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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Herculito Maritime Ltd & Ors v Gunvor International BV & Ors [2020] EWHC 3318 (Comm) (04 December 2020) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2020/3318.html Cite as: [2021] 2 All ER (Comm) 1278, [2021] Bus LR 516, [2021] Lloyd's Rep IR 127, [2021] 1 Lloyd's Rep 150, [2020] EWHC 3318 (Comm), [2020] WLR(D) 678 |
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
sitting as a Judge of the High Court
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HERCULITO MARITIME LIMITED AND OTHERS |
Claimants |
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- and - |
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GUNVOR INTERNATIONAL BV AND OTHERS |
Defendants |
____________________
Stephen Hofmeyr QC and Mark Jones (instructed by Tatham & Co) for the Defendant
Hearing date: 23 November 2020
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Crown Copyright ©
Sir Nigel Teare :
"All above via Suez with the Suez costs to be for Owners' account. All expenses at load port to be for Charterers' account. If STS all expenses are for Charterers' account and to be settled directly by them."
"All bills of lading issued under this Charter shall be deemed to contain War Risks, Both to Blame and New Jason clauses."
(i) Pursuant to Clause 39.2 the Owners were entitled to cancel the Charter if, at any time before the Vessel commences loading, it is considered that performance of the contract of carriage may expose the Vessel to War Risks.
(ii) Pursuant to Clause 39.3, the Owners were not required to continue to load or to sign bills of lading or to proceed or continue on a voyage where it appeared that the Vessel may be exposed to War Risks. If it should so appear the Owners were entitled to request the Charterers to nominate a safe port for the discharge of the cargo. If within 48 hours the Charterers failed to nominate such a port, Owners were entitled to discharge the cargo at any safe port of their choice in complete fulfilment of their obligations under the Charter. The extra expenses of such discharge were payable by the Charterers.
(iii) Pursuant to Clause 39.4, if, at any stage of the voyage, it appeared that the Vessel may be exposed to War Risks on any part of the route and there is another longer route to the discharge port, Owners were entitled to give notice to Charterers that this route should be taken. The extra expenses of such route, if the extra distance exceeded 100 miles, were payable by the Charterers.
(iv) Pursuant to Clause 39.5, the Owners were at liberty to comply with the orders of identified third parties.
(iv) Pursuant to Clause 39.6, anything done or not done in compliance with the clause shall not be a deviation.
(1) The additional "Gulf of Aden Clause" provided that time awaiting an escort or protection team shall count (half time) against used laytime or demurrage if on demurrage. It also provided that additional costs incurred by reason of entering a convoy or picking up a protection team were to be shared 50/50 between Owners and Charterers. Finally, any additional insurance for matters such as P&I Kidnap Risks and Ransoms were to be for Charterers' account subject to a maximum of $40,000.
(2) The additional "War Risk Clause" provided that any additional premiums payable by the Owners in respect of war risks were for the Charterer's account.
"pursuant and subject to all terms and conditions, liberties and exceptions as per TANKER VOYAGE CHARTERPARTY indicated hereunder, including provisions overleaf."
"All terms and conditions, liberties and exceptions of the Charter party, dated as overleaf, including the Law and Arbitration Clause are herein incorporated."
"For the purposes of the bill of lading : ..CHARTERER means the person entering a Charter Party contract with the carrier ."
The questions of law
(i) Are agreements between a shipowner and a charterer in a charter party which delineate the responsibility for the payment of additional war risk or K&R premia between the shipowner and charterer, germane to the carriage of the vessel's cargo in the context of a bill of lading?
(ii) Does an agreement between a shipowner and bill of lading holder concerning the allocation of responsibility for the payment of War Risks Hull & Machinery and K&R insurance premia give rise to an exclusive insurance fund precluding the shipowner from recovering in GA a contribution from cargo interests in respect of any losses suffered as a result of perils falling within the insurances?
i) Were the terms of the voyage charter (dated 20 September 2010) made between the Owners (qua owners) and Clearlake Shipping Ltd. (qua charterers), including in particular Clause 39 "War Risks" of the BPVOY4 form (as amended by the Recap), the Additional "War Risk" Clause , and/or the Additional "Gulf of Aden" Clause, incorporated into the Bills of Lading 9 as pleaded in paragraphs 9, 10 and 11 of the Respondent's Amended Defence?
ii) Did the Owners on a true and proper construction of the Bills of Lading, including in particular Clause 39 "War Risks" of the BPVOY4 form (as amended by the Recap), the Additional "War Risk" Cause , and/or the Additional "Gulf of Aden" Clause and/or by implication, agree to look solely to their insurance cover under the "war risks" insurance and/or K&R insurance identified in those clauses, and not to their counterparties under the Bills of Lading in, for example, general average (or by any other means on any other basis), in the event they suffered a loss covered by that insurance cover?
