Carboex SA v Louis Dreyfus Commodities Suisse SA

This is the Claimant’s appeal under s. 69 of the Arbitration Act 1996 against an award of an arbitral tribunal dated 11 June 2010 (“the Award”). The claim referred to the tribunal was for demurrage alleged to be due in respect of four vessels, the Co-op Phoenix, the Alpha Glory, the C Young and the Royal Breeze, each of which was chartered by the Defendant to the Claimant under a Contract of Affreightment dated 6 March 2008 (“the COA”) for the carriage of coal from Indonesia to Puerto de Ferrol in Spain, to be discharged at the terminal of Endesa SA (“Endesa”), the largest power utility company in Spain. The Claimant is a subsidiary of Endesa for which it imports coal for use in Endesa’s power stations.

The COA was on an amended version of the AmWelsh voyage charterparty form. It was a berth as distinct from a port charter. The relevant clauses of the COA are clauses 9 and 40. They are set out below. Clause 9 is one of the standard printed clauses of the AmWelsh Charterparty. It was amended by the parties as shown by underlining for words added and striking through for words excised. Clause 40 is a bespoke typed amendment to the standard clause 9 agreed by the parties.

9.

The cargo to be discharged by consignee at port of discharge, free of expense and risk to the vessel, at the average rate of 25,000 metric tons per day weather working day of 24 consecutive hourspermitting, Sundays and holidays and after noon on Saturdays included, excluded Superholidays, see also CL 40 excepted provided vessel can deliver at this rate. If longer detained, Charterersconsignee to pay vessel demurrage at the rate of See Cl 68 … per running day (or pro rata for part thereof). If sooner dispatched, vessel to pay Charterer or his agentsSee Cl 68 … per day (or pro rata for part thereof) dispatch money for all working time saved. Time to commence twenty-four (24) hours, Sundays and holiday excepted, after vessel is ready to unload and written notice given, whether in berth or not, even if vessel is already on demurrage, and the time allowable for discharging to be calculated on the basis of bill of lading quantity. In Case of strikes, lockouts, civil commotions or any other causes included but not limited to breakdown of shore equipment or accidents beyond the control of the Charterersconsignee which prevent or delay the discharging, such time is not to count unless the vessel is already on demurrage.

Cl. 40 At port of discharge, time to commence twelve (12) hours after the vessel’s arrival at berth, vessel is ready to unload and Notice of Readiness received and accepted, unless sooner commenced in which case time actually used to count. If the berth is not available when vessel tenders Notice of Readiness, but provided vessel/Owners not at fault in relation thereto, then laytime shall commence twelve (12) hours after first permissible tide, Notice of Readiness received and accepted, whether in berth or not, whether in free pratique or not, whether in customs clearance or not, unless no customs clearance or no free pratique due to vessel’s fault, unless sooner commenced in which case only time actually used to count. Notices to be tendered in writing Telex, Cable, Fax or Radio form from usual waiting place, any time day or night Sundays and Holidays included excepting Superholidays as below. ….

Co-op Phoenix tendered NOR at 12:30 on 14 June 2008. At that time, there were two vessels ahead of her in the line-up waiting to discharge coal, Double Progress and Iron Manolis, which had arrived on 14 June. These vessels respectively berthed on 19 June and 26 June and completed discharge on 22 and 29 June 2008. Co-op Phoenix commenced discharge at 14:45 on 30 June and completed discharge by 18:20 on 2 July 2008.

The Alpha Glory tendered NOR at 13:30 on 15 June, at which time the above-named 3 vessels were ahead of her in the line-up. Discharge of the Alpha Glory commenced at 17:33 on 3 July and was completed by 09:00 on 7 July 2008.

The C Young tendered NOR at 20:30 on 7 July. There were 3 vessels ahead of her in the line: the Red Seto (NOR on 28 June, discharge completed on 12 July); the Island Globe (NOR on 28 June, discharge completed on 13 July); and the Bellatrix (NOR on 6 July, discharge complete on 22 July).

The Royal Breeze tendered NOR at 16:00 on 16 July, at which time the Island Globe, the Bellatrix and the C Young were ahead of her in the line. Discharge of the Royal Breeze commenced on 10:00 on 26 July and was completed by 29 July. This and the following three paragraphs are in accordance with the facts stated in the Award. (Paragraphs 3-6 are in accordance with the facts stated in the Award).

The Charterers contended that the discharge of the four vessels was delayed by reason of the strike, official and unofficial, and this period was excluded from the computation of laytime in virtue of clause 9 of the COA, particularly the last sentence thereof.

The Owners contended that the combined effect of clauses 9 and 40 was that Charterers took the risk of delay caused by congestion at the port, so that it was only delay suffered once the vessel had berthed by reason of a strike then in progress that was excluded by clause 9. Since the strike was over when each of the vessels eventually berthed, no period stood to be deducted from the laytime and demurrage calculated accordingly was due.

The parties agreed that two preliminary issues should be decided by the tribunal:

(i)

Whether clause 9 of the COA applies in the case of a vessel which is delayed by the after effects of a strike which has ended; and

(ii)

Whether clause 9 of the COA applies in the case of a vessel which has arrived after the strike has ended.

Question (i) was relevant to the Co-op Phoenix and the Alpha Glory, whilst question (ii) was relevant to the C Young and the Royal Breeze.

