Portolana Compania Naviera Ltd. v Vitol S.A. Inc & Anor

The Claimants are the owners of the vessel “Afrapearl.” I shall refer to them hereafter as “the Owners.”

By a charterparty in amended Asbatankvoy form dated 3 May 2001 and various addenda thereto the Owners chartered their vessel to one or other of the Defendants for the performance of a laden voyage carrying fuel oil from, in the event, two loading ports in the US Gulf to Dakar, Senegal and Gibraltar at which latter ports the vessel discharged. Dakar became a permissible discharge port only by reason of Addendum no. 4 agreed on 21 June 2001. The vessel was in fact ordered to discharge at Dakar only on 5 July 2001. Discharge at Dakar was ordered to be in three parts:

The Owners say that Vitol S.A. Inc were the charterers, and indeed at the initial stages of the transaction they undoubtedly were. The Defendants say that by reason of a novation agreement Vitol S.A. became the charterers and that Vitol S.A Inc agreed to guarantee performance of the charter. It is thus agreed to be unnecessary for me to resolve this dispute. Accordingly, I shall simply hereafter refer to the Defendants compendiously as “the Charterers.”

The substantive dispute which has arisen concerns delay and extra expense incurred at Dakar in consequence of the unfitness of the sealine, without necessary repairs, to be used in the initial discharge contemplated thereat. This translates into a claim by the Owners for (i) outstanding disputed demurrage in the sum of US$ 455,851.46 and (ii) additional agency fees and expenses in the sum of US$100,007.03.

Under the charterparty 84 hours laytime was allowed for loading and discharging. 64 hours and 33 minutes thereof was used at the loadports.

Further relevant provisions of the charterparty which contains various amendments to the standard form are: -

“

The vessel arrived at Dakar and tendered Notice of Readiness at 1500 on 10^th July. Shortly afterwards a pilot came on board and the vessel began manoeuvring towards the M’bao sea berth with the assistance of two tugs.

The M’bao sealine berth at which vessels discharge into the terminal of SAR is in the Port of Dakar roads in the middle of the Bay of Gorée. On the western side of the bay is the Port of Dakar and on the eastern side is the town of M’bao. The sealine runs from the SAR oil terminal, slightly north of M’bao on the coast of the Bay, to the sealine berth. The pipeline extends from the SAR terminal about 2.3 nautical miles south west and then 0.7 nautical miles south. The pipeline is made of a series of sections of API 5L x 24 inch steel pipe, coated in polyethylene of about 2cms, which in turn is encased in a concrete sleeve of 5 – 10cm thickness. For about the first 200 metres the sealine is buried underground but then it runs along the seabed rather than being buried beneath it. At the end of the pipeline is the pipeline end manifold or “PLEM” which forms a connection between the pipeline and two 16 inch diameter flexible hoses. The PLEM is not and has never been anchored to the seabed. The hoses are 60 metres long and are made of six lengths of flexible hose each ten metres long which are fitted together. They are made by reputable companies such as Dunlop and Trelleborg and have a breaking point of 42 tonnes. In July 2001 the sealine was in poor condition. It was poorly maintained and corroded and had leaked on earlier occasions. In about November 1999 the PLEM was pulled westwards either by a tug or by a ship. This movement bent the sealine out of position severely weakening it. No repairs were then carried out. In October 2000 when the vessel Front Driver was at the sealine there was a very considerable leak of oil from the pipeline, as a result of the hoses being pulled too far by the handling tug. I should explain that on each berthing there are potentially two opportunities for such damage to occur. Firstly, the hoses might be picked up by the tug and pulled clear of the area where the vessel is to moor in advance of her arrival. This operation would be unnecessary if the hoses were found already to be in the correct position, or at any rate not in a position whereby they were likely to be fouled by the mooring vessel. Then, after the vessel was secured to the buoys the hoses would again be lifted by the tug and brought for connection to the ship’s manifold. After the incident involving Front Driver the last 20 metre section of the pipeline was replaced and the PLEM repaired. However there was again a serious leak during the visit of Cabo De Hornos in November or December 2000. Following that incident no proper repairs were carried out.

In July 2001 the M’bao sea berth consisted of 6 mooring buoys beneath which, on the seabed, lay the end of the pipeline to which two 16 inch diameter flexible hoses were attached. Each hose was marked by its own buoy. The PLEM itself had originally been marked by its own buoy, but this was missing in July 2001. There was no jetty or other structure on the surface.

