AIC Ltd. v Marine Pilot Ltd.

AIC Ltd. v Marine Pilot Ltd.

The Charterer was not liable for deadfreight because it had formally tendered the full contractual cargo at the berth, and the Owner (through the Master) declined to load more than 67,058mt due to draft restrictions. The Charterer was not obliged to exercise the STS transfer option to avoid deadfreight liability. The phrase '1 safe port Ventspils' constituted a safe port warranty by the Charterer. Draft restrictions that prevent loading and safe departure with the full cargo may render the port unsafe, subject to whether the restriction was due to an abnormal occurrence.

Parties
Claimant/charterer: AIC Limited; Defendant/owner: Marine Pilot Limited
Jurisdiction
England and Wales
Judgment Date
17 May 2007
Procedural Posture
Appeal Under Section 69 of the Arbitration Act 1996 / Judgment on Appeal From Arbitral Award on Preliminary Issues
Outcome
Appeal allowed in part; Tribunal's finding of deadfreight liability set aside; declaration substituted; safe port warranty issue determined against Charterer; matter remitted for further determination on factual issues.
Legal Topics
Charterparty Interpretation, Deadfreight Liability, Safe Port Warranty, Arbitration Appeal, Contractual Performance, Port Safety
Commercial Law Maritime Law Arbitration Charterparty Interpretation Deadfreight Liability Safe Port Warranty Arbitration Appeal Contractual Performance +1 more

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Parties

AIC Limited

Claimant/charterer

Marine Pilot Limited

Defendant/owner

Procedural Posture

Appeal Under Section 69 of the Arbitration Act 1996 / Judgment on Appeal From Arbitral Award on Preliminary Issues

Legal Issues

  1. 1 Whether the Charterer failed to supply the minimum contractual cargo despite formal tender
  2. 2 Whether the Charterer was obliged to exercise the option to load by ship-to-ship (STS) transfer to avoid deadfreight liability
  3. 3 Whether the phrase '1 safe port Ventspils' constitutes a safe port warranty by the Charterer

Ratio Decidendi

The Charterer was not liable for deadfreight because it had formally tendered the full contractual cargo at the berth, and the Owner (through the Master) declined to load more than 67,058mt due to draft restrictions. The Charterer was not obliged to exercise the STS transfer option to avoid deadfreight liability. The phrase '1 safe port Ventspils' constituted a safe port warranty by the Charterer. Draft restrictions that prevent loading and safe departure with the full cargo may render the port unsafe, subject to whether the restriction was due to an abnormal occurrence.

Court Disposition

Appeal allowed in part; Tribunal's finding of deadfreight liability set aside; declaration substituted; safe port warranty issue determined against Charterer; matter remitted for further determination on factual issues.

Orders

  • Paragraphs 19–33 of the Tribunal's Reasons set aside.
  • Declaration substituted: Owner not entitled to claim deadfreight for the difference between the minimum contractual quantity and the quantity loaded on the sixth voyage.