The tribunal answered these questions “No”. They concluded that clause 9 was ambiguous and should be construed contra proferentem. They further held that clause 9 was materially the same as the clause construed in Central Argentine Railway v Marwood [1915] AC 981 and that the House of Lords there held that the clause did not apply to a vessel prevented from berthing because the berths are occupied by other vessels, even where the reason for this congestion is a strike.

The tribunal also held that pursuant to the ejusdem generis rule, the words “other causes” in the last sentence of clause 9 (“[i]n Case of strikes, lockouts, civil commotions or any other causes included but not limited to breakdown of shore equipment or accidents beyond the control of the Charterers ….”) did not include congestion caused by strikes.

At the hearing of the appeal Ms Healy QC for the Owners formulated another preliminary question which it was agreed the court should answer since this would decide construction issues that were common to those raised by questions (i) and (ii) answered by the tribunal. This reformulated question is:

Does the strike exception in clause 9 apply to a vessel which is unable to berth due to berth congestion caused by a strike?

Ms Healy submitted that the effect of the WIBON provision within the bespoke clause 40:

If the berth is not available when vessel tenders Notice of Readiness, but provided vessel/Owners not at fault in relation thereto, then laytime shall commence twelve (12) hours after first permissible tide, Notice of Readiness received and accepted, whether in berth or not, whether in free pratique or not, whether in customs clearance or not, unless no customs clearance or no free pratique due to vessel’s fault, unless sooner commenced in which case only time actually used to count [Emphasis supplied]

was that prima facie the risk of delay due to congestion at the discharge port was on the Charterers. She relied on the fact that clause 40 was a bespoke clause and cited the following passages in Lord Brandon’s judgement in The Kyzikos [1989] 1 Lloyd’s Rep 1;

…. The first consideration is the meaning which has been given to the phrase “whether in berth or not” in the authorities relating to it (Footnote: ¹). …..

So far as the authorities are concerned, they present two aspects, one positive and the other negative. The positive aspect of the authorities is that in them the phrase “whether in berth or not”, when used in a berth charter-party, has uniformly over a long period been interpreted as relating to the availability or unavailability of a berth. In other words the phrase has been interpreted as dealing with the problem of congestion in ports, and putting on the charterers rather than the owners the risk of delay caused by such congestion….

The negative aspect of the authorities is this. The phrase “whether in berth or not” has been used in berth charter-parties at least since 1909, the date of the the charter-party in Northfield Steamship Co v Compagnie L’Union des Gaz [1912] 1 KB 434. Yet counsel for the owners was unable to point to any reported case in which it had ever been contended that the phrase covered a case where a berth was available for a ship but she was prevented by bad weather from proceeding to it.

The inference which it seems to me to be right to draw from these two aspects of the authorities, the one positive and the other negative, is that the phrase “whether in berth or not” has over a very long period been treated as shorthand for what, if set out in long hand, would be “whether in berth (a berth being available) or not in berth (a berth not being available).” There is, in my view, nothing unusual in commercial men, knowing the purpose for which a phrase is inserted into a particular type of contract expressing their common intention in a shorthand form in this way.

Ms Healy contended that the consequence of the transfer of risk to charterers of delay due to congestion has an important impact on the construction of an exceptions clause in the nature of clause 9. In her submission, such a clause would have to be particularly widely drawn for the risk of delay caused by congestion due to a strike to be passed back to the owners. Thus, whilst an exclusion clause that specified any “obstruction” or “hindrance” whatsoever beyond the control of the parties would be sufficient to shift the congestion risk back on to the owners, the AmWelsh strike clause was too narrowly drawn for this to be achieved. It followed, submitted Ms Healy, that even in the absence of binding authority, clause 9 did not, as an ordinary matter of construction, prevent the running of lay days where the vessel was unable to berth due to congestion caused by a strike. But in fact the question had been decided, she submitted, by the House of Lords as long ago as 1915 in Central Argentine Railway Ltd. v Marwood [1915] AC 981.

Mr Kimmins QC argued that Ms Healy’s contentions based on WIBON were inconsistent with Leonis Steamship Co v Rank(No. 2) [1908] Com. Cas. 295 (CA); London and Northern Steamship Co Ltd v Central Argentine Railway Ltd [1913] 108 LT 527 (Scrutton J); and Reardon Smith Line Ltd v MAFF [1962] 1QB 42 (CA). The latter two cases concerned berth charters with WIBON provisions but it was not suggested by counsel or the court that WIBON had any effect on the construction of the exceptions clause. The former case involved a port charter under which the risk of congestion was on charterers, as it is under a berth charter containing a WIBON provision.

Relying on Reardon Smith Line Ltd v East Asiatic Co (1938) 62 Ll. L.Rep. 23 and the decision of the Court of Appeal in The Amstelmolen [1961] 2 Lloyd’s Rep 1, Mr Kimmins further submitted that WIBON had no bearing on the construction of an exception clause in the nature of AmWelsh clause 9. The only significance of WIBON was that it provided for when the laytime clock was to start ticking. Clause 9 should accordingly be construed as a self-standing provision and on the basis that the charterparty is a business document drawn up by business men to be used in a business sense, see Leonis Steamship Co v Rank(No. 2) [1908] Com. Cas. 295. So construed, the delay in discharging in respect of each of the four vessels in question was caused by the nation wide Spanish haulage strike, regardless of the fact that the vessel was delayed by the after effects of the strike, whether or not she arrived during or after the strike.

