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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> St.Maximus Shipping Co.Ltd. v A.P. Moller-Maersk A/S [2014] EWHC 1643 (Comm) (22 May 2014) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2014/1643.html Cite as: [2014] EWHC 1643 (Comm) |
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Rolls Building, Fetter Lane, London, EC4A 1NL |
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B e f o r e :
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Claimant |
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- and - |
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A.P. Moller-Maersk A/S |
Defendant |
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Chris Smith QC and Neil Hart (instructed by Hill Dickinson LLP) for the Defendant
Hearing dates: 7 and 8 May 2014
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Crown Copyright ©
Mr Justice Hamblen :
Factual background
"14.(c) General Average: General average shall be adjusted at the place as indicated in Box 33 according to the York-Antwerp Rules 1994 or any amendment thereto by an adjuster appointed by the owners. In the event of general average or salvage, the Charterers shall provide an acceptable temporary security covering all goods and containers to avoid delay and secure their release so that transit/delivery may continue. The owners agree that the Charterers temporary guarantee may be exchanged in due course for a full set of securities from the appropriate interested parties covering all goods and containers. The Charterers agree to co-operate with the Owners and the Owners' appointed adjusters, to assist by supplying manifest and other information and, where required, to endeavour to secure the assistance of the Charterers' local agents in the collection of security, at the Owners' expense."
"We, the undersigned, A.P. Moller-Maersk A/S are the Time Charterers of the m.v. MAERSK NEUCHATEL under a BIMCO, BOXTIME Charterparty dated 16th August 2004. Various Cargo and Containers were shipped on the above vessel by various parties for delivery at Walvis Bay, Tema, Lome, Cotonou and Apapa and Bills of Lading have been issued by us and Safmarine Container Lines (SCL).
In consideration of the delivery to Cargo Interests or to their order on payment of the freight due of the cargo carried onboard the m.v. MAERSK NEUCHATEL at the time of the above mentioned casualty, we hereby undertake and agree as follows:-
1. To pay the proper proportion of any General Average and / or Special Charges which may hereafter be ascertained to be due from the Cargo or the Shippers or Owners thereof under an Adjustment prepared by the appointed Average Adjusters in accordance with the Charterparty, dated 16th August 2004, and / or the Bills of Lading issued by us or SCL.
That in the event of the vessel's cargo or part thereof being forwarded to original destination by other vessel, vessels or conveyances,
(a) rights and liabilities in General Average shall not be affected by such forwarding, it being the intention to place the parties concerned as nearly as possible in the same position in this respect as they would have been in the absence of such forwarding and the adventure continuing by original vessel for as long as is justifiable under the law applicable or under the Contract of Affreightment. The basis of contributions to General Average of the property involved shall be the values on delivery at original destination unless sold or otherwise disposed of short of the destination; but where none of the cargo is carried forward in the vessel, she shall contribute on the basis of her actual value on the date she completes discharge of her cargo.
[ ]
2. To furnish particulars of the value of the said Cargo as may have been provided by cargo or the shippers or owners thereof, supported by copy of detailed Cargo Manifest(s) covering the Cargo, Bills of Lading and by commercial invoices rendered or, where there is no such invoice, to accept the valuation of the Cargo as estimated by an independent Cargo Valuer as instructed by the Average Adjusters on the basis of the Cargo Manifest(s), and if insufficient information is available, a value of USD25,000 per TEU to apply.
3. To make one or more payment(s) on-account of such sum or sums as will be certified by the Average Adjusters to be due from Cargo and payable in respect thereof by the Shippers/Consignees/Cargo Owners."
"I enclose herewith a scanned copy of the GA Letter of Guarantee provided by AP Moller-Maersk A/S dated 6/09/07 on behalf of all cargo interests.
This guarantee is provided on the basis that any liability on the part of cargo to contribute in GA arising out of this incident is agreed between owners and Charterers or determined by the English High Court of Justice in the event GA liability is disputed"
I will forward the original L/G to you when received."
