Venetico Marine SA v International General Insurance Company Ltd & Ors

The claimants, Venetico Marine SA, who owned the vessel “Irene EM”, claim $18 million from the defendant underwriters on the basis that on 30 October 2009 the vessel suffered damage caused by an insured event in the Gulf of Khambhat on a voyage from Salalah in Oman to Dahej on the North West coast of India. Their primary case is that the vessel grounded fortuitously and the damage was caused by a peril of the seas. They have a secondary case that the loss was caused by negligence on the part of the master, officers or crew in that they did not observe that the vessel was dragging her anchor. (At the start of the trial the claimants had a further case, that the damage was caused by a latent defect in the vessel’s machinery or hull in that her anchor failed, but that was abandoned during the trial.)

The claimants contend that the “Irene EM” was an actual total loss (“ATL”) or a constructive total loss (“CTL”). They recognise that they will have to give credit against any recovery for the proceeds of selling the vessel as scrap (which I understand amounted to something over $3 million), less expenses that they incurred in keeping the vessel at anchor pending her disposal, but the parties have agreed to defer consideration of any issues about that: any differences should be capable of agreement. The claimants seek damages only for a total loss; there is no alternative claim for the cost of repairs or other damages.

The claimants sue under policies of Hull and Machinery Insurance (“H&M policies”) covering the “Irene EM” (and other vessels), a policy in respect of the increased value of the vessel (the “IV policy”), and policies in respect of the anticipated costs of replacement of the vessel (the “ACR policies”). They are all governed by English law. The H&M policies and the IV policy were for a period from 00.01 hours on 1 August 2009 to 00.01 hours on 1 October 2010 and the ACR policies from 13.00 hours on 14 December 2008 to 13.00 hours on 14 December 2009. The H&M policies comprised five policies subscribed by the first eighteen defendants, and under them the hull and machinery of the vessel and everything connected therewith were insured for an agreed value of $12 million. The 2^nd, 5^th to 10^th and 19^th defendants subscribed to the IV policy, which provided insurance for an increased value of $3 million. The ACR policies were two policies subscribed by the 19^th and 20^th defendants, the sum insured being $3 million.

The H&M policies incorporated (so far as is material) the Institute Time Clauses – Hulls 1/11/95 (the “ITCH”). The ITCH included the following provisions:

“6.

PERILS

6.1

This insurance covers loss of or damage to the subject-matter insured caused by …

6.1.1

perils of the seas rivers lakes or other navigable waters …

6.2

This insurance covers loss of or damage to the subject-matter insured caused by …

6.2.2

negligence of Master Officers Crew or Pilots …

provided that such loss or damage has not resulted from want of due diligence by the Assured, Owners, Managers or Superintendents or any of their onshore management …”.

“19

. CONSTRUCTIVE TOTAL LOSS

19.1

In ascertaining whether the Vessel is a constructive total loss, the insured value shall be taken as the repaired value and nothing in respect of the damaged or break-up value of the Vessel or wreck shall be taken into account.

19.2

No claim for constructive total loss based on the cost of recovery and/or repair of the Vessel shall be recoverable hereunder unless such cost would exceed the insured value…”.

The IV policy and the ACR policies incorporated the Institute Time Clauses – Hulls Disbursement Increased Value (CL290) 1/11/95 (the “ITCHDIV”). The ITCHDIV included the same “perils” provision as the ITCH, and a similar Constructive Total Loss clause, except that the provision corresponding to the second sub-clause (clause 19.2, set out above) was, “No claim for constructive total loss based upon the cost of recovery and/or repair of the vessel shall be recoverable hereunder unless such cost would exceed the insured value of the insurances on hull and machinery …”. Where I refer to a provision of ITCH in this judgment, I include the corresponding provision of ITCHDIV.

The ITCH and the ITCHDIV both required the claimants to ensure throughout the period of the insurance that the vessel was classed with a classification society and that her class was maintained. They also provided (by clause 4.3) that “Any incident condition or damage in respect of which the Vessel’s Classification Society might make recommendations as to repairs or other action to be taken by the Assured Owners or managers must be promptly reported to the Classification Society”.

The M/V “Irene EM” was a single-skin geared bulk carrier built in Brazil in 1980. She was classed mainly (and so far as is material) with Bureau Veritas (“BV”). Her flag was of St Vincent and the Grenadines. The claimants, a Liberian company, were her owners, and she was managed by Chian Spirit Maritime Enterprises Inc. (“CSME”) of Greece, who at the relevant time managed nine bulk carriers, ranging from some 38,000 tonnes deadweight (“dwt”) to some 76,000 tonnes dwt. The “Irene EM” was about 38,000 tonnes dwt on a summer draft of 10.935 metres (her class deadweight apparently being 35,025 tons, or 35,587 tonnes). Her length overall was 193.84 metres, her beam at mid-ships was 27.6 metres and her depth was 14.8 metres.

The vessel had seven holds and hatches, numbered 1 to 7 from forward to aft, and accommodation was aft of the holds. The holds were separated by corrugated bulkheads, mounted on stools. There were double-bottomed compartments beneath the cargo holds, both port and starboard, that extended upwards to form lower hopper tanks with sloped plating in way of the holds. Most of them were used for storing water ballast and bunkers, but those under holds 5 and 6 were used for fuel oil. She had topside tanks for ballast water at the top of her holds, immediately under the deck, on both starboard and port sides. She was strengthened for heavy cargo, and she could carry ballast for heavy ballast condition in her no 5 hold. She was generally built of ordinary shipbuilding steel (including by way of the double bottom tanks), but her deck and associated structures were of higher tensile steel.

The “Irene EM” had a single 6-cylinder Sulzer engine, which had a maximum rating of 12,000hp (8,826kW) at a maximum continuous rating of 122 revolutions per minute (“rpm”). Her normal service rating was 112 rpm: this is apparent from a Vessel Condition Report issued at Aqaba and dated 2 to 7 April 2009. The engine was directly coupled to a single sized-pitch propeller. It used marine diesel oil (“MDO”) while manoeuvring and intermediate fuel oil (“IFO”) at full sea speed.

Electrical power was supplied by three generators, the starboard engine being designated generator no 1, the centre engine being no 2 and the port engine being no 3. They were designed to run on MDO. By 2009 they were nearly 30 years old.

Steam for heating purposes was generated by an auxiliary oil-fired boiler designed to operate on MDO and an exhaust gas boiler using heat recovered from the main engine gases.

After the casualty, on about 20 November 2009, the underwriters of the H&M policies retained GL Noble Denton (“Noble Denton”) to inspect and report on the casualty. During the trial the defendants disclosed files of Noble Denton. The late disclosure disrupted the trial to some extent, and because it was late it caused some inconvenience to and demands on the claimants and their representatives, but I do not consider that it resulted in any prejudice or unfairness.

However, another question arose from the disclosure. There is an issue between the parties about whether it would have been possible for the damaged vessel to have been towed to Mumbai. The documents from Noble Denton disclosed during the trial included exchanges within Noble Denton about bribing public officials in Mumbai. In particular (by way of sufficient examples for present purposes):

It seemed to me that in view of the circumstances of disclosure and these exchanges I might make criticisms of Noble Denton in my judgment, and that fairness demanded that they should have an opportunity to make representations before I did so. Before final submissions I indicated possible areas of concern in an email dated 3 May 2013 from my clerk to Ross & Co, Noble Denton’s solicitors, as follows:

“1.

Indications in documents before the court that those acting for [Noble Denton], including Mr Murray and Captain Gregory, might have contemplated that people working for the Mumbai authorities should be bribed.

2.

The credibility and reliability of the answers of Mr Murray and Captain Gregory about the documents.

3.

The fact that the witnesses [Mr Murray and Captain Gregory] in their statements, although referring to the possibility of repairs at Mumbai, did not allude to any possible payments of this kind.

4.

The fact that the relevant documents were disclosed late, only in the course of the hearing (and the possible suggestion that they were withheld deliberately).”

Accordingly Noble Denton instructed Mr. Michael Bools QC, and he presented written and oral submissions on their behalf. With regard to the late disclosure of their documents, it was explained that, apparently partly because it was thought that persons at Noble Denton might be regarded as expert witnesses rather than giving evidence of fact, Noble Denton were not asked to provide the whole of their files, it being thought wrongly that papers in them would be privileged. I accept that that is why disclosure was late, and that, whatever the precise circumstances of the error, Noble Denton did not deliberately withhold documents that they knew or thought should be disclosed. I observe in passing that the problem that arose reflects a common misconception that documents privileged from production need not be even disclosed: they generally should be.

Although both Captain Gregory and Mr. Murray discussed in their statements whether the vessel might be towed to Mumbai, they did not mention that their exchanges referred to the possibility that a bribe might be paid to port authorities. Mr Bools acknowledged that “it would have been preferable for both witnesses to have referred to the various emails in which there were discussions of possible payments or benefits being given to officials in Mumbai”. I would put it more strongly: by omitting any reference to this, their evidence was not candid and did not tell the whole truth. However, this is a criticism of the witnesses and not of Noble Denton.

The most important aspect of this as far as Noble Denton are concerned is that the emails themselves show that their employees or representatives contemplated being party to arrangements that involved paying bribes to public officials. Given the number of people within Noble Denton to whom emails about this were sent and that the communications about this were, I infer, openly filed in Noble Denton’s records, apparently it was not thought that this would or should be a cause of concern within the organisation. It is true that in the event no bribes were paid, that presumably any bribes would have been paid by the owners or underwriters rather than by or through Noble Denton, and that probably the proposed bribery was not initially suggested by Noble Denton’s representatives. The fact remains that those acting for Noble Denton discussed bribing officials and appear not to have regarded it as improper.

This is regrettable, particularly perhaps within an organisation of Noble Denton’s standing. However, I was assured and accept that Noble Denton’s senior management knew nothing of this at the time. I was also told that Noble Denton have “anti-corruption” policies and procedures, but clearly the documents disclosed (to put it mildly) raise questions about whether they are adequate and effective. I trust that they will be reviewed.

The claimants called five witnesses of fact to give oral evidence:

The claimants also put in evidence two statements of witnesses who were not called to give oral evidence. They were:

A notice to adduce Captain Medina’s evidence under the Civil Evidence Act, 1995 was given on 18 October 2012, but the defendants invited me to draw inferences adverse to the claimants because he did not attend to be cross-examined. In a statement dated 19 February 2013 Captain Bourdis said that enquiries made of the Owners’ manning agents, Bright Maritime Corporation of the Philippines (“BMC”), had “revealed that [Captain Medina] is now working for another manning agent, is currently at sea and will be performing his current contract for the entire duration of the trial”. I regard this evidence as unsatisfactorily vague. Further, it was served on the defendants only after Captain Bourdis had been cross-examined on 14 February 2013. The correspondence with BMC exhibited to his statement did not support what Captain Bourdis said in it: BMC simply said in a letter dated 28 January 2013 that they could “advise that Captain Medina is definitely at sea”.

In Wisniewski v Central Manchester Health Authority, [1998] Lloyd’s LR Medical 223, Brooke LJ identified these principles about drawing inferences when a material witness does not give evidence:

“(1)

In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action.

(2)

If a court is willing to draw such inferences they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness.

(3)

There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue.

(4)

If the reason for the witness’s absence or silence satisfies the court then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.”

Similar principles apply, I think, if a witness whose statement is served is not called to give oral evidence and be cross-examined, and the statement is adduced as hearsay evidence. However, Mr Christopher Smith QC, who represented the defendants, did not submit that the claimants decided not to call Captain Medina because they did not want him to be cross-examined. His submission was that Captain Medina “clearly does not want to speak to [the claimants]”, and that I should infer that he did not attend that trial because “he did not wish to be cross-examined upon his evidence”, (emphasis added), in particular about allegations of negligence on his part and on the part of the crew. The defendants’ contention, therefore, was that he did not give oral evidence because he, Captain Medina, was unwilling to do so, rather than because the claimants decided not to expose him to cross-examination. Further, as Mark Templeman QC, who represented the claimants, submitted, there is no evidence that Captain Medina was unwilling to attend the trial for any other reason than that he preferred to earn his living by serving on another vessel. Of course, I should be the more cautious about accepting the evidence in his witness statement simply because he was not cross-examined, but I decline to draw any other inference adverse to the claimants. Moreover, as I have said, in substance his account was originally made on 5 January 2010, and (as Mr Templeman submitted and I infer) before the defendants challenged the claimants’ account of when and in what circumstances the grounding occurred. It cannot have been tailored to refute the defendants’ allegations.

I make these observations about the witnesses of fact who gave oral evidence, although I have sought to test the evidence by reference to documents and the inherent probabilities of the case rather than to assess the impression that they gave when they gave evidence.