The first question, incorporation
"57 The route taken by the Vessel was, in our view, of central importance to the adventure and to the legal relations between carriers and cargo. This is not just because of commercial considerations, the cost to the Owners and the marketing of cargo afloat, but also for discretely legal reasons, the possibility and consequences of deviation."
"The passage through Suez and into the Indian Ocean was well-known at the time to involve piracy perils and the growth of kidnap and ransom insurance was equally well-known."
"In the event however that the Owners did have to look to bill of lading holders for the premium, we think that each bill of lading holder would be liable to pay the unpaid premium but (a) the total payment by all bill of lading holders could be no more than the premium, not the premium times six, and (b) there would most probably be restitutionary rights as between the bill of lading holders, even though the formula for effecting that restitution might be complex. We do not think that complexity should alter the position as between the parties to each single bill of lading. As between those parties there would be no need to consider such things as apportionment or the basis for apportionment."
"For the purposes of the bill of lading : ..CHARTERER means the person entering a Charter Party contract with the carrier ."
The second question, the insurance solution
"We do not think the issue here is whether the cargo interests, as such, acquired an obligation to pay the relevant premiums nor whether the word "Charterers" in the pertinent clause can/need be manipulated to read "lawful holders of the bill of lading", since we think all that matters is that the Charter code involved an agreement by the Owners not to seek contribution for piracy losses. It is not a case of incorporating a positive obligation on cargo but of an agreement by the Owners excusing cargo from liability. It is thus not infected by the same onerous uncommerciality that drove Lord Diplock's thinking in The Miramar; quite the reverse since an exclusion of liability is not in the least onerous on the beneficiary bill of lading holder. A bill of lading holder would, in our view, have to have taken leave of his senses not to accept the exclusion of his liability for the effects of piracy risks by reason of the relevant "code" .."
The position as between the Owners and the Charterers
"Similar problems can also arise, in the absence of joint insurance, if one party to a commercial relationship is required to pay premiums for an insurance against loss or damage to the property insured. If a loss occurs as a result of a breach of contract or negligent conduct on the part of the party who pays the premium , can the insurer use the name of the "innocent" party to sue the "guilty" party once the insurer has paid for the loss ? Since insurance is usually intended to cover an insured for any breach of contract or duty on his part, it is generally thought that the answer to this question must be "No"; otherwise the party paying the premium has not secured the insurance cover he was entitled to expect."
"Thus even in a case where there was no provision for joint insurance but the insurance was paid for by the "guilty" party, the insurance was held to cover the liability of that party and no rights of subrogation existed. Clear words to exclude that possibility were not required, once it was evident that the insurance was intended to be for the joint benefit of the parties."
" the prima facie position where a contract requires a party to that contract to insure should be that the parties have agreed to look to the insurers for indemnification rather than to each other."
As we read his speech, Lord Roskill was saying that the "code" interpretation which he adopted was a sufficiently clear expression of the shipowner giving up the right to sue for a breach of warranty of safety.
The position as between the Owners and the holders of the bills of lading
This is a radical departure from and extension of both the Evia No.2 and the Ocean Victory, where what was at stake was the equity between the two contracting parties where one had contributed to or paid insurance premiums for policies held by the other in relation to the relevant eventuating risks. If there is only a Fund Agreement between Owners and Clearlake, premised on the equity of Clearlake having paid or been liable to pay the premiums, it is wrong to extend the benefit of that equity to any bill of lading holder that Owners may in future contract with once bills are issued.
"We do not think the issue here is whether the cargo interests, as such, acquired an obligation to pay the relevant premiums nor whether the word "Charterers" in the pertinent clause can/need be manipulated to read "lawful holders of the bill of lading", since we think all that matters is that the Charter code involved an agreement by the Owners not to seek contribution for piracy losses. It is not a case of incorporating a positive obligation on cargo but of an agreement by the Owners excusing cargo from liability. It is thus not infected by the same onerous uncommerciality that drove Lord Diplock's thinking in The Miramar; quite the reverse since an exclusion of liability is not in the least onerous on the beneficiary bill of lading holder. A bill of lading holder would, in our view, have to have taken leave of his senses not to accept the exclusion of his liability for the effects of piracy risks by reason of the relevant "code" ..".
i) The "code" in the charter party included an agreement by the Owners not to seek contribution for piracy losses.
ii) The bills of lading incorporated "all terms and conditions, liberties and exceptions" of the charter party.
iii) The agreement by the Owners not to seek contribution for piracy losses was a term of the charterparty and so was incorporated into the bills of lading.
