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England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Bandwith Shipping Corp. v Intaari  EWHC 2532 (Comm) (17 October 2006)
Cite as:  ArbLR 8,  EWHC 2532 (Comm)
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| BANDWITH SHIPPING CORPORATION
|- and -
Mr Luke Parsons QC & Mr Christopher Smith (instructed by Ince & Co) for the Defendant
Hearing dates: 6th & 7th September 2006
Crown Copyright ©
MR JUSTICE CHRISTOPHER CLARKE:
The background facts
"The vessel was constructed to operate independently in thick one year old ice with enclosed multi year old ice. The vessel is capable to break up to 1.2. metres of one year old fast level ice with both engines at the continuous speed of 3.5 knots and to break ridges of 7 metres in the running mode. The vessel has an ice knife on the stem for safe navigation of the vessel in Antarctica waters".
The course of the voyage
Cape Town to Mirnyy
Mirnyy to Novo
The Charterers' case
"8 Had the vessel performed in accordance with the charterparty she would have returned to Cape Town on or about 30th May 2002 and/or she would not have been trapped in ice on or about 30th May 2002 and would not have needed to seek refuge in Muskegbukta.
9. As a result of the matters set out above:(i) Between 2nd May and 30thMay 2002 there was 5.8 days loss of time or delay.(ii) Time lost from 19th April 2002 until 30 May 2002 due to the inefficiency of the vessel was properly deducted by the Respondents under clauses 11 (A) and/or 13 of the charterparty.(iii) The vessel was off hire from 30th May 3002 and/or the Claimants are responsible for any delay thereafter pursuant to [the same clauses].(iv) Further or in the alternative, during the 5.8 days referred to above and/or from 30th May 2002 the Respondents were deprived of the use of the vessel and the Respondents were entitled to deduct any hire during those periods."
(a) She would not have lost 5.8 days time, some of which was time lost in May;
(b) She would have returned to Cape Town by about 30th May. This obviously meant that she would have left Novo before 30th May. If she was to arrive on 30th May her departure could not have been later than about 23rd May at best;
(c) If she was still at Novo on 30th May she would not have been trapped there, i.e. having departed Novo on her actual date of departure she would then have crossed the ice bar and reached Cape Town without difficulty;
(d) In any event she would have returned to open waters in July/August.
The Charterers' opening submissions
"If the vessel had complied with her ice breaking capacity and/or if the vessel had been seaworthy would she have been able to break through the ice and if so when?"
Mr Timothy Young, Q.C., for the Owners agreed with the formulation of the issues, including this one, by Mr Luke Parsons, Q.C. for the Charterers.
"Given that the ALMIRANTE IRIZAR was able to make it through the ice, Professor Riska's figure 9 clearly demonstrates that the Vessel, had she been seaworthy and had she been able to perform in accordance with the charterparty ice-breaking warranty would have been able to leave the ice and return to Cape Town in good time (Gibson calculates that the Vessel should have returned by 24th May 2002, see Gibson paragraph 8.5.7)."
The Owners' opening submissions
The Charterers' written closing submissions
"1. Following the oral evidence the shape of the Charterers' case has not significantly altered since the Charterers served their Opening Skeleton Argument ("the Charterers' Opening") with the possible development that the unseaworthiness of the vessel and its effect on performance in the ice encountered is now in sharper focus. These Closing Submissions are served as a supplement to the Charterers' Opening in order to comment on the evidence and are designed to be read with that Opening."
"3. The Charterers invite the Tribunal to make the following findings: …
(9) The delays to the vessel and the need for the vessel to remain over winter were caused by the breach of warranty and unseaworthiness of the vessel. If the vessel had been seaworthy and/or had been able to perform in accordance with the ice breaking warranty, the vessel would have returned to Cape Town by end May/beginning of June.
(10) Accordingly, the Charterers are not liable to Owners for more than the 35 days the Vessel should have taken to complete the voyage ……
(5) WHAT WAS THE CAUSE OF THE VESSEL WINTERING IN THE ANTARCTIC?...
"59 The first issue the tribunal needs to consider on this point is whether the vessel could have broken through the ice and returned to open water if she had complied with her ice breaking warranty and/or been seaworthy.
"62 Had the Vessel been able to generate full power on her engines and engage her ice-breaking mode, she would have been able to cross the ice-belt and return to open waters (further particulars were then given).
"68 The Charterers ask the Tribunal to find that the vessel would have returned to Cape Town by 24th May (see Gibson paragraph 8.5.7…) if there had not been a breach of charterparty."
