Ince & Co Chinese Shipping E-brief August 2010 English Version

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easoning that a similarly wordedcovenant not to sue was only enforceableby the contractual carrier to prevent theshipper from suing third parties. The thirdparty was only intended to have thebenefit of such defences and immunities aswere available to the carrier to defend itselffrom incurring liability.The Cargo interests further argued thateven if the covenant not to sue could onlybe enforced on behalf of a third party, if athird party had performed “carriage”obligations, any attempt to grant that thirdparty total protection from being suedcontravened Art. III r.8, again because theHimalaya contract itself became a contractof carriage to which the Hague Rulesapplied. The Cargo interests said that thisargument was supported by the decisionon this point of the House of Lords in TheStarsin. Again, the judge disagreed. Afteranalysing each of the five judgments givenby the Lords in The Starsin, Mr JusticeFlaux held that the real reason the Court inthat case found that the Himalaya contractwas a contract of carriage was not becausethe third party had performed “carriagefunctions”, but because the Himalayaclause in the particular bill of ladingincluded a “deeming” provision. This saidthat to the extent that parties wereprotected by the Himalaya clause, theyshould be deemed to be parties to the billof lading contract. There was no suchdeeming provision in the bill of ladingissued for cargo shipped onboard theMarielle Bolten.functions which the relevant third partieswere in fact performing, he was firmly ofthe view that although the managers, P&Iinsurers, charterers and sub charterers allperformed services incidental to thecarriage of goods, none of them hadactually undertaken the carriage of thegoods.Furthermore, the judge was persuaded thaton the facts, by commencing proceedingsin Brazil, in breach of the exclusive EnglishCourt jurisdiction clause, it was the Cargointerests, and not Owners, who wereseeking to circumvent the application ofthe Hague Rules.Consequently, the anti‐suit injunction,restraining proceedings from beingcommenced or continued against the thirdparties was granted.michael.volikas@incelaw.comcarrie.angell@incelaw.comFinally, the Cargo interests submitted thateven if both of the previous propositionswere wrong, the contractual carrier shouldnot be allowed to enforce the covenant notto sue because this would have the effect ofcircumventing Art. III r.8. The judge heldthat there was no authority in support ofthis submission. Having considered the7
Express warranty in the charterparty:elements required to prove damages forbreach of warranty by the ownersAl Dawood Shipping Lines Limited v DynasticMaritime Incorporated (MT Napa) [2010]EWCA Civ 104This decision of the Court of Appealhighlights the elements of claim thatcharterers need to prove in order tosucceed in an action against owners forbreach of express warranty by the owners.Faced with the owners’ claim for unpaidhire and damages, the charterers putforward the defence of breach of warrantyand counterclaimed for the loss of profitthat they would have made on the subcharterhad the owners complied with thewarranty. To succeed, charterers needed todemonstrate that the owners breached thewarranty, that they would have been ableto have concluded the sub‐charter but forthe breach and that the hire rate of suchsub‐charter would have been higher thanthe charter hire rate.The case is also an important illustration ofthe fact that a party who fails to complywith procedural deadlines and courtorders risks losing an opportunity to putforward its case.FactsThe MT Napa charterparty was for a periodfrom November 2006 to November 2007 onBPTime 3 form. The original cancellingdate of 30 November 2006 was lateramended to 8 December 2006.The Charterparty stated that it included“…OCIMF Vessel Particulars Questionnaireor Q88 current at the date hereof (togetherreferred to as the “Questionnaire”) as attachedhereto.”Clause 9.6.5 of the charterparty expresslyprovided that the certificates confirmed bythe owners “shall be maintained in forceduring the currency of the Charter.” The Q88was attached to the charterparty andincluded the International Oil PollutionPrevention Certificate (“IOPP Certificate”)in the list of certificates confirmed by theowners. The Q88 also contained a referenceto paragraph 2.6 of the OCIMF RevisedShip Inspection (SIRE) Programme form(the “SIRE form”). The standard SIRE formwas completed for MT Napa and containedparagraph 2.6 which stated that the IOPPCertificate was issued on 20 November2006 and that it expired on 20 November2009. The Court found that the SIRE formwas most likely completed after thecharterparty was signed.On 6 December 2006, the owners producedthe IOPP certificate, which was called an“Interim Certificate” and which was validuntil 15 May 2007. Prior to the certificatebeing provided, in November 2006, thecharterers chased the brokers for thecertificate and told them that the potentialsub‐charterer was awaiting it prior tomaking a decision whether or not to subcharterthe vessel.The vessel was delivered on 8 December2006. The first instalment of hire was notreceived by the owners and the vessel waswithdrawn shortly afterwards.Procedural HistoryThe owners commenced an action for hiredue, the cost of bunkers and damages forwrongful repudiation.The charterers’ main defence was that theowners breached an express warranty thatthe vessel’s IOPP Certificate would beissued on 20 November 2006 for a period8
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