39. WAR RISKS
39.1 For the purpose of this Clause 39 the words:-
"Owners" shall include the shipowners, bareboat charterers, disponent owners, managers or other operators who are charted with management and/or operation of the Vessel, and the Master; and
"War Risks" shall include any war (whether actual or threatened), act of war, civil war, hostilities, revolutions, rebellion, civil commotion, warlike operations, the laying of mines (whether actual or reported), acts of piracy, acts of terrorists, acts of hostility or malicious damage, blockades (whether imposed against all vessels or imposed selectively against vessels of certain flags or ownership, or against certain cargoes or crews or otherwise howsoever), by any person, body, terrorist or political group, of the Government of any state whatsoever, which, in the reasonable judgment of the Master and/or Owners, may be dangerous or are likely to become dangerous to the Vessel, her cargo, crew of other persons on board the Vessel.
39.2 If at any time before the vessel commences loading, it appears, in the reasonable judgement of the Master and/or Owners, that performance of the contract of carriage, or any part of it, may expose, or is likely to expose, the Vessel, her cargo, crew or other persons on board the Vessel to War Risks, Owners may give notice to Charterers cancelling this Charter, or may refuse to perform such part of it as may expose, or may be likely to expose, the Vessel, her cargo, crew or other persons on board
the Vessel to War Risks provided always that if either Section E or F of PART 1 provides for a loading or discharging Range, as the case may be, and the Vessel, her crew, other persons on board, or cargo may be exposed, or may be likely to be exposed, to War Risks, at the port originally nominated by Charterers, then Owners shall first require Charterers to nominate a safe port which lies within the relevant Range, and may only cancel this Charter if Charterers shall not have nominated such safe port within forty-eight (48) hours of such request.
39.3 Owners shall not be required to continue to load cargo for any voyage, or to sign Bills of Lading for any port, or to proceed
or continue on any voyage, or on any part thereof, or to proposed through any canal or waterway, or to proceed to
remain at any port whatsoever, where it appears, either after the loading or the cargo commences, or at any stage of the
voyage thereafter before the discharge of the cargo is completed, that, in the reasonable judgement of the Master and/or Owners, the Vessel, her cargo (or any part thereof), crew or other persons on board the Vessel (or any one of them) maybe, or are likely to be, exposed to War Risks. If it should so appear, Owners may, by telex or email, request Charterers to nominate a safe port for the discharge of the cargo or any part thereof, and if within forty-eight (48) hours of the receipt of such telex or email, Charterers shall not have nominated such a port, Owners may discharge the cargo at any safe port of their choice (including the loading port) in complete fulfilment of their obligations under this Charter. Owners shall be entitled to recover from Charterers the extra expenses of such discharge and, if the discharge takes place at any part other than the loading port, to receive a full fright as though the cargo had been carried to the discharge port originally nominated. Any additional period by which the steaming time taken to reach the port at which the cargo is discharged exceeds the time which would have been taken had the Vessel proceeded to the original discharge port directly, and bunkers consumed for steaming during such additional period, shall be calculated and compensated in accordance with the provisions of Clause 22.3.
39.4 If at any stage of the voyage after the loading of the cargo commences, it appears, in the reasonable judgement of the
Master and/or Owners, that the Vessel, her cargo, crew or other persons on board the Vessel may be, or are likely to be, exposed to War Risks on any part of the route (including any canal or waterway) which is normally and customarily used in a voyage of the nature contracted for, and there is another longer route to the discharge port, Owners may give notice to
Charterers that this route should be taken.In such case this Charter shall be read in respect of freight and all other conditions whatsoever as if the voyage performed were that originally designated. IN THIS EVENT THE OWNERS SHALL BE ENTITLED, IF THE TOTAL EXTRA DISTANCE EXCEEDS 100 NAUTICAL MILES TO THE
EXTRA EXPENSES INCURRED (WHICH TO INLCUDE EXTRA TIME AND BUNKERS CONSUMED AS A RESULT OF HAVING TO PROCEED VIA AN ALTERNATIVE ROUTE LESS SAVINGS MADE) TO BE FOR CHARTERERS ACCOUNT. TIME SHALL COUNT AS LAYTIME OR IF THE VESSEL IS ON DEMURRAGE FOR DEMURRAGE.
