IMT Shipping & Chartering GmbH v Chansung Shipping Company Ltd, Owners of the "Zenovia"

This is an appeal brought with permission of Flaux J granted pursuant to section 69 of the Arbitration Act 1996 against an arbitration award made in London by two arbitrators appointed to resolve a shipping dispute. The arbitrators were Mr Michael N. Howard QC and Mr Christopher Moss. Since they agreed upon their award they had no need to appoint an umpire. The case concerns the status and effect of a notice of approximate redelivery date and intended port given by a time charterer to an owner pursuant to the requirements of a time charter in amended New York Produce Exchange Form. In essence, the question raised is whether the charterers may subsequent to the giving of such notice revise their plans, consistent nonetheless with redelivery of the vessel within the contractually agreed period. In reality, the question is which of the charterers and the owners may here take advantage of an unexpected opportunity to fix the vessel in a rising market.

The Zenovia is a self-trimming bulk carrier. The owners, Chansung Shipping Company Limited, time chartered the vessel to COSCO Bulk Carrier Co. Ltd on 28 July 2006 for a “period of minimum 11/about 13 months (abt mean + 15 days)” from delivery.

COSCO sub-time chartered the vessel to Western Bulk Carriers KS. The date and precise terms of this charter party are not revealed in the award or in evidence before me.

Western Bulk Carriers KS sub-sub-time chartered the vessel to IMT Shipping and Chartering GmbH on 23 March 2007 for a “period up to minimum 20 September 2007/maximum 22 November 2007”.

These three period charters were treated by the parties and by the arbitrators as being, for all practical purposes, on back-to-back terms. The latest permissible redelivery date was treated as being 22 November 2007. The redelivery range was wide – “… one safe port Aden/Japan range (in case of Persian Gulf, to be passing Muscat Outbound) including Indonesia, Thailand, PR China, Philippines, Boston/Bahia Blanca range (including Caribbeans/North Coast South America/US Gulf), Vancouver/Valparaiso range, Skaw/Cape Passero range (including Mediterranean Sea/Black Sea), Capetown/Mombasa range, port in Charterers option, at any time day or night Sundays and Holidays included…”

The arbitrators record that as the period of these charters was approaching its conclusion IMT chartered the vessel to Noble Chartering Inc BVI for a time-charter trip. As it happens this is incorrect. IMT in fact sub-chartered to Oldendorff Carriers, who in turn sub-chartered her to Noble for a time charter trip. Nobody suggests that anything turns on this misapprehension, although it is as well to bear in mind that (i) there is no finding, nor is it in evidence, on what terms IMT chartered to Oldendorff and (ii) there was in fact no contractual relationship between IMT and Noble. The arbitrators make no findings as to the terms of the charter to Noble. They proceeded upon the basis that IMT had sub-chartered the vessel to Noble for a time charter trip, and so shall I.

The arbitrators proceeded therefore on the basis that the three “back-to-back” period charters all provided for redelivery “minimum 20 September 2007/maximum 22 November 2007” and that each provided, by clause 4:

“… hire to continue until the day of her redelivery … on dropping last outward sea pilot one safe port ADEN/JAPAN range … charterers are to give Owners not less than 30 days followed by 20/15/10/7 days notice of approximate redelivery date and intended port thereafter 5/3/2/1 days definite notice of redelivery date and port.”

The arbitrators then set out the events which gave rise to the dispute:

“5.

On 5^th October 2007, Noble gave:

‘approximate notice of redelivery for the MV Zenovia at DLOSP 1 sp China on about 04 Nov 2007 basis agw, wp, wog, uce …’

This message was passed up the broking chain, and the version which was eventually given to the Owners gave 6^th November as the redelivery date.

6.

It later became clear that the Vessel’s performance was such that an extra voyage could be squeezed in before the contractual redelivery date. On 15^th October, therefore, the Charterers sent a further notice to the Owners which read:

‘Plse note that we hereby have to revise the date of redelivery to owners to abt Nov 20^th within the range of redelivery.’

In this arbitration, nothing turns on the fact that in the first notice reference was made to six reservations as to its certainty and in the second only to one.

7.

The owners did not accept that the Charterers were entitled to change the expected redelivery date in this way. They wrote on 16^th October, asserting that they had already fixed the Vessel for her next employment, and insisted that the Vessel had to be redelivered at the end of the voyage to China. The Charterers replied that they were acting within their legal rights, and that they had the right to use the full period given by the contract. The Owners are not English lawyers, and it is not surprising that their first reaction was expressed in terms which are technically unjustified and rather muddied the waters. They asserted that the Charterers had exercised a contractual option by giving their 30 days’ notice, and that

‘under English law … when the option has been exercised, the option should be a contract as if it has been written into the charter from the beginning.’

This had the result that the Charterers first set of submissions were directed at rebutting this proposition, which in the event was never advanced in the arbitration.

8.

The Owners withdrew the Vessel from the Chartered service on 2^nd November at 1624 UTC. The Charterers contended that this was a wrongful withdrawal, and claimed damages for repudiation.

9.

Given the number of parties in the chain, it is not surprising that there was an Agreement as to the way in which the dispute was to be resolved. The parties entered into an (undated) quadripartite agreement whereby all four of them entered into the same dispute resolution process. We refer to this Agreement as ‘the Joint Submission’. …”

The arbitrators then set out relevant terms of the Joint Submission. This is an agreement which recites that each party thereto was represented by solicitors and it was plainly intended to lead to an expeditious and economical disposal of what was thought to be a relatively straightforward dispute. Indeed it was no doubt in that spirit that the arbitrators were not invited to convene an oral hearing but were asked to deal with the matter on the basis of written submissions drafted by counsel for sub-charterers IMT and head owners Chansung respectively. In their opening submissions, as the arbitrators record, IMT sought to rebut the case which they reasonably understood owners to be advancing, viz that the giving of the 30 day notice amounted to the exercise of a contractual option which, once made, could not be resiled from. However the owners in their Defence Submissions put forward “a different analysis altogether”. Reliance upon the “option” analysis was abandoned.

The consequence of the owners putting their case in a manner not anticipated by IMT was that it gave rise to a subsidiary dispute as to the admissibility of certain material which had not emanated from IMT and which they had never seen. In particular, owners sought to rely upon a provisional Final Hire Statement sent to them by COSCO and the form of the hire payment made by COSCO pursuant thereto on 10 October. This statement and payment included a deduction for the value of the bunkers expected to be remaining on board on conclusion of the then anticipated Noble voyage which, as the arbitrators found, “revealed an assumption that the Noble voyage was the last voyage”. It was in the light thereof that owners refixed the vessel, as the arbitrators found in paragraph 23 of their Reasons in these terms:

“On the basis of their understanding, the Owners now refixed their vessel for a time charter trip with STX Pan Ocean Co with a laycan of 1-11 November. It was only shortly after this fixture was entered into, on 15 October, that the Charterers notified the Owners that there was a revised date for redelivery, namely about 20 November.”