As the vessel approached the sea berth, the Master observed oil on the surface of the sea, indicating a leak in the sealine. As I shall explain in more detail hereafter the Master nevertheless agreed to connect up the hoses and to test whether it was possible to discharge the cargo.

By 1900 on 10^th July the vessel was all fast at the sea berth and time began to run again pursuant to clause 6 of the charterparty. Laytime was due to expire at 1427 on 11^th July.

Discharge commenced at 2245 on 10^th July but, after a short time, increased amounts of oil were observed coming to the surface, and discharging was suspended by order of the terminal at 2300. The vessel remained at the sea berth during 11 July while divers inspected the sea line and made an attempt to repair the leak.

A diving inspection revealed the source of the leak to be a gap in the flange connecting the last section of the pipeline before the PLEM to its neighbour, at a distance of about 20 metres back from the PLEM. The last 20 metre section before the PLEM was also found to be bent. This damage is consistent with the final 20 metre section of the pipeline having been pulled in a direction roughly perpendicular to its original attitude by tugs used to handle the hoses attached to the PLEM. In the absence of a buoy marking the position of the PLEM those on board the handling tugs were unable accurately to gauge its position.

Attempts were made to carry out temporary repairs to the pipeline during 11^th July. These repairs involved tightening the bolts which held the flanges of the two pipe sections together. The temporary repairs were not successful. The vessel was eventually ordered off the sea berth at 1100 hours on 12 July. By 1430 hours on 12 July a pilot and tugs were in attendance in order to shift the vessel to the anchorage. By 1700 hours the vessel was clear of the sealine berth. The further repairs which now took place involved the application of wedges and quick drying cement.

The vessel remained at the anchorage until 21 July. At 1100 hours that day she was ordered back to the sea berth to resume discharge. She re-berthed at 1600 hours and connected up to two hoses as before. At 2000 hours she resumed discharging, but after about forty minutes this was stopped as oil was again observed to be leaking from the pipeline. She was again ordered off the sea berth at 0900 hours on 22 July, and by 1130 hours on the same day a pilot and tugs were in attendance in order to shift the vessel to the anchorage. The vessel was clear of the sealine berth by 1300 hours.

The vessel remained at the anchorage until 29 July. During this time the last 20 metre section of the pipeline was removed altogether, along with the PLEM, and a single 16 inch diameter flexible hose, 90 metres long, was attached to the new end of the pipeline.

At 1130 on 29^th July the vessel was ordered back to the sea berth. She re-berthed at 1730. Discharging recommenced at 2015. This time, no leakage was observed. However, the rate of discharge was reduced, because now only one hose could be used, and then only with a reduced pressure. The vessel took 18 hours and 57 minutes to complete discharging her first parcel of cargo at 1512 on 30^th July.

For a week or perhaps a little more before Afrapearl came to Dakar the Dakar Port Authority (Port Autonome de Dakar) received complaints from residents on Gorée Island that oil pollution had been found on the island. The source of this pollution was never exactly ascertained. However as I have already indicated the Master observed oil on the surface of the sea when he was two cables distant from the mooring position. Small bubbles of oil were breaking the surface of the sea in the vicinity of the sealine and a noticeable film of oil extended away from the mooring area following the slight north westerly current. The loading Master made a half-hearted attempt to pass this off as dirt coming to the surface following the earlier disturbance caused to the seabed by divers surveying the berth. He also said to the Master that in any event, whether or not there was a slight leak from the sealine, he wanted to berth the ship and connect up the hoselines in order to test whether it was possible to discharge her. After discharge had been suspended for the first time the loading Master acknowledged that the leak was the result of pre-existing damage to the pipeline which had not been properly repaired since the visit of Cabo De Hornos.

I find that the sealine was already leaking before the arrival of the vessel at Dakar, indeed even before the charterparty was concluded and/or Dakar was added to the permitted discharge range. It is unclear whether the hoses were in fact manoeuvred clear prior to the vessel’s approach to the mooring area. If they were the earlier damage may have been exacerbated as indeed it may have been by the operation to bring the hoses to the ship’s manifold. The opportunity for such exacerbation was presented by the poor condition of the pipeline, the product of earlier damage and neglect.