The Owners' written closing submissions
"The delay encountered going into Novo, after crossing the Ice Belt was due to the onset of a hurricane, she plainly could not either berth (or stay at berth) in such a wind and hence she "tacked" for two days, as she would have done with or without ice-breaking capacity".
Oral closing submissions
"[quoting from the submissions] 'If the Vessel had been seaworthy and/or been able to perform in accordance with the ice breaking warranty, the Vessel would have returned to Cape Town at the end of May, beginning of June'. I have put a big no against that and you can see why. That is where my case lies. And he really does not have any evidence"
Given that the Charterers' submission was based on the Gibson calculation this broad brush approach was understandable. As Mr Young rightly surmised the Tribunal was not going to regard Mr Gibson's theoretical calculation as justifying the conclusion for which the Charterers sought to deploy it. His oral submissions addressed the Charterers' contentions that, but for the breach of warranty, the vessel would have got back from the Antarctic without having to winter there if she had left on 30th May or thereafter.
"And in any event what we submit is that that this vessel is unseaworthy ---and that that is the root cause of all the problems that they encounter when they meet the ice on the 12th May, the 23rd May, the 30th to the 19th June and is the root cause of the decision that is made to winter in Muskegbutka.."
13 So it [the Khromov log] helps you on that basis. It also -- we will
14 come back to it -- helps you on the question of
15 causation. Because Mr Khromov's log records the
16 conditions in the Ice Belt, that this vessel went
17 through three times and on the balance of probabilities,
18 are the conditions that the vessel would have had to
19 encounter when she went back the fourth time.
20 MR TEARE: And for the purposes of causation, the relevant
21 period to look at the log is what?
22 MR PARSONS: Well, there are two different bases of thinking
23 that. Because of course if she had not been delayed on
24 the 12th and 13th, and the 22nd and 23rd, she might have
25 been coming through that bit earlier anyway. …
10 So it would have been earlier, possibly than the
11 figures show in this diary. But for the purposes of
12 calculating the conditions on our worst case, you would
13 be looking at the 30th May to the 10th June. When the
14 conditions are described as 20 to 30 centimetres." 
"17 MR PERSEY: There are two aspects to it. One is by how much
18 was she in breach. And then secondly whether, given her
19 stated capacity, could she have broken the ice which she
20 in fact did face?
21 MR PARSONS: Yes, I agree. Those are the two issues."
The reference to "the ice which she in fact did face" is a reference to the actual situation that the vessel faced and not the hypothetical situation which would have arisen if the vessel had left Novo earlier than she did. But since it was apparent that, on any view, the Charterers were saying that the vessel, if warranty conforming, would have left before 30th May, I cannot accept that Mr Persey thought that no case was being made that the vessel ought to have been able to break through such ice as in the event she would have faced, if she had not become jammed as a result of a breach of warranty.
16 So the question then is: when would the vessel have
17 returned? There are on this basis a number of
18 possibilities. She could have gone straight back from
19 the 30th, is one possibility. She might have been going
20 back a few days earlier because she was delayed, so she
21 would have been going back from, say, the 27th. Or she
22 might have been going back after the ice abated. Those
23 are the three possibilities. I did them in the wrong
25 MR TEARE: Tell me which month you are talking about.
1 MR PARSONS: Yes, sorry. Either you could find that she was
2 trying to turn back a few days before the 30th May; from
3 Novo, because she would have got to Novo a little bit
4 early if she had not got stuck. That is my first case.
5 Second case is --
6 MR PERSEY: She would have gone straight north then because
7 there would have been no hurricane --
8 MR YOUNG [sc. PARSONS]: That is what I am saying. She would have gone
9 straight north. The second one is: that she would have
10 done that on the 28th instead of the 30th because she
11 got delayed getting there.
12 The second one is she would have gone straight north
13 from the 30th.
14 My third case is that she would have gone, if she
15 started going to the west, she would have broken out at
16 some stage or at the latest, once the pressure abated
17 from say the 6th or 7th she would have gone back. Those
18 are the three possibilities.
19 And Mr Gibson -- I have given you the reference --
20 has calculated the length of the route and it is
21 a question of taking that and applying that to one of
22 those dates effectively.
23 MR TEARE: And that is the reference you have taken us to,
24 is it?
25 MR PARSONS: Yes."
(a) a few days earlier than the 30th May – 27th or 28th;
(b) the 30th May;
(c) 6th/7th June.