Following the provision of the LOU the remaining containers were discharged from the vessel at Tema, and she sailed to Gdansk for repairs. The repairs were undertaken between 26 November 2007 and 21 February 2008. The vessel was surveyed by Mr Bowman on behalf of the Owners and by Mr Gordon on behalf of Maersk. She was also inspected by Mr Sandomeer, a German surveyor instructed by SHH.
The preliminary issues
(1) Whether the defendant is bound, on a proper construction of the terms of the Letter of Undertaking, to pay the proportion of any general average and/or Special Charges that is properly and legally ascertained to be due, in accordance with the York Antwerp Rules 1994, from the Cargo (or the Shippers or Owners thereof) under the Adjustment, the Defendant being bound by such factual determinations as the Average Adjusters have made in the Adjustment.
(2) If the answer to Issue 1 is yes, whether the Claimant is nonetheless estopped by representation from asserting that the Defendant is bound to pay the proportion of any general average and/or Special Charges that is properly and legally ascertained to be due, in accordance with the York Antwerp Rules 1994, from the Cargo (or the Shippers or Owners thereof) under the Adjustment, the Defendant being bound by such factual determinations as the Average Adjusters have made in the Adjustment.
(3) Alternatively, if the answer to issue 1 is yes, whether the LOU should be rectified as follows:
"1. To pay the proper proportion of any General Average and/or Special Charges which may hereafter be ascertained to be due from the Cargo or the Shippers or Owners thereof under an Adjustment prepared by the appointed Average Adjusters in accordance with the Charterparty, dated 16th August 2004, and/or the Bills of Lading issued by us or SCL, and which is legally due from and payable by the Cargo or the Shippers or Owners thereof."
(4) If the answer to issue 1 is yes and to issues 2 and 3 is no, whether or to what extent the Defendant is bound:
a. by the Adjusters' determinations referred to in paragraph 9.a. of the Defence;
b. by the Adjusters' determination of their proper fees, as referred to in paragraph 9.b.i. of the Defence; and
c. by the Adjusters' determination of the sum due from cargo interests under the Non-Separation Agreement.
Issue (1) construction of the LOU
Factual matrix
(1) The fact that, as a matter of English law, it is well established that the parties are not bound by a General Average Adjuster's conclusions. The question is therefore whether Maersk has contracted out of its right to challenge the adjustment. If there is any doubt about this it should be resolved contra proferentem in favour of Maersk.
(2) The fact that Average Adjusters do not act as arbitrators or quasi legal tribunals.
(3) The fact that, before the LOU was tendered, both parties were aware of the fact that the vessel had suffered extensive bottom damage both as a result of the grounding and as a result of the refloating operation. Both parties were aware that a substantial dispute as to what percentage of the relevant repair costs was recoverable in General Average and what percentage would have to be borne by the Claimant without recourse to others was a real possibility.
(4) The fact that, because a General Average Adjustment is not a quasi legal or arbitral process, it is not an appropriate forum for deciding complicated contested issues. Any party claiming to recover in General Average will have to provide details of the cost which it claims is recoverable. Any party liable to contribute in General Average will have to provide evidence as to value. It is then for the adjuster to form a view as to which claims to allow in General Average and how much each party must contribute towards them. None of the parties has any right to put in factual, still less expert, evidence on disputed points and none of the parties has any right to make submissions (still less require a hearing of any kind). Although the Adjuster must act impartially, his role is not to determine disputes between the parties.
The language of the LOU
(1) There is a clear undertaking to pay.
(2) That is to be contrasted with the obligation in clause 3 to make payment "on account".
(3) The payment is to be of a sum "ascertained to be due". To "ascertain" means to make certain. "Due" connotes due and payable.
(4) The sum so ascertained is to be as set out "under" the Adjustment.
(5) There is no suggestion that the sum ascertained to be due under the Adjustment is only conditionally or provisionally due, nor is there any procedure or mechanism laid down as to when and how it becomes unconditionally due.