The owners sought also to rely upon what the arbitrators describe as “communications passing directly from Noble to the owners”. The arbitrators found that these messages “by-passed” IMT although they do not set out in terms what was their content. However they included “the voyage orders emanating from Noble” – Reasons paragraph 38. The critical content of those orders can be gleaned from what the arbitrators said at paragraph 22 of their Reasons:

“The Noble notice was given in the context of a single voyage from Chennai in South East India to Xingang in China.”

By “the Noble notice” the arbitrators meant the Noble notice of 5 October giving the approximate date of redelivery as 4 November, which by the time it reached the head owners gave a date of 6 November. The Zenovia was at that time in Karachi. The arbitrators continued:

“The Owners carried out a Netpas calculation contemporaneously which showed them that the voyage in question would end at approximately the date given in the notice. Although the Charterers expressed doubts as to when the calculation was carried out, the Owners tendered a statement from Mr Jin Yong Park, the ship’s operations manager in which he says that he carried out such a calculation when he received COSCO’s notice. We accept this evidence. The calculation was in any event only one subsidiary part of the picture they were contemplating. In our view, it was therefore clear to them that the intention was that the ship would be redelivered at the end of the Noble trip. This was confirmed by the form of hire payment made by COSCO on 10 October. This was calculated on the basis that the voyage was the last one, because the value of the bunkers rob was deducted.”

From this it can be inferred that the Noble voyage orders which by-passed IMT envisaged a voyage from Chennai to Xingang. This is of some significance, for as the arbitrators point out at paragraph 38 of their Reasons, “the 30 day notice [presumably in the form in which it reached the head owners] did not mention Noble, the voyage, the employment of the vessel or the future plans for the vessel after the Noble fixture”. It was thus by reference to the Noble voyage orders, the COSCO provisional Final Hire Statement and the form of the hire payment made by COSCO to the head owners on 10 October that the head owners were seeking in the arbitration, to IMT’s evident surprise, to fashion a case which went beyond the status and effect of the 30 day notice of approximate redelivery looked at in isolation.

It thus became necessary for the arbitrators to consider the meaning and effect of the Joint Submission. I am sure that when they did so the arbitrators had well in mind the entirety of the agreement, and indeed they make specific reference in their discussion at paragraph 16 of their Reasons to clause 3 thereof, the terms of which they did not set out at paragraph 9 of their Reasons, the point at which they set out some of the terms of the agreement. The parties were agreed that it was permissible on the hearing of the appeal for the court to have regard to the entirety of the agreement and I therefore set it out in full below:

“Zenovia Agreement

1.

IMT time chartered the “Zenovia” from WBC under an NYPE form dated 23 March 2007 with a latest redelivery date of 22 November 2007.

2.

WBC had in turn time chartered the vessel from COSCO who had also time chartered the vessel on similar terms from Head Owners.

3.

A dispute has arisen between the parties concerning the legitimacy of the Owners actions culminating in the withdrawal and/or redelivery of the vessel at 1624 UTC 02^nd November 2007, whereas the respective charters stated the latest date for redelivery to be 22 November 2007.

4.

Charterers (COSCO, WBC and IMT) required the vessel to continue in the charter and to be redelivered back to Head Owners by 2400 on 22 November 2007 (UTC). Charterers are claiming in damages the difference between the market rate and the charter party rate for the period between 1624 02 November and 2400 22 November being 20.3067 days. Head Owners deny that any damages are payable and contend that they were entitled to treat the vessel as redelivered at 1642 UTC on 02 November 2007.

5.

The parties have agreed for the purposes of this dispute, that the relevant market rate is US$55,000/day, less the commission that would have been deducted from the hire payment received by IMT. Thus the only issue is the legitimacy of the Head Owners action of treating the vessel as redelivered at 1642 UTC on 02 November 2007 and their refusal to comply with Charterers further orders.

6.

Sach solicitors represent IMT; Mills & Co represent WBC; Swinnertons represent COSCO; Reed Smith Richards Butler represent Head Owners.

7.

It is mutually agreed that to save costs, the Head Owners and IMT will handle the dispute by way of discussion and arbitration at their absolute discretion save that there shall be no settlement of the dispute without the consent of COSCO and WBC.

i.

If the matter progresses to arbitration, all the parties are agreed that the arbitrations as between the respective contractual parties will be consolidated into a single arbitration.

ii.

The arbitration terms which will apply will be those set out in the charter party between Head Owners and COSCO. It is agreed, however, that the quantum of the claim against Head Owners will be 20.3067 days at US$55,000/day less the daily rate payable to Head Owners under their charter party with COSCO.

8.

All submissions served by IMT against the Head Owners, and vice versa will be deemed served by and served upon WBC and COSCO respectively.

9.

All the parties agree to be bound by:

i.

The Arbitrator’s award, (or appeal, if any) of which there will only be one award naming each of the parties to it, or;

ii.

Any settlement agreement reached by the Head Owners and IMT, with the consent of COSCO and WBC.

10.

Any application for leave to Appeal and any appeal, of the arbitration award will be handled on the same basis as the arbitration, namely between the Head Owners and IMT with all the other parties agreeing to be bound by the decision.

11.

It is agreed that the successful party (Head Owners or IMT) can recover their damages and legal costs as awarded or agreed from the losing party (Head Owners or IMT) with the same rights as if IMT had chartered the vessel direct from Head Owners.

12.

All sums (if any) paid by the Head Owners by agreement or in settlement of an arbitration award (or judgment on Appeal), including any costs award, will be paid to IMT. The sums paid will be divided between IMT/WBC/COSCO in the following manner:

i.

IMT will retain hire for 20.3067 days at the agreed rate of US$55,000 less US$30,500. IMT will also deduct from the sums paid, such sums as are necessary to reimburse IMT’s costs on an indemnity basis (to be taxed if not agreed).

ii.

Each party will settle the commission payable under their respective charters.

iii.

The balance of sums paid, after having deducted the sums in (i) above, will be divided ratably between WBC and COSCO in the proportion that the difference between the daily hire receivable by them under their sub charter and the daily hire payable by them under their head charter bears to the difference between the daily hire receivable by Head Owners under their charter with COSCO and the daily hire payable by IMT under their charter with WBC.

iv.

