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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> AMS Ameropa Marketing Sales AG & Anor v Ocean Unity Navigation Inc [2023] EWHC 3264 (Comm) (19 December 2023) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2023/3264.html Cite as: [2023] EWHC 3264 (Comm) |
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
KING'S BENCH DIVISION
LONDON CIRCUIT COMMERCIAL COURT
Fetter Lane, London, EC4A 1NL |
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B e f o r e :
sitting as a Deputy Judge of the High Court
____________________
(1) AMS AMEROPA MARKETING SALES AG (2) BALOISE BELGIUM S.A. |
Claimants |
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- and - |
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OCEAN UNITY NAVIGATION INC |
Defendant |
____________________
David Semark (instructed by Wikborg Rein LLP) for the Defendant
Hearing dates: 28 & 29 November 2023
Draft judgment provided 8 December 2023
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Crown Copyright ©
Ms Clare Ambrose :
A Introduction
B The claims
a) USD 363,061.59 for loss of value of the Rejected Cargo based on the difference between its sound market value at the time of discharge (i.e. USD 454/MT) and its actual value as evidenced by the Salvage Sale at a price of USD 1,292,998.75.
b) USD 54,128.58 for ancillary fees and expenses consisting of:
i) SGS fees in respect of monitoring, inspection, offshore transportation and other services in the sum of USD 11,648.38;
ii) survey fees in the sum of USD 14,883.37;
iii) warehouse rental, trucking and stevedoring fees in the total sum of USD 27,598.83.
C The evidence
D The Factual Background
"QUALITY SPECIFICATIONS:
BROKEN/SPLITS: 20% MAXIMUM
MOISTURE: 13.5% MAXIMUM
TOTAL DAMAGED KERNELS: 5.0% MAXIMUM
INCLUDING HEAT DAMAGED KERNELS: 0.5% MAX
FOREIGN MATERIALS: 2.0% MAXIMUM
SBNS OF OTHER COLOURS: 2.0% MAXIMUM
PROTEIN: 34% MINIMUM
OIL: 18.5% MINIMUM (FOSFA METHOD)
AFLATOXIN (TOTAL, B1, B2, G1, G2): MAX. 20 PPB TOTAL, INCLUDING MAX 10 PPB B1
GOODS MUST BE SOUND, LOYAL MERCHANTABLE QUALITY AND FREE FROM FOREIGN SMELL AND LIVE INSECTS OR WEVEILS
WEIGHT/QUALITY AND CONDITION:
QUALITY AND CONDITION FINAL AT LOADING AS PER INDEPENDENT FIRST CLASS FOSFA APPROVED SURVEYOR'S CERTIFICATE AND/OR FGIS CERTIFICATE, IN SELLER'S OPTION AND EXPENSE. …
…
PRICE:
C/BU BASIS CBOT NOVEMBER 2020 FUTURES."
Following completion of discharge
"We, the undersigned INTERNATIONAL OIL MULTISEED EXTRACTION CO. herewith assign to AMS AMEROPA MARKETING AND SALES AG, all rights pertaining to us in connection with the above-referenced shipment.
In particular we assign all rights to AMS AMEROPA MARKETING AND SALES AG to recover the loss suffered from the liable parties and in particular against the owner of the vessel m/v "DORIC VALOUR"."
E FINDINGS ON THE ISSUES
a) Does the First Claimant have title to sue for the damages claimed?
b) Were the losses claimed caused by the Owners' breach?
c) What was the extent of physical damage to the Cargo caused by the Owners' breach?
d) Was the Rejected Cargo sound?
e) Were the damages claimed incurred in reasonable mitigation of loss caused by the Owners' breach? Do Owners have a defence of failure to mitigate loss?
f) Were the damages claimed adequately proven?
Title to sue
Conclusions on title to sue
Causation issues: were the losses claimed caused by the Owners' breach?
