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Charterparty - Breach by owner
Taokas Navigation SA v Komrowski Bulk Shipping KG (GmbH & Co) and other companies: QBD (Comm) (Mr Justice Teare): 11 July 2012
The instant appeal concerned a question of law pursuant to section 69 of the Arbitration Act 1996, which arose out of an award on a preliminary issue made by arbitrators in respect of a charterparty of a vessel, Paiwan Wisdom.
The arbitrators had also made three such awards arising out of other charterparties of the vessel Paiwan Wisdom on materially identical terms. The lead appellant in the instant case was the sub-sub charterer, Solym Carriers Ltd. The lead respondent was the owner Taokas Navigation SA. The intervening charterers were Komrowski Bulk Shipping and Kent Line.
For the purposes of the argument, the terms of the charterparties had been taken from the charterparty between Kent Line, as disponent owner (the owner) and Solym Carriers (the charterer). The charter period was 11 to 13 months trading via safe ports from delivery at Hakodate dock, Japan. The vessel was delivered on 22 April 2010, and the charterer’s instructions for the first voyage were for the vessel to proceed to Hoping, Taiwan and there load a cargo of cement clinker for discharge in Mombasa, Kenya. The owner refused to perform those voyage instructions in reliance on a war risks clause in the charterparty, namely clause 4 of Conwartime 2004. In refusing to perform the instructions to proceed to Mombasa, the owner referred to recent developments in the Indian Ocean in respect of piracy and to piracy getting more severe and extending further along the coast/waters of east Africa. The charterer had to charter another vessel to perform the voyage at a cost of $815,000. The arbitrators determined a preliminary question in favour of the owner. The charterer appealed.
The preliminary issue for determination was whether, on the true construction of the charterparty, the owner was precluded from relying upon on the Conwartime 2004 clause to justify its refusal to proceed on a voyage to Mombasa ordered by the charterer in the event that there was no material change in the risk (otherwise encompassed within the words of the Conwartime 2004 clause) of proceeding with that voyage between the date of the charterparty and the date of the order.
Consideration was given to clause 94 of the charterparty, which provided, inter alia, that: ‘The vessel, unless the written consent of the owners be first obtained, shall not be ordered to or required to continue to or through, any port, place, area or zone (whether of land or sea), or any waterway or canal, where it appears that the vessel, her cargo, crew or other persons on board the vessel, in the reasonable judgement of the master and/or the owners, may be, or are likely to be, exposed to war risks.’ Consideration was given to whether Conwartime 2004 contained a requirement that the relevant war risk had to have escalated since the date of the charterparty and to whether there was a lack of commercial sense in a construction of the charterparty which permitted trading to Kenya on day one but which entitled the owner to refuse an order to trade to Kenya on day two. The appeal would be dismissed.
In the instant case, the answer to the preliminary issue was ‘no’. There was no doubt that Kenya was within the vessel’s trading limits under the charterparty. However, clause 94 of the Conwartime 2004, provided that an owner might refuse to proceed to a place which was dangerous on account of a war risk. Conwartime 2004 did not contain a requirement that the relevant war risk had to have escalated since the date of the charterparty. Conwartime 2004 had to be read in the light of the charterparty as a whole.
The instant case was not one in which the owner had, by the terms of the charterparty construed in its factual context, accepted the risk of piracy in trading to Mombasa, Kenya. The court did not accept that there was a lack of commercial sense in a construction of the charterparty which permitted trading to Kenya on day two but which entitled the owners to refuse an order to trade to Kenya on day two. While trading to Kenya was permitted, Conwartime 2004 enabled the owners or master to avoid danger from war risks which might be encountered en route to Kenya (see , , , ,  of the judgment).
Malcolm Jarvis (instructed by Stockler Brunton) for Solym Carriers Ltd; Robert Bright QC (instructed by Reed Smith) for Taokas Navigation SA; Charlotte Tan (instructed by Holman Fenwick Willan) for Kent Line International Ltd; Christopher Wood (of Winter Scott) for Komrowski Builk Shipping KG (GmnH & Co) the intervening charter.
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