In these circumstances the Charterers suggest that, in relation to certain periods on and between 10 and 29 July neither laytime nor demurrage runs or counts against them or that, if it does, it runs only at half rate. The Charterers rely upon three provisions of the charterparty:-

Clause 6

Clause 7

Clause 8

I understand it to be agreed in the light of these conclusions that the Owners are entitled to recover US$455,851.44 by way of demurrage.

The claim for additional agency fees and expenses

The Charterers point out that it was only on the first occasion, on 12 July, that they instructed the vessel to shift, and then on the express instruction of SAR, and that thereafter it was SAR who gave the instructions to the Master direct. I do not think that this argument avails them. First, I would be prepared to treat all the consequences in terms of shifting as flowing from the initial order given by Charterers on 12 July. Second, in any event, this must be regarded as a case in which the Charterers delegated to SAR their right to give subsequent shifting orders. They had sold part of the cargo to SAR and they no doubt anticipated recovering from SAR all costs of compliance with their instructions. Third, the present is a case very different from Cosmar Compania Naviera S.A. v. Total Transport Corporation (“The Isabelle”) 1982 2 LLR 81 where orders to wait given by a port authority were not attributed to the Charterers. Here the subsequent orders were given by the consignees of part of the cargo to whom the Charterers had sold that part. The consignees were not exercising administrative functions akin to those exercised by a port authority in cases of congestion or unsafety. The Charterers could have countermanded SAR’s directions or have refused to adopt them as their own without, for example, an express indemnity in respect of the expenses caused by compliance therewith.

Mr Phillips had a number of other ways of putting his claim for additional expenses, involving various different provisions of the charterparty, claims for an express or an implied right of indemnity and claims for damages. I need not deal here with all of those arguments, by none of which I was immediately convinced, but they will all of course be available to the Owners in the event that the case goes further.

Subject to a possible point about some watchman expenses, as to which I am unsure whether it remains unresolved and on which I will hear further argument if necessary, it follows that the Owners are entitled to recover US$ 100,007.03 by way of additional agency fees and expenses.

I must next set out my reasons for refusing, on the first day of the trial, to grant to the Charterers permission to amend their Defence so as to plead reliance upon the time bar contained within Additional Clause 8, which clause I have set out above. The relevant 90 day period expired on 9 November 2001, being 90 days after completion of discharge at Gibraltar, the second discharge port, and the Charterers wish to contend that the Owners had failed within that time to present to them a written claim in respect of the additional agency fees and expenses together with all available supporting documents.

GETMA were the vessel’s agents at Dakar, appointed by the Owners at the Charterers’ request and on their instructions, GETMA being an acronym for “Groupement d’Entreprises de Transports Maritimes et Aeriens,” a French company based in Paris, with branch office in Dakar. GETMA was also appointed for certain purposes by Charterers. GETMA sent its invoice for its final account to Owners in early October 2001. The account greatly exceeded what Owners were expecting, the excess being accounted for by the extra costs necessitated by the shifting off and onto the sealine on the two occasions in addition to the first and last manoeuvres.

On 18 October 2001 the Owners indicated to the agents that they would only accept liability for such expenses as would have been incurred had the call at Dakar taken its natural and intended course, and invited GETMA to debit “the responsible party i.e. Charterers and/or cargo receivers.” Owners then heard nothing more from GETMA until 7 December 2001. On that day GETMA faxed Owners as follows: -

“ UPON RECEIPT OF YOUR REPLY DATED 18/10/2001, THE D/A WAS PASSED ON TO MRSS CHARTERERS VITOL SO THAT BOTH PARTIES COME TO AN AGREEMENT REGARDING THE BREAKDOWN OF PORT EXPENSES AS PER CHARTER PARTY.

MRSS VITOL UNDERLINED THAT – GETMA NOT BEING A PARTY IN THE CHARTER – (TELEX IN QUOTE/UNQUOTE ENCLOSED) ISSUES CONCERNING D/A SHOULD ONLY BE RESOLVED BETWEEN RELEVANT CONTRACT PARTIES.

AS FAR AS GETMA ARE CONCERNED, WE WERE APPOINTED AS AGENTS BY OWNERS STEALTH MARITIME, LIABLE FOR PORT COSTS AND AS PER TODAY YOUR ACCOUNT SHOWS AN OVERDUE DEBIT BALANCE OF USD 181 350.61 FOR WHICH REMITTANCE SHOULD BE URGENTLY ARRANGED INTO OUR ACCOUNT SO AS TO CLOSE THIS FILE WITHOUT ANY PREJUDICE.