Mr Smith submitted that Mr Moschos’ evidence should be treated with particular caution “given his penchant for exaggerating the extent and cost of any damage found on the vessel”. I reject that submission. I accept that, like Captain Bourdis, he was sometimes argumentative and that at times he used rather extravagant language. He also had difficulty in focusing on what he was asked in cross-examination. But I do not accept that this was because he was seeking to mislead and the criticisms do not reflect upon the care of his inspections of the damage. Mr Smith identified three particular matters which were said to reflect badly on Mr Moschos’ credibility:

The defendants called six witnesses of fact who gave oral evidence and were cross-examined:

The defendants also relied upon evidence of what the Chief Mate, Mr Reynaldo Caguiat, said when he was interviewed by Captain Ogg on 9 January 2010 about heaving the starboard anchor on 30 October 2009. Although Captain Ogg’s own account of the interview was not in evidence, the defendants adduced the relevant part of the notes taken by Mr James Cashman of Holman Fenwick Willan, the claimants’ solicitors, who was present. The claimants did not object to them doing so.

Captain Ogg’s and Mr Carney’s original witness statement described Captain Ogg’s interviews with officers of the vessel, and they commented upon the officers’ demeanour when he interviewed them. However, before he gave his evidence it was agreed that those passages of the statements should not be adduced. Captain Ogg also exhibited to his statement draft statements of Captain Medina, Mr Noquial and Mr Caguiat, but neither party put those draft statements in evidence. Accordingly, the evidence of Captain Ogg was effectively confined to his observations of the vessel when he visited it, and, unsurprisingly since he had not been instructed to inspect the vessel, his evidence was of little importance.

The other five defence witnesses whom I have mentioned and who gave oral evidence were all called, as I have said, as witnesses of fact, but some of their statements expressed opinions that, to my mind, could properly have been adduced only as expert evidence. They should not have done so. Permission for the witnesses to give expert evidence was not sought or granted, and the witnesses did not make the declaration required of those who give expert evidence. Nor do I consider that generally they showed the detachment properly to be expected of expert witnesses, although I would except Dr Dingwall from this observation. By way of illustration Mr Boyd’s second witness statement, dated 25 January 2013 expressed his opinions about what damage to the machinery was attributable to the grounding; about what temporary repairs were needed before the vessel might be moved; and about what is “standard practice” for deciding on a method of repairing a vessel following a grounding. He took it upon himself to answer matters covered by the claimants’ expert reports. Similar criticism might be made of much of Captain Gregory’s second witness statement and Mr Murray’s second witness statement. I would in any case have treated with some caution Mr Boyd’s evidence on matters where he expressed expert views: for example, he commented on a price quoted by COSCO Shipyard Group Co Ltd (“COSCO”), a Chinese shipyard, “This, in my experience, is exceptionally high for a Chinese yard …”; but when he was cross-examined he admitted that he had no experience of Chinese yards. He described that part of his evidence was “a mistake”, but he was presenting himself as having expertise that he did not have.

I recognise that in cases such as this, where the condition of the vessel was inspected by surveyors, engineers and others with professional skills and experience, the line between evidence of fact and expert evidence can be indistinct. It might be that a similar criticism could be made of some of the evidence of Mr Moschos and Mr Drikos, although the claimants’ witnesses came closer to observing the proper limits of factual evidence than those of the defendants. I also recognise that Mr Boyd and others might well have been qualified to give expert evidence on some matters had the defendants decided to call them in accordance with the procedural directions instead of Mr Jeremy Colman or Mr Raymond Luukas (whom they properly called as their expert witnesses), or if they had successfully applied to call additional expert evidence. However, they did not do so, and I made it clear during the trial that I should have regard only to their factual evidence and encouraged counsel to cross-examine accordingly.

I make it clear that I do not criticise the evidence of fact that Mr Boyd gave about what he had seen when he visited the vessel. Here his evidence appeared to me careful and generally reliable. However, as I have indicated, even had it been properly adduced, I would consider the expert views that he expressed less persuasive and would regard them circumspectly.

Dr Dingwall was undoubtedly an honest witness, but his evidence was, I conclude, less than reliable for two main reasons:

I was not impressed by Mr. Carney and Mr. Murray as witnesses. Mr Carney had confident views about the different aspects of the claim, and expressed them forcefully. However, as a witness of fact, his relevant evidence was about the damage to the vessel that he observed when he visited her at Bhavnagar and at Alang. I consider his evidence about this less than satisfactory for three main reasons. First, his inspections were not detailed and careful: he was unclear about what he had observed on his different inspection visits to Alang; and he was vague about the extent and the location of damage that he described. Secondly, he readily drew upon his experience of dealing with other vessels in other situations: I conclude that this coloured his approach to this case in that he did not distinguish carefully and reliably between damage that he actually had observed and what damage he would have expected if the vessel had been grounded. Thirdly, he expressed firm opinions without proper consideration: for example, he dismissed a detailed report of Mr Moschos as “gross exaggeration” although he acknowledged that he had read it “very quickly”, and, in my judgment, it became obvious that he had hardly even skimmed through it. He sought to explain or excuse this on the basis that he “saw these things professionally on an almost daily basis”, but that does not justify his ready and immoderate criticism. He similarly criticised the expert views of Dr Jones: for example, he apparently dismissed evidence about the set-up of the no 5 tank top plating in the mistaken belief that Dr Jones had not seen this for himself. I generally prefer the more careful and detailed observations of Mr. Moschos and Dr Jones to Mr Carney’s evidence.

I am driven to conclude that Mr Murray was a partisan witness and that sometimes his evidence was untruthful. I give two examples. Firstly, he was asked about an e-mail that he sent to Captain Gregory dated 27 September 2010 in which he referred to “[t]he supervisor whose palms we had greased”, and he claimed that he was referring only to taking the supervisor out for lunch. I think that that beggars belief. Secondly, for reasons that I explain at para 208 below, I consider that in cross-examination he dishonestly tried to explain away parts of his report of 10 December 2009 where he gave a description of damage which, on its face, supported the claimants’ contentions. In my judgment, when he gave evidence he deliberately minimised the damage that he saw and his descriptions of it are not reliable.

I find it more difficult to assess Captain Gregory’s evidence. Although he did not acknowledge it in cross-examination, it seems to me that he conducted his investigations on the basis that he should find arguments that the defendants (or at least the underwriters of the H&M policies for whom Noble Denton acted) might deploy. For example, in an email to Mr. Murray dated 20 December 2010 he contemplated that, if damage could be attributed to the vessel being winched up the beach, that “could get us out of a bit of trouble in number 5”. Captain Gregory was not looking for a detailed assessment of how damage was caused. Perhaps more significantly, it appears from his exchanges with Mr Murray that their approach to assessing the cost of repairs was similar: see para 277. Despite the fact that he contemplated with apparent equanimity that public officials might be bribed and failed to refer to this in his statement, I accept that Captain Gregory sought to be honest when he gave evidence, but he had been partisan around the time that he was inspecting the vessel and reporting on it, and this coloured his observations about the damage.

All the expert witnesses were well qualified to give the opinions that they expressed. The claimants had four expert witnesses:

The defendants called to give oral expert evidence:

The defendants also served a report of Mr Isik, a naval architect and chartered engineer, who has had over 20 years’ experience with BV and now works for Brookes Bell. It became increasingly clear when Mr Rule was cross-examined that expert evidence about the vessel’s classification status was not useful and probably not admissible, and the parties agreed to curtail Mr Rule’s cross-examination and that Mr Isik should not give oral evidence. The only statement from Mr Isik’s report on which the defendants wished to rely was not contentious: that “BV Rules do not specify conditions for a tow. The conditions for towing a damaged and classed vessel would be mentioned in BV internal quality procedures. Such procedures are normally confidential and only available to BV employees”. (Since the proposition is uncontroversial, I need not consider whether it is evidence of fact or a matter for an expert witness.) It was also agreed that the joint memorandum of Mr Rule and Mr Isik should be in evidence, together with particular paragraphs of Mr Isik’s report to which it refers.

Like witnesses of fact, the expert witnesses too had some difficulty at times in distinguishing between questions of expertise and factual matters, although generally Dr Jones and Mr Colman sought to observe the limits of their role. I am sure that they were all seeking to assist the court, although I am left with the impression that at times Mr Luukas allowed himself to take an inflexible view of the facts and sometimes made unrealistic criticisms of the claimants.

At the start of the trial there was an issue about whether the claimants were entitled to claim under two of the H&M policies, but it has been resolved by agreement and I need say no more about it.

The underwriters do not admit in their pleaded defence that the vessel grounded at all, but they did not dispute this at the trial. Their main contentions were:

Although the defendants now accept that the vessel grounded, they do not accept the claimants’ account of the circumstances in which she did so. The account given by Captain Medina is that on the morning of 30 October 2009 between 09.30 and 09.45 he was called by Mr Gomez, who was on watch, and told that the anchor was dragging; and Mr Gomez’s evidence was that he was sure that the vessel stopped moving between 09.45 and 10.00. The defendants dispute that account, which for convenience I shall label the “10.00 contention”: they plead that (assuming the vessel grounded) “she did so at about 11.50 hrs on 30 October 2009”, and they do not admit whether she dragged her anchor or “drifted on a tidal current having previously heaved up her anchor for shifting”.

I do not seek here to identify all the differences between the parties, but I should explain further some of the main areas of dispute. With regard to their contention that the damage was caused by an insured peril, the claimants’ primary case, as I have indicated, is that the grounding was a peril of the seas and was a proximate cause of the damage to the vessel: they submit that this is so regardless of how the grounding came about and providing only that it was fortuitous. Their alternative case is that the grounding, and so the damage, was caused by “the failure of the Master, officers or crew to observe that the vessel was dragging her anchor”, and so by their negligence. In answer to the alternative case, the defendants contend that the damage resulted from want of due diligence on the part of the claimants or CSME, both in allowing the “Irene EM” to sail from Salalah to Dahej and in instructions that they gave (or failed to give) while she was at Dahej awaiting a berth.

Although it is for the claimants to show that the damage was caused by an insured peril, the defendants have pleaded a positive case that the proximate cause of the grounding was “the defective state of the vessel’s engine and/or generators when she left Salalah… which meant that the vessel was incapable at that time of making more than 6 knots and/or was and remained thereafter vulnerable to the loss of electrical power by reason of the failure of her generators”; and therefore, “the vessel was by 30 October 2009 incapable of generating enough power to hold her position against the tidal current of approximately 2 to 3 knots”. One reason that the time of the grounding is significant is that the ship’s records indicate that she used or tried to use her engine after 10.00 on 30 October 2009, and so the timing is relevant to whether engine failure or deficiencies caused the grounding. The defendants made their complaint of the vessel’s deficiencies in relation to (i) the cause of the damage and (ii) the claimants’ want of due diligence: rightly they did not allege that it would in itself provide a defence that the vessel was sent to sea in an unseaworthy state because, of course, under these time policies there was no implied warranty of seaworthiness: see section 39(5) of the Marine Insurance Act, 1906 (the “1906 Act”).

As for the damage caused by the grounding, the defendants accepted that it caused buckling of transverse bulkheads between cargo holds nos 4 and 5 and between holds nos 6 and 7, and of the hopper plating, particularly the plating on the starboard side of the vessel in no 5 hold. The claimants’ case is that the grounding also (i) set the vessel up amidships so that her keel and structural members were in “an extreme hog position” and “In effect, her back was broken”; (ii) caused other damage to the hull, including extensive damage to the double bottom structure by way of the nos 5 and 6 double bottom tanks; and (iii) damaged the main engine, displacing and misaligning the crankshaft. The defendants disputed both the extent of this other damage and its cause, contending (inter alia) (i) that it is not unusual for cargo bulkers to be set up amidships as the “Irene EM” was, and that the longitudinal bending strength of her hull girder was not “severely compromised” and her “back was [not] broken” as a result of her grounding; (ii) that damage to the hull that the claimants attribute to the grounding, particularly by way of the double bottom structure, was in fact caused after she had been taken to Alang to be scrapped, and had been beached and winched up the beach; and (iii) that “The alleged condition of the engine was not caused by the grounding but pre-dated it”.

With regard to whether the vessel was a total loss (whether actual or constructive), the claimants say that as a result of the grounding the vessel could not be towed, or at least could not safely and lawfully be towed, to a place where she could be repaired, and that, even if she could have been, the costs involved in repairing her would have been more than $12 million. They pleaded that “the minimum total cost of repairs to the hull of the vessel … was $25,176,680 without allowance for any contingency and without allowance for the cost of any main engine/crankshaft repairs”, and that “The minimum cost of repairs to the hull and machinery of the vessel … [was] US$28,845,000 without allowance for any contingency”. The defendants, on the other hand, pleaded that she “could have been repaired for less than [$12 million]. For example, she could have been towed to and repaired at the Arab Ship Building and Repair Yard (“ASRY”), Bahrain, for about USD 4,391,250.” At trial they also contended that permanent repairs might have been done at Dubai Dry Dock (alternatively to ASRY), and that she could have been towed to “a suitable location (probably Mumbai)” for underwater inspection and, unless permanent repairs could have been done there, after temporary repairs she could have been towed elsewhere.