Without prejudice to IMT’s right to retain its costs on an indemnity basis as set out in clause 12(i) above, COSCO and WBC will have no liability whatsoever to any party in relation to the dispute set out herein or under any settlement agreement in relation to that dispute or under any arbitration award made in relation to that dispute (even if by the award they are required to make a payment) whether for principal, interest, legal costs or any other sum whatsoever.

13.

Any dispute under this agreement will be referred to London arbitration as per the head charter terms, and to the same Tribunal (if any) as appointed to resolve the substantive dispute, English law to apply.”

The arbitrators dealt with this subsidiary dispute at paragraphs 14-18 of their Reasons which I reproduce below:

“14.

(ii) Admissible material

The second point concerns the admissibility of various communications. The Charterers objected that the Owners might be ‘trying to introduce factual matters particular to their own position vis-à-vis their immediate Charterers COSCO’. This was said to be inadmissible, because the decision of the tribunal was to affect everyone in the chain. Two classes of communications were the subject of this protest. The first was communications passing directly from Noble to the Owners. The second was communications from COSCO to the Owners, in particular a provisional Final Hire Statement. In both cases the Charterers did not see the messages, the first because the messages by-passed them, the second because COSCO were at the top of the contractual chain.

15.

Owners’ response to this objection was to say that the messages from Noble were to be treated as messages from the Charterers in whose shoes they stood. As to the COSCO Final Hire Statement, the Owners submitted that the arbitrations between the parties were ‘consolidated into a single arbitration’ in order ‘to save costs’ and that it would be impractical if they were barred from adducing evidence which was relevant to the lawfulness of their decision to withdraw the ship. The Charterers’ point was that all parties were bound by the one decision and that anomalies would result if matters peculiar to disputes between individual parties to the chain were considered in the litigation.

16.

If this issue shows anything, it demonstrates the desirability of having either pleadings or an agreed statement of facts. Unless a question of law is framed in very narrow and abstract terms (not itself a desirable or even useful way of proceeding), the tribunal is likely to have to consider some facts. Of course, the saving of costs is a laudable object in cases where there is a multiplicity of parties but essentially only one dispute. It may be that at the time of the Joint Submission, the parties anticipate that the question for decision would be the narrow one of whether or not there was a legal option conferred by the Charterparty. But that was never likely to be the case, and clauses 3 and 4 of the Submission put the question forward quite generally as whether the Owners’ withdrawal was or was not legitimate.

17.

It would no doubt be possible to frame a question of pure law for the determination of the Tribunal; but this is not what happened. The fact that the Noble communications were given directly to Owners is irrelevant: it is as if they had passed all the way up the contractual chain. (It is to be noted that the Charterers’ Opening Submissions rely on the Noble 30 days notice which gave 4^th November as the terminus date rather than the COSCO notice directly to the Owners which gave the 6^th.

18.

So far as the Provisional Final Hire Statement is concerned, it appears to us that the evidence must be admissible. We cannot accept that the existence of the arbitration agreement had the result that the Owners were not entitled to give consideration to the materials which they received from their Charterers. Only COSCO were party to the contract with the Owners and only they could have a cause of action against them. The fact that IMT took the lead role in the management of the arbitration does not rewrite the contracts between the parties. If other parties further down the chain agree to be bound by the result of the dispute between the Owners and the head Charterers, that can hardly prevent the Owners from raising matters which validly ground a claim or a defence against the only party with whom they had direct contractual relations unless the multipartite arbitration specifically excluded them. That would we think require very clear words. Here, on the contrary, nothing in the language of the Submission is in the least apt to exclude this material from our consideration.”

Having thus resolved the subsidiary dispute the arbitrators proceeded to deal with the main issues. They turned first to the way in which the owners put their case in their opening submissions. The 30 day notice, set in the context of and/or combined with the voyage instructions, COSCO’s provisional Final Hire Statement and subsequent treatment of the hire payment, were said to have given rise to one or other of three types of estoppel – waiver by election, promissory estoppel or estoppel by convention. The charterers’ initial answer to these arguments was to point to the reservations contained within the redelivery notice – in addition to the fact that the notice was “approximate” there were five further reservations as introduced by the word “about” and by the four acronyms “agw”, “wp”, “wog” and “uce”. These acronyms the arbitrators simply elucidated without discussion at paragraph 21 of their Reasons as meaning “all going well”, “without prejudice”, “without guarantee” and “unforeseen circumstances excepted”.

I must confess to surprise that the arbitrators should have regarded the acronym “wp” as meaning in this context “without prejudice”. Drawing on my own experience I would have regarded it as likely to have been intended to mean, in this context, “weather permitting”. However this is quintessentially a matter on which I should defer to the views of commercial arbitrators, particularly where the parties have as here stipulated in their arbitration agreement that their dispute is to be resolved by “commercial men conversant with shipping knowledge… qualified by experience to deal with shipping disputes”. I did however ask counsel whether either party had suggested to the arbitrators that “wp” meant in this context “without prejudice”. They had not. On the contrary the owners had simply referred to “wp” in their Defence Submissions as meaning “weather permitted (sic)” and IMT for their part had simply said nothing as to their understanding of the acronym. As far as I can see in their submissions the charterers simply placed no reliance at all upon the acronym “wp”, and therefore had no need to say what it meant. The arbitrators set out at paragraph 46 of their Reasons that the charterers “did not suggest that the use of the phrase ‘without prejudice’ conferred on them any privileges wider than those conferred by the phrase ‘without guarantee’”, and they proceeded to treat those two phrases as “(another) co-terminous pair of exceptions or qualifications”. However they held at paragraph 50 of their Reasons that the words “without guarantee” could not alter the effect of the 30 day notice, that if they “did anything” the notice would be uncontractual and that, for good measure, “the same would indeed be true of agw, uce and wp”. They concluded on this point, at paragraph 50 of their Reasons:

“If they [the words ‘without guarantee’] show that the Charterers are not contracting that the ship will be redelivered in about 30 days, they do no more than remind the Owners that this is not the exercise of a contractual option. If they purport to do more than that, they should not be in the notice at all.”

Charterers IMT say that these conclusions sit ill with certain earlier conclusions of the arbitrators expressed in connection with their discussion of the owners’ defences.

The arbitrators considered the estoppel arguments and concluded that whilst neither waiver by election nor estoppel by convention were made out, nonetheless the charterers’ claim to be entitled to the use of the vessel for the last twenty days of the charter period was defeated by a promissory estoppel. The promise from which the charterers could not resile was, broadly, that they would redeliver the ship at the end of the Noble voyage and that they would not exercise their right to redeliver at the very end of the charter period. There is no express finding of detrimental reliance or inequity. However the arbitrators do find that the owners in refixing the vessel on 15 October with a laycan of 1-11 November relied on their belief that they would have their ship back in time for the new fixture, and that the position was clear from the material emanating from the charterers’ side on which they were entitled to rely. At paragraph 34 of their Reasons the arbitrators correctly identified as an ingredient of promissory estoppel that it must be inequitable that the promisor should be allowed to resile from his promise. Reading the Reasons as a whole, generously as one should when considering an arbitration award, including the arbitrators’ discussion of a yet further argument to the effect that the charter contained a relevant implied term, it is plain that the arbitrators concluded that it would be inequitable to allow the charterers to resile from their promise so “frustrating” the owners’ plans.