Mr Kimmins further submitted in respect of Central Argentine Railway Ltd. v Marwood that: (i) the passages in the speeches relied on by Ms Healy were obiter and did not constitute the reasoning of the majority of the court; (ii) the decision had never been understood as holding that the AmWelsh strike clause did not apply to delay due to congestion caused by a strike; and (iii) there were such difficulties in discerning what was decided as a consequence of the WIBON provision that it was not appropriate for the court to spell out the ratio decidendi in order to be bound by it.

In Leonis Steamship Co v Rank(No. 2) [1908] Com. Cas. 295 the chartered vessel was delayed in loading cargo due to congestion in the load port, Bahia Blanca, caused by an antecedent military revolt and a strike by railway workers. The charterparty was a port rather than a berth charter. Clause 23 provided that cargo was to be loaded at the rate of 200 tons per running day with time for loading to commence 12 hours after NOR. Clause 39 provided:

If the cargo cannot be loaded by reason of riots or any dispute between masters and men, occasioning a strike of …. Railway employés or other labour connected with the working, loading, or delivery of the cargo proved to be intended for the steamer, or through obstructions on the railways or in the docks or other loading places beyond the control of charterers, the time lost not to be counted as part of the lay-days….

The owners claimed demurrage. The charterers relied on clause 39. Counsel for the owners, Mr Hamilton KC (later Lord Sumner), argued that the excepted causes must directly affect the loading. The strike and the military insurrection were over before the vessel reached Bahia Blanca and consequently they did not affect the loading. He also argued that the port being full of ships that had arrived in the ordinary course was not an “obstruction”. Bigham J at first instance (Footnote: ²) held that the case was covered by the strikes exception. The intended cargo was coming by railway and the carriage of and the dealing with it were delayed by causes within clause 39. In that way the cargo was prevented from being loaded. He also held that the case was covered by the “obstruction” exception. “Obstruction” was to be given its real meaning, not the narrow meaning suggested by Mr Hamilton. The other ships at the port, or in turn to come there, were an obstruction that caused the chartered vessel to be unable to get alongside.

In the Court of Appeal, Vaughan Williams LJ upheld both of the grounds given by Bigham J for dismissing the demurrage claim – the strike exception and the obstruction exception – although he thought the first was the stronger ground. Fletcher Moulton LJ upheld the strike exception and expressed no opinion as to the second ground.

We have had a very able argument from Mr Hamilton in which he tried to make very refined distinctions as to the real scope of the several words used in the clause. In my opinion this is a business document, drawn up by business men to be used in a business sense, and there is no room for those very refined distinctions. We have to look at the question from the point of view of business men, and ask was this a strike which stopped the cargo being delivered to the steamer. I have not the slightest doubt that any business man would say that it was, and I think that the reasons given by the House of Lords in Larsen v Sylvester (Footnote: ³), although that case does not directly bear upon this, gives the approval of that tribunal as to the manner of regarding documents of this nature.

Buckley LJ (the future Lord Wrenbury) agreed, stating that he thought the judgement of Bigham J was quite right.

In London and Northern Steamship Co Ltd v Central Argentine Railway Ltd [1913] 108 LT 527 the owners of the Holgate claimed demurrage under a charterparty on the Welsh coal form which contained a clause with identical wording to the present AmWelsh clause 9. Time for unloading was to commence when notice was given that the vessel was ready to unload, whether in berth or not, and unloading was to be at the rate of 200 tons per day. If longer was taken, demurrage was payable. The vessel arrived at the discharge port, Villa Constitucion in Argentina, and NOR was given on 2 January 1912 before there was an available berth. On 6 or 7 January a strike began by employees of the charterers employed on the railway and the crane drivers of the port. A berth became available on 19 January 1912 but had the Holgate taken that berth discharge could not have begun until 27 January when some discharging was taking place notwithstanding the strike. In the event, the Holgate went in on 9 February and completed discharging on 2 March, the strike having ended on 15/16 February.

The owners claimed 42 ½ days’ demurrage. The charterers paid into court 28 ½ hours’ demurrage.

Scrutton J rejected a submission that the effect of the strike clause was that charterers were protected for the whole of the period of the strike without having to show that the strike had a causative effect on their ability to discharge. The charterers had the protection of the strike exception to the extent that a strike delayed their work and no further. He went on to hold that three days had expired by the time of the strike and that up to 16 February the Holgate ought to have had coal amounting to six days. As for the period after the end of the strike on 16 February, the effect of the strike was getting less every day and the rate of discharge was also affected by the scarcity of wagons that was not a consequence of the strike. Doing the best he could on the figures furnished by the charterers showing the amount of coal actually put on every day from 27 January to 2 March, the learned judge concluded that the owners were entitled to six days’ demurrage.

As Mr Kimmins submitted, if the WIBON provision had the effect contended for by Ms Healy, time would have counted in full during the period of the strike when the vessel was waiting to berth (ie between 6 January and 19 January -- a total of 12 days) yet neither counsel nor the judge took the WIBON point and the owners were only awarded 6 days’ demurrage. It would also seem that Scrutton J applied the strike clause to the period that elapsed after the end of the strike on 16 February.

In Reardon Smith Line Ltd v East Asiatic Co (1938) 62 Com. Cas. 23, the vessel was chartered to proceed to Dairen or Rashin as ordered by the charterers to load a cargo of soya beans. When she arrived at Dairen there was no available berth due to Government requisitioning of ships and quay space. After a day or two she berthed but was ordered away by the Government authorities and was unable to return for a period of days. Clause 7 of the charterparty provided that charterers were to be allowed one lay day for every 600 tons for loading at the load port and lay days were to start 24 hours after the steamer was dunnaged, matted, and all hatches are ready for cargo, whether in berth or not, and of the captain having given notice to that effect.