In the first paragraph of their opening submissions, the defendants observed that the claimants had no employment fixed for the vessel after her cargo had been discharged at Dahej, and that, although she was insured for $18 millions, her market value was, they said, only $4.25 millions. If they intended to suggest that the claim was fraudulent or exaggerated or to suggest that the claim should be regarded with suspicion because the vessel was over-insured, the point was not pursued, and it is not relevant to the issues that I have to decide. However, Mr Smith explained that the only point of the observation was that this might explain why the parties did not co-operate in exploring how the vessel might be repaired, but even here the evidence was not developed to enable me to make findings about this or to rely upon it in reaching my conclusions.

The defendants understandably complained about the paucity of documentation that the claimants have produced in support of the claim and about the standard of log keeping and other record keeping both on the vessel and by CSME, but they did not allege that the claimants had deliberately suppressed documents in order to advance their claim, or that they had not made proper disclosure of documents.

At the start of the trial the defendants sought permission to amend their pleadings to introduce a further argument, which I shall label the “clause 4.3 defence”: that before the vessel left Salalah the claimants (or more precisely CSME: in this judgment I shall not generally distinguish between CSME and the claimants because it was not suggested that the distinction is relevant to anything that I have to decide) gave BV information about the state of the vessel’s generators in a letter dated 17 September 2009 (to which I shall refer as the “BV letter”). The BV letter, it is said, was misleading, and the defendants contended that, had proper information been provided to BV, then BV would not have permitted the vessel to leave Salalah in the condition that she did: if they had permitted the voyage at all, they would have made recommendations about her generators that would have prevented the grounding. Accordingly, the defendants sought permission to plead that the damage was caused by the claimants’ breach of the ITCH and the ITCHDIV, and not an insured peril, or alternatively that the claim fails for circuity of action (because the defendants would be entitled to recover damages in the amount of any liability under the policies). They cited Arnould’s Law of Marine Insurance and Average (18^th Ed, 2013), para 19.34, which states that, while clause 4.3 is not a warranty, breach of it will afford a complete defence to a claim for any resulting loss if the underwriters show that compliance with the clause would have resulted in recommendations that would have averted it.

I did not determine the application for permission for this amendment to the defence when it was made, but directed that the parties should conduct the trial on the basis that the amendment had been made and that I would decide in this judgment whether to permit it. I deferred my decision because it was unclear at the start of the trial whether such a late amendment would unfairly prejudice the claimants in that they could not adduce relevant evidence to meet it. I made it clear that I would take into account whether the claimants had sought and failed during the trial to obtain evidence, in particular about how BV would have responded if the claimants had given them the information about which the defendants complain. In the event the claimants abandoned their opposition to the amendment in their closing submissions, while maintaining that the clause 4.3 defence cannot succeed. I therefore granted permission for the amendment, and I treat the defence as so amended without further procedural formalities.

Another issue about pleading arose near the end of the trial. It concerned whether the vessel was an ATL and the claimants’ argument in that context that it would not have been lawful for her to be towed to Mumbai for inspection and temporary repairs without permission from the Indian Register of Shipping (“IRS”), that the IRS would not have given permission unless the vessel had been inspected and certified for the voyage by her classification society and that BV refused to provide the necessary certification without her undergoing repairs which could not have been carried out at Bhavnagar. Mr. Smith pointed out in his written closing submissions that this allegation was not pleaded and was made only late in the proceedings. In response Mr. Templeman applied for permission to amend the claimants’ pleading to introduce this argument. The application was opposed, and Mr. Smith advanced two main grounds: that the argument that the claimants sought to introduce would fail on the evidence presented at the trial; and that it would be unfair to permit the amendment because the defendants had not had a proper opportunity to investigate factual questions that it would introduce. The only new material that they were in a position to present was (i) the International Maritime Organisation (“IMO”) Guidelines on Places of Refuge for Ships in need of Assistance adopted on 5 December 2003, and (ii) information said to evidence that India would probably have complied with the Guidelines and that India has established a maritime assistance service, which the Guidelines require of coastal states.

Mr. Smith submitted that among factual questions that the defendants could have investigated if the allegation had been pleaded earlier are these:

I granted permission for the amendment to be made so that the argument could be considered on its merits, but I protected the defendants from prejudice by making clear that, if it turned upon whether it would have been lawful for the vessel to be towed to Mumbai, I would not allow the claim without giving the defendants an opportunity to make representations that they should be permitted to adduce more evidence or to make further submissions on the point. It has not proved necessary for them to do so.

The vessel’s last dry-docking before the grounding was between January and May 2008 in China, when she underwent class and statutory renewal surveys. Because of corrosion and wastage of the structure, steel was renewed by way of the side shell plates (above and below the water line), the main deck plates, the transverse bulkhead plates, the hatch cover plates and the hatch coamings. The ballast tanks and cargo holds were re-coated.

On 21 March 2009 the vessel’s time charterers instructed her to proceed to Jebal Ali anchorage, Dubai, for bunkering and then to load cargo at Aqaba, Jordan. She arrived at Aqaba on 1 April 2009. On the voyage there the main engine was run at between 90 and 110 rpm with the manoeuvring handle set at between 4.0 and 6.1. She achieved speeds of between 9.08 and 13.10 knots. The output of her no 1 generator varied from 215 kw to 270 kw, and that of her no 2 generator varied between 220 kw and 260 kw. They were both in use throughout the voyage. On every day the combined load was at least 435 kw, and on occasion it reached 530 kw. The defendants relied on this as evidence of the vessel’s seagoing load: see para 326.

The vessel left Aqaba on 8 April 2009 with a cargo of 38,000 mt of rock sulphate for discharge at Dahej, north of Mumbai and in Gujarat province on the northwest Indian coast. The cargo was evenly distributed between the seven cargo holds. Her voyage was to take her down the Red Sea, through the Gulf of Aden and across the Arabian Sea. Her no 3 generator was not working, and the automatic voltage regulator was found to be faulty by the Aqaba Port State Control, but the vessel was allowed to sail with two operating generators. The vessel’s noon reports show that between 8 and 13 April 2009 both the operating generators (no 1 and no 2) were run, each generating between 215 kw and 230 kw and the total output from the two generators being between 435 kw and 450 kw.

On 13 April 2009 the vessel was seized by Somali pirates in the Gulf of Aden, and she and her crew were held until about 14 September 2009. The vessel’s first annual inspection after her special survey of May 2008 was due on 10 August 2009. At CSME’s request, BV and the Maritime Administration of St Vincent and the Grenadines agreed to postpone her class and statutory surveys for two months to 10 October 2009 or, if sooner, until she arrived at Dahej.

According to a report by CWA Marine Consultants and Engineer Surveyors (“CWA”), to which I refer below as the “CWA report”, the pirates used the main engine to transport their boats and equipment; the generators and auxiliary boiler were run on fuel oil after diesel fuel ran out; and when fresh water reserves were exhausted, the (sealed) fresh water cooling systems of the main engine, the auxiliary engines and the boiler were “topped up” with sea water. There is no reason to doubt that the report is accurate and I conclude that it is, but there is no evidence about how long the diesel oil and fresh water lasted before fuel oil and sea water were used.

While the pirates held her, the vessel’s hull became heavily fouled with marine growth, and at some point the crankcase in the no 3 generator exploded. The crew did less maintenance work while they were detained than they would have done in normal circumstances. However, I accept Captain Medina’s evidence that some maintenance and cleaning work was done. I acknowledge that in a report dated 15 December 2009 Mr Moschos wrote that, while the vessel was detained, “the auxiliary machinery was working … without any maintenance as this was prohibited by pirates”; and, as I have said, later he asked repair yards to include in their quotations a sum for overhauling the generators. Mr Moschos explained in cross-examination that he did not have not specific information about this, but had so inferred because “it is common knowledge in Piraeus that … pirates do what they like with the machinery and the generators”. Captain Bourdis gave evidence that he did not tell Mr Moschos that the pirates prohibited or prevented all maintenance, and that the crew had told him that they had done “minor maintenance”. I accept Mr Moschos’ explanation, and I do not, as the defendants invited me to do, infer that Mr Moschos had been told that the generators were unreliable.

On 16 September 2009, the vessel was released on payment of a ransom. She had little fuel, but she was supplied with some diesel oil by a Dutch warship. She was ordered by CSME to proceed to Salalah, Oman, as a port of refuge and in order to change crew and to take on provisions. It was, as Captain Bourdis explained, considered the only port of refuge that was realistically available, Muscat being too far away and Mukalla in Yemen having draft restrictions that prevented the laden vessel from going there.

In the BV letter dated 17 September 2009 addressed to BV Piraeus and signed by their technical manager, Mr. Argyris Stathopoulos, CSME set out damage apparently reported by crew members “regarding the deck, accommodation area including bridge equipment as well as the engine room”. The report said that “Auxiliary Engine No 03 is completely inoperative”, and it continued:

“Nevertheless we would like to stress in this context, that the capacity of the two remaining auxiliary engines is such that in the event of any one generating set being stopped, it will still be possible for the remaining one out of both to supply the services necessary to provide normal operational conditions for propulsion and safety, in accordance with SOLAS II-1/Reg 41. The above is evidenced by the existing vessel’s calculation of Short-Circuit booklet (No 232-505-003) read in conjunction with the relevant table on balance of electrical power analysis, copies of which are being attached hereby for your consideration …”.

There was attached to the BV letter a “Load Analysis Table of Electrical Plant”. It listed equipment that called for a “total continuous load” of 283 kw, and a “total intermittent load” of 67 kw (on the basis that the total requirement of the items was 167.8 kw and applying a “diversity factor” of 40%). Thus, the total load was calculated to be 350 kw. The main diesel generator capacity was said to be 480 kw, and therefore the “generator load factor” was calculated as 73%.

Captain Bourdis explained in his evidence that this letter was sent after discussions with Mr Stathopoulas, who assured him that, although the no 3 generator was not working, this was not “really a problem” because the other generators were sound and provided sufficient power.

In a departure report of 17 September 2009 the vessel reported to CSME that the distance from where she had been held at anchor by pirates to Salalah pilot station was 587 miles, and her estimated time of arrival was given as 02.00 on 19 September 2009. (In fact, the report gave the date of arrival as 19 October 2009, but the month was clearly an error.) In a noon report on 18 September 2009 her estimated time of arrival was given as 18.00 on 19 September 2009, and her speed was given as 8.20 knots. This report, however, is inconsistent with the departure report in that the distance already voyaged was said to be 196 miles and the distance to Salalah 238 miles, a total distance of 434 miles rather than 587 miles. On 13.15 on 19 September 2009 the vessel gave notice of estimated arrival at anchorage at Salalah port of 23.00 on 19 September 2009, and that was when she in fact arrived.

Mr Smith invited me to infer from these reports that during the voyage to Salalah the main engine was not operating satisfactorily, or as well as expected. The estimated time of arrival in the report of 17 September 2009 reflected an estimated speed of over 11 knots, but on 18 September 2009 she was making slower progress, and in the event her average speed during the voyage was only 7.8 knots. I am not impressed by that point: there is no evidence about whether the speed of the vessel’s progress was affected by the current or the weather; as Captain Bourdis pointed out, the vessel was burning MDO rather than IFO in her main engine. I consider these mutually inconsistent reports too fragile a basis for any inference about the condition of the engine at that time.

According to Captain Medina’s statement, “As the previous Chief Engineer left the vessel he told us that he had isolated one of the cylinders”. Captain Medina could not remember quite what the problem was, but said that the engineers “fixed the problem” when the vessel was off Salalah. I infer that the problem was that the no 3 cylinder of the main engine was leaking because, as I shall explain, Mr Noquial and Mr Papanikolas carried out repairs to deal with such a leak.

There is no evidence that I accept of other problems with the vessel’s machinery on the voyage, and I infer that otherwise the main engine was operating satisfactorily. This was Mr Edmonds’ view, and he observed in support of it (i) that there is no evidence of other problems being reported, and (ii) that the noon report of 18 September 2008 stated that the main engine was running at 102.2 rpm and making 8.2 knots, these being, as Mr Edmonds explained, average figures over the preceding 24 hours. I recognise that there is little evidence about this: there is only one noon report in evidence, there is no evidence about the current or weather conditions and after their detention the officers and crew will inevitably have been more concerned about reaching the port of refuge than with making reports about the state of the engines. But it is, to my mind, sufficient to support Mr Edmonds’ conclusion. However, in the end this question is of no real significance to what I have to decide.

The “Irene EM” arrived at Salalah on 19 September 2009, but because the port was busy and because of the Eid holiday she could not berth immediately. On 23 September 2009 Captain Medina sent a message to the Salalah Shipping and Maritime Services that they were running out of provisions and water, asking “specially water for the engine use. We have run-out of water for the engine use, that’s why the main engine cannot run …”. On 24 September 2009, CSME were told that the vessel could be berthed “for 24 hours only”, and on 25 September 2009 she was permitted to berth on this basis.

Representatives of CSME, including Captain Bourdis and Mr Papanikolas, had arrived at Salalah the previous day. Captain Bourdis gave evidence that, when she was in Salalah, “the Vessel’s hull was straight, without any sign of hogging”. This was not challenged in cross-examination, and I accept it.

