Charterer refused leave to appeal against off-hire ruling

С. A. Venezolana de Navegacion v Bank Line Ltd

These proceedings before the Court of Appeal in London were brought by С A Venezolana de Navegacion, as charterer of the Bank Line-owned vessel Roachbank. The charterer was appealing against the decision of the Queen’s Bench Division upholding an arbitration award in favour of Bank Line.

The events giving rise to the dispute had their origin in a New York Produce Exchange Time charter dated May 4,1979, covering the Roachbank for a trip with delivery at Singapore and redelivery South America/Caribbean. Clause 15 of the charter provided, “77га/ in the event of loss of time... by any other cause whatsoever preventing the full working of the vessel, the payment ofhire... shall cease for the time thereby lost.”

On May 16, 1979, the vessel was delivered to the charterer at Singapore. She loaded cargo and sailed for Taiwan, there to load at Kaohsiung and Keelung with cargo bound for South America.

A week later, in the South China Sea, the Roachbank sighted and closed on a small boat containing 290 Vietnamese refugees. The master embarked the refugees and continued his voyage to Kaohsiung, arriving there on May 25. But the authorities refused to allow the refugees to land and required the vessel to remain outside the port. Later, the authorities were prepared to allow the Roachbank into the port, provided the owner undertook that all the refugees would remain on the ship throughout her time there and that they would leave with her.

On June 3, having come into the port, the vessel was ready to berth. The question which was subsequently referred to arbitration was whether the vessel was off-hire from May 25 until June 3.

The arbitrators, by a majority decision, found in favour of the owner. They decided that the vessel was not off-hire during the period in question. It was their interpretation that the decision of the Taiwanese authorities requiring the Roachbank to remain outside the port for a period often days or so was an extraneous cause and that, applying Clause 15 on that basis, the vessel was not off-hire between the material dates. The arbitrators were also of the opinion that the vessel was always capable, as a vessel, of performing the service immediately required by the charterer and was not prevented by the presence of the refugees from being fully worked, had port facilities been made available for her to do so.

The charterer applied for leave to appeal, and this was granted under the 1979 Arbitration Act. The appeal came before Mr. Justice Webster in the Queen’s Bench Division (Commercial Court), where it was noted that, only if the vessel was not fully efficient and able to render the service then required of her, would it be necessary to consider if she was prevented from being so by a relevant charterparty clause.

The court said that, if the vessel was not capable of fulfilling the service required by the charterer, and where the off-hire clause contained the word “whatsoever”, then unless it could be suggested that the words “any other cause whatsoever” were to be limited in some way, it should not be necessary to consider the particular cause which prevented the full working of the vessel.

It was held that the majority arbitration decision was a conclusion of fact or mixed fact and law which any reasonable tribunal could have reached having in mind the wording of the clause. The appeal was dismissed.

The charterer again applied for leave to appeal under the Arbitration Act. In the Court of Appeal, Lord Justices Dillon, Neill and Stocker held that the charterer had failed to establish sufficient grounds to enable leave to appeal to be granted.

It was submitted for the charterer that there were conflicting decisions on this issue and that these ought to be resolved by the Court of Appeal. It was also argued that existing decisions did not give full effect to the amendment introduced into Clause 15 by the introduction of the word, “whatsoever”.

But the Court of Appeal said the courts had recognised that the words in Clause 15 involved some limitations on the cause. It was held that, in the present dispute, there was no prima facie case for saying that the interpretation of the words in Clause 15 “preventing the full working of the vessel” was plainly wrong. The application was dismissed.

Case № 7