FAILING A POSITIVE ISSUE, WE’LL HAVE NO ALTERNATIVE BUT TO PASS THIS FILE ONTO OUR LEGAL DEPARTMENT.

WE DRAW TO YOUR ATTENTION TELEX RECEIVED FROM MRSS VITOL:

QUOTE

TO: GETMA INTERNATIONAL, PARIS

ATTN: FRANCOISE HENRY/SERVICE OPERATIONS

CC: VITOL SA, GENEVA

ATTN: CHRISTIAN HALLER

RE: MT AFRAPEARL – DAKAR 10/7/01 – OUR REF 42413

WE REFER TO YOUR LETTER DD 18/10/01 THAT ONLY RECENTLY RECEIVED IN OUR OFFICE.

WE NOTE THAT THE CHARGES APPARENTLY RELATE TO DISBURSEMENTS INCURRED DURING VESSEL’S PORT CALL AT DAKAR DURING 10/7 – 3/8/01. WE UNDERSTAND THAT THE VESSEL OWNER HAS INDICATED THAT HE DOES NOT AGREE WITH ALL COSTS BEING FRO HIS ACCOUNT AND HAS REQUESTED THAT YOU FORWARD THE DISBURSEMENTS ON TO CHARTERERS. THIS PROCEDURE IS OF COURSE INCORRECT AND IT IS NOT ACCEPTED BY US. WE WOULD STRONGLY RECOMMEND THAT YOU REMIND OWNER OF THEIR OBLIGATIONS TO YOURSELVES, ACTING AS VESSEL’S AGENTS, TO SETTLE THE OUTSTANDING DISBURSEMENTS IN FULL WITH YOURSELVES. IF OWNER BELIEVES THAT ANY OF THE DISBURSEMENTS ARE SUBSEQUENTLY RECLAIMABLE FROM CHARTERER UNDER THE TERMS OF THE CHARTER PARTY THEN THEY SHOULD PRESENT THEIR FULLY DOCUMENTED CLAIM TO CHARTERER IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE CHARTER PARTY.

YOU ARE OF COURSE NOT A PARTY TO THE CHARTER AND YOU ARE UNAWARE OF THE TERMS AGREED BETWEEN OWNER AND CHARTERER. ANY ISSUES CONCERNING DISBURSEMENTS AND/OR PORT COSTS UNDER THE CHARTER PARTY ARE TO BE RESOLVED BETWEEN THE RELEVANT CONTRACT PARTIES, WITHOUT INVOLVING YOURSELVES AS A THIRD PARTY. CHARTERER DOES NOT OF COURSE HAVE ANY CONTRACTUAL RELATIONSHIP WITH GETMA. ON THE OTHER HAND GETMA ARE ACTING AS THE VESSEL’S AGENTS AND OWNER OF THE VESSEL IS CONTRACTUALLY OBLIGED TO REIMBURSE YOU FOR ALL SUMS INCURRED IN RESPECT OF HANDLING OF THE VESSEL DURING VESSEL’S CALL IN DAKAR.

IN THE CIRCUMSTANCES YOU MUST TAKE THIS MATTER UP WITH VESSEL OWNER.

BEST REGARDS,

EWAN WARREN

VITOL SERVICES LTD

AS INSTRUCTED BY VITOL SA, GENEVA

290688 VLTLGL G#

getma a 642909f

UNQUOTE

REGARDS

F. HENRY

GETMA PARIS ”

The quoted fax from Vitol to GETMA, had, as is now known, been sent by Vitol on 6 December 2001.

On or about 3 January 2002 the Charterers faxed the Owners as follows: -

“ MT AFRAPEARL C/P 3/5/01 OUR REF 42413

WE REFER TO OWNER’S REMINDERS IN RESPECT OF PENDING DEMURRAGE CLAIM. PLEASE INFORM OWNER THAT WE ARE CLOSE TO FINALISING OUR REVIEW OF THEIR CLAIM HOWEVER IN ORDER TO FINALISE SUCH REVIEW AND IN PARTICULAR THE DELAYS IN DAKAR, WE WOULD BE GRATEFUL TO RECEIVE A COPY OF THE DECK AND ENGINE LOG ABSTRACTS COVERING VESSEL’S CALL THERE. WE WOULD ALSO APPRECIATE TO RECEIVE A COPY OF THE RELEVANT CLASSIFICATION DOCUMENTATION IN RESPECT OF THE VESSEL’S ANCHOR CHAIN PERTINENT AT THE TIME OF THE VESSEL’S CALL AT DAKAR UNDER THIS CHARTER.