Having reached the conclusion that owners succeeded on the basis of promissory estoppel, the arbitrators turned finally to an argument raised only for the first time by the owners in their Rejoinder Submissions. They described this argument in this way:

“… Although it appeared at a late stage in the argument, it reflected the commercial question at the heart of this case which underlay many of the submissions on both sides – whether the Owners are correct in their contention that a change of mind by the Charterers is an inadmissible reason for changing the date of redelivery. This was that there was an implied term that where an approximate date of redelivery is given by the charterers of a vessel, those charterers are obliged not to do anything deliberately which prevents that approximate date being met. The Owners drew analogical support from the position of statements by shipowners as to when a vessel was expected ready to load – The Mihalis Angelos [1971] 1 QB 164 (C.A.). Once such a statement was given, there was an implied obligation on the owner to use reasonable care to meet that date – The Democritos [1976] 2 Lloyd’s Rep 149 (C.A.)”

After discussion, although without overt consideration whether the usual tests for the implication of contractual terms are satisfied, the arbitrators concluded that there was indeed such an implied term. It mattered not that if there were a breach thereof, the owners were not entitled to terminate the charterparty on account thereof: “Formally, that is the position. But the substantive question for us is whether the Owners were entitled to refuse to allow the Charterers to give further orders. If the revised 30 day notice was an illegitimate one, then the Owners were entitled to act on the notice which had already been given at the time when it became effective. For this reason also, the Owners are entitled to succeed.” - see paragraph 58 of the Reasons.

The fact that the arbitrators treated the redelivery notice as given “without prejudice” creates to my mind a real problem. I am bound to accept that the notice was so given. There is no appeal against the arbitrators’ finding in this regard and it would be a difficult conclusion to appeal. Mr Edey, whose clients had in any event been successful in the arbitration, had no incentive to challenge the arbitrators’ finding, particularly in an appeal where he naturally placed great reliance upon the arbitrators’ findings as to the commercial context and the appropriate allocation of risk. Mr Priday for his part had not invited the arbitrators to go down this route. In his skeleton argument produced for the appeal Mr Priday observed that the arbitrators considered that the acronym “wp” in the 30 day approximate notice meant “without prejudice” and submitted “if so, they ought to have held that a notice so qualified could not give rise to a promissory estoppel. Such an estoppel is tantamount to a contractual variation or waiver and cannot be based upon a statement made ‘without prejudice’.” I am inclined to agree. The expression “without prejudice” is often used in commercial communications in a manner which may be inappropriate in that it may not always be used to preface or to introduce a bona fide attempt to compromise an existing dispute. Often invocation of the mantra “without prejudice” is in the context simply meaningless. See generally Ofulue v Bossert [2009] 2 WLR 749 at 752-754 per Lord Hope of Craighead, where the leading authorities are summarised. On the other hand even if not all who use the phrase understand its technical meaning, most in my view intend by its use to convey that what they say is not thereafter something to which reference may be made, or to which they are to be held, in legal proceedings, should they eventuate. Putting it broadly, it is intended and, I think, generally understood, as indicating that what is said cannot usually be relied upon unless of course it leads to an agreement intended to be binding. I am reluctant to uphold a conclusion that a notice of approximate redelivery expressly given without prejudice can without leading to an agreement nonetheless give rise to a promissory estoppel binding the giver of the notice. By the same token, whether the charter contains a relevant implied term or not, I am reluctant to accept that a notice of approximate redelivery expressly given without prejudice generated without more an obligation on the charterer not deliberately to do anything which might prevent the approximate date given therein being met.

In my view the award is susceptible to being set aside on this short ground. However merely so to do without engaging with the underlying arguments would in my judgment be unfair on the owners, who would on this basis lose on the footing that the arbitrators had attributed to the acronym “wp” a meaning for which neither side had contended and which both sides, whatever their formal position, were inclined to recognise as unsustainable once the court’s dilemma became apparent. Furthermore, not to engage with the arbitrators’ underlying analysis might leave scope for argument that the approach of the arbitrators is basically sound, and would have held good had not the notice of approximate redelivery been given without prejudice. I turn then to the substance of the arbitrator’s reasoning.

In its un-amended 1946 version the NYPE form of time charter requires charterers to give owners

“not less than … days’ notice of vessel’s expected date of redelivery, and probable port”.

In Time Charters, 6^th Edition (the first edition of that work not to bear Michael Wilford’s name) at paragraph 15.18 it is observed that:

“The giving of due advance notice of redelivery ensures that when the charterers redeliver, they do not commit the breach of charter just discussed [viz, a breach consisting in having failed to serve notice of redelivery the necessary number of days previously]. The cases have not yet considered what further legal effect a notice of redelivery may have.”

The learned authors then put forward their own tentative views on this as yet undecided point. They continue:

“… It is thought, first, that by serving notice of redelivery the charterers do not undertake that the ship will be redelivered on the date indicated. The redelivery notice is not a promise that the ship will encounter no delay in any remaining employment under the charter. Always allowing for that, nonetheless the main purpose for requiring the charterers to give advance notice of redelivery is so that the owners may plan the ship’s future employment. The ordinary expectation, when advance notice of redelivery is given, is that the owners will indeed rely on it in planning and arranging such employment. On that basis, it is thought that a redelivery notice has a more positive legal effect than merely preventing a breach at redelivery. The gist of the redelivery notice is a statement or promise that there will be no further employment orders under the charter that are inconsistent, when given, with redelivery in accordance with the notice. It is less easy to say whether such a statement or promise is capable of operating as an election, immediately binding the charterers not to give any such inconsistent orders, or is capable only of giving rise to an estoppel, precluding the charterers from claiming to be entitled to give inconsistent orders if but only if reliance on the notice by the owners in the meantime has rendered it unjust for the charterers to do so. There are arguments in favour of, and also difficulties with, either approach.”

It is interesting to note that it does not appear to have occurred to the learned authors to suggest the implied term analysis adopted here by the arbitrators. They do however raise the possibility of a notice giving rise to an estoppel.

I turn first therefore to the suggested implied term. I have already summarised the arbitrators’ conclusion. The arbitrators’ reasoning was as follows:

“53.

