Golden Fleece Maritime Inc and Another v ST Shipping and TransportInc

Tag : double-sided fleece

Court of Appeal
Published June 10, 2008
Golden Fleece Maritime Inc and Another v ST Shipping and TransportInc
Before Sir Anthony Clarke, Master of the Rolls, Lord JusticeLongmore and Lord Justice Lawrence Collins
Judgment May 23, 2008
Owners of vessels which failed to comply with the Marine PollutionConvention, as warranted in the charterparty and were unable tocarry to all specified ports the full range of petroleum productsset out therein, were in breach of time charters.
The Court of Appeal so held, dismissing the appeal of shipowners,Golden Fleece Maritime Inc and Pontian Shipping SA, against thedecision of Mr Justice Cooke ([2007] 1890 (Comm)) that they wereliable in damages to the charterers, ST Shipping and Transport Inc,for breach of charter from the date when work ought to have beencarried out to enable the vessels to comply with the amended MarinePollution Convention.
Mr Gavin Kealey, QC and Mr Timothy Hill for the owners; Mr NicholasHamblen, QC and Mr Malcolm Jarvis for the charterers.
LORD JUSTICE LONGMORE said that since the 1970s theInter-Governmental Maritime Consultative Organisation, since 1982the International Maritime Organisation, had been concerned tominimise occurrences and consequences of pollution. Under itsauspices, the Convention on the Prevention of Marine Pollution byDumping of Wastes and Other Matter 1972 had introducedinternationally recognised regulations covering the prevention ofpollution of the marine environment by ships.
The parties to that Convention had gradually been requiringimprovements of the design of tanker vessels. A requirement thatsegregated ballast tanks should be fitted alongside the vesselwhile oil was carried in the central tanks was introduced. Thosevessels were called double-sided. The final step was to require thecargo tanks to be protected not only at the sides but also at thebottom, or double-hulled.
Amendments to the 1972 Convention to secure that end were adoptedin 1992 and came into force in 1993 by regulation 13F of annex 1 tothe Convention. They applied to existing ships 30 years afterdelivery to the original owner.
The International Maritime Organisation accelerated the phasing outof single-hulled tankers by adopting regulation H of annex 2 to theConvention to come into force on April 5, 2005. From that date onlydouble-hulled vessels could carry fuel oil cargoes. There were,however, exemptions from that regime in regulations 13H(5), (6) and(7).
The charterparties in question were made on May 30, 2003, andAugust 10, 2004. Neither vessel was double-hulled. The partiestreated them as double-sided although to a small extent they werenot with the result that they did not meet the requirements of theexemption.
The critical question was whether the failure of the vessels tocomply with the Convention’s new provisions for double-hulledvessels meant that the owners were in breach of charter after April5, 2005.
The charters were on the Shelltime 4 form, a standard form of timecharter. Its terms provided that the vessels were to be fit tocarry dirty petroleum products such as fuel oil, they were to haveon board certificates and documents required by the applicable law,and they were to comply with all applicable conventions, includingspecifically the amended Marine Pollution Convention.
The authorities established no principle of law that the terms of atime charter as to seaworthiness or fitness to carry the cargorelated only to the vessel’s physical condition and couldnever extend to legal fitness to carry the cargo. It was all aquestion of fact and construction of the individual charterparties.
The wording of the clause requiring relevant documents to be onboard was curious. To carry fuel oil the vessels needed, as fromApril 2005, an exemption under regulation 13H(5). It was a documentrequired at a particular time. The opening words of the clause,however, looked to the date of the vessel’s delivery underthe charter.
There was thus an inconsistency between the opening words and thewords “required from time to time” in the body of theclause. Precedence should be given to the words in the body ratherthan those in the introducing phrase on the basis that theparticular should prevail over the general. That would be enough toresolve the appeal in favour of the charterers.
The first two paragraphs of clause 52 led to the same conclusion.Clause 52 warranted that the vessel was eligible under applicableconventions, laws and regulations for trading to and from portsspecified in the charterparty, and had on board all certificatesand required documents. The warranty explicitly applied to thefuture and expressly referred to the Marine Pollution Convention asamended and extended.
Without the regulation 13H(5) exemption, the vessels did not complywith the Convention because they were designated fit to carry dirtypetroleum products but could not do so unless they had the relevantexemption for double-sided vessels. Thus on any view there was abreach of clause 52 because the vessels were unable to obtain thatexemption.
The Master of the Rolls and Lord Justice Lawrence Collins agreed.
Solicitors: Stephenson Harwood; Clyde & Co LLP.