On 25 and 26 September 2009 surveyors from CWA, who had been appointed by the vessel’s war risk underwriters, surveyed the vessel, inspected the engine room and spoke with the outgoing Chief Engineer, Mr Entrampas Aparre. They said in their report that a “superintendent” (probably Captain Bourdis) and Mr Aparre reported damage as follows:

“The Main Engine unit No.3 was leaking out exhaust gasses from the cylinder head area.

The Fresh water Generator pump was damaged and out of order.

Auxiliary Engine No. 3 had a crank case explosion and was out of order after it was run on Heavy fuel oil after the Diesel oil was exhausted. Two cylinder heads from this engine were removed and used on other engines as spares.

The Boiler was also run on heavy oil and the burner system and assembly was reported to be malfunctioning.

Motors of Fresh water Generator, No. 1 L.O pump. No. 2 JCW pump and 1 Reefer cooling water pump were reported to be out of order.

The pipeline of the reefer cooling system had burst.

There were no pilferages reported from the Engine room.”

They continued:

“It was reported that the pirates used the Main Engine to transport their boats and equipment to various locations.

As the diesel oil got over the Generators and the Auxiliary Boiler were run on fuel oil. When the fresh water reserves were exhausted the fresh water cooling systems of the Main engine, Boiler water and Auxiliary engines were reportedly topped up with sea water.

The vessel feared hidden damages to the [engine room] machinery because of the use of Heavy fuel oil for the Generators and the Boiler which were originally run on diesel oil.

Damages due to contamination of fresh water cooling system by sea water were also feared”

The vessel’s new crew had arrived at Salalah on 23 September 2009. It was a crew of 23, including Captain Medina. They were all from the Philippines, and they had been selected by CSME from a list of candidates provided by BMC. Before they left the Philippines, they had attended a two days’ course to introduce them to the vessel and the Safety Management system. On 25 September 2005 Captain Bourdis and others from CSME gave them a general introduction to the vessel.

The new crew went on board the vessel at 14.15 on 26 September 2009, and the old crew disembarked at 18.00 on 26 September 2009. The new crew learned that some of the vessel’s documentation was not available. For example, Mr Gomez was told by the Third Officer whom he was relieving that the Safety Management Equipment Manual was burned by the pirates, and Noble Denton were later told that all plans of the vessel had also been burned. Mr Noquial was not provided with her planned maintenance records or information about her load requirements. (He also said in his evidence that he was given a document stating the load requirements of items of machinery by Captain Bourdis only after the grounding, but I conclude that his evidence about this was inaccurate: Captain Bourdis explained that after the grounding he discovered among the ship’s papers (in the “library”) the load requirements document, but that Mr Noquial had not previously aware of it. But nothing turns upon why Mr Noquial did not have it during the voyage. Mr Smith suggested that the very fact that Captain Bourdis found the document suggests that he was concerned about the condition of the generators, but I do not infer this. I know nothing about what prompted him to find the document: he did so when Captain Ogg came to the vessel, but there is no evidence whether Captain Ogg asked for it, or whether Captain Bourdis decided on his own to look for it, or whether he simply chanced upon it.)

The procedures for handover between crews were curtailed and less formal than they would have been in other circumstances: CSME recognised the departing crew’s obvious anxiety to return to the Philippines as quickly as possible after being held captive for so long. Mr Papanikolas was to sail as a riding engineer. He was familiar with the vessel: he had been on her from May to August 2006 and had also visited her in 2008. Captain Bourdis considered that Mr Papanikolas could give the new engine room crew advice and assistance that would compensate for them not having fuller discussions with the departing engineers.

However, the departing crew gave their replacements some introduction to the vessel: for example, although Mr Gomez did not have a normal handover from his predecessor as third officer, who, as Mr Gomez put it, “wanted to talk about his experience at the hands of the pirates”, he did have the operation of the bridge equipment explained to him. Mr Papanikolas and Mr Noquial learned from the departing chief engineer that the no 3 cylinder was leaking and he had isolated “one of the cylinders”, presumably the no 3 cylinder. They also learned that the main engine had been run on seawater. Mr Noquial was asked in cross-examination whether he was concerned that the sea water had caused damage, but he replied that he was not because “During the turnover I start changing the seawater to freshwater two times, so the freshwater remained on the cooling generators system”, meaning, as I interpret his evidence, that he had the system flushed with fresh water twice.

Mr Noquial said that he and the departing chief engineer did not sign the usual documents such as certificates of the fuel on board and records of the condition of the engines and state of the engine room. But Mr Papanikolas inspected the engine and considered it generally to be in good order. He and Mr Noquial checked each piece of machinery in order to familiarise themselves with it, and they conducted running tests on all the machinery.

Mr Papanikolas gave evidence that no 1 and no 2 generators were “working very normally”: they were not making noise or showing high temperatures or leaking. The only information that Mr Noquial was given about the no 1 and no 2 generators was that they were in good running condition, and he saw that their gauges showed normal temperatures and pressures. He explained that the various pieces of machinery were labelled to specify what power they required. He assessed that the total normal load was 200 kw (Captain Bourdis heard him tell Captain Ogg this on 7 January 2010), and he compared it with the output of the generators.

Mr Noquial said, and Mr Papanikolas confirmed, that they were not worried that the generators had been run on fuel oil because they were designed for use with fuel oil or diesel and fuel oil’s viscosity would have been reduced before use. It was suggested that this was inconsistent with evidence that Mr Noquial gave about the no 3 generator. I reject the suggestion: in one answer in cross-examination Mr Noquial acceded to the suggestion that the departing crew had said that the crankcase exploded because heavy fuel oil had been used after diesel oil ran out, but in my judgment Mr Noquial did not understand the question or appreciate quite what he was being asked to accept. He also said that he was told by the departing crew that the crankcase had exploded and that he thought that this was because the bolt had tightened and snapped after it had not been checked and properly maintained while pirates were holding the vessel. In my judgment this evidence was Mr Noquial’s real understanding about why the crankcase exploded, and it is consistent with his evidence that he did not think that the use of fuel oil had put the other generators at risk.

The hull and propeller were not cleaned of marine growth before the vessel left Salalah. In their pleading the defendants apparently criticised the claimants for allowing her to sail before cleaning, but I reject the criticism. Captain Bourdis discussed with local agents, Archipelago Middle East Shipping LLC, whether she could be cleaned and he was advised that it would be extremely difficult, especially during Ramadan. In an email dated 1 September 2011, their managing director, Mr Michael Kritikakis, said that permission for cleaning was not given by the authorities and could not be obtained “due to Ramadan holidays”. In cross-examination, it was suggested to Captain Bourdis that this reply shows that at other times permission could have been obtained and the vessel could have delayed leaving Salalah until the holidays were over, but I consider that the suggestion reads too much into the email exchange. Captain Bourdis said that other owners to whom he had spoken had agreed with him that underwater cleaning could not be done at Salalah. I am not persuaded that it was necessary or that it was realistically possible.

Before the voyage to Dahej the Second Officer prepared a passage plan, and Captain Medina and other officers endorsed it. CSME’s Safety Management Manual required that this be done: that the Master should delegate to the Navigation Officer responsibility for preparing a passage plan and should approve it, its purpose being “the safe navigation of ship and the achievement of best operational conditions”. The manual also required that consideration be given to (inter alia) “The reliability of ship’s equipment, specifically navigational equipment”.

The passage plan for the voyage to Dahej contemplated a passage speed of only 6 knots and gave an estimated time of arrival of 8 October 2009. The defendants contended that this reflects concerns about the main engine and shows that Mr Noquial and Captain Medina must have discussed its condition. Mr Noquial denied this: he said that, while the vessel was at Salalah, he discussed with the Second Officer the speed that the vessel would achieve, and made it clear that he could give no guarantees about it because of the marine growth. Mr Gomez said that he understood that the passage plan contemplated that the speed might be reduced because of bad weather around the monsoon season (although in fact speed was not reduced during the voyage on account of weather conditions). To my mind there is no proper basis to reject Mr Noquial’s or Mr Gomez’s evidence about this: there is no evidence that Mr Noquial expressed concerns about the main engine or other machinery to Captain Medina or the Second Officer.

The underwriters pleaded that, when she departed from Salalah, the vessel was not properly supplied with “spares” for her engine room. Mr Noquial’s evidence was that “all major spares for the engine were available”, but he accepted that the vessel had no further spare gaskets after she had carried out repairs off Salalah. Subject to that, there is no proper reason to reject Mr Noquial’s evidence, but in any case this complaint seems to me inconsequential.

It is also pleaded that the vessel was not supplied with the equipment required to maintain the engine room and accurately to monitor the operation and performance of the engine, and that “essential” equipment was broken or missing, including indicator card equipment, peak pressure gauges, a tachometer (to count engine revolutions), exhaust gas and fuel injection pyrometers, and flow meters to measure fuel oil consumption. Again, I cannot understand how these allegations might assist the defendants even if they were made out. In any case, I reject the contention that equipment that could properly be described as “essential” was not functioning:

On 27 September 2009 the “Irene EM” was ordered from berth at Salalah by the port authorities due to congestion. According to Mr. Noquial, it became apparent when the vessel left berth that the no 3 cylinder of the main engine was leaking between the gasket and the cylinder head. It was not serious enough for him to isolate the cylinder, and he proceeded slowly. At 12.36 on 28 September 2009 the vessel went to anchorage to carry out repairs. The problem was explained by Captain Medina to CSME in a message of 28 September 2009 in these terms: “More specific, there is exhaust gas leaking between cylinder head and liner. Also note that vessel safety [sic] from the berth to anchorage with cylinder no 3 out of use”. He estimated that the time required for repairs would be about 20 hours.

In the engine room log book the repair was recorded as follows: “Pull out [main engine] cylinder head cyl no 3. Replaced with recondition spare lower and new spare upper cover”. Mr Noquial said in his witness statement that “we had a problem with the no 3 cylinder and we changed it with another cylinder”. However, in cross-examination Mr Noquial insisted that he only changed a gasket and not the covers; the repair would have involved removing the cylinder head because of the leaking gas, but otherwise, he said, the entry in the log was wrong. I accept this evidence: the entry is probably a description of repairs done when the problem recurred after the vessel had sailed from anchorage. I suspect that Mr Noquial’s witness statement might have been drafted from the log, but I must not speculate about that.

The deck log records that at 8.04 on 29 September 2009 “tested [main engine] ahead & astern & all nav[igation] equipment & communication”, and the vessel sailed from anchorage at 09.06 on 29 September 2009, and departed Salalah at 12.00. Mr Noquial ran the main engine at about 96 rpm and achieved a speed of 8.9 knots. On 30 September 2009 a further or continuing problem with the no 3 cylinder again interrupted the voyage, and further repairs were required. At 12.23 Captain Medina conveyed to CSME a message from Mr Noquial that at 07.30 hours the vessel had stopped “due to main engine cylinder cover no 3 lower and upper broken, gas and water leaking. We pull out main engine cylinder cover”. Later at 19.11 he and Mr Noquial reported that “Engine crew proceed for repairs/replace the same with spares available on board. Due to swell and [vessel’s] rolling we cannot estimate time of completion at this time”.

It is recorded in the engine room log that at 07.30 the main engine was stopped “due to cylinder cover no 3 having leaks at the upper and lower gasket … Pull out cyl[inder] … no 3. Replaced [with] new spare upper and reconditioned spare lower”. Mr Noquial and Mr Papanikolas carried out repairs overnight. They replaced the upper and lower heads, but the repairs took quite a while because the new upper head was oversized and they had to grind the lower head to fit it. It is not entirely clear whether the cylinder itself or only the gasket was damaged. In one answer in cross-examination, Mr Noquial appeared to accept that there was a little damage to the cylinder itself, but Mr Papanikolas described this as light burn marks on the cylinder head and explained that Mr Noquial decided to change the heads out of prudence and because spares were available, but it was not really necessary to do so. Although this explanation was challenged in cross-examination, I accept it: it was entirely understandable that Mr Noquial should have erred on the side of caution after having to stop twice for repairs. The vessel had no spare gaskets on board after the repairs off Salalah: Mr Noquial’s evidence was that they could not have carried out further repairs if the problem recurred, but it did not do so. Mr Papanikolas is possibly open to criticism that his description in his first statement of the repairs at Salalah was so incomplete as to be misleading: he said that at anchor he found that a steel washer between the cylinder cover and cylinder liner was damaged and that he “put in a new washer and crown and fixed it. It was leaking again in two days so I fixed it again”. But his second statement was more detailed and is consistent with Mr Noquial’s evidence, and I am not persuaded that I should reject his oral evidence because of any deficiencies in his first statement. I conclude that there was no significant damage to the cylinder itself; and that it was leaking because of the gasket.

According to the engine log records for 29 and 30 September 2009 no generators were working during the 08.00 to 12.00 watch on 30 September 2009. Although the log provided for a record of “running hours since last general survey” (as well as the running hours for each generator in each watch) the record was not completed for 29/30 September 2009, and accordingly this does not provide information for cross-checking the recorded running hours during the 08.00 to 12.00 watch. Mr. Noquial’s evidence was that the generators were running, but this was not recorded. The engine log records of generator running hours are on any view unreliable (see para 115), and I do not consider that there is any proper reason to reject Mr. Noquial’s evidence about this.