The Charterers contended that there was no analogy between The Mihalis Angelos and the present case, because that decision concerned the expression ‘expected ready to load’. Although there are many differences, there is a fundamental underlying commercial resemblance. An estimate of time is given. The estimate must be given bona fide. The purpose of that estimate is to enable the other party to the charter to make his own dispositions. He is entitled to rely on it, even though this does not immunize him against the ordinary risks of sea transport. The analogy seems strong to us.

54.

So far as Charterers’ objection that The Democritos was concerned with a voyage charter and an express obligation to proceed with the utmost dispatch, we do not really understand the argument. The case concerned a time charter, not a voyage charter. And we do not believe that there was any such express obligation mentioned. The obligation in question was the implied obligation of the Owners to proceed with reasonable speed to the loading port. And the observation that there is no obligation [on] the charterer to proceed with reasonable dispatch does not advance the argument at all. The speed of the voyage is within the shipowners’ control just as the time of redelivery is within the charterers’.

55.

In our view, the purpose of a 30 day notice of approximate redelivery is clear. It is to give shipowners a measure of control over their commercial operations. It increases the predictability of the ship’s time-table. There has to be an allocation of risk as between the parties. Charterers cannot be expected to bear the risks of shipowners’ future programme. The workings of the seas, of men and of machinery are too varied and haphazard for an unconditional guarantee to be given that a ship will be redelivered by charterers on a particular day, just as shipowners normally give a laycan spread or expected ready to load dates which are not warranted but are reasonably estimated. But we do not think that there is any commercial sense in a provision which imposes on shipowners the risks not only of the ordinary vagaries of trade but also the whims of the party who has to give the notice. If the 30 day notice did not constrain the Charterers’ conduct thereafter in any way, then Owners would be right: a clause which is inserted for the benefit of Owners would instead enure for the benefit of Charterers. The Charterers would be able to give a 30 day notice at the earliest possible moment and thereafter conduct a daily review of their position, resiling from the notice if an opportunity presented itself throughout the whole of the period at any time up till the giving of the 5 days’ definite notice which they were also required to give.

56.

This would be a commercial absurdity. It would result in a wholly inappropriate allocation of risk. Shipowners will have the means of knowing how their ship is performing, what the weather is doing and whether there are any problems in the port or ports for which the ship is bound. They will necessarily be unaware of what other business their Charterers are seeking; and they are unlikely to have anything of the expertise to make any assessment of what might be available, even if it were practicable for an ordinary shipowner to conduct the necessary inquiries.

57.

The Charterers concede only that the 30 days notice has to be bona fide. By implication , they say that the effect of the words ‘without guarantee’ is that the notice does not even have to be reasonable. We think that as a matter of business necessity, a ship owner confronted with the situation which arose in the present case must be entitled to make his plans on the basis that the charterer will not frustrate them. The ship may sink in a storm, may hit a mine, or be arrested. These are misfortunes which he has to bear. We do not think that the Charterers’ speculation is another. Not only was the 30 days notice not expressed to be UWCOM; the Charterers were not entitled to give such a notice.

58.

The Charterers pointed out that even if there was such a term, there was no obligation that it was a condition. Nor was it alleged that the breach went to the root of the contract. That being so, the Owners were not entitled to terminate for breach. Formally, that is the position. But the substantive question for us is whether the Owners were entitled to refuse to allow the Charterers to give further orders. If the revised 30 day notice was an illegitimate one, then the Owners were entitled to act on the notice which had already been given at the time when it became effective. For this reason also, the Owners are entitled to succeed.”

It is accepted that the implication of a term into a contract is a matter of law for the court – see Chitty on Contracts, 30^th Edition, paragraph 13-003; Re Comptoir Commercial Anversois v Power, Son & Co. [1920] 1 KB 868, 899; O’Brien v Associated Fire Alarms Limited [1968] 1 WLR 1916, 1923, 1925. In determining whether a term is to be implied the court attempts to ascertain the intention of the parties from both the wording of the agreement and the surrounding circumstances – see again Chitty, paragraph 13-003. Mr Edey rightly reminded me that the arbitrators’ findings as to the commercial context are not themselves questions of law and are not therefore amenable to review. He also reminded me that the arbitrators had spoken of the possibility of charterers being able to change their mind as “a commercial absurdity”. To my mind the arbitrators’ discussion at this point comes close to overlooking that a notice must , as I would accept by analogy, at the least be given honestly or in good faith – both formulations are found in the authorities. I do not need to decide whether, by analogy with certain statements having contractual effect, such as a vessel’s expected date of readiness to load, it must also be given on reasonable grounds – cf. The Mihalis Angelos. Likewise I leave out of account at this stage the question whether the qualification “without guarantee” necessarily indicates that the particular notice given here did not purport to be based upon reasonable grounds – cf. The Lendoudis Evangelos II [1997] 1 Lloyd’s Rep. 404. The requirement of good faith alone would I think ordinarily be likely to act as a constraint upon the more egregious conduct which the arbitrators envisage. Nonetheless, I note that, in company with the learned authors of Time Charters, the arbitrators regard the main purpose of requiring the charterers to give advance notice of redelivery as enabling the owners to plan the ship’s future employment.

Mr Priday submits that the arbitrators’ relevant findings, particularly at paragraph 57 of their Reasons, are directed not to the question whether the suggested term is necessary for the business efficacy of the contract but rather to the business convenience of the owners in arranging the future employment of the vessel i.e. that to be undertaken after the relevant contract has come to an end. I agree. Nowhere do the arbitrators address the question whether without the suggested implied term the contract will not work. Manifestly it will.

Mr Edey suggested that perhaps the arbitrators’ reference to commercial absurdity is to be understood as a holding that the suggested implied term, although not expressed in the contract, is nonetheless so obviously a stipulation in the agreement that the parties must have intended it to form part of their contract. This is always a difficult argument where, as here, the contract in question is a carefully drafted 33-page document built on a standard form in wide usage over very many years in respect of which the relevant inference has never before been drawn nor, so far as is known, suggested. Furthermore I find it difficult to believe that reasonable parties circumstanced as these parties were would, without more, have agreed to the suggested implied term. The suggested implied term obliges the charterers not deliberately to do anything which prevents the approximate date given in a notice of approximate redelivery being met. At the very least, reasonable parties pressed with the analogy which the arbitrators saw with The Democritos would in my judgment have been unprepared to agree to a term concluded in absolute terms, rather than an obligation to use reasonable diligence, the implied term discussed in that case being that an owner undertakes to use reasonable diligence to deliver into time chartered service by the cancelling date a ship fit for the service. I should add that I consider the analogy as far from perfect. A cancelling date is an expressly agreed fixed contractual date. An estimated date of redelivery provided on not less than 30 days notice is something rather different. Moreover in this charter there is provision for the giving of five notices of approximate redelivery, at 30, 20, 15, 10 and 7 days’ notice followed by a further four notices of definite redelivery, at 5, 3, 2 and 1 day’s notice respectively. Each notice must at the very least be given honestly or in good faith. It is not to me at all obvious that the parties would necessarily have agreed that between the giving of a 30 day and a 20 day notice of approximate redelivery the charterer is not at liberty to do anything which prevents the date first given being met. Indeed, I am quite sure that they would not.