WITH REGARD TO REFERENCES TO ALLEGED ‘ADDITIONAL D/A’DUE TO VESSEL’S PROTRACTED STAY AND REPEATED SHIFTING AT THE DISPORT, WE WOULD, WITHOUT PREJUDICE TO OUR POSITION IN GENERAL UNDER THE CHARTER, BE GRATEFUL TO RECEIVE A COPY OF OWNER’S CLAIM. WE WOULD ALSO REQUEST TO RECEIVE EVIDENCE OF FULL PAYMENT BY OWNER OF THESE DISBURSEMENTS.

WE WILL BE IN A POSITION TO REVERT MORE FULLY IN RESPECT OF BOTH THESE PENDING MATTERS ONCE THE AFOREMENTIONED DOCUMENTS HAVE BEEN RECEIVED AND REVIEWED BY US. ”

It is to be noted that no reference was there made to any applicable time bar in respect of the alleged additional disbursements account due to the vessel’s protracted stay and repeated shifting at the discharge port. On 24 April 2002 Mr Michael Smith of the Owners’ solicitors Messrs Mills & Co sent a fax to Mr Ewan Warren, Claims Manager in the Legal and Claims Department of Vitol Services Ltd which included the following:-

“ As you will see, GETMA are continuing to claim the sum of US$127,350.61 in respect of their alleged agency fees. As we have previously pointed out, any amount beyond the original estimate of US$56,997.18 would be for Charterers’ account pursuant to clauses 11 and/or 9 of the charterparty. In the circumstances, we would have thought that the best way to deal with GETMA’s claim would be for Charterers to negotiate directly with GETMA and to make the necessary payment. We should be grateful if you would let us know that you are contacting France P.and I. /GETMA directly to resolve this matter.”

To this Mr Warren responded by e-mail on 1 May 2002 as follows: -

“ With regard to your suggestion that Charterer negotiate and settle disbursements directly with GETMA, regret this cannot be accepted. Charterer has no contractual link with vessel’s agents and has no liability to them. As you will be aware Owner is obliged to settle all disbursements with their agents directly. Should Owner believe that any element of the D/A could have been claimed under the charterparty then Owner should have presented their formal claim in accordance with the C/P terms and conditions. Since our conversation earlier we have noted from the C/P that the deadline for presentation for such claims was, as suspected, 90 days from completion of discharge and very strictly any claim Owner might now present would be time barred (in fact Owner only forwarded the GETMA invoice and vouchers after the deadline). We do however refer to our “without prejudice” comments in this respect.”

These proceedings were begun in June 2002. From the outset, the Claimants included their claim to such part of the additional charges and expenses as had been incurred by reason of the additional shifting. The first Defence was served on 25 July 2002. No reliance was placed upon the time bar. An Amended Defence was served on 29 November 2002 and again there was no reliance upon time bar.

The action proceeded in the usual way and directions were made for the service of Witness Statements. On 9 May 2003 the Defendants served upon the Claimants the first Witness Statement of Mr Warren. Paragraph 14 of that Witness Statement reads as follows: -

“ Additional Charges and Expenses

In addition to claims for demurrage the Claimant claims the sum of US$124,353.43 in respect of additional charges and other expenses. These claims are also denied. In any event, these claims are time barred because they were not presented to the Defendants within the time limit set out in clause 8 of Vitol’s Voyage Charter Terms which forms part of the charterparty. Under clause 8 charterers are discharged from all claims owners may have unless the claim is presented to them in writing with all available supporting documents within 90 days from completion of discharge of the cargo. So far as I am aware, nothing was received in relation to these port expenses until 3 December 2001 when a bundle of documents was received by Vitol’s SA’s Geneva office from GETMA, the Dakar port agents. The bundle was faxed to me on the same day. This was a bundle containing, inter alia, twenty six (26) copies of invoices and vouchers from local port service providers. On 6 December I sent a telex to Getma acknowledging receipt of the documents and reminding them that we had no contractual relationship with them and that they should take up the matter of any outstanding disbursements with vessel owners. Subsequently on 13 December 2001 we received from the Claimant’s agents, Stealth Maritime Corporation SA, some eighty six (86) documents, consisting largely of original invoices and vouchers from local port service providers, together with a covering letter requesting settlement of outstanding disbursements. No invoice from the Claimant, or breakdown of the costs they were claiming was included. The Claimants did not therefore present the claim for additional charges and expenses with all available supporting documents within 90 days of completion of discharge.”