The vessel resumed her voyage at 05.30 on 1 October 2009. According to the claimants, thereafter the voyage to Dahej was uneventful, the weather was fine and the main engine had no further mechanical problems of any significance. Mr Noquial saidthat the main engine readings and exhaust gas temperatures were normal, and he observed no vibration or “funny noises”. Mr Smith pointed out that the vessel made slow progress: even at slow (60 rpm) and half (80 rpm) ahead she would be expected to make between 6.5 and 9.2 knots, but in fact the noon reports show average daily speeds of between 5.3 and 6.0 knots. Captain Medina accepted that the average speed during the voyage was “low” and said this was because the hull was fouled by marine growth and because the vessel was running on reduced rpm. The defendants submitted that Captain Bourdis had no credible explanation about why the hull could not have been cleaned before the voyage, but, however this might be, the fouling clearly would have slowed the vessel’s progress. I do not infer from this that the machinery was deficient.

The defendants submitted that on the voyage the main engine was operated “in an unbalanced condition”, and argued, or at least suggested, that the no 3 cylinder was not in use. Certainly Mr Noquial did not consider it safe to operate the engine at more than 70 rpm: he explained that, having repaired the no 3 cylinder, he tried to increase the rpm through the critical range (between 72 and 80 rpm) to above 80 rpm, but it took a long time, about 2 minutes, to pass through it and caused vibrations. He therefore brought the rpm back down to avoid damaging the bearings. He “was not sure of the seal so [he] decided for safety reasons to keep the engine at 70 rpm”; and he told Captain Medina that he thought that the engine should not be run above 70 rpm. They together decided that Mr Noquial should respond to an order of full ahead by operating the engine at 70 rpm, and he would set the manoeuvre handle at no more than 4.2 or 4.3 in order to achieve this. (Mr Luukas appeared in his first report to attach significance to this, but he agreed in cross-examination that it is consistent with Mr Noquial’s decision to restrict the engine to 70 rpm.) On 2 October 2009 Captain Medina advised CSME’s technical and operations departments that the main engine was running at about 70 rpm “but always less than critical point”, reporting that because of marine growth the main engine was “difficult to respond and overpass the critical range”.

The claimants’ evidence is that the repairs to the no 3 cylinder proved successful. Captain Medina stated in his witness statement that they were and, more importantly since Captain Medina was not cross-examined, Mr Papanikolas said that after the repairs the cylinder was “working normally” and Mr Noquial denied that there were problems from the no 3 cylinder after the second repair and denied that it was isolated. However, Mr Luukas considered that the engine log books indicated that the unit might have been isolated, or at least its fuel delivery reduced:

There is no sufficient reason to reject the evidence of Mr Noquial and Mr Papanikolas that the cylinder was not isolated during the voyage after it was repaired. Although Mr Smith submitted that “Mr Luukas’s conclusion is that the No 3 cylinder had been isolated and was not in use”, that overstates (or at least over-simplifies) his evidence. In the end, I think, Mr Luukas could only suggest that there was little or no combustion in the cylinder. Even assuming that expert evidence was properly adduced about this, in the end it is a question of fact, and in my judgment the evidence would not have supported an inference that the no 3 cylinder was isolated even without the evidence of Mr Noquial and Mr Papanikolas to the contrary.

Mr Luukas suggested only relatively late in the proceedings that it might be significant that apparently the no 3 unit was sometimes producing little heat during the voyage. He recognised that the logs contain high readings on 5 October 2009 for the no 3 cylinder on the 8 to 12 watch, but thought that they were likely to have been errors. He also suggested that the engineers might have tried to fire the units on that watch, but that is speculation and the suggestion was not put to Mr Noquial in cross-examination. Both Mr Noquial and Mr Papanikolas gave evidence that in fact the no 3 cylinder was producing heat. Mr Noquial said that there were indicator cocks on each cylinder and he opened them to check the sound and the intensity of the flames. All the cylinders appeared to be the same, and he observed no black smoke or unusual sounds, which might have signalled a problem. Mr Noquial pointed out that some readings might have been low because thermometers were defective. Mr Papanikolas’ evidence in cross-examination was similar: that the thermometer was broken, but that he checked the position by “opening the hole” and seeing “the fire that was coming out”: “The temperature was normal and that pistons were normal”. I reject the defendants’ argument and Mr Luukas’ evidence about the no 3 unit not producing heat on the voyage to Dahej. In reaching this conclusion, I do not overlook that after the vessel arrived at Dahej the unit’s gasket was found to be damaged, but, as I understood Mr Noquial’s evidence, this was discovered during normal maintenance, and, in view of the limited information about this that I have, I can attach no significance to it.

The defendants say that the generators were unreliable, and I shall consider this below (see para 107). Here I set out the evidence about how they performed during the voyage to Dahej. Mr Noquial said that during the voyage he continued to assess the power that the different pieces of machinery required: as I have said (at para 76), they were labelled, but the power that they actually used varied according to the circumstances and the speed at which the machinery was being operated. It is clear from the noon reports that the vessel used both her no 1 and her no 2 generators routinely. Mr Noquial explained that it was his usual practice to run two generators when he was not familiar with a vessel, and also that he wanted to safeguard against a blackout: the generators on the “Irene EM” were not designed to start automatically if another failed. Thus, according to Noquial, he used both generators out of caution, but in the event there were no problems with either the first or the second generator: whenever the Master rang for the main engine to be used, he started both generators, but he said that that was “for safety reason”.

In the noon reports of 3, 4, 5, 6 and 7 October 2009, the output from the no 1 generator was said to be 190 kw, 100 kw, 90 kw, 95 kw and 90 kw. The output from the no 2 generator was not recorded, and, according to Mr Noquial, this was because its kilowatt meter was not working. The ammeter was working, and he could calculate from this the approximate output in kilowatts, but he did not consider this sufficiently accurate to include the information in the noon reports.

Mr Smith invited me to infer that the report of the no 1 generator producing 190 kw on 3 October 2009 was an error for 90 kw since this would be consistent with the output reported on 4 and 5 October 2009. I do not consider that there is a proper basis for speculating about this: I simply do not have enough information of the demands on the engines at different times. This is perhaps partly because, when Mr Noquial was cross-examined about the load on the generators during the voyage, he and the interpreter were clearly having great difficulty in understanding the questions and conveying his replies. I criticise no one for this, but I am not confident that the transcript conveys the flavour of this part of his evidence.

On 7 October 2009 the vessel entered the Gulf of Khambhat on the western side. That evening Captain Medina tested the main engine astern in accordance with CSME’s “preparation for arrival” checklist. On the morning of 8 October 2009 the vessel arrived off Dahej, anchored in the port limits at 07.48 and finished with her engines at 08.05. Her anchorage position is not recorded in the deck log book, but Mr Gomez, who was standing watch when she dropped anchor, plotted the position by taking a bearing from Birla Copper Jetty and recorded it on the vessel’s working chart and in her bridge bell book: 21.43.78 north and 072.29.14 east.

Captain Medina observed in his statement that the relevant British Admiralty Charts and the Admiralty Pilot Book warn about the strength of currents where the vessel anchored. The Pilot Book states in relation to the tidal stream at Dahej that, “the tidal stream in the anchorage has a rate of 5 kn during spring tides and up to 7 kn at the berth”. The next spring tides after 7 October 2009 were due between 18 and 22 October 2009. The Pilot Book also advises that “attention should be given to possible depth changes in the channel which runs through the road and to the shifting of banks lying on either side of the channel. Local knowledge is advisable”.

Captain Medina said that the Second Officer used Admiralty Tables to work out the times and height of tides at Dahej. Mr Gomez explained that before the vessel arrived at Dahej the Second Officer had used a computer to extrapolate the times and heights from the information about Bhavnagar, Dahej being a secondary port and Bhavnagar the standard port. Mr Gomez’s evidence was that, while they were at anchor off Dahej, he and the Second Officer observed that in fact the tides were “much earlier” than indicated on the table prepared by the Second Officer: he said that they were “about an hour” earlier. I see no good reason to doubt this evidence and I accept it: it is not at all remarkable that a theoretical calculation of this kind made during the voyage should turn out to be inaccurate. Mr Smith submitted that the evidence should be rejected (i) because the ship’s records and reports do not refer to tides or currents being other than as expected and (ii) because Mr Gomez first gave evidence about this in cross-examination and not in his witness statements. I am not persuaded by these points. Captain Medina and others were not careful in keeping the ship’s records or in making post-incident reports, and I can draw no inferences from their failure to record or comment on this. Nor is it surprising, in my judgment, that Mr Gomez’s witness statements do not mention this: they, like those of Mr Noquial and others, are not as full as witness statements often are in this court, and sometimes appear to reflect difficulties in communication with the witnesses.

While the vessel was at anchor the officers continued sea-going watches (six four-hour watches). According to Captain Medina’s statement, he warned the deck officers about the strength of the tidal stream in the Gulf of Khambhat and that they needed to be vigilant on their anchor watches; and ordered them to check the anchor position “frequently”. Mr Gomez said that they observed weather, changes of tides and tidal currents, and at the start of their watches they compared the anchor position with the position recorded in the bridge bell book and plotted it on the chart. He would check the vessel’s position by using the global positioning system (“GPS”) and take the radar range and bearing every hour or half hour.

On 15 October 2009 the Second Officer recorded the vessel’s position in the GMDSS Radio Log as being 21.41.50 north and 72.28.30 east. There was no evidence as to when and why she had shifted her position. Mr Gomez did not recall her doing so: he recalled the vessel moving between 8 October 2009 and 30 October 2009 only between 18 and 20 October 2009. (He said that he kept the 08.00 to 12.00 watch between 8 and 30 October 2009, and the anchor did not otherwise drag while he was on watch.) Despite Mr Gomez’s evidence, there is no reason not to accept as accurate the position recorded in the radio log.

On 18 October 2009 spring tides had nearly arrived and high water was at 04.49. According to Captain Medina, early in the morning of 18 October 2009 the Second Officer, who was on watch, informed him that the anchor had dragged and the vessel moved north. Captain Medina’s evidence was that he went to the bridge but “by that time the flood stream had eased and the vessel was maintaining its position”. She was now about two miles north of her original anchorage, and was at 21.46 north and 72.29 east. Later that morning at about 07.15 Mr Caguiat informed him that the anchor was again dragging, and reported that the anchor chain “was very tight and then sometimes vibrating and going slack”. He ordered Mr Noquial to have the engine ready for manoeuvres. The engine room bell book shows that the vessel began heaving anchor at 07.45, and Captain Medina gave orders for dead slow and then slow ahead.

When about three shackles were on deck, Mr Caguiat reported that he could not heave the anchor further because the electric motor in the starboard anchor windlass had burnt out. Captain Medina paid out the chain to its full length. Mr Luukas suggested that the windlass might have been overloaded because the engine was not powerful enough to bring the vessel to the anchor. I do not consider that there is any sufficient basis to infer this.

The vessel used her engine during the day between 07.48, when the tide was ebbing to the south, and 13.40, and again from 14.20 to 14.52, by which time the tide was flooding to the north. Over the next few days, there were spring tides. The anchor dragged a little, and the engine was used to minimise this in the mornings of 19 and 20 October 2009 when the current was at its strongest: between 01.51 and 04.10 on 19 October 2009 and between 02.20 and 05.15 on 20 October 2009. Although on the days of the spring tides Captain Medina sometimes rang for full ahead and half ahead, Mr. Noquial said, and I accept, that he did not run the main engine at more than 70rpm.

According to Captain Medina, at the end of these manoeuvres the vessel’s position was about 21.47.30 north and 72.29 east, a position perhaps 7 miles north of Dahej towards the southern end of Tankari Road and between the mouth of the Dhadhar River and the Makra Bank. (I shall refer to this as the “20 October position”.) The position was not recorded in the log book or the bell book. Indeed, the log book does not refer to the anchor dragging at all and the bridge bell book only to the engine manoeuvres. This perhaps reflects badly on how the vessel’s records were kept, but does not, in my judgment, cast doubt on the claimants’ account of what happened over these days.

As the defendants observed, the vessel did not file an International Safety Management (“ISM”) form (a “Near Misses/Accident/Incident Analysis” form) about the dragging incident on 18 October 2009. However on 19 October 2009 Captain Medina informed CSME’s technical and operations departments that the vessel had dragged her anchor the previous day and that the windlass motor had burned out. The report ends “Please advise”, and Captain Medina explained in his statement that he was seeking advice about what he should do about the starboard windlass motor. CSME instructed the vessel to replace the burned out motor with the port anchor motor, and the electric motor was transferred from the port to the starboard windlass. They also provided wiring instructions, and the repairs to the starboard windlass engine were completed on about 22 October 2009.

After the spring tides, Captain Medina decided that the vessel should remain where she was at the 20 October position: it was north of her original position, but the anchor was holding.