Mr Edey frankly recognised that the width of the term regarded by the arbitrators as to be implied into the contract presented him with real difficulties. Whilst not formally abandoning the term found, he pressed only for a more narrow formulation. His first suggested formulation was that the charterers should not do further voyages the effect of which would be that the first approximate date given would not be met. However pressed to define what for this purpose would constitute a voyage – would it for example necessarily involve loading cargo over and above that loaded or anticipated to be loaded when the notice was given – he was inclined to refine the implied term still further so that it prevented the charterers from undertaking additional employment.

To my mind these attempts to salvage from the arbitrators’ formulation a more manageable term simply demonstrates that the content of such a term is not so obvious that the parties can confidently be regarded as bound to have agreed to it had it been suggested. I have already pointed out that the analogy between an approximate date of redelivery given by not less than 30 days’ notice and a contractually fixed cancelling date or date of expected readiness to load is far from perfect. The inexactness of the analogy is pointed up in the clause here under consideration (which is in relatively familiar if not standard form) by the dichotomy between the approximate dates required to be given on 30, 20, 15, 10 and 7 days’ notice and the definite dates required to be given on 5, 3, 2 and 1 day’s notice. Furthermore, as Mr Priday pointed out, this particular redelivery clause requires each successive notice of approximate redelivery date to give also the intended port of redelivery, from which it may be inferred that it is envisaged that the intended port may change. If the charterers were under the sort of absolute obligation envisaged by the arbitrators, it might be thought necessary to name the intended port only in the first notice. In paragraph 55 of their Reasons the arbitrators drew attention to the qualitative difference between the approximate and the definite notices for which the charter calls. In my judgment the very structure of that regime militates against any argument that the parties must be bound to have agreed that the giving of the first notice constrained the charterers’ freedom of action thereafter. Suppose on the facts of the present case that Noble had become insolvent shortly after the 30 day notice was given on 5 October 2007 so that the then intended [last] voyage had become incapable of performance. It is impossible to suppose that, when contracting, both parties would have immediately agreed that in such a situation charterers would nonetheless do nothing deliberately which would prevent the approximate date of redelivery given in the 5 October notice being met. Nor in my judgment is the difficulty solved by seeking to couch the obligation in terms of reasonable diligence or best endeavours. When the parties’ competing financial interests are at stake, there is room for disagreement as to what would, in such a situation, amount to reasonable diligence or best endeavours. Would it be unreasonable for the charterers to seek substitute employment which might involve the approximate date given not being met? The answer to that question no doubt depends upon from whose point of view it is asked. The analogy with a fixed contractual date simply breaks down. In my judgment it is not possible in the present case to imply into the charter a term whereby the charterers’ freedom of action is in some way constrained by reference to an approximate redelivery date given, as required, honestly and on not less than 30 days’ notice. It is simply not possible now confidently to assert what the parties must inevitably have agreed, when they made their contract, had the point then been raised.

As I have recorded above the arbitrators first concluded that the defences of waiver by election and estoppel by convention failed. Mr Priday submits that the reasons given for the failure of these defences were in fact fatal to the defence of promissory estoppel. Mr Edey for his part reminded me that inconsistency in the arbitrators’ findings of fact is not in itself a valid ground for an attack on an award – see per Steyn LJ in The Baleares [1993] 1 Lloyd’s Rep. 215 at 228. That is of course so, but the contention here is that the arbitrators’ findings relevant to the first two defences demonstrate that their findings as to the legal effect of the same words in the same context relevant to the third defence, promissory estoppel, are simply unsustainable.

The arbitrators found that the waiver by election argument failed because:

a.

Charterers had not made an unequivocal representation that they had chosen one of two alternative courses of conduct.

b.

There was no unilateral abandonment of rights by Charterers.

c.

‘The Charterers never gave any indication that they intended to abandon any right to retain the use of the vessel until the end of the charter period. Insofar as the Owners can rely upon their representations, express or implied, as to their future conduct, those representations were far too uncertain to generate an unequivocal abandonment of rights.’

d.

‘The situation which arose in the present case was in a category altogether different from those where a true waiver by election can be made … It was not a situation where the law confers on one party the privilege of insisting that the other selects the legal rules which govern their future relationship.’

e.

‘The argument based on waiver by election is an attempt to resurrect the contractual option argument under another guise’.

See Reasons paragraphs 25-27.

Similarly the arbitrators found that the estoppel by convention argument failed because:

a.

‘The assumption which the Owners rely on is that the Noble voyage was the last one to be made under the Charterparty … the Charterers did not intend that assumption to be the basis of the legal relations between the parties, or to give the Owners any reason for believing it was.’

b.

‘Even on the footing that shared post-contractual assumptions can give rise to an estoppel by convention, they must be assumptions of fact or law.’

c.

‘It is hard to see how the Charterers could be said to have assumed that the notice they gave bound them irrevocably to its terms, even without the reservations attached to it.’

d.

‘The Charterers doubtless did assume at first that the voyage would be the last one under the charter. That is not the same as an assumption that they did not have the right to change their mind. There is no reason to believe that that was their assumption, or indeed that consideration of that question ever entered their heads.’

e.

‘It is equally difficult to see how the Owners could have conveyed the fact that that was their assumption in a meaningful way unless they had specifically said that that was so.’

f.

‘Owners say that the common assumption was that the vessel was on her last voyage. This formulation conceals an important feature of the assumption. It is not really an assumption of fact at all: rather it is an assumption about the future conduct of the parties. The Owners have sought to translate a statement about future intent into a statement of present fact.’

See Reasons paragraphs 28-33.

When they came to deal with promissory estoppel the arbitrators rightly recognised that what was required was a clear and unequivocal representation by the charterers that they were giving up their strict rights, which in context would mean giving up their right to retain the vessel in their employment until 22 November. See Spencer Bower on Estoppel by Representation, 4^th Edition, paragraph XIV.2.1. The promise must be intended to affect the parties’ legal relations and must be understood to be a promise that will be acted upon by the promisee – see again Spencer Bower at paragraph XIV.2.1 and per Denning J in Central London Property Trust Limited v High Trees House Limited [1947] KB 130 at 134. Finally the promisee must act upon the promise either in the way intended by the promisor or in a way which it is reasonable for him to act, having regard to the content of the promise, such that it is inequitable for the promisor to insist upon his strict rights – see again Spencer Bower at paragraph XIV.2.22. I leave out of account whether it adds anything to say that the promisee’s reliance must be detrimental.