Messrs Mills & Co for the Claimants immediately responded by fax to the Defendants’ solicitors Messrs Stephenson Harwood. In that fax Mr Smith of Messrs Mills & Co said this:-

“ We refer to the statement of Mr Warren received by us on 9 May. Obviously all of our clients’ rights in respect of late exchange of Witness Statements are reserved. We note, however, paragraph 14 of that statement. So far as we can see, this paragraph does not relate to an issue in the proceedings. We should be grateful if you would, therefore, clarify your clients’ intentions. In particular do they intend to apply for leave to amend their Defence?

If your clients do intend to apply for leave to amend their Defence, our clients will resist any such application on the grounds that it is too late since extensive disclosure on this issue will be required (even most of the documents referred to paragraph 14 have not been disclosed by your clients) and there will be insufficient opportunity for our clients to deal with this matter properly with all of the relevant witnesses.

In any event, regardless of the eventual outcome at trial our clients will seek payment of all of their costs relating to the additional charges and expenses issue should any application for leave to amend your clients’ Defence affect the outcome at trial of the former issue.”

Even in response to that unequivocal request the Defendants’ solicitors did not give a clear and unequivocal answer. Messrs Stephenson Harwood’s reply of 23 May 2003 read as follows:-

“ We refer to your fax of 13 May.

At present our clients reserve their position regarding seeking leave to amend their Defence.

As regards the grounds you raised to resist such an application, namely non-disclosure of documents and lack of opportunity for your clients to deal with the issue properly, we would make the following points:

1.

There are very few documents on which our clients rely and they will be disclosed shortly. Your clients are aware of the documents.

2.

The only issue is whether your clients complied with the provision of Clause 8 of the Charterparty. Clause 8 requires a claim to be presented within 90 days of completion of discharge of the cargo. This is clearly not a matter which will require a great deal of time or expense to investigate, nor will there be a great deal of witness evidence. We therefore see no prejudice to your client with an application to amend.”

The position was therefore that the Defendants were unwilling to make clear whether they would at trial seek to rely upon the time bar. Messrs Mills for the Claimants wrote again on 29 May seeking elucidation of the position, but no such elucidation was forthcoming, no draft amendment was sent for consideration and no disclosure relevant to the issue was provided.

Application for leave to amend or, strictly, leave to reamend the Defence was only made on the first morning of the trial although a draft of the proposed amendment was apparently given to the Claimants’ Counsel at the end of the previous week on a “Counsel to Counsel” basis. The application is dated 7 July 2003 which would have been the first day of the formal hearing had it not been designated a reading day. The application was in due course supplemented by a Witness Statement, Mr Warren’s Second, similarly dated 7 July but only served upon the Claimants on 8 July, although again this document was faxed to the Claimants’ Counsel’s Chambers after 6pm on the evening of Monday 7 July. This new evidence, as elucidated orally, supplies some information as to what happened between the Owners telling the agents on 18 October 2001 to invoice the Charterers and/or the receivers and 7 December 2001when the Owners again heard from GETMA. It will be remembered that in his first Witness Statement Mr Warren had said that, so far as he was aware, nothing was received in relation to these port expenses until 3 December 2001 when a bundle of documents was received by Vitol SA’s Geneva office from GETMA. However Mr Warren’s Second Witness Statement paints a rather different picture. Paragraph 8 reads as follows: -

“ It seems that GETMA sent some documents by DHL to Vitol SA Geneva on 18 October. On 23 November 2001 Christian Haller (Vitol SA, Geneva) spoke to GETMA (Paris). They claimed that they had already sent their claim to Vitol. Christian Haller could not find the documents in question and contacted DHL, who confirmed that an envelope had been delivered on 23 October 2001. As no such documents could be located in either Geneva or in London, Vitol asked GETMA to resend the documents (see pp 24-25 of EPW1). The resent documents were received by Vitol SA Geneva on 3 December (see EPW1 pp 5-20). I have since spoken to Christian Haller at Vitol SA, Geneva who has reviewed his files and has confirmed that there is no record of the letter from GETMA dated 18 October being received before 3 December 2001 and no other relevant documents.”