(6) The clause says nothing about the sum being legally due.
(7) The clause does not even say that it has to be properly due.
(8) The only reference to "proper" is in relation to "proper proportion".
(9) In the context of General Average that it is to be understood as a reference to Cargo's pro-rated General Average liability i.e. its appropriate proportion of the overall liability.
"In consideration of the delivery to us or to our order on payment of the freight due, of the goods noted above we agree to pay the proper proportion of any salvage and/or general average and/or special charges which may hereafter be ascertained to be due from the goods or the shippers or owners thereof under an adjustment prepared in accordance with the provisions of the contract of affreightment governing the carriage of the goods or, failing any such provision, in accordance with the law and practice of the place where the common maritime adventure ended and which is payable in respect of the goods by the shippers or owners thereof.
We also agree to: (i) . . . (ii) make a payment on account of such sum as is duly certified by the average adjusters to be due from the goods and which is payable in respect of the goods by the shippers or owners thereof. " (emphasis added)
"Unless the words "and which is payable in respect of the goods by the owners thereof" add a qualification to the agreement to pay the proper proportion of the general average which has been ascertained, those words would be surplusage. They have been inserted for a purpose.
If the meaning of a document is clear then effect must be given to it regardless of the consequences. But if there is an ambiguity I prefer to resolve that ambiguity with a construction that makes good commercial sense. Counsel for the cargo-owners submitted that the words of the average bond mean that when the adjustment has been made and stated in accordance with the York-Antwerp Rules 1974 it is not open to the cargo-owners to set up actionable fault as an answer to a claim on the bond. If that is the correct construction of the bond the consequence is that the cargo-owners are obliged to pay the amount stated by the average adjuster and thereafter recover from the shipowner, if they can, such amount as might be due to them in respect of a fault of the shipowner. Such a claim by the cargo-owners would probably have to be made without security.
I do not see an ambiguity in the average bond. I have been left in no doubt that the words "and which is payable" mean "and which is legally due". They preserve the right of the cargo-owners to challenge the amount said to be due to the shipowners".
"Despite argument to the contrary, I have no doubt that the words "proper proportion" mean pro rata according to the values of the ship and cargo."
Conclusion on construction
Issue (2) estoppel by representation
(1) a clear and unequivocal representation of fact by the representor;
(2) reliance on that representation by the representee; and
(3) that it would be inequitable to allow the representor to resile from the representation made.
"by accepting the LOU on the basis set out in Hill Dickinson's [email], the Claimant unequivocally represented that it agreed that the LOU was provided on that basis"; and that "[Maersk] relied on the said representations in that it permitted the Claimant to retain the LOU and did not enter into any further negotiations as to the wording of the LOU. In the premises it would be unconscionable for the Claimant to advance the assertions made [in the Reply]":
Issue (3) - rectification
(1) The parties had a continuing common intention, whether or not amounting to an agreement in respect of a particular matter in the instrument to be rectified;
(2) There was an outward expression of accord;
(3) The intention continued at the time of the execution sought to be rectified; and
(4) By mistake, the instrument did not reflect that common intention.
See Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101 at [48] per Lord Hoffman citing with approval the requirements "succinctly summarised" by Peter Gibson LJ in Swainland Builders Ltd v Freehold Properties Ltd [2002] 2 EGLR 71 at 74 para. [33]; Chitty on Contracts (31st Edition) at para. 5-115ff.
Issue (4) - Whether or to what extent the Defendant is bound:
a. by the Adjusters' determinations referred to in paragraph 9.a. of the Defence;
b. by the Adjusters' determination of their proper fees, as referred to in paragraph 9.b.i. of the Defence; and
c. by the Adjusters' determination of the sum due from cargo interests under the Non-Separation Agreement.
Conclusion
Issue (1) "Yes".
Issue (2) "No".
Issue (3) "No".
Issues (4) a.b.c. "Yes".