-hire when detained or arrested, this construction of the proviso means that hire will continue to run where the act, omission (etc) is that of Cargill or its delegates – and thus, in a broad sense, on Cargill's, rather than NYK's side of the line.
- As a matter of business commonsense, the background to cl. 49, including the proviso, is as expressed by Rix LJ in The Doric Pride (supra), at , of:
" …a basic distinction…entirely familiar to owners and charterers, between those matters which lie upon the owners' side of responsibility, essentially the vessel and crew, which the owners have to provide to the charterers, and those matters relating to the charterers' employment of the vessel and crew for their trading purposes, which lie upon the other side of the line…. "
There can be no doubt in the present case that the acts, omissions or defaults in question, culminating in the detention or arrest of the vessel (whatever the ultimate conclusion on causation), involved Cargill's delegates and fell on its side of the line. NYK was not, in any sense, involved in the apparent dispute between Transclear and IBG as to the delay in unloading the vessel. While it is correct to say that Cargill was under no obligation to discharge the vessel in any given time, the dispute in question arose out of its trading arrangements concerning the vessel. Unless therefore precluded by the wording of the clause, I would regard it as unsurprising if such events came within the "carve-out" and at least curious if they did not (again deferring any question of causation). Accordingly, the commercial context powerfully reinforces my interim conclusion as to the true construction of the proviso.
- Pulling the threads together, the language of the proviso, the charterparty as a whole (if to a somewhat limited extent) and the commercial context all point to the same conclusion: namely that the carve-out was of sufficient width to be applicable in the circumstances of the present case. The general scheme of cl. 49 provides for the vessel to be off-hire in the case of detention or arrest; that general scheme would cover matters either on NYK's side of the line or the acts or omissions (etc.) of third parties, unconnected to either NYK or Cargill – for example, governmental authorities. Here, however, the dispute between Transclear and IBG fell – and fell clearly - on Cargill's side of the line, with the result that hire continued to run over the relevant period (always of course subject to questions of causation). On the approach to which I am attracted, the acts or omissions of both Transclear and IBG lead to this result. While the starting point must be the construction of the clause in question, rather than any generalised assumption, the outcome is unsurprising and gives effect to the familiar division between owners' and charterers' spheres of responsibility. For all these reasons, therefore, with respect, I prefer Mr. Young's submissions to those of Mr. Baker as to the construction of the proviso.
- For completeness:
i) I have (respectfully) no quibble with the authorities to which Mr. Baker referred us but they do not deter me from the conclusion to which I have come. Thus, The "Jalagouri"  1 All ER (Comm) 700, concerned the actions of a third party, a port authority and does not shed light on the true construction of the proviso to cl. 49 in the present case. The "Goodpal" (supra) concerned the apportionment of claims under the Interclub NYPE Agreement, not off-hire under the particular clause here in question. So far as concerns The "Doric Pride" (supra), I rely on it for the statement of principle cited above; it is neither here nor there that the particular clauses with which the Court was there concerned are different to those under consideration here.
ii) I am conscious that, with regret, my conclusion differs from that reached by the majority arbitrators. I am, however, fortified that the result at which I have arrived is the same as that which attracted Field J – so reinforcing my view that the proviso was applicable and the vessel was not off-hire in the circumstances in question - albeit that I have reached it by a different route and my route extends to the acts or omissions of both Transclear and IBG, not IBG alone. With respect, my difficulty with the reasoning of the learned Judge is that if it be necessary to match the obligations of a Cargill delegate (whether Transclear or IBG) under a very different contract to a Cargill obligation under the charterparty, then I do not think I would have been able to do so. However, for the reasons given, I do not think it is necessary to seek or achieve such correspondence between Cargill's obligations and those of its delegates; in that regard, I part company with Field J. It may be, as Mr. Young submitted, that the learned Judge was led astray by an analysis conflating vicarious liability in respect of breach of the charterparty with off-hire but that is by the by.
- Accordingly, on the question of construction of the proviso to cl. 49, I would uphold the decision of the Judge, if for somewhat different reasons.
- (3) The Judge's decision to remit the question of causation: I take this issue almost summarily. Tempting as it might be, pragmatically, to deal with this question, I am in no real doubt that Mr. Baker is correct in submitting that we should not do so. There has been no decision by the arbitrators on whether Transclear's and/or IBG's acts or omissions (etc.) occasioned the detention or mistaken arrest of the vessel and the parties are entitled to such a decision, whether or not any new facts emerge. It is for the arbitrators to rule on a question or questions of this nature, including (if it arises) whether the chain of causation has been broken: see, for instance, Borealis AB v Geogas Trading SA  EWHC 2789 (Comm);  1 Lloyd's Rep 482; The Toisa Pisces  ECA Civ 1625;  1 All ER (Comm) 1179. Further and in any event, the decision of Field J that this question was to be remitted was a discretionary decision – one which he was amply entitled to make. I would therefore uphold the decision of the Judge on the question of remission.
Lady Justice Gloster: I agree.
Sir Stanley Burnton: I also agree.