Clause 11 provided:

Any time lost at port or ports of loading and discharging through riots, detention by ice …. and time lost by inability of steamer to load and discharge as above not to count as lay-days. If the cargo cannot be loaded by reason of riots, civil commotions …. or by reason of obstructions or stoppages beyond the control of the charterers on the railways feeding the port or ports of loading or in transit or in the docks, or other loading places …. the time for loading … shall not count during the continuance of such causes …. In the case of any delay by reason of the aforementioned causes, no claim for damages or demurrage shall be made by the charterers or owners …

The owners claim for demurrage went to arbitration and was dismissed on the basis there existed within the port a state of affairs that amounted to “obstructions in the docks and other loading places”. The owners appealed by way of special case stated. Branson J was of the view that unless there was a material difference between the language of the charterparty in the instant case and that in The Leonis Steamship Co Ltd v Joseph Rank Ltd (No. 2) [1908] Com Cas 161 he was bound to put the same construction on clause 11 as was adopted by the Court of Appeal in that case. In dismissing the appeal, Branson J said:

Mr Mocatta attempts to differentiate between the two cases by reference to two other clauses in this charter-party. He relies, first of all, upon the fact that in Clause 7 there are the words “whether in berth of not,” and he says that shows that the finding of a berth is made a matter entirely for the charterer and that the charterer, in reply, undertakes the liability of it. To my mind that clause can have no effect upon the construction to be put upon the exceptions in Clause 11. All that that clause is doing is to indicate the time at which a notice of readiness shall be given in order to fix when the lay-days shall commence to run. And what it is saying is that that notice may be given, whether the ship is in berth or not, and the existence of that clause cannot, to my mind, have any effect in enabling me to put a different construction upon the exceptions clause from that which was adopted in the case of Leonis Steamship Company Ltd v Joseph Rank Ltd.

In The Amstelmolen, the vessel was chartered to sail to New Orleans to load a cargo of wheat for carriage to Madras but following her arrival at New Orleans she was unable to find a berth for 14 days because of congestion at the port. The charterparty provided that the vessel was to be loaded according to berth terms, with customary despatch, and if detained longer than five weather working days, charterers were to pay demurrage provided such detention was their fault. NOR had to be delivered at or before 4 pm and the lay days were to commence at 7 am the next business day, whether in berth or not. The charterparty incorporated the Centrocon Strike Clause (Amended) which provided:

If the cargo cannot be loaded by reason of Riots, Civil Commotions or of a Strike or Lock-out of any class of workmen, essential to the loading of the cargo or by reason of obstructions or stoppages beyond the control of the Charterers on the Railways, or in the Docks or other loading places …. the time for loading ….shall not count during the continuance of such causes …In case of any delay by reason of the before mentioned, no claim for damages or demurrage, shall be made by Charterers, Receivers of the cargo, or Owners of the steamer ….

The issue before the Court of Appeal was whether the delay in loading the vessel was caused by an “obstruction” within the Centrocon Strike Clause. Ormerod LJ held that the court was bound to give the word “obstructions” the same meaning as given to “obstruction” in Leonis v Rank (No. 2) where, as we have seen, it was held that something at the quay side that prevented the vessel from coming alongside to load was an “obstruction” for the purposes of the exceptions clause there in issue. Ormerod LJ said:

It has been put up by Counsel – though I confess at the moment I am not exactly clear as to the consequences of it – that the words in the charterparty to which reference has been made “whether in berth or not” must in this case have some particular bearing, and emphasis is laid upon the fact that those words “whether in berth or not” are not included in the printed part of the charter-party, but have been added later by typewriter.

As I understand this charter-party, the position is that it was the duty of the ship on arriving at the port in question to give notice, in accordance with the terms of the charter-party, of readiness to load. That notice having been given, then the lay days, that is to say, the time allowed in the charter-party for loading, would commence at 7 a.m. on the next business day whether the ship was in berth or not.

Mr Donaldson has, I think quite correctly, said that the effect of that is, to use his phrase, that at 7 o’clock the morning after notice was given the clock begins to tick, and it ticks whether the ship is alongside loading or whether the ship is still standing off somewhere in the port, and will continue to tick for the necessary number of lay days unless it is stopped permanently or temporarily by some event which is within the meaning of the strike clause. That appears to me to be a proper reading of those words in the charter-party. It may be that the lay days commenced – and indeed I think there is no doubt – at 7 o’clock on the morning after notice was given, but, because of the congestion in the dock which made it impossible for this ship to come alongside for nearly a fortnight, there was an obstruction within the meaning of the charter-party which stopped the clock, which was not able to tick again until there was a berth available.

Upjohn LJ agreed that the appeal should be dismissed. When dealing with the argument founded on WIBON he noted that the reason for the inclusion of the words “whether in berth or not” was the desire of the owner to throw liability for delays in coming alongside upon the charterer. He said that whilst he found attractive the argument that “obstructions” did not include commercial congestion in light of the words “whether in berth or not”, he could not accede to it.

