Seatrade Group N.V. v Hakan Agro D.M.C.C. (The "ACONCAGUA BAY") (2018)
A warranty containing wording that a berth should be "always accessible" to a ship can be found in many dry cargo charterparties, including GENCON, HEAVYLIFTVOY, North American Grain Charterparty and Americanized Welsh Coal Charterparty. Whilst it is well-established that such a warranty extends to the vessel getting into the berth, the position with regard to the vessel departing the berth has been less clear. On 26 March 2018, the High Court handed down a succinct decision1 resolving this point of law.
Seatrade Group N.V. (the "Owners") and Hakan Agro D.M.C.C. (the "Charterers") entered into a voyage charterparty on an amended GENCON 1994 form, which, in clause 10, contained a warranty for "1 good safe berth always afloat always accessible..." (the "Warranty").
During the loading operation, a bridge and lock of the "ACONCAGUA BAY" (the "Vessel") were damaged, and this resulted in the Vessel being unable to leave the berth until 14 days after the loading completed. The Owners brought arbitration proceedings against the Charterers claiming damages for detention for the period of delay.
The question of law was whether the Warranty applied so that the Vessel should always be able not only to enter but also to leave the berth. The Umpire in the arbitration ruled that the Warranty was confined to entry to the berth only. The Owners appealed against the arbitration award pursuant to s. 69 of the Arbitration At 1996, and were granted leave to appeal as the question at stake was considered of general public importance and one on which there was no binding authority.
The Court was asked to determine whether the Umpire was correct in law in ruling that the parties intended to omit departure from the berth from the scope of the Warranty.
Following the well-established principles of interpretation, the parties' intention was determined by reference to "what a reasonable person having all the background knowledge that would have been available to the parties would have understood them to be using the language in the contract to mean".
The Judge noted a number of judgments and awards, such as London Arbitration 11/97, which construed the term "always accessible" as confined to entering the berth. In this ruling, however, the position as to departure was not a decisive point. The Judge also observed that the Tribunal had not had the benefit of referring to the Baltic Code 2003 (as well as its 2007 and 2014 versions), which stated that:
"Where the charterer undertakes that the berth will be 'always accessible', he additionally undertakes that vessel will be able to depart safely from the berth without delay or at any time during or on completion of loading or discharge".
The Judge also observed that whilst the Umpire had considered the dictionary definition of "accessible", in this case, dictionaries were not able to resolve the point of interpretation.
Furthermore, the Judge considered the wording "reachable on arrival" featuring in some tanker charterparties. Whilst some decisions, such as Seacrystal Shipping Ltd v Bulk Transport Group Shipping Co Ltd (The "KYZIKOS"), have treated this wording as synonymous with "always accessible", it is only in respect of the arrival of the ship at berth that the effect of the two terms is the same. In addition, whilst finding force in both parties' submissions, the Judge felt convinced by the argument made on behalf of the Owners that, in considering the subject of berthing, a reasonable commercial party would bear all aspects in mind and would not restrict itself to merely the entry aspect of it.
For the above reasons, the Judge found that the Umpire had erred in law and allowed the Owners' appeal.
The industry will no doubt welcome the certainty secured by this decision in terms of the clear meaning of the term "always accessible". Should the parties wish such a provision to be confined to entry to the berth, alternative wording should be used.
1 Seatrade Group N.V. v Hakan Agro D.M.C.C. (The "ACONCAGUA BAY") (2018)
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