"43. First, although an evidential burden rests on the defendant insofar as it contends that there was a break in the chain of causation, the legal burden of proof rests throughout on the claimant to prove that the defendant's breach of contract caused its loss.
44. Secondly, in order to comprise a novus actus interveniens, so breaking the chain of causation, the conduct of the claimant "must constitute an event of such impact that it 'obliterates' the wrongdoing . . " of the defendant: Clerk and Lindsell on Torts, 19th Edition, at para 2-78. The same test applies in contract. For there to be a break in the chain of causation, the true cause of the loss must be the conduct of the claimant rather than the breach of contract on the part of the defendant; if the breach of contract by the defendant and the claimant's subsequent conduct are concurrent causes, it must be unlikely that the chain of causation will be broken. In circumstances where the defendant's breach of contract remains an effective cause of the loss, at least ordinarily, the chain of causation will not be broken….
45. Thirdly, it is difficult to conceive that anything less than unreasonable conduct on the part of the Claimant would be capable of breaking the chain of causation."
What was the extent of physical damage caused by the Owners' breach?
Mechanism and extent of damage on board
Was the Rejected Cargo at the warehouse sound?
Conclusions on amount of damaged cargo
Were the damages claimed incurred in reasonable mitigation of loss caused by the Owners' breach? Do Owners have a defence of failure to mitigate loss?
a) refusing to allow manual segregation to take place on board the vessel;
b) failing to carry out further segregation by grab;
c) failing to carry out a proper segregation exercise post-discharge notwithstanding SGS's indication that this would be carried out;
(Owners maintained that all these measures would have limited the contaminated cargo to around 300MT)
d) failing to obtain proper bids when seeking alternative buyers and concluding the Salvage Sale.
Stopping manual segregation
Other means of segregation on board or at the warehouse
Failure to obtain proper bids when seeking alternative buyers
a) The Rejected Cargo included Cargo that was known to have been heat damaged, as was apparent from the photos and survey reports. It had been segregated from the rest of the Cargo. The parties also knew that the surface temperature in hold 4 was up to 47 °C on discharge in late August, again consistent with a damaged cargo.
b) Three weeks had passed since damage to the Cargo had been discovered. Oilex appeared to have rejected the Rejected Cargo.
c) On 24 September 2020 the parties did not know whether the Rejected Cargo was stable or susceptible to further deterioration due to the heating and damage already found and it was in the interests of both sides to minimise such damage. Indeed, the very purpose of sampling on 24/25 September 2020 was to investigate its actual condition.
d) Dr Rodrigues's evidence was that there were some isolated spots of cargo in the warehouse where the soybeans were moist and germinating. He also noticed water leaking from the warehouse ceiling.
e) Several surveyors had inspected the damage on board. Surveyors also inspected the Rejected Cargo at the warehouse on 17 September. At that stage, the cargo interests' surveyors were describing the Rejected Cargo as "apparently sound" in correspondence. Several of the surveyors present at the inspection had agreed that a salvage sale was the best solution. The views of these surveyors were not tested and are not decisive, but they show how local surveyors were viewing the Rejected Cargo and that any sale was likely to be on the basis of the cargo being "apparently sound".
f) Cargo interests had instructed an established local broker who had surveyed the Rejected Cargo and put out a tender. There had been more than one bid and the highest bid accepted was 82% of the price invoiced to Oilex on 30 August 2020 for sound cargo.
g) In light of the known damage and delay since discharge some discount on the market price for a US No.2 grade cargo being delivered to Egypt straight from the US would have been inevitable.
h) Dr Rodrigues' estimate of the heat damaged cargo suggested that there were up to 4 times more heat damaged beans than allowed under the US No.2 grade specification. My finding as to the quantity of physically damaged cargo on discharge also suggests that the proportion of heat damaged beans present in the Rejected Cargo would have exceeded the US No.2 grade specification.
Were the damages claimed adequately proven?