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“Always accessible”: arrival, departure or both?

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Seatrade Group N.V. v. Hakan Agro D.M.C.C (Aconcagua Bay) [2018] EWHC 654 (Comm)   

An “always accessible” berth warranty is often used by an owner to transfer the risk of delays in berthing to a charterer. The Commercial Court has now settled the debate as to whether that warranty also transfers the risk of delays in departing the berth post the completion of cargo operations to the charterer. The Court concluded that it did.

The background facts

The Vessel was chartered for a voyage from the US Gulf to the Republic of Congo and Angola, on an amended GENCON 1994 form which, amongst other things, provided:

“10. Loading port or place (Cl.1)
1 good safe berth always afloat always accessible 1-2 good safe ports in the USG in Charterers’ option …”

While the Vessel was loading, a bridge and lock were damaged with the result that the Vessel was unable to leave the berth for 14 days following the completion of loading. The Owners sought damages for detention from the Charterers and relied on what they said was a breach by the Charterers of the “always accessible” warranty. The dispute went to arbitration.

As the two party-appointed arbitrators could not agree, the claim was determined by an Umpire, who decided that the “always accessible” warranty given by the Charterers was not an undertaking that the Vessel would also be able to leave the berth. From the judgment, it appears that the Umpire’s decision was influenced by:

a.  London Arbitration 11/97 (1997) LMLM 463, in which the Tribunal inferred “that charterers agreeing “always accessible” terms were under an obligation to provide a berth which was available immediately on arrival, but that that particular regime did not apply after the ship was actually in the berth”. This inference was drawn from the fact that: (i) the textbooks considered ignored the possible application of “always accessible” to the departure of a vessel from a berth; and (ii) the Voylayrules 1993 made no reference to a vessel leaving a berth or a port; and

b.  The fact that the dictionary definition of “accessible” was concerned with access to rather than access from the berth.

The Owners were granted leave to appeal the Umpire’s decision pursuant to section 69 of the Arbitration Act 1996 on the ground that the question of law that arose was of general public importance. The Commercial Court subsequently had to decide whether the warranty in a voyage charterparty that a berth is “always accessible” means that the vessel is always able not only to enter, but also to leave, the berth.

The Court held that the Umpire’s decision was wrong in law. Where a charterer warrants that a berth is “always accessible”, they are warranting that the vessel will always be able to enter and leave the berth. In particular, the Court stated as follows:

a.  The point was not decisive in London Arbitration 11/97 and that decision had not always been free from question when commentaries referred to it.

b.  The Baltic Code 2003, 2007 and 2014 and the Laytime Definitions for Charterparties 2013 refer to the vessel’s departure from the berth. 

c.  If a wider selection of dictionaries was considered, then capable of “use” or usability could be found among the available meanings of accessibility and “use” was a word that could readily include departure. While this was not conclusive, it suggested that a dictionary alone cannot resolve a point of interpretation.

d.  The question was whether the parties intended to provide for departure in the wording that they used. Where commercial parties addressed the question of the accessibility of a berth, there was no reason to conclude that they should be taken to have addressed entry alone. The reasonable commercial party looking at the subject of berthing would bear all aspects in mind and not confine themselves to getting into the berth. That was decisive.

e.  There was a useful vocabulary from which parties could choose if “always accessible”applied to departures as well as entry and if “reachable on arrival” applied to entry alone.

Comment

As a result of this judgment, there is now a distinct difference between a warranty that the berth will be “reachable on arrival” and a warranty that the berth will be “always accessible”. Accordingly, parties should take care to ensure that the warranties given by a charterer to the owner accord with what is intended to be agreed with regard to the risk of delays, especially where fixtures are concluded on basis done terms.

Michael Volikas

Michael Volikas Head of Shipping

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