However if the Vessel discharges the cargo at a port outside the Ranges stated in Section F of PART 1, freight shall be paid as for the voyage originally designated and any additional period by which the teaming time taken to reach the discharge port exceeds the time which would have been taken to reach the originally designated discharge port directly, and bunkers consumed for steaming during such additional period, shall be calculated and compensated in accordance with the provisions of Clause 22.3. Any additional port, canal or waterway expenses incurred by Owners as a result of the Vessel discharging outside the Ranges stated in Section F of PART 1 as aforesaid shall be for Charterers' account and Charterers shall reimburse to Owners any amounts due under this Clause 39.4 upon receipt of Owners' invoice together with full supporting documentation.
39.5 The Vessel shall have liberty:-
39.5.1 to comply with all orders, directions, recommendations or advice as to departure, arrival, routes, sailing in convoy, ports of call, stoppages, destinations, discharging of cargo, delivery or in an way whatsoever which are given by the government of the state under whose flag the Vessel sails, or other government to whose law Owners are subject, or any other government which so requires or anybody or group acting with the power to compel compliance with their orders or directions;
39.5.2 to comply with the orders, direction or recommendations of any war risks underwriters who have the authority to give the same under the terms of the war risks insurance applicable to the Vessel;
39.5.3 to comply with the terms of any resolution of the Security Council of the United Nations, any directions of the European Community, the effective orders of any other supranational body which has the right to issue and give the same, and with national laws aimed at enforcing the same to which Owners are subject, and to obey the orders and directions who are charged with their enforcement;
39.5.4 to discharge at any other port any cargo or part thereof which may render the Vessel liable to confiscation as a contraband carrier;
39.5.5 to call at any other port to change the crew or any part thereof or other persons on board the Vessel it there is good reason to believe that they may be subject to interment, imprisonment or other sanctions; and
39.5.6 If cargo has not been loaded or has been discharged by Owners under this Clause 39, to load other cargo for Owners' own benefit and carry it to any other port or ports whatsoever, whether backwards or forwards or in a contrary direction to the ordinary or custom any route.
39.6 If any compliance with Clauses 39.2 to 39.5 anything is done or not done, such shall not be deemed to be a deviation, but shall be considered as due fulfilment by the party concerned of its obligations under this Charter.
The Gulf of Aden Clause
" Gulf of Aden Clause For this CP only dated 20.09.10
In case the vessel for safety reasons is escorted by naval vessel(s) and/or restricted by daylight, and/or if a protection team and or any other protective measures is employed, all time used while awaiting escort and/or awaiting daylight and/or awaiting the protection team and/or awaiting implementation of protective measures to count at half time against used laytime or demurrage if vessel already on demurrage.
Furthermore if it is necessary for the vessel to follow a fixed route (way points) and/or to enter a convoy and/or to deviate to pick up/drop off a protection team and/or implement any other protective reasonable measure, and/or to deviate from the usual route, additional costs (including the costs of protection team and protective measures), time and bunkers used to be shared 50/50 between owners and charterers.
Any additional insurance premia (including, but not limited to, those in respect of H&M, Crew, P&I kidnap risks and ransoms), crew bonuses (which to be in accordance with the international standard) shall be for chrtrs account. Max USD40,000 for charterers account for any additional insurance premium except for crew bonus which to be max USD 20,00 for charterers account"
The Additional War Risk Clause
"Any additional premiums payable by owner in respect of war risks under their policies of insurance that are incurred by reason of the vessel trading to excluded areas not covered by owner's basic war risk insurance shall be for charterer's account. Any bonuses or additional premiums payable by owners in respect of their crew which are due by reason of trading to such excluded areas shall also be for charterer's account.
For the avoidance of doubt it is agreed that if the vessel is bound to enter an excluded area in order to arrive at the load port, or if the vessel will have to steam away from the discharge port in order to leave an excluded area then the additional premiums and bonuses payable by charterers shall include those payable from the time the vessel passes into the excluded area inward bound to the load port and until the time the vessel passes out of the excluded area outward bound from the discharge port calculated at normal speeds and prudent navigation. Such additional premiums and expenses that are for charterer's account are payable by charterers together with freight against owner's invoice supported by appropriate documents. If such documents not available then such additional premiums and expenses shall be settled not later than 2 weeks after receipt by charterer from owner's invoice and appropriate supporting documents.
Any discount or rebate refunded to owner for whatsoever reason shall be passed on to charterer. Any premiums and increase thereto attributable to closure. Max USD 20,000 crew war bonus for charterers account"