I might mention in passing that Mr Warren has found himself obliged to prepare yet a Third Witness Statement because with his Second Witness Statement he omitted to include all the documents he had received from the Geneva office on 3 December. The documents apparently arrived in two faxes, as there was a problem faxing them all in one go. Mr Warren’s Second Statement exhibited the first fax. With his Third Witness Statement he exhibited the second fax, which comprised some 17 or 18 further vouchers sent by GETMA.

The inference is irresistible that the documents sent by GETMA to Vitol on 23 October 2001 will have been the same as those resent by them at the end of November or in early December. The catalyst for GETMA resending the documents was that on 23 November they contacted Mr Haller by telephone chasing for payment. They told Mr Haller that they had sent their claim, consisting of the account with supporting documents, on 18 October. When contacted by Vitol DHL confirmed that the relevant envelope had indeed been delivered to Vitol’s Geneva office. Mr Warren knew all of this on 23 November 2001. It is to say the least most unfortunate that he did not think it appropriate to give a full and frank account of these matters in his first Witness Statement. I am prepared to accept that the documents did not come to the attention of a responsible person at Vitol until 3 December 2001 but it was plainly an error of judgment on the part of Mr Warren not to set out the full picture when he dealt with this matter in his first Witness Statement.

Mr Warren also gave oral evidence at the trial. He told me that a deliberate decision was made not to plead the time bar in the First Defence. Time bar is he said an emotive issue and it is his policy, although not necessarily that of everyone in his company, not to rely upon a time bar if a claim can be defended in some other way. By the time the Amended Defence came to be served on 29 November 2002 the parties were apparently in discussion with a view to settlement. Mr Warren told me that a deliberate decision was made not to plead the time bar at that stage because he did not want to scupper the discussions. Mr Warren denied that time bar was then referred to in his Witness Statement of 9 May 2003 in an effort to induce settlement by introducing a point which might make the Owners feel less confident of their case but he did however say that the reason why the Defendants merely “reserved their position regarding seeking leave to amend their Defence” in Messrs Stephenson Harwood’s letter of 23 May 2003 was again because there were ongoing settlement discussions which he did not wish to jeopardise. Mr Warren very frankly stated that the reason why the decision was ultimately taken, on the eve of the trial, to run the time bar point was because the settlement negotiations were not looking too hopeful. Hence this application made on the first day of the trial of which no formal prior notice was given.

This is therefore an application for leave to amend to introduce a defence of the potential applicability of which the Defendants have been aware throughout the entire life of the proceedings but upon which they have deliberately hitherto placed no reliance for tactical reasons related to settlement. This may be a very sensible way to conduct commercial negotiations but it is plainly not an acceptable way to conduct proceedings. All of our modern procedures are designed to encourage parties to place their cards upon the table and to identify as early as possible what are the issues in dispute. Mr Macey-Dare suggested that notwithstanding this history the amendment should be allowed unless the Claimants can point to some real irremediable prejudice arising out of it having been made so late. In that regard he said that the Claimants would themselves know or be able to ascertain from GETMA the capacity in which they acted and the authority which they had.

I do not accept that the Claimants have not in fact been prejudiced in their ability to deal with the point. GETMA were long ago paid and it is obvious that it must now be more difficult to investigate matters than had the point been unequivocally pleaded in 2002. However prejudice is measured in other ways too. It is prejudicial for a party to prepare for trial on a certain basis, only to be told on the first day of the trial that he must prepare to meet a new point – the more so when he has specifically enquired in advance whether the point is to be relied upon, and has received only a temporising and non-committal reply. There is also these days to be considered the prejudice caused to other court users by reason of litigation being conducted in this fashion. Late amendments occasion, as did this one, protracted argument simply on the question whether they should be permitted to be made, and of course very often increase the length of the trial if permitted to be made. I do not suggest that this amendment would significantly have lengthened the trial, but without the argument concerning its introduction the trial would have been over comfortably within one day.