The lay days run from the date of notification. If there is delay, and the ship cannot come alongside, any liability for such delay will prima facie fall on the charterer, but the parties have expressly agreed that this prima facie liability to demurrage shall be governed by a clause of exception in certain circumstances. They have chosen to treat as one of the exceptions to the charterer’s liability delay due to “obstructions”. The meaning of that word must be ascertained on ordinary principles. That is its ordinary morning as construed in these Courts, and its meaning cannot, I think, be affected merely because the charterer, apart from the clause of exception, would be liable for delay in berthing due to commercial congestion.

Mr. Justice Branson dealt with the same point in the case of Reardon Smith Line Ltd v East Asiatic Company Ltd (1938) 62 Ll L Rep 23 at p. 27-8; (1938) 44 Com. Cas. 10, at p. 15, and he deals with this very point quite shortly. He came to the conclusion that the fact that in the charterparty the words were inserted “whether in berth or not” could not make any difference to the ordinary meaning of the word “obstructions”, and he therefore adopted the construction which had been given in the Leonis (No. 2) case, sup. I agree with his reasoning, and I do not think I can usefully add anything thereto.

Davies LJ also held that the appeal should be dismissed, finding that the meaning of “obstructions” had been determined in the Leonis (No2). He expressly agreed with the other two members of the court as to why the argument based on the words “whether in berth or not” failed.

It is clear in my judgement that Upjohn and Davies LJ both held that the effect of WIBON was no more than to start the laytime clock ticking and that the exceptions clause was to be construed as a free-standing provision. In the words of Mr Kimmins, WIBON did not “cross–contaminate” the exceptions clause. It is less clear that Ormerod LJ went this far but on balance I conclude that he did, since: (i) he rejected the argument that some particular bearing or emphasis should be laid on the inclusion of the words “whether in berth or not”; (ii) he held that the effect of those words was that the laytime clock began to tick after NOR had been given and would continue to tick for the necessary number of lay days unless it is stopped permanently or temporarily by some event within the meaning of the exceptions clause; and (iii) he adopted the construction of “obstructions” applied by Branson J in Reardon Smith Line Ltd v East Asiatic Co who said expressly that WIBON was no reason for adopting a different construction from that adopted in Leonis v Rank (No. 2), which was not a WIBON case.

In Reardon Smith Line Ltd v MAFF [1962] 1QB 42, one of the issues was whether charterers of four vessels, the loading of which with grain was delayed by a long strike of elevator men at the ports of Vancouver and New Westminster, were protected from claims for demurrage by an exceptions clause which provided:

Lay or working days shall not count at ports of loading during any time when the supply or loading of stiffening, or the supply or bringing to rail, craft or otherwise to port of loading or alongside the vessel, or the loading of cargo or the intended cargo, or part thereof, is delayed by …. force majeure …. strikes …. or any other hindrance of whatsoever nature beyond the charterers’ control ..

The four charterparties also provided:

… Six weather working lay days …. to commence twenty-four hours after receipt …. of the captain’s written notice of readiness accompanied by the surveyor’s certificate that his vessel is …. ready to receive cargo whether in berth or not are to be allowed the charterers for loading …

The strike in Vancouver was at five out of seven elevators, which meant that some grain was available to be loaded, but at the direction of the Canadian Wheat Board this was loaded only onto liner vessels. No full cargoes of wheat were loaded on to any tramp ships (ships chartered to carry full and complete cargoes). The plaintiffs’ tramps arrived at the port after the strike began, as did 27 other such vessels.

The plaintiff owners argued that the delay was partly caused by the actions of the Canadian Wheat Board and not by the strike. The Court of Appeal rejected this argument. Sellers LJ was of the view that when a sensible and reasonable arrangement was made for loading what could be loaded, those who were shut out from receiving cargo could properly be said to be shut out by the strike. (Footnote: ⁴) And if this view was wrong, he had no doubt that the charterers could rely on the loading having been delayed by a hindrance beyond their control, especially as they could rely on a hindrance of whatsoever nature. In his opinion, Leonis v Rank (No. 2) supported the charterers’ argument (Footnote: ⁵).

Willmer LJ adopted the same approach.

Was the delay then caused by one of the excepted clauses? The judge, in approaching this question, directed himself correctly, in my judgment, when he sought to apply the principles stated by Fletcher Moulton LJ in Leonis v Rank (No. 2), and by Lord Dunedin in Leyland Shipping Co. v Norwich Union. (Footnote: ⁶) Viewing the matter from a business point of view and as a matter of common sense he reached the conclusion that the cause of the delay to these four ships was the strike. For my part, I am of the same opinion. It would, I think, be difficult to reach any other conclusion on this point without saying that Leonis v Rank (No. 2) was wrongly decided, which, so far as I know, has never been suggested. In that case the ship was delayed in reaching her loading berth because of a congestion of shipping following a strike which was all over before she reached the loading port. Yet Bigham J and the Court of Appeal had no difficulty in arriving at the conclusion that the delay was due to the strike, so that the time lost came within the exceptions clause in that case.

If I am wrong in saying that the delay in this case was due to the strike, I should hold that the charterers would in any event bring themselves within the exception of “any other hindrance of whatsoever nature beyond the charterers’ control.” It is conceded that in the context of this clause these words cannot be construed ejusdem generis with the causes previously specified. That being so, the words used, as it seems to me, provide the widest possible cover.

Donovan LJ delivered a concurring judgement.

It seems to have been argued on behalf of the owners that Central Argentine Railway Ltd. v Marwood decided that it was only time when the ship in question and no other ship was delayed by a strike that is relevant.

