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The Commercial Court has considered once again the wording of
an additional clause on an amended form NYPE46 charterparty, in the
context of a seizure by pirates, in order to determine whether a
vessel was on or off-hire during a period of detention by
pirates.
In Osmium Shipping Corporation v Cargill International
SA (The "CAPTAIN STEFANOS") [2012] the charterparty
contained the following clause:
Clause 56
Should the vessel put back whilst on voyage by reason of any
accident or breakdown, or in the event of loss of time either in
port or at sea or deviation upon the course of the voyage caused by
sickness of or accident to the crew or any person onboard the
vessel (other than supercargo travelling by request of the
Charterers) or by reason of the refusal of the Master or crew to
perform their duties, or oil pollution even if alleged,or capture/seizure, or detention or threatened
detention by any authority including arrest, the
hire shall be suspended from the time of the inefficiency until the
vessel is again efficient in the same or equidistant position in
Charterers' option, and voyage resumed therefrom. All extra
directly related expenses incurred including bunkers consumed
during period of suspended hire shall be for Owners' account.
[emphasis added]
Owners said that any "capture/ seizure" had to be by
an authority, whereas Charterers argued that capture/seizure was an
off-hire event distinct from "detention or threatened
detention by any authority", and that acts of piracy clearly
fell within the meaning of "capture/seizure".
Owners also argued that a proper reading of clause 56, alongside
the rest of the clauses in the charterparty, including CONWARTIME
2004 (which was incorporated), had the effect of allocating the
risk of piracy to Charterers.
Charterers submitted that the words in clause 56 should be given
their plain and ordinary meanings, which were clear. Owners'
invocation of CONWARTIME as a risk allocation mechanism was
misplaced, as CONWARTIME, and the "liberty" provisions
within it were unrelated to the off-hire provisions in the
charterparty.
The judge found in favour of Charterers, and held that clause 56
should be construed in accordance with the "plain and obvious
meaning of the words used in the clause". Piracy was an
off-hire event, being a "capture/seizure" within the
meaning of clause 56, as the relevant capture/ seizure was not
required to be by "an authority". The finding was in
contrast to the earlier case of Cosco Bulk Carrier Co. Ltd v
Team-Up Owning Co, Ltd, The "SALDANHA" [2010] in
which the Court considered a clause similar to clause 56, but
different in some respects, resulting in the vessel in that case
being on-hire for the duration of a detention by pirates.
The judge also held that CONWARTIME related to the performance
of the charterparty and to breach, not to off-hire.
The case serves to underline, yet again, the importance of using
clear words to allocate the risk of piratical events, to avoid the
risk of subsequent disputes.
Clyde & Co acted for the successful Charterers in this
case.
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