As I have said, the vessel’s no 3 generator was not in working order at any time during the voyage, and she had no emergency generator. The defendants submitted that by 30 October 2009 the vessel’s remaining generators had proved unreliable, that neither unit no 1 nor unit no 2 could generate enough power for safe operation at sea, and that the vessel had had black-outs when both generators failed. They argued that the grounding was caused because the generators were defective and inadequate.

The defendants pleaded that, when the generators were last surveyed in May 2008, the “present” capacity of the generator no 1 was 190 kw and that of no 3 generator was 200 kw. This was based on a “Condition Report” (the “2008 Condition Report”) for the vessel by CSME that covered the period from January to May 2008 and was signed by CSME’s various departments in July 2008. It records the “rated” capacity for all three generators as 480 kw. In a witness statement Captain Bourdis said that each generator had a capacity of 560 kw, but he explained in cross-examination that his point was that the engine that turned the generators could create 560 kw: I accept his explanation, and that his statement was not intended to mislead, but the rated capacity of the generators was correctedly stated in the 2008 Condition Report to be 480 kw.

The 2008 Condition Report also recorded the pleaded “present” capacities. No equivalent figure was given for generator no 2, but the defendants invited the inference that it had a capacity similar to that of the other two and suggested that the “present” capacities in the 2008 Condition Report referred to how much power the generators could produce in their then condition. The claimants disputed this interpretation, and I reject it. BV surveyed the vessel for class purposes between January 2008 and May 2008, and they inspected and passed her generators. Mr Luukas agreed in cross-examination that it was unlikely that BV would have done so if their capacities had been only about 190 kw or 200 kw. A Condition Report of CSME of 2 to 7 April 2009 recorded that the rated capacity of each of the three generators was 600 kw and the “present capacity” for each was recorded as “same”. Mr Luukas accepted in cross-examination that the readings for no 1 and no 3 generators that were recorded were “most likely” the actual load on the generators at the time of survey, no 2 generator not being operated at the time. I agree with that, and reject the defendants’ argument that the report evidences the actual capacity of the generators. This conclusion is corroborated by the fact that on the voyage generator no 1 in fact produced more than 190 kw.

The defendants also relied on entries in the Engine Room Log Book to argue that there were frequent problems with the generators while the vessel was lying at anchor off Dahej, together with Mr Noquial’s assent in cross-examination to the proposition that the records show that the engineers had had to undertake “significant works of maintenance to [the] two generators nearly every day”. I cannot attach any importance to this answer: I do not know what was meant by “significant” or what Mr Noquial understood by it, and in any case in my judgment Mr Noquial did not understand this question and his answer is unreliable. I prefer to consider the log entries themselves. On 9 October 2009 an increase in the oil level of the no 2 generator oil sump was recorded and associated with water leaking by way of the no 3 cylinder. On 10 and 11 October 2009 the no 2 generator was again leaking. On 12 October 2009 the no 1 generator was overhauled. On 14 October 2009 there were maintenance checks on the no 2 generator. On 15 October 2009 there was further maintenance work to the nos 1 and 2 generators. On 22 October 2009 the vessel reported that the no 6 cylinder of generator no 2 had been overhauled because of water leaking.

Mr Noquial denied that more work was required on the generators than normally would be expected. There is no convincing evidence to the contrary. Mr Luukas said in his report that the no 2 generator stopped on 9 October 2009 and the repair does not appear to have been completed until 12 October 2009; and that repairs to the no 1 generator for problems experienced on 15 October 2009 extended to 20 October 2009. However, the records make clear that the no 1 generator was in use between 15 and 20 October 2009. It might be that maintenance work was carried out at a leisurely pace while the vessel was waiting her place at port, but I would not infer more than that.

On 20 October 2009 the vessel was blacked out for about 15 minutes. The log book notes that at 23.45 on 20 October 2009 the no 2 generator broke down because of a broken cable wire and the vessel switched to using the no 1 generator to maintain power. This was reported by the vessel to CSME, and it was said that after repairs the no 2 generator was “restarted and found out in good condition and … generating voltage normally”. According to Mr Papanikolas, that was the only occasion on which the vessel was blacked out and at all other times at least one generator was working. His evidence was not challenged. Mr Noquial was cross-examined and gave evidence to similar effect, explaining that entries in the vessel’s records that suggested otherwise were wrong. However, the defendants argued on the basis of entries in the engine log that the vessel had more black outs.

First, Mr Luukas referred to what he described as an anomaly in the recorded consumption of generator fuel in that the consumption for one unit dropped from about 1.85 tonnes for the period until 19 October 2009 by about half (to between 0.8 tonne and 1 tonne) for the period 20 to 23 October 2009. The consumption returned to about 1.9 tonnes on 24 October 2009. However, about 66 tonnes of MDO was bunkered on 24 October 2009. Mr Luukas accepted in cross-examination that the vessel might have been running short of MDO before taking bunkers and simply economised on electricity. This seems to me the obvious explanation.

However, the defendants also relied upon the records about when the generators were run. The engine log was meant to record (i) the running hours of each generator in each watch (with details of temperatures and pressures) and (ii) the total running hours each day for each generator (the purpose being to ascertain its total running hours since the last general survey). The two records do not always tally. I have already considered the records for 30 September 2009 (at para 87). Further,

On any view the engine log was kept carelessly and it contains errors and inconsistencies. To my mind the errors in entries on 30 September 2009, 20 October 2009 and, as far as the running hours are concerned, 27 October 2009 are readily explicable and of no real significance. They do not indicate that the vessel blacked out or had major problems with the generators. The entries about running hours on 17 October 2009 are more curious, but in my judgment there is not sufficient evidence to conclude that the vessel blacked out and there is no proper basis to reject Mr Noquial’s evidence about this. I am driven to think that, for some reason, an originally accurate entry about the operation of the no 1 generator during the 16.00 to 20.00 watch was changed, possibly to reconcile it with the total running hours.

As for the three entries about a problem with the no 6 cylinder of the no 1 generator and its repair, I conclude:

Finally, Mr Smith relied upon the ship’s records about the early hours of 31 October 2009 (after the grounding, as I shall conclude) as evidence that the generators were inadequate. He pointed out that the engine room bell book records that the main engine was stopped at 02.50, just before high water, and it was stopped for some two hours over the high water period when it might be expected that Captain Medina would have tried to re-float the vessel. The engine room log records that the no 2 generator stopped or was stopped at 02.00 (“02.00 hrs stopped D/G #2”). Captain Medina’s statement does not explain what was happening at all convincingly: he said that he stopped the main engine “between 04.10 and 05.45 on the morning of 31^st” because he was “conscious of the possibility of damaging the main engine during these re-float manoeuvres”, but he did not explain the earlier stoppage or its timing. When Mr Noquial was asked about these matters in cross-examination, it was clear that he had no specific recollection of them, but that he would, as I accept, simply have taken the orders of Captain Medina and that he considered that the vessel needed only one generator.

I was invited by Mr Smith to infer that there was a problem with the no 2 generator, that the no 1 generator alone could not generate sufficient power and that therefore the main engine was stopped. Nothing corroborates this supposition. If there were other cogent evidence of significant generator problems, I might have accepted Mr Smith’s submission, but in view of my other conclusions there is no proper basis to do so.

According to the evidence of Captain Bourdis, which I accept, on 30 October 2009 in the afternoon he was telephoned by Captain Medina and told that that morning the vessel had dragged her anchor and “touched the bottom”. Captain Medina believed that he could refloat her on the high water by her own means, and he convinced Captain Bourdis of this. Captain Medina also reported that the anchor “look[ed] missing”.

On 31 October 2009 at 10.07 local time Captain Medina sent a casualty report to CSME, reporting an incident that was said to have happened at 11.50 local time (or 06.20 UTC) on 30 October 2009. The information given about “route: information/details of intended track” was this: “transfer anchor position due to dragging”. The damage was said to be, “Stbd [starboard] Anchor fluke missing from the shank”. As for the “Action taken to control the situation”, it was reported that “prior heaving up stbd anchor informed Dahej port control … to shift anchor position, while the anchor is cleared from the water, we found out that the anchor fluke missing and vessel touch bottom due to strong current”. The report said that assistance was not required: “… we tried to refloat vessel at next tide using vessel main engine”.

Captain Medina sent a further report at 19.05 that: “At 09.45 hrs [local time] 30 October 2009, the duty officer called me that the vessel is dragging her starboard anchor”. He explained that he told Mr Noquial to prepare the main engine for manoeuvring and gave instructions to stand by for “heave up anchor to transfer to a better anchor holding ground position”. He gave instructions at 10.23 for the anchor to be heaved, and when it cleared the water “chief officer informed the bridge that the anchor fluke gone missing and detached from the anchor”. He said that attempts to refloat the vessel without assistance had proved unsuccessful: she had moved about 0.7 cables.

The claimants’ 10.00 contention is that the vessel grounded not at or about 11.50 (as Captain Medina had reported as the time of the “incident” in the first report), but some two hours earlier. In his witness statement Captain Medina said that she had “grounded about 4 hours before high water which was at 14.09 on 30 October 2009”. He said that Mr Gomez called him to the bridge “somewhere between 09.30 and 09.45”. He called the engineers to have the engines ready for use. He noticed that the vessel was not moving and that she was “3 miles north of our previous anchor position”: I infer that he meant three nautical miles. He said that, although he had felt nothing, he “thought perhaps the vessel was aground”. He sent Mr Caguiat and the boatswain to heave the anchor, and used the main engine to put slack in the chain and take stress off the anchor windlass. At 11.27 the anchor was aweigh, and he was told by Mr Caguiat that the anchor flukes were missing. According to his statement and the deck log, the vessel was aground at 21.50.66 north and 72.29.66 east, and Captain Medina explained that this position was taken from the GPS, which showed that the vessel’s position did not change while the anchor was heaved. Captain Medina said that, “The current was flooding to the north but the ship maintained the same position. It was now obvious to me that the ship was aground”. He attempted to re-float the vessel immediately and used main engine ahead and astern “almost continuously until 13.49” without success. The vessel’s heading remained at 195 degrees throughout these manoeuvres.

Mr Gomez’s evidence was that he came on watch at 08.00 on 30 October 2009. He checked the vessel’s position at 08.15 and she had not moved. She was headed south. At 09.45 he noticed that the vessel was moving and could see from the latitude reading of the GPS that her position had changed: in cross-examination he said that he saw from the GPS that the vessel was moving at more than 2 knots. He called Captain Medina, and the other officers came on deck. At 10.00 he saw that the vessel was not moving, but he did not know whether she had grounded or the anchor was holding. He accepted that, if the vessel was moving, this would be readily apparent because the digits on the GPS would be changing. At the direction of Captain Medina he plotted the position of the vessel at 10.00 on the chart and later photocopied the relevant part of it. On 31 October 2009 Captain Medina transmitted the photocopy to CSME: a position was marked in Mr Gomez’s writing as “10.00 LT [local time] vessel position”.

Mr Noquial said that he was in the engine room at the relevant time. He did not feel the grounding and was unaware of it, and he did not notice anything affecting how the main engine operated.

Mr Cashman’s notes of Captain Ogg’s interview of Mr Caguiat include an account of heaving up the starboard anchor, in which, as I understand it, he said that the anchor was coming in easily, although with a lot of weight which indicated that it had some hold, but that then the cable went first tight, then slack and after that it came in easily. Mr Caguiat said that, because the cable went slack suddenly, he was not surprised to find that it was broken. This account, if taken at face value, indicates that the flukes broke in the course of the anchor being heaved, but it does not indicate whether they broke at the start of the process or later.

Mr Caguiat wrote these entries in the deck log about the incident;

“08.00 Anchor watch maintained. Watch relieved by [Third Officer].

09.45 Vessel observed dragging.

10.15

Engine stand-by.

10.23

Start heave up anchor.

11.27

Anchor aweigh, Found that the anchor “fluke” gone missing and detached from the anchor shank and the vessel touch bottom due to strong current.”

The bridge bell book also records that the main engine was put on stand-by at 10.15, and that the vessel started to heave her anchor at 10.23. The engine room bell book and the engine room log give the time that the engine was put on stand-by as 10.00, and Mr Gomez agreed in cross-examination that they were correct. The log book records, “started [generator no 2] and synchronised to [generator no 1] for shifting and [standby main engine]”. (Mr Smith submitted that the engine room log suggests that the anchor was raised at about 10.00. It does not: normally the engine would be started before the vessel started to heave her anchor. The only entry about when she started to heave her anchor is in the deck log, and I do not consider that the engine room log contradicts it.)

The engine room bell book records instructions of “dead slow ahead” for short periods at 10.12, 10.17, 10.28 and 10.43; and then at 10.59, 11.10 and 11.14 she was instructed to proceed at dead slow, slow and half speed ahead respectively. She went slow and half speed astern between 11.44 and 12.06 and made further manoeuvres ahead and astern until 13.49. She was instructed to proceed once at full speed ahead between 1305 and 13.31. At 13.49 the vessel stopped her engines until 17.12 because she needed fresh water: a water barge had been ordered and, although she was aground, it would not wait for her. The barge was alongside from 14.25 to 17.05.