There was another argument based on Marwood which was that some benefit should be given to each of the plaintiff owners on the basis of some apportionment of the actual loading periods between the waiting vessels as days not lost by the strike. There was at all times sufficient grain available in the two elevators unaffected by the strike to load any of the ships if taken in isolation. The delay to the ships was accordingly not caused by the strike, but by the fact that the charterers had other commitments, in that they had chartered more ships than they were in a position to load; and the charterers having other commitments cannot be regarded as a hindrance beyond their control. This led the Court of Appeal to analyse what was decided in Marwood. I shall return to this aspect of the judgements when dealing with Ms Healy’s and Mr Kimmins’ submissions on what that case decided.

At this point I propose to deal with the parties’ competing submissions on Reardon Smith Line Ltd v East Asiatic Co (1938) 62 Ll. L.Rep. 23 and The Amstelmolen [1961] 2 Lloyd’s Rep 1. Ms Healy argued that The Amstelmolen is simply an example of the pendulum of congestion risk swinging back to owners by virtue of the width of the Centrocon Strike clause that protected charterers against “obstructions or stoppages beyond the control of the charterers on the railways, or in the docks or other loading places.” She relied on the fact that this case was decided before the decision of the House of Lords in The Kyzikos andsuggested that the idea that WIBON was concerned only with fixing the time when the laytime clock started to tick was absurd, since, in a case where the excepted cause was operating when the ship arrived, within a scintilla of time of the service of NOR, the clock would cease to tick.

In my opinion, these submissions do not adequately grapple with the reasoning in Reardon Smith Line Ltd v East Asiatic Co and The Amstelmolen that the meaning of an exceptions clause is to be determined without regard to the fact that, by virtue of WIBON, the charterer, but for the exceptions clause, would be liable for delay in berthing due to commercial congestion. For the reasons I have already given, that reasoning was part of the ratio decidendi in The Amstelmolen and I note that in Schofield, Laytime and Demurrage 5^th ed para 4.139, the view is expressed that the general effect of The Amstelmolen is that where there is delay due to congestion and an exceptions clause contains a generally phrased exception such as “obstructions or hindrances beyond the control of either party,” laytime commences either because the vessel concerned has arrived at a point within the port where it is at the immediate disposition of the charterers in the case of a port charter, or because there is a provision for bringing forward the commencement of laytime, such as a WIBON provision, and is then immediately suspended.

I would add that I do not find anything in the Court of Appeal’s reasoning in The Amstelmolen to be inconsistent with Lord Brandon’s judgement in The Kyzikos. That latter case involved the interpretation of the acronym WIBON; it did not involve the interpretation of an exceptions clause. It held that the effect of a WIBON provision in a berth charter is that even though no berth is available NOR can be given thereby starting the accumulation of laytime. Accordingly, in the absence of an appropriately worded exceptions clause, the risk of such congestion is thereby passed to the charterer, as Lord Brandon observed. Where, however, there is an exceptions clause whose effect in the circumstances that have arisen is to protect the charterer against the consequence of congestion, risk of congestion will not have passed.

The Amstelmolen is a decision that was binding on the arbitral tribunal and binds this court unless the reasoning of the Court of Appeal is inconsistent with that of House of Lords in Central Argentine Railway Ltd. v Marwood.

In Central Argentine Railway Ltd. v Marwood the plaintiff/respondent claimed for demurrage under a charterparty by which the plaintiff chartered TheGoathland to the defendants to carry coal from Barry Dock to Villa Constitucion. Clause 8 of the charterparty was for relevant purposes in identical terms to the current AmWelsh clause 9:

Time to commence when steamer is ready to unload and written notice given, whether in berth or not. In case of strikes, lock-outs, civil commotions, or any other causes or accidents beyond the control of the consignees which prevents or delays the discharging, such time is not to count, unless the steamer is already in demurrage.

The Goathland arrived on 12 January 1912 to find the port seized up by reason of the same strike that led to the demurrage claim in London and Northern Steamship Co Ltd v Central Argentine Railway Ltd. The strike had begun on 6 January. There was a partial resumption of work from 27 January and the strike ended on 15 February. The Goathland eventually berthed on 1 March and completed discharging on 23 March. The defendant/appellant charterers conceded that lay time began to count from midnight 15 February. For their part, the respondent/owners conceded that time did not count in the earlier period 12 January (arrival of vessel) to 27 January (partial resumption of work).

The dispute between the parties related solely to the period between 27 January and 15 February. During this time the Goathland, though ready to discharge, was not in berth and could not be berthed because the four berths at the port were occupied by other ships which had arrived before her and had been delayed in discharging by reason of the strike. The tons of coal discharged from other vessels between 27 January and 15 February represented 6¼ normal days’ working (Footnote: ⁷). The defendants contended that time should not count during this period of 6 ¼ days. They argued, inter alia, that so long as the strike continued time did not count and since the strike continued to 15 February, the owner was not entitled to count any days between that date and 27 January. They also appear to have submitted in the alternative that they did not have to give credit for the 6 ¼ days when discharging took place between 27 January and 15 February because, but for the strike, the four vessels that were berthed at this time would not have been alongside, but the Goathland would have been.

The action was tried without pleadings on an agreed statement of facts. It is to be noted that the owners’ concession that time did not count in the period 12 January to 27 January is inconsistent with Ms Healy’s argument in this case that by reason of WIBON, time lost through congestion due to a strike is not excluded from the computation of laytime. Perhaps because of this inconsistency, the owners do not seem to have run this argument before their Lordships.