In my judgment the arbitrators’ findings to which I have referred at paragraphs 27 and 28 above are amply sufficient to demonstrate that on the facts of this case the defence of promissory estoppel could not succeed. The charterers said nothing from which it could reasonably be inferred that they were abandoning any contractual rights. The charterers said nothing from which the owners could reasonably infer that the charterers intended what they said to affect the legal relationship between them. In any event what was said by the charterers, either expressly or impliedly, as to their future conduct was far too uncertain to generate an unequivocal abandonment of rights. Furthermore, when they came in fact to deal with promissory estoppel, the arbitrators concluded that the words “without guarantee” were “amply sufficient to negative the assumption of any contractual content to the 30 days of the notice, even if the other qualifications were not sufficient to do so” – Reasons, paragraph 49.

How then did the arbitrators come nonetheless to the conclusion that the charterers made a clear representation that they would not perform another voyage after the Noble trip and would not therefore use the whole of the remaining period of the charter – see paragraphs 35 and 39 of the arbitrators’ Reasons. The arbitrators’ essential reasoning is I think to be found in the following passages from their Reasons:

“38.

The Charterers say, and again the Owners agree with them, that the Owners’ case is centred not on the notice period but on the fact that they understood that the Noble voyage was to be the last voyage under the charterparty. The Charterers’ case is that this belief cannot justify any action by the owners which is inconsistent with the Charterers’ legal right to retain the vessel until 22 November. As the Charterers point out, the 30 day notice did not mention Noble, the voyage, the employment of the vessel or the future plans for the vessel after the Noble fixture. So, it is said, no representation could have been made by the notice. The matters on which the Owners based their decision are all extrinsic to it. But the notice is not the only source of information on which the Owners could reasonably rely. The doctrine of promissory estoppel does not involve a formal constraint of this kind. The true questions is: what was the Owners’ understanding and what was the source of the material on which they based it? The notice was part of it, and the rest included the voyage orders emanating from Noble and the final hire statement from COSCO. As indicated earlier, we consider that information passing to the Owners from Noble at one end of the chain and from COSCO at the other all emanated from the Charterers’ side, and the Owners were entitled to rely on them as such.

…

41.

Although the representation on which the Owners are entitled to base their promissory estoppel is wider than the 30 days notice itself, that notice constitutes a vital component of the representation. We have noted that there are no less than six forms of words which reduce the certainty and precision of the representation which was made. The Charterers submitted that the effect of these reservations was to negative any unequivocal representation by them to the Owners as to their intentions. If, as we have concluded, the material passed from Charterers to Owners taken as a whole was such as to lead the latter to the belief that the ship would be redelivered at the end of the voyage under the Noble charter, how far do these reservations impinge on that?

42.

The Owners’ case was that all the qualifications referred to matters outside Charterers’ control. There was therefore no inconsistency between the qualifications and the representation as interpreted by the Owners. There is no inconsistency between the Owners’ case and the use of the words ‘about’ or ‘approximate’. The exact date when the Noble charter would come to an end could not be predicted with precision at the time the notice was given and that would be so even if the notice had in terms tied redelivery to the conclusion of the Noble charterparty. The same may be said to be true of the expression ‘all going well’. None of these exceptions could be said to be applicable to the situation which arose when another voyage was interposed. The margins were too great.

…

45.

The use in the Charterparty of the expressions ‘approximate’ and about’, ‘all going well’ and ‘unforeseen circumstances excepted’ are a vivid realisation of the principle that the presumption against mere surplusage has little or no weight on commercial contracts. We think that each half of each of these pairs is interchangeable, and that none of the four add significantly to the others. In any event, once it is recognised that the Owners accept that even their construction of the exchanges involves some flexibility, they are all consistent with a representation that the Noble voyage was the last voyage. Put more shortly, the reservations qualify only the certainty of the period that that voyage was expected to occupy and not the fact that the voyage itself was the last one.

…

47.

The Owners’ general submission was that there is a difference between charterers who give a mistaken estimate and charterers who give an estimate which is provisional only and from which they can resile if it suits them. It is tempting to say that the latter cannot amount to a notice given in good faith; but that was not the Owners’ case. Their submission was that the expression ‘without guarantee’ added nothing to the other expressions with which the 30 days was qualified.

48.

It is clear from The Lipa [2001] 2 Lloyd’s Rep. 17 that a proposition in the form of an undertaking in a charterparty given ‘without guarantee’ does not amount to a warranty. That authority beat the air so far as the present case is concerned, because it was never the Owners’ contention here that the Charterers had warranted that the ship would be redelivered in 30 days or even in about 30 days. The Lendoudis Evangelos II is closer to the facts of the present case in that it concerned a time estimate. The vessel was chartered for a particular trip ‘duration about 70/80 days without guarantee’. The trip took over 103 days, and the Owners claimed that the estimate of 70/80 days was given negligently. It was held that the words ‘without guarantee’ meant that the charterers could not be liable for the overrun unless the estimate was given in bad faith (which was not alleged).

49.

In the context in which they are relevant, these cases go very far. They appear to show that the words ‘without guarantee’ have a powerful effect to eliminate the contractual content from an undertaking which would otherwise have a contractual effect. They are amply sufficient to negative the ascription of any contractual content to the 30 days of the notice, even if the other qualifications were not sufficient to do so. But as the 30 days notice is not a contractual option, it cannot be said to have a contractual effect in any event. The Owners submitted that these authorities did not go so far as to show that words ‘without guarantee’ could provide a party with an escape route when the matter was a matter entirely within that party’s control. In the circumstances covered by the principle of those cases, though, we think that they may well be sufficient for that purpose. If contractual intention is negatived, the motive for one party’s conduct cannot be relevant.

50.

There are two reasons why the decisions on the words ‘without guarantee’ are not decisive in favour of the charterers. The first is that, in this context, they cannot alter the effect of the notice. The Charterers are obliged to give a 30 day notice of approximate date of redelivery, and the Charterparty does not give them the right to give such an estimate ‘without guarantee’. If those words did add anything, the notice would therefore be an uncontractual one. (The same would indeed be true of AGW, UCE and WP). If the words ‘without guarantee’ are merely an indication that the notice is of an approximate date of redelivery, they add nothing. If they show that the Charterers are not contracting that the ship will be redelivered in about 30 days, they do no more than remind the Owners that this is not the exercise of a contractual option. If they purport to do more than that, they should not be in the notice at all.