It is to my mind overwhelmingly clear that it would not be an appropriate exercise of my discretion to permit an amendment to raise, on the morning of the trial, a point which the Defendants had hitherto for tactical reasons deliberately decided not to take, the more so when they did not even make their intentions clear when asked to clarify their position a few weeks before trial.

An additional reason for exercising my discretion in this way is however that in my judgment the Defendants have no realistic prospect of successfully relying upon the time bar in order to defeat the claim. It is true that on 18 October 2001 GETMA did not purport to put forward a claim on behalf of the Owners. They did however send to the Charterers their invoice, together with, as I have already inferred, all available supporting documents in the shape of the vouchers which were in due course resent as I have already recorded. GETMA asked Charterers to contact the Owners with a view to sorting out who bore the responsibility for the various items in order that GETMA could be paid as soon as possible. This could have involved Charterers paying GETMA direct for some items or it could have involved their agreeing to reimburse the Owners in respect thereof. Bingham J in The Oltenia 1982 1 LLR 448 explained the commercial intention underlying a clause in the form of the Claims Clause with which I am here concerned. It is to ensure that claims may be investigated and, if possible, resolved while the facts are still fresh. That was precisely the exercise which the Charterers were invited and enabled to carry out. Furthermore Mr Warren told me that when ultimately he received GETMA’s letter of 18 October 2001, assisted by Mr Haller’s rough translation, he appreciated that the Owners would claim from Vitol the amount over and above what would have been incurred by a normal visit to the port in the event that Vitol did not pay those amounts to GETMA direct. This would have been apparent to any experienced claims handler upon receipt of the letter. It is of course nothing to the point that the letter and its enclosures appear to have gone astray within the Vitol organisation after delivery by DHL. I would of course accept that in the usual case a claim is likely to be presented by or on behalf of the person to whom payment is ultimately said to be due. In this unusual situation however it seems to me that there was presented to the Charterers within the required time a claim by the agents which required payment by the Charterers either to the agents direct or to the Owners in the event that Charterers decided not to pay GETMA. Insofar as it was a claim for payment by GETMA it was clear that it would be transformed into a claim in a like amount by the Owners if the Charterers did not pay direct. The commercial purpose of the clause as explained by Bingham J was entirely satisfied. It would be a triumph of form over substance to hold that the Charterers could rely upon the clause to defeat a claim by the Owners. Had it been necessary to decide the point I would have held that on these unusual facts Charterers were not discharged and released from liability in respect of the claim for additional expenses occasioned by shifting in and out of the sealine berth.

Finally the Charterers sought leave to amend to argue that the time between 2230 hours on 29 July and 1620 hours on 30 July was delay awaiting tide and/or a pilot and/or tugs. The draft Re-Amended Defence must be wrong since the vessel was still discharging at 2230 on 29 July. In his skeleton argument Mr Macey-Dare only sought relief on this ground in respect of the period between 1940 hours on 30 July and 1620 hours on 31 July. However this again seems wrong as the vessel was manoeuvring between 1940 and 2230 hours on 30 July. At the hearing Mr Macey-Dare suggested that the relevant period was 2230 hours on 30 July to 1620 hours on 31 July. It is correct to point out, as Mr Macey-Dare did, that the Statement of Facts records, at 2230 on 30 July, “vessel re-anchored awaiting high tide for in port berthing.” The next entries are 1605 on 31 July – “pilot on board” and 1620 on that day, “anchor aweigh.” However this point was only sought to be raised after the Charterers had indicated to the Owners that they did not require the attendance of any of their witnesses and at a time when it was quite impossible for the Owners realistically to check whether all of this period, presumably from 2230 on 30 July to 1620 on 31 July, was in fact spent awaiting a high tide, which seems unlikely as there are two each day, or awaiting pilot or tugs. Mr Macey-Dare pointed out that not all tides might be sufficiently high to have permitted berthing, but that is of course precisely the sort of point which the Owners ought to be able to investigate in good time before they are obliged to respond to it. The Master might have been able to shed some light. This new point was not even included in the first draft Re-Amended Defence supplied informally to Owners’ Counsel late in the week before trial – it was mentioned only in a new and revised draft served on the first day of the hearing. In the exercise of my discretion I refused leave to introduce this small point since it seemed to me that the Owners had no opportunity fairly to deal with it.