All of their Lordships decided that under clause 8 “such time” meant time during which discharging is actually prevented or delayed by reason of an excepted cause. They rejected the charterers’ submission that these words meant the time during which any of the excepted occurrences was operating whilst there was delay in discharging.

Having dealt with the “such time” issue, Lord Parker of Waddington dismissed the appeal on the basis that the 6¼ days were not time lost by reason of the strike but time gained towards the point when the Goathland could berth.

It appears to me that the appellants, having already had all the benefit to which they were entitled under clause 8 by the exclusion in the computation of the lay days of all time lost by reason of the strike, are endeavouring, to the extent of 6 ¼ days, to secure that benefit a second time ….It must be remembered that according to the express terms of the charterparty the lay days commence to run whether the vessel is or is not berthed. It follows that the mere fact the four available berths being already occupied when the vessel arrives is no reason for excluding any period of time from the computation of the lay days. ….The period of delay due to the occupancy of the four berths would in any case be counted in reckoning the lay days, and there is nothing in the statement of facts to show that this period was increased by reason of the strike beyond the period which the respondent has already allowed between January 12 and February 15. We are not told when the four vessels respectively went into berth or what was the tonnage of their respective cargoes.

Lord Parker’s grounds for dismissing the appeal were accordingly his decision on the meaning of “such time” and his finding that there was nothing in the statement of facts to show that the period of delay due to the occupancy of the four berths was increased by reason of the strike beyond the period which the owners allowed. Those grounds did not include a finding that by reason of the WIBON provision in clause 8, delay in discharging due to congestion caused by a strike was not excluded from the computation of laytime.

Lord Sumner first decided that the effect of clause 8 was that only for such time as discharging is prevented or delayed by excepted causes is an allowance to be made out of the lay days. Further, “such time” meant the discharging time of the ship in question. Thus, strike time is only excepted when the strike delays the ship in question, not when it simply occurs or even simply delays other ships. He went on:

My Lords, I do not construe the agreed statement of facts as warranting the inference drawn at the trial, that “had it not been for the strike the four steamers would have been discharged and the berths would have been free, and therefore the Goathland would have been discharged in ordinary course.” I think that the statement is consistent with the arrival of some or all of these vessels so short a time before the Goathland’s arrival that considerable delay, or even delay as long as that now in question, might have happened to her in ordinary course.

Be this as it may, I do not think the charterers can succeed. It is to be remembered that when notice of readiness had been given, the ship being then ready to unload, the shipowner’s part is done and the risk of delay, including the risk of want of a berth, falls on the charterer, subject to his right to bring himself within the strike clause in question if he can. The words are express, “whether in berth or not.” I think the words “which prevents or delays the discharging” mean strikes which in themselves prevent or delay the discharging of the chartered ship herself, and do not extend to the case of strikes which only prevent the chartered ship from getting into a berth because they prevent some other ship from getting out of that berth. Further, the Goathland was not delayed by the fact that partial discharging went on during the seventy-five hours in question, but by the total absence of any discharging during the earlier days. The fact that more work was not done during the seventy-five hours may in a sense have delayed her; though even so not for the seventy-five hours, but in truth the work actually done during that time advanced instead of delaying her discharging, because pro tanto it brought her nearer to the point at which she could berth and begin her discharge.

In my opinion, Lord Sumner is here giving four reasons for finding against the charterers and each is part of the ratio decidendi of his judgement: (1) the meaning to be given to “such time”; (2) the agreed statement of facts allowed for the possibility that the Goathland would have been held up by the earlier arrival of the four ships even if there had not been a strike; (3) by reason of the WIBON provision, the words “strikes ….which prevents or delays the discharging” mean strikes which in themselves prevent or delay the discharging of the chartered ship herself, and do not extend to the case of strikes which only prevent the chartered ship from getting into a berth because of congestion caused by the strike; and (4) the 6 ¼ days said by the appellants not to count were, on the facts, days that hastened the time when the Goathland would discharged, unlike the situation that obtained in the earlier period of 12 January – 27 January when there was a total absence of any discharging and it was conceded that such time did not count.

The question is whether, as Ms Healy submits, Lord Parmoor’s and Lord Wrenbury’s grounds for dismissing the appeal included Lord Sumner’s ground 3.

Lord Parmoor began by holding that under clause 8 it was only time wasted by delay or prevention in discharging a vessel by reason of a strike that was excluded, and accordingly the 6 ¼ days were not excluded from the computation of lay days. He went on:

One of the effects of the strike was that the Goathland could not be berthed because the four berths at Villa Constitucion were occupied by other steamers which had arrived before the Goathland. These steamers had been delayed in discharging and remained occupying the four berths by reason of the strike. In my opinion the occupation of the four berths made no difference. There was an obligation upon the appellants to discharge, whether or not there were vacant berths, so soon as the Goathland was ready to unload and written notice had been given. My Lords, in my opinion, the appeal fails.

To mind, it is impossible to determine, or it is at least very unclear, whether Lord Parmoor was here saying: (i) whatever the reason for the four other vessels congesting the port, the delay caused by the congestion is not excluded as a matter of construction of clause 8 because of WIBON; or (ii) the charterers could not show that the congestion only happened because of the strike and therefore, because the risk of non-strike-caused congestion was on them by virtue of the WIBON, delay resulting from the congestion was not excluded.