51.

Secondly, as we have sought to show, the 30 days notice was not the true basis of the Owners’ claim. It is true that their submissions gave greater prominence to the notice than to the other materials on which the Owners relied. But viewed as a whole, their real case was that the representation on which they relied was that the Charterers would redeliver the ship at the end of the Noble voyage and that they would not exercise their right to redeliver at the very end of the charter period. (One of the Charterers’ principal grounds of complaint, indeed, was that the Owners’ case was not properly anchored in the notice but depended on the voyage to which the notice made no reference). The 30 days notice was part of that representation; and it was not absolutely binding. But whether or not the 30 day notice was itself binding was not the right question. Insofar as the Charterers made an unequivocal representation about the voyage and their right to redeliver up to 22 November, that was not subject to any of the qualifying phrases. The information which lent precision to the representation in those respects was not contained in the notice. If one strips the case down to its bare essentials, the Owners asked when the ship would be redelivered, and the Charterers said that it would be redelivered at the end of the Noble voyage. They did not say that that was without guarantee. They did not commit the Noble voyage to being completed within the 30 days or any other period. But they tied redelivery to that event, and impliedly, but clearly, excluded some further choice by them. That was sufficient to create the necessary estoppel.”

With respect to the arbitrators, I believe that they lost sight of their earlier clear findings for three main reasons. Firstly, they allowed discussion of cases such as The Lipa [2001] 2 Lloyd’s Rep. 17 and The Lendoudis Evangelos II, which are concerned with the qualifying effect of the words “without guarantee” upon a contractual term, or upon an obligation couched by reference to a contractual term, to distract their attention from the fact that the same words were equally capable of qualifying the effect of a representation. Secondly, the arbitrators concluded that if the words “without guarantee” did purport to do more than remind the owners that the charterers were not exercising a contractual option, they should not be in the approximate notice of redelivery at all. Whilst there may be an argument for saying that an approximate notice of redelivery given by the charterers “without guarantee” could have been rejected as uncontractual, this ignored the fact that the owners were seeking to spell a promissory estoppel out of what the charterers had in fact said. For that purpose, one cannot ignore part of what is said on the ground that the charterers had no entitlement to say it. Thirdly, whilst the arbitrators recognised that the redelivery notice constituted “a vital component” of the representation out of which owners attempted to spell a promissory estoppel, they concluded, wrongly in my judgment, that the tentative and qualified nature of the redelivery notice was of no relevance when considering the nature of the representation which the owners were entitled to regard as made by the voyage orders and the manner in which COSCO dealt with the provisional Final Hire Statement and the payment made pursuant thereto. Thus it was that they came to the conclusion that charterers “tied redelivery” to completion of the Noble voyage and “impliedly, but clearly, excluded some further choice by them”. With respect to the arbitrators I do not believe that it is permissible to compartmentalise the representation (or promise) in this way. If the promise is to be spelled out of the totality of what was said, expressly or impliedly, on three or four separate occasions, then the tentative and qualified nature of the approximate notice of redelivery cannot be ignored when determining the representation imparted by the material as a whole.

It follows that the only conclusion to which the arbitrators could permissibly have come was in my judgment that by the totality of the words and conduct attributed to them the charterers did not make to the owners a clear and unequivocal promise either that the Noble voyage would be the last employment under the charter or that they would not, in the event, seek to retain the vessel in their employment until the last permitted date for redelivery, 22 November. Nothing said or done by the charterers contained or amounted to a promise as to what they would do in the future.

It also follows that it is strictly unnecessary to consider whether the arbitrators were correct in their conclusion that the Joint Submission did not preclude owners’ reliance upon the Noble voyage orders, the COSCO provisional Final Hire Statement and the form of COSCO’s payment of hire. I agree with Mr Edey that some caution is needed before assuming that the arbitrators’ conclusion resulted in unfairness to the charterers since it is unknown whether authority was given, expressly or impliedly, for the giving of voyage orders directly to the head owners and unknown to what extent the treatment of hire as between COSCO and head owners may have been replicated down the chain of charters. However the question is simply what is the true construction of the agreement. The assumption underlying the Joint Submission is that the question which had arisen should be answered in the same manner regardless of under which of the three back-to-back time charters it arose. It can only be for that reason that it was agreed, by clause 12(iv), that COSCO and WBC were to have no liability to any party and further agreed that, if IMT were successful in any arbitration with the head owners, WBC and COSCO would receive the balance of the award, after deduction of the sum to which IMT was entitled, rateably as provided by clause 12(iii). My approach to the Joint Submission would therefore be that unless it can confidently be assumed that the relationship between the three pairs of owners and charterers was in every respect back-to-back, thereby precluding a different outcome to the three distinct disputes, the overwhelming likelihood is that the parties intended that reliance would be permissible in the arbitration only on material which was common to all parties. That would be consistent with what the arbitrators came close to finding was the parties’ common belief at the time of entering into the Joint Submission that the question for decision was the narrow one whether there was a legal option conferred by the charterparty. Such a common belief would I consider be an appropriate matter to take into account as constituting part of the surrounding facts and circumstances in the light of which the Joint Submission has to be construed – see generally per Lord Wilberforce in Prenn v. Simmonds [1971] 1 WLR 1381 at pages 1383-1386 and per Lord Hoffmann in Investors Compensation Scheme Limited v. West Bromwich Building Society (No. 1) [1998] 1 WLR 896 at pages 912-913. I need not express a final view on this issue of construction. Mr Edey realistically accepted that the promissory estoppel defence would be the more difficult to establish if it fell to be spelled out of the redelivery notice alone.

Formally the owners cross-appealed on the issue of election but Mr Edey very frankly recognised that if he failed on both implied term and promissory estoppel it was inconceivable that the defence of election could succeed. I need say no more about either that or Mr Priday’s contingent application under section 68 of the Arbitration Act.

In my judgment the Award must be set aside. Subject to hearing counsel on the form of order, I would substitute therefor an award of US$741,194.55 in favour of IMT. I would also substitute for the arbitrators’ award on costs an order that the owners pay the charterers’ costs of the reference together with the fees and expenses of the arbitrators.

By way of postscript I would merely note that the arbitrators did not enjoy the advantage which I had of hearing economical oral argument from highly skilled counsel. The case demonstrates to my mind the increased burden of the task cast upon a tribunal, arbitral or judicial, when oral argument is dispensed with or impermissible. I respectfully doubt whether the arbitrators would have reached the conclusions which they did had they had the benefit of hearing the propositions tested in oral argument.