According to the statement of Captain Medina, during the afternoon of 30 October 2009 he instructed Mr Caguiat to take soundings of all the ballast and other tanks, and Mr Noquial checked the engine room and sounded all the fuel oil tanks. I accept this evidence: Mr Noquial’s evidence confirmed that he sounded the fuel oil tanks on 30 October 2009 after the grounding. Captain Medina still did not realise the extent of the damage that had been done to the vessel: he said that “It soon became apparent that the watertight integrity of the vessel had not been breached”. Soundings of the fuel oil tanks were next taken on 14 November 2009, when sea water was found in the no 5 tank.

Captain Medina also instructed the crew to take soundings over the ship’s side: in his statement he said that soundings were taken twice on 30 October 2009, the results being sent to CSME. His statement continued: “One of the sets of soundings was taken at low water and I think the other was carried out at high water. With respect to the accuracy of these soundings, it was very difficult to take accurate soundings because of the current”. One set of soundings, which is marked as being at “low tide”, recorded six readings, including 8.19 metres to the starboard quarter and 10.3 metres to the port quarter: the other readings were between 9.1 and 9.6 metres. The other set, which must be those that Captain Medina thought were taken at high water, included a reading of 16.00 metres to the stern (there was no corresponding sounding at low water), and 15.50 metres and 14.25 metres by way of the port and starboard quarters respectively, and otherwise the readings were of 11.25 metres or 11.50 metres.

On 31 October 2009 Captain Medina sent CSME a checklist recording actions taken in response to the grounding, and with it he sent another copy of the marked chart together with the soundings taken on 30 October 2009 and the Second Officer’s calculations of tide times at Dahej. Mr Smith submitted that this indicates that he considered the tide tables to be accurate and reliable with regard to the tides at the position of the grounding, particularly because apparently they were copied by hand from the Second Officer’s laptop, and would not have been readily available. I do not draw that inference: I do not know why the tide tables were sent and I consider this too fragile a basis for an inference about the tides that had been observed at the position of the grounding, beyond what might be inferred from the tide tables themselves.

Nor do I regard the soundings as reliable:

The soundings, Captain Medina said, encouraged him to think that he could re-float the vessel without assistance. Manoeuvres with the main engine resumed at 17.38, after the water barge had left: according to Captain Medina, the tidal waters were setting the vessel to the south, and, had she re-floated, she would have been carried south and into deeper waters. However, he soon realised that the vessel was not going to re-float, and at 17.56 he decided to await the next high water. Throughout the attempts to manoeuvre on 30 October 2009 the vessel remained, according to Captain Medina, on an even keel and her heading was 195 degrees.

Captain Medina tried to free the vessel by further manoeuvres with the main engine in the early hours of 31 October 2009 until about 06.30, that is from about three hours before high water until about three hours after it, but he was unsuccessful. During these manoeuvres Mr Noquial tried to increase the rpm above 70, but the engine vibrated continuously and he brought them back down. He said that otherwise nothing was wrong with the main engine: its temperature was normal and no alarms sounded. Captain Medina said that he was concerned that the manoeuvres might damage the main engine, but that Mr Noquial assured him that “all the engine parameters were OK”. The vessel did not move and remained on an even keel: Captain Medina did not know whether her heading changed, but said that he thought that it turned to 242 degrees.

There had been neap tides on 28 and 29 October 2009: the difference between high and low water would have been at its lowest and tidal current would have been weaker than at other times. The tidal ranges were increasing on 30 and 31 October 2009, and Captain Medina still believed that he could re-float the vessel without assistance. He made further attempts to do so between 12.31 and 17.46 on 31 October 2009, on either side of high water. The position of the vessel “changed very slightly” and the heading “turned”. (In a report sent to CSME on 31 October 2009 he said that as a result of the manoeuvres the vessel shifted 7 cables, but this was a slip: the message should have referred to 0.7 cables.) On 1 November 2009, attempts to refloat the vessel made between 01.25 and 06.10 failed, but her heading turned from 244 degrees to 334 degrees, and in these attempts the vessel took on a starboard list of about 5 degrees at about 04.40. Eventually the vessel re-floated at about 16.55 on the afternoon of 1 November 2009, which was about 90 minutes after high water. She was upright and on an even keel. She re-anchored to the south west of the port of Dahej, using the port anchor (the windlass engine being transferred back from the starboard engine), and the anchor chain was run out to 11 shackles. Mr Noquial said that nothing suggested that the main engine had been damaged. There had been no ballasting while the ship was aground.

The claimants’ pleaded case is that the vessel grounded “on the morning” of 30 October 2009. They submitted that, accepting the evidence of Captain Medina and Mr Gomez, I should conclude that the vessel was aground “at or around 10.00”, and before she had used or tried to use her engines (and so, they say, any deficiencies in her machinery cannot have played any part in the grounding or caused any damage). The defendants disputed that the grounding occurred as early on 30 October 2009 as the claimants contended, but they also maintained that, if the vessel had grounded by 10.00 on 30 October 2009, she probably drifted without power that morning, either because her generators would not start the main engine, or because the main engine was in such disrepair that it did not have enough power to overcome the current.

Although the defendants did not admit in their pleading that the vessel grounded at all, as I have said, this is no longer disputed. However, the defendants accepted only that she grounded at some time before she completed discharge on 14 November 2009. To my mind it is clear that she grounded on 30 October 2009. I accept that, on the face of it, it is odd that those aboard the vessel did not apparently feel a grounding that on any view caused significant damage, but that is the curious position whenever the grounding occurred: this does not help to decide when it happened. I have accepted the evidence of Captain Bourdis that he was told of it by Captain Medina on the afternoon of 30 October 2009, and so realistically it must have happened by the time that they spoke. It was not suggested to Mr Noquial or to Mr Gomez when they were cross-examined that the vessel did not ground on 30 October 2009 at all, and there is no evidence that she grounded on some later date. (That is not, of course, to say that all the damage caused by the grounding happened on 30 October 2009. The vessel remained grounded until 1 November 2009, and is likely to have sustained further damage at each low water while she was stranded.)

The real and more difficult question is whether the grounding happened at around 10.00 on 30 October 2009 or later that day before Captain Bourdis and Captain Medina spoke. Here, the first point to consider is whether the initial report that Captain Medina made after the incident on 31 October 2009 significantly contradicts what he said in his statement. The report was not about the grounding but about the anchor fluke: that was the “damage” that was being reported, and that was discovered when the anchor was aweigh. At first Captain Medina apparently made a rough estimate that it was aweigh at 11.50, whereas in fact it was at 11.27, but I attach no significance to that difference. More importantly, I reject the defendants’ submission that Captain Medina was reporting the time of the grounding as being 11.50. Although with hindsight it might superficially seem strange that the report did not focus on the grounding (or, as it was initially described, the vessel touching the bottom), at first it was not appreciated that it had caused damage.

This interpretation is corroborated by CSME’s analysis of the incident made on 7 December 2009. The event time was said to be “11.27 local time (grounding)” and in a section headed “Master’s Observations” there was set out what Captain Medina wrote in his report at 19.05 on 31 October 2009. However, the compilers of the report did not consider that the grounding occurred at the time that the anchor was aweigh: the “analysis/lesson to be learned” section stated, “Although the Main Engine was on Standby within 15 minutes of the order (10.00) and the first manoeuvre with the Engine was earlier than starting heaving up anchor the vessel was already grounded due to fast dragging caused by the anchor’s fluke detached/missing”.

I should also mention the rather elusive references in the initial report of Captain Medina at 10.07 on 31 October 2009 to “shift[ing] anchor position”. In the defence it was not admitted whether the vessel dragged her anchor or whether she drifted on the current having heaved up her anchor for shifting. When Mr Gomez was cross-examined, the case put to him was, it appeared, that the vessel had a problem with the main engine after the anchor was aweigh and as a result the vessel drifted and grounded. Mr Gomez rejected the suggestion, and I find the suggestion difficult to reconcile with the references in the report to the vessel shifting position. These are, to my mind, more naturally be understood as a response to the incident on 30 October 2009 than, as the defendants invited me to suppose, to a plan to shift from the position where the vessel was anchored. It seems to me improbable that Captain Medina would explain under the heading “action taken to control situation” a plan to move the vessel from the position where she had apparently been anchored for some time.

On analysis, I do not consider that Captain Medina’s earlier reports are inconsistent with his statement of 5 January 2010 that, when he was called to the bridge before 10.00am, the vessel was not moving.

Next, I consider the vessel’s books. The claimants argued that they show that the generators did not fail: the starboard windlass was in operation and used to haul up the anchor between 10.23 and 11.27, and the main engine was operated from time to time from 10.12. Moreover the engine log records that both the no 1 generator was operating on 30 October 2009 throughout Mr Gomez’s watch from 08.00 to 12.00 and for the 24 hours thereafter: there is no indication that the engine could not be operated because of generator failure. More importantly, it would seem improbable that Captain Medina would have given the orders that are recorded in the engine room bell book if the purpose was to use the engine to resist the current, but it failed to do so either because it did not operate at all or it had insufficient power. In those circumstances, it is unlikely that the orders would have been dead slow ahead for intermittent periods of a few minutes between 10.12 and 11.10, and that at 11.10 only slow ahead. Even at 11.14 the order was only half ahead. Had the engine been deployed against the current, it would have been used continuously and at slow, half head and then full ahead: indeed it was so used 18, 19 and 20 October 2009. Moreover, it is unlikely that orders would be given for slow astern and then half astern at 11.44 and 11.47. These orders are more consistent with attempts to manoeuvre than with attempts to resist the tide.

I see force in this argument, with which Mr Luukas appeared to agree when he was cross-examined, although my conclusion about the timing of the grounding does not depend upon it. Mr Smith sought to meet it by submitting that the orders recorded in the bell book remain puzzling even on the claimants’ case in that, if the engine were being used only for raising the anchor, there is no apparent reason for the order for half ahead at 11.14, and he suggested that this is inconsistent with Captain Medina realising only later that the vessel had grounded. I accept that this is a little curious, but to my mind it is a relatively minor point when compared with the overall picture of the engine operations given by the bell book.

In my judgment, the evidence of the witnesses, the vessel’s books and the reports of the incident to CSME are all consistent with the 10.00 contention, and are sufficient to shift the evidential burden to the defendants to demonstrate that it is to be rejected. Is, however, the account in particular of Mr Gomez so inherently improbable that I should reject it, in particular his evidence that he did not notice that the vessel was moving north from her position at the start of his watch to where she was said to have grounded? On the face of it, it did indeed seem improbable that the vessel should have moved something like three miles without Mr Gomez noticing it. He said that he did not check the position of the vessel for at least 90 minutes because he was “busy”, but it is unclear what he was or might have been doing: whether he was engaged on the ship’s business or simply pre-occupied. However, if his evidence is wrong, he must have been lying: he cannot have been mistaken. I find it difficult to conceive as to why he should have given a false account, particularly since:

The defendants advanced two contrary arguments:

The defendants submitted, relying upon Mr Colman’s opinion, that if the vessel had grounded at 10.00, about two hours after low water and about four hours before high water, she would have floated at the following high water. The very fact that she did not do so, it was said, demonstrates, or at least indicates, that she grounded later than the claimants contended. Certainly it would appear that, if the soundings that Captain Medina apparently said were taken at high water were correct, she would have been expect to re-float. The lowest depth was recorded as 11.25 metres, and the draft of the vessel was about 11.15 metres. (Mr Colman took the draft to be 11.15, apparently on the basis of the discharge draft survey at Dahej, where the exact drafts recorded were 11.15 forward and 11.17 aft. However Mr Colman himself questioned the reliability of those readings for the purposes of determining the hog of the vessel that the claimants say resulted from the grounding. The pilot card on departure from Salalah records the aft draft as 11.20 metres.) But this reasoning seems to prove too much: even if she did not ground before high water on 30 October 2009, the fact remains that she did not re-float at subsequent high waters on 31 October 2009 or 1 November 2009. She floated only after the high waters on 1 November 2009. Indeed, as Mr Colman observed, the Admiralty Time Table for Bhavnagar shows that, because the spring tides were approaching, each successive tide would have been higher than the last, and it might seem more remarkable that the vessel did not float at high water on 31 October 2009 and 1 November 2009 than that she did not do so on 30 October 2009.

I am therefore not persuaded by the submission that the difference between the height of the tide at 10.00 on 30 October 2009 and its height at 14.00 was such that, had she grounded at about 10.00, she would inevitably have floated at the next high water. It was based on a chart of the tide times at Dahej, in which the Second Officer calculated that the height at 10.00 was 4.16 metres and at 14.00 was 6.56 metres, and so, if the chart be correct, the tide rose at Dahej by 2.4 metres in the four hours. Even assuming, despite Mr Gomez’s evidence that the charts had not proved accurate, that the times and heights of tide are correct and assuming that the water rose by a comparable amount where the vessel grounded, the argument simply provides a further illustration that the rise in the water level might have been expected to let the vessel float free. The fact remains that she did not do so.