The last judgement was that of Lord Wrenbury. After having decided the “such time” issue, he said:

My Lords, I learn from the agreed statement of facts that during the period from January 27 to February 15 the Goathland could not be berthed or discharged, because the four berths were occupied by other steamers, and that those steamers remained occupying the berths by reason of the strike. These statements may be compressed into the single statement that the Goathland failed to get a berth by reason of the strike. But under the charter time is to commence when steamer ready to unload and notice given whether in berth or not. The charterer took the risk of being unable to get a berth. The Goathland was prevented from discharging, not by the strike, but by a consequence of the strike, namely, that the berths were occupied by other vessels longer than they otherwise would have been. From January 12 to January 27 she was also unable to get a berth. She has, however, rightly or wrongly, been allowed this time because there was a strike. She is really seeking to be allowed this time over again. There is nothing to show that if there had been no strike she would have been able to get a berth at once upon arrival on January 12. Neither is there anything to show that if the four ships had arrived just before her, say, on January 11, they would have discharged and left the berths free in time to allow her to escape demurrage. There are not, I think, facts to support the charterer’s contention. I think the appeal fails and must be dismissed.

In my view, whatever Lord Wrenbury was saying in the above third to sixth sentences (inclusive), he was deciding the appeal on the basis that the facts do not support the charterers’ contention. That finding and his decision on the “such time” issue were the ratio of his judgement; what he said in the third to sixth sentences was not.

I am also of the opinion that Lord Wrenbury is not to be taken in these third to sixth sentences as expressing the same reasoning as informs Lord Sumner’s ground (3). In my judgement, the former’s distinction between a “strike” and the “consequence of a strike” is not part of Lord Sumner’s reasoning.

The ratio decidendi of a case is the common reasoning of a majority of the court for the decision arrived at, see In re Harper [1974]1 QB 614 at 621D and 622H. The common reasoning also has to be clear. “[If] it is not clear, then I do not think it is part of the tribunal’s duty to spell out with great difficulty a ratio decidendi in order to be bound by it”, per Viscount Dunedin (dissenting) in The Mostyn [1928] AC 57 at 73. It follows in my opinion that the ratio of Marwood was: (i) “such time” in clause 8 means delay in discharging actually caused by one of the excepted occurrences; and (ii) the charterers could not show that the strike caused the delay in discharging because they could not show that, but for the strike, discharge would have been achieved within the allowable laytime.

This conclusion is in line with the observations on Marwood made by the Court of Appeal in Reardon Smith Line v MAFF.

It is also significant in my opinion that Marwood is only referred to in the textbooks in respect of the “such time” point. Nowhere is it referred to as an authority for the proposition that Ms Healy says it decided, namely that the AmWelsh strike clause does not exclude delay caused by congestion due to a strike, which would be most surprising if Ms Healy’s submission were well founded, given the widespread use of the AmWelsh charterparty form for the carriage of coal. Further, if Ms Healy’s submission on Marwood is correct, one would have expected Marwood to have been cited in The Amstelmolen and Reardon Smith Line Ltd v East Asiatic Co, but it was not, and it would be surprising that Scrutton J should have decided London and Northern Steamship Co Ltd v Central Argentine Railway Ltd as he did.

I propose therefore to approach the construction of clause 9 in the manner adopted in The Amstelmolen. In my judgement, on their ordinary meaning, the words “In case of strikes ... beyond the control of the Charterers which prevent or delay the discharging” cover delay in discharging caused by congestion due to the after effects of a strike that has ended. They also cover delay in discharging caused by congestion due to a strike where the vessel arrived after the strike had ended. The strike exception in Clause 9 is in similar terms to the strike clause in Leonis Steamship Co v Rank(No. 2) (see paragraph 20 above). There, loading was delayed because the ship was delayed in berthing for more than a month by congestion resulting from a strike which had finished before the vessel arrived at the port. As we have seen, Bigham J and the Court of Appeal held that the delay was covered by the strike exception in the clause.

A similar approach was adopted by the Court of Appeal in Reardon Smith Line Ltd v MAFF where the chartered vessels arrived before the end of the strike and were delayed in loading by reason of congestion due to the strike. Court of Appeal held that the trial judge had been correct to apply the principles stated in Leonis and to have concluded as a matter of common sense that the cause of the delay had been the strike.

Further, as we have seen, Scrutton J held in London and Northern Steamship Co Ltd v Central Argentine Railway Ltd that the AmWelsh strike clause excused delay caused by the after-effects of the strike.

I also note that the editors of Cooke on Voyage Charters express the view inpara 25.6 that the approach normally adopted in interpreting the effect of strike exceptions, is to hold that delay caused by congestion in the aftermath of a strike is excused.

It follows that for the reasons I have given, I find that the arbitral tribunal erred in law in deciding on the basis of Marwood that the charterers did not have the protection of clause 9.

In the tribunal’s defence, it is only right that I should point out that Reardon Smith Line Ltd v East Asiatic Co and The Amstelmolen were not cited to them. Mr Kimmins told me that this was because he did not anticipate the way Ms Healy was to develop her WIBON argument.

It further follows that I find that the tribunal erred in law in answering the two questions they were asked to deal with “No.” The answers to those questions and Ms Healy’s freshly minted question is “Yes”.

In these circumstances it is not necessary for me to deal with Mr Kimmins’ alternative argument that the delay was covered by the words “any other causes .... beyond the control of the Charterers” in clause 9 and I do not propose to lengthen this judgement by doing so.

I accordingly order that the tribunal’s award should be set aside and I shall hear argument on what consequential orders, if any, I ought to make.