"24 MR TEARE: Just going back to paragraph 68. When
25 you say the charterers asked the Tribunal to find the
1 vessel would have returned to Cape Town by the 24th May,
2 your first case, as you gave me a moment ago, that she
3 might turn back a few days before the 30th May, she is
4 going to arrive back in Cape Town by the 20th May. So
5 I am ignoring -- Mr Gibson says she would get back to
6 Cape Town by the 24th May but that is not your primary
8 MR PARSONS: I better just think about that. The problem is
9 I was trying to do this while quantum was being
10 discussed and I had thought we would actually have
11 figures for different dates. Could you bear with me --?
12 MR YOUNG: A ten day ...
13 MR PARSONS: I am afraid I did not grapple with this because
14 I had thought quantum was being dealt with.
15 MR YOUNG: I have some sympathy with my learned friend.
16 MR TEARE: What we need to know in relation to your three
17 cases is an agreed figure for the number of days it
18 would take to get back to Cape Town."
19 MR YOUNG: After getting out of the Ice Belt.
20 MR TEARE: I am looking at page 229 and I cannot find an
21 answer on that page.
22 MR YOUNG: There is not one. I think it was 10 to 15 days.
23 MR PERSEY: Surely you could agree on that and let us know.
24 MR TEARE: Add to date to whatever date you think she would
25 have returned back, if you think that is the case.
1 THE CHAIRMAN: As Mr Persey says, this is not something that
2 needs to be done now and certainly not something that
3 should be done in a rush.
4 MR PERSEY: I think you should agree and send us a letter.
5 If you cannot then set out the parameters and identify
6 where you disagree.
7 MR YOUNG: I agree.
8 MR PARSONS: I agree. Having said those are our three cases,
9 because Mr Gibson has got had a (inaudible) I just need
10 it to see if I have missed something because it sounds
11 as though I have.
12 MR YOUNG: Yes. If it is of any consolation, I think the
13 problem that my learned friend has with Mr Gibson,
14 I think it is why it does not matter, is that the
15 discharging at Mirnyy, because of the thickness of the
16 ice, had to be done by helicopter which then had to be
17 stopped at various times because of weather or
18 visibility. And his calculations did not factor that in
19 at all, nor did he factor in the fact that if the vessel
20 had got into Novo earlier, the hurricane, the first of
21 the two hurricanes, would have hit earlier and so she
22 would have put off the berth then. So I suspect we
23 can -- we can ... well, I suspect we can probably agree
24 things once you have produced your award. No, we
25 cannot. That will not work."
"In relation to the sums claimed by the claimant and counterclaimed by the respondents and/or adjustment to final hire statements they cannot be agreed until the tribunal has ruled in relation to, inter alia, commencement of the charter, ending of the charter and any off-hire periods that the tribunal may find. In these circumstances, it is agreed between the parties that the decision of the tribunal will be discussed between the parties with a view to then presenting to the tribunal agreed claim or counterclaim figures (as appropriate)".
Owners' reply submissions
"The Charterers' primary case, as clarified in their closing written submissions, was that the vessel would have returned to Cape Town by 24 May had she complied with her ice breaking warranty. In this regard reliance was placed upon a calculation of voyage time by their expert marine engineer Mr Gibson … Their secondary case was that if the vessel would have left Novo on 30 May in any event she would have been able to reach the open sea had she complied with her warranty … . Their third case was that she should have been able to follow the channels created by the ALMIRANTE IRIZAR in July 2002 and thereby reach the open sea. (In their closing oral submissions the third case was put on the basis that the vessel would have broken out of the ice on 6 or 7 June and no mention was made of following the ALMIRANTE IRIZAR in August 2002).
(a) 5 hours on 12th May;
(b) 10 hours on 22nd May
(c) 2 hours on 23rd May
These were hours lost on the journey from Mirnyy to Novo. The arbitrators concluded that, but for the breach, the vessel would have been able to depart about 17 hours earlier than the time of her actual departure from Novo. If so, she would have cast off her lines at about 1200 on 29th May (and not on 30th May). The Tribunal found that, on that hypothesis, the Master would have set off east instead of west because the conditions then were markedly better than those of the morning of 30th May, when she did in fact leave; and that she would have emerged from the ice belt on 2nd or 3rd June and arrived in Cape Town on 17th June 2002. As a result they concluded that the Owners' substantial breach of the ice breaking warranty was an effective cause of the vessel wintering in the Antarctic.
The Owners' contentions
"(a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent"
"68. - (1) A party to arbitral proceedings may … apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings or the award…
(2) Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant-
(a) failure by the tribunal to comply with section 33 (general duty of tribunal);"
The Owners' submissions
"The test of "substantial injustice" is intended to be applied by way of support to the arbitral process. Thus it is only in those cases where it can be said that what has happened is so far removed from what could reasonably be expected of the arbitral process that we would expect the Court to take action. The test is not what would have happened had the matter been litigated. To apply such a test would be to ignore the fact that parties have agreed to arbitrate not litigate. Having chosen arbitration, the parties cannot complain of substantial injustice unless what has happened cannot on any view be defended as an acceptable consequence of that choice. In short clause 68 is really designed as a longstop, only available in extreme cases where the tribunal has gone so wrong in its conduct of the arbitration that justice calls out for it to be corrected."
"..the fact that if the vessel had got into Novo earlier, the hurricanes, the first of the two hurricanes, would have hit earlier and so she would have put off the berth then .."
Note 1 In which Shackleton’s “Endurance” was trapped and crushed. [Back] Note 2 In their Award the Tribunal decided that the voyage from Novo across the ice belt to Novo would have taken about 18 days. [Back] Note 3 Originally pleaded as “on or about 30th May 2002”. [Back] Note 4 The Charterers contend that there is no evidence to that effect and that the tenor of the evidence is that, if the vessel had been in the condition warranted by the charterparty, she would have been able to remain at berth during the hurricane. [Back] Note 5 The emboldening in this and other citations is not in the original transcript. [Back] Note 6 Mr Young’s submission at Day 10, page s 144-5, lines 24-1 show that he thought so too. [Back] Note 7 “The Charterers ask the Tribunal to find that the vessel would have returned to Cape Town by 24th May (see Gibson para.8.5…. )7 if there had not been a breach of charterparty.” [Back] Note 8 No case had ever been made that the vessel would have arrived at Cape Town by 20th May. It seems to me likely that was Mr Teare said or meant to say was “she is not going to arrive back in Cape Town by the 24th May”. [Back] Note 9 The word may well be “calculation”. [Back] Note 10 The invitation was couched in terms which anticipated that Owners would be replying to his point that the vessel would, but for the breach, have left a few days earlier (“That is my primary case. If however you are persuaded by anything Mr Young says in reply to find a later one …”): Day 10, page 140, lines 18-20. [Back] Note 11 There is, however, a problem with the use of this or any log for this purpose. It is possible to consult the log in order to see the weather conditions that it recorded 17 hours earlier than any given moment. The record will be of the weather conditions where the vessel actually was at that earlier time. But, if she had not had 17 hours of delay she would not have been at that spot. [Back] Note 12 “Well, we were entirely seaworthy. We withstood hurricanes twice”: Day 10, page 4, line 21. See, also, Day 10, page 136, lines 20-21. [Back]
Note 1 In which Shackleton’s “Endurance” was trapped and crushed. [Back]
Note 2 In their Award the Tribunal decided that the voyage from Novo across the ice belt to Novo would have taken about 18 days. [Back]
Note 3 Originally pleaded as “on or about 30th May 2002”. [Back]
Note 4 The Charterers contend that there is no evidence to that effect and that the tenor of the evidence is that, if the vessel had been in the condition warranted by the charterparty, she would have been able to remain at berth during the hurricane. [Back]
Note 5 The emboldening in this and other citations is not in the original transcript. [Back]
Note 6 Mr Young’s submission at Day 10, page s 144-5, lines 24-1 show that he thought so too. [Back]
Note 7 “The Charterers ask the Tribunal to find that the vessel would have returned to Cape Town by 24th May (see Gibson para.8.5…. )7 if there had not been a breach of charterparty.” [Back]
Note 8 No case had ever been made that the vessel would have arrived at Cape Town by 20th May. It seems to me likely that was Mr Teare said or meant to say was “she is not going to arrive back in Cape Town by the 24th May”. [Back]
Note 9 The word may well be “calculation”. [Back]
Note 10 The invitation was couched in terms which anticipated that Owners would be replying to his point that the vessel would, but for the breach, have left a few days earlier (“That is my primary case. If however you are persuaded by anything Mr Young says in reply to find a later one …”): Day 10, page 140, lines 18-20. [Back]
Note 11 There is, however, a problem with the use of this or any log for this purpose. It is possible to consult the log in order to see the weather conditions that it recorded 17 hours earlier than any given moment. The record will be of the weather conditions where the vessel actually was at that earlier time. But, if she had not had 17 hours of delay she would not have been at that spot. [Back]
Note 12 “Well, we were entirely seaworthy. We withstood hurricanes twice”: Day 10, page 4, line 21. See, also, Day 10, page 136, lines 20-21. [Back]