Certainly Mr Colman has identified a feature of the case that is curious and puzzling, but it is not, as I see it, a reason to think that the vessel grounded later than the claimants contended. Dr Jones suggested various explanations for this apparent anomaly: that the presence of the vessel might have distorted the currents around her and caused deposits around the hull; or that the current might have scoured the sea-bed and caused hollows to form; or that there might have been suction forces between the bottom of the vessel and the sea bed; or that the current pushed the vessel up a rising slope on the sea bed and she remained stuck on higher ground when the flood tide turned. As I understand it, Dr Jones presented these as possible explanations, and did not suggest that any explanation was established on the evidence. Mr Smith criticised this evidence as unhelpful and lacking in credibility, partly because Dr Jones did not have relevant expertise. However that may be, his suggestions demonstrated various possible explanations for the vessel not floating. Moreover, there is no information about the effect of attempts to manoeuvre the vessel after she grounded. There is not enough evidence to explain why the vessel refloated after high water on 1 November 2009 but not before. This enigma does not help me to decide when the vessel grounded.

The stronger argument against the 10.00 contention is that the tidal current could not have carried the vessel to where she grounded by 10.00 because:

First, the proposition that current did not begin to flow north at the 20 October 2009 position until after 9.09: this was based on Admiralty Chart no 1486 (dated 27 November 2008), and specifically on its information about tidal streams at the position marked as diamond C that at 5 hours before high water the direction of the stream would have been 62 degrees before moving to 300 degrees at four hours before high water. The position marked diamond C is between Bhavnagar and Dahej. According to the Admiralty Tide Table for Bhavagar on 30 October 2009 low water was at 08.39 (and 21.20) and high water was at (2.26 and) 14.09, and similar times for Dahej are on the tide table that the Second Officer calculated.

I am not convinced. The 20 October position was not at diamond C or at Dahej or at Bhavnagar. The defendants’ proposition supposes (i) that the times of low and high water at the 20 October position are likely to be about the same time as at Bhavnagar and Dahej, and (ii) that the current changes direction at the 20 October position at about the same time in relation to high water as at diamond C. However, the Admiralty Tide Tables themselves indicate that low water at Dahej is 70 minutes earlier than at Bhavnagar, and the evidence of Mr Gomez, which I accept, was that he and the Second Officer observed that the tides turned earlier than the Second Officer had calculated. Mr Smith submitted that the information about the current at diamond C was the best indication available about the current at the 20 October 2009 position. This might be so (although the position is nearer to another diamond mark on the chart, diamond B, where the currents are apparently distinctly different), but it does not mean that the tide tables reliably indicate the currents at the 20 October 2009 position. Mr Smith also emphasised that generally (and apart from Captain Medina’s initial report of 31 October 2009) the claimants’ contemporaneous documents which refer to the tide or current are apparently based on the Admiralty tables, and suggested that this indicates that the claimants regarded them as reliable and relevant. I am not persuaded: Captain Medina and others probably used information from the tables simply because they were readily to hand rather than because they had assessed that they were accurate and applicable. There is no robust evidence that the current did not begin to flow north at the 20 October 2009 position before 9.09.

Secondly, the proposition that, if the vessel moved from the 20 October 2009 position to where she is said to have grounded by 10.00, she would have travelled at at least some 1.7 knots: that is based on the following reasoning:

The calculation is necessarily less than precise both as to the distance that the vessel moved and as to the time in which she might have moved. The 20 October 2009 position is not exactly known: it was not recorded in the logs and is based on the evidence of Captain Medina, who expressly described it as approximate. It is also possible that the vessel did not remain in the same position until 30 October 2009: I must be wary about speculation, but it is striking that the vessel apparently did move between 7 and 15 October 2009 although the logs do not record this and Mr Gomez had no recollection of her doing so. Captain Medina’s statement that the vessel had moved three miles north when she stopped moving was also, as I would understand it, an approximation. The evidence of where she grounded is a position that Mr Gomez marked on the chart: Mr Templeman submitted that “recording of the vessel’s position generally seems to have been somewhat haphazard”, and that is an understatement. As for timings, the time of 8.15 cannot be exact: it is based simply on the indication in Mr Gomez’s evidence that he took the vessel’s position 15 minutes after he went on watch. Realistically he might have taken it at any time after about 08.00. This is not, I think, contentious: the defendants did not purport to present an exact calculation, and their contention is that the claimants’ account of the grounding cannot be right even if generous allowance is made for all this.

Thirdly, the speed of the tidal stream: Mr Smith submitted that “the tidal stream did not even reach an average speed of 1 knot by 10.00”, a submission, as I understand it, based upon the information on the Admiralty chart about the tidal streams at the diamond C position. It transfers this information to the stream in Tankari Roads, but the evidence about currents in the Gulf of Khambhat generally and at the 20 October position in particular is inconclusive, and the defendants have not established reliably how strong they might have been. In the defendants’ own pleading, the Gulf is described as “well known for extremely strong tidal currents and its difficulty of navigation”, it is said that on 30 October 2009 the vessel was “in waters that were known for their shoals, banks, strong currents and tidal streams”, and reference is made to the “high tidal range” of the waters off Dahej and to “currents and tides of a high velocity”. The 20 October position was in Tankari Roads, which Mr Colman described as “a narrow deep area between shallow banks where tidal currents or streams would naturally run rapidly …”: this is readily apparent, even to the inexpert eye, from the chart. In an article by Kumar and Kumar in Marine Geodesy, Vol 33(2), 2010, p.218, “Waves and Currents in Tide Dominated Locations off Dahej, Gulf of Khambhat, India” (which was produced by Dr Jones), this was said of the narrowing of the Gulf of Khambhat going northwards: “As a result, the cross-sectional area decreases nearly exponentially with distance from the open end. The resulting confinement of the tide must lead to amplification.” Dr Jones pointed out that the data cited in the article does not extend north of Dahej, but cogently observed that “it is reasonable to suppose that this amplification effect would continue for some distance to the north of Dahej, until frictional effects come into play at the shallower northern end of the Gulf.” Mr Smith rightly submitted that Dr Jones had no expertise in bathometrics and hydrodynamics to express views about the accuracy or reliability of tidal data, but his observation simply expressed what in any case I infer from the evidence.

How fast might the vessel have moved if she was dragging her anchor chain? Mr Colman’s opinion was that “It would seem that the only way for the vessel to have dragged on 30^th October from the position on 20^th October to the position on 30^th October is if there was no restraint whatever”. Mr Colman assumed that, if the flukes of the anchor were broken when the vessel started to drift, the vessel would still have been restrained by the weight on the seabed of the shank of the anchor and the catenary of the chain. He supposed that the weight of the anchor itself would have been reduced from about 7.35 tonnes (for the intact anchor) to about one tonne (for shank of the anchor alone). On the basis of that, he assessed that the power holding the vessel would have been reduced from about 14.7 tonnes to 0.5 tonne, which was his assessment of the holding power of the chain and the shank without the flukes, an assessment that he described as conservative.

This reasoning was based on theoretical simulation exercises carried out by BCTQ, which necessarily depended on assumptions about the holding power of the chain on the seabed if the flukes were broken. I am not persuaded that the assumptions are robust: they are based on the statement of Captain Medina, who said that after the dragging incident on 18 October 2009 he decided “to pay out the starboard anchor chain again – this time to 10 shackles”. However, the anchor dragged again on 19 and 20 October 2009, and it cannot be inferred that the anchor remained paid out to 10 shackles. But this is crucial to Mr Colman’s reasoning: if the vessel was restrained by the catenary, the current would, he reasoned, make her yaw but nor drag significantly because the chain would restrain her at the peak of the yaw. And, in the words of Mr Colman’s second report, “The reason that the vessel does not drag faster is that there is a large amount of chain on the sea bed”: he estimated that there was always more than 160 metres with a current of 5 knots and always more than 180 metres if the current was 3 knots. Thus, even assuming that Mr Colman’s exercise itself was accurate and reliable within its own limits, it is dependent upon what is, to my mind, a questionable inference about how the vessel was anchored.

What of the proposition that the current never exceeded 4 knots or at most 5 knots? These figures were used by Mr Colman, as I understand it, because (i) the Admiralty Chart 1486 states that streams of up to 4 knots at spring tides and up to 2.2 knots at neap tides occur at diamond C at two hours before high water, and (ii) the Fairplay Shipping Port Guide, according to Mr Colman, said: “Tidal stream: The flood tidal stream in Tankari Road continues for 1 hour after the time of [high water]; the streams in the roadstead attain a rate of 5 [knots] at springs”. In fact the tides on 30 October 2009 were closer to neaps than springs, and Mr Colman therefore considered the stream at the 20 October position would probably have been running at about 2.5 knots. This was based on information about streams at diamond C, and to my mind the information about the tidal stream in Tankari Road is a better starting point. However that might be, Mr Colman drew conservative inferences from the information available to him, but the fact remains that only limited information was available to him and is available to me.

As I have said, Mr Caguiat’s account to Mr Cashman suggests on its face that the flukes broke only when the vessel was heaving her anchor. However, this is hearsay evidence, I am not confident that it is reliable and it is too vague to be compelling. Despite it, I am not persuaded of the defendants’ sixth proposition, that the flukes were probably not broken from the start. Dr Jones thought that they broke as a result of a bending overload in a single event in which a transverse load was applied to the free end of the shank, and he gave convincing reasons based on his (macroscopic) observation of the features of the fracture, specifically that the free end of the shank was bent out of line with the axis of the shank and that the direction of the bend was consistent with the features of the fracture, and calculations of the force required to produce a sufficient load. I accept Dr Jones’ views about this: his detailed observations of the anchor were more reliable than general observations, such as that of Mr Carney when he visited the vessel on 7 January 2010 and saw that the fracture to the anchor was “remarkably flat, as if it had sheered off”. Mr Colman suggested, because the fracture was brittle in nature and exhibited a “chevron-like” pattern and because he understood that there was no observable deformation, that the failure probably resulted from a shock or impact rather than bending, and so that it might have happened when the anchor was weighed. However, as I see it, Dr Jones cogently answered that point, not least because such forces would probably cause a facture running from one side to the other, whereas the fracture ran from top to bottom. Mr Colman accepted that he did not have metallurgical expertise (although he had, he said in cross-examination, had some experience of brittle steel factures, albeit not of anchors), and I prefer the more detailed analysis of Dr Jones, whose expertise in this area is unquestionable.

Mr. Smith sought support for the sixth proposition by comparing the time that it took to heave the anchor on 30 October with the times recorded in the log on other occasions that the vessel raised her anchor. On 30 October 2009 it took something over an hour. When the port anchor was raised on 2 November 2009, 5 November 2009 and 11 November 2009 the recorded times show that it took 1 hour 30 minutes, 1 hour 24 minutes, 1 hour 8 minutes. On the other hand when the vessel left Salalah, she apparently only took 17 minutes to raise the starboard anchor. I do not think that any inference can be drawn from these varying times, or records of times.

Dr Jones went on to suggest that that the bending action that caused the fracture could have resulted from the 180◦ change of bearing that would be expected when the tide turned. This was only a tentative suggestion, and I do not find it convincing. As Mr Colman observed, the currents would have been at their weakest when the tide turned, and, on the face of it, it seems improbable that there would have been sufficient to explain why the flukes broke away.

It is, I am driven to conclude, impossible to reach any conclusion on the evidence about how and when the anchor fractured, and I am not persuaded that the anchor probably had its flukes when the vessel started to move. On the contrary, the very fact that the vessel was carried on the current to my mind suggests that it did not.

Mr Colman’s evidence about how the current might have carried the vessel was careful, but he was conducting a theoretical exercise that necessarily depended upon assumptions of fact or, at best, inferences that were based on inadequate information. The crucial question is whether his reasoning and, more importantly, the premises on which it is based, are sufficiently robust to refute Mr Gomez’s evidence and other evidence that corroborates it. In the end, I conclude that they are not. As I shall explain, however, this conclusion is not essential to my decision about the defendants’ liability.

If I am right to accept the claimants’ 10.00 contention, I also accept their contention that the grounding occurred before any attempt was made to use her engines. There was some suggestion, in particular from Mr Luukas, that there might have been earlier attempts, but they are not supported by evidence in the vessel’s logs or bell books or of any other kind.

As I have said, the vessel refloated at about 16.55 on 1 November 2009. She went to a new position to the south west of the port of Dahej and anchored there with her port anchor. Mr Noquial continued to restrict the main engine to 70 rpm. On 2 November 2009 the vessel picked up her anchor to go alongside at Dahej. Because of a problem with the impeller of the no 1 sea water pump, Mr Noquial switched to the no 2 pump. However, the coupling bolt to that pump had broken, and Mr Noquial stopped the pump and replaced it. Captain Medina dropped the anchor because they were then close to berth and several anchored vessels: he was concerned about drifting in the strong current. The problem was resolved and there was no other problem with the main engine. However, when the anchor was picked up again, the chain stuck and because of the delay the vessel lost her place at berth. (On 2 November 2009 the vessel’s agents wrote to CSME that she could not berth due to “engine break down”, but I conclude that the problems were no more than I have described.) She eventually berthed on 5 November 2009: she ran her engines over four hours without problems with the lube oil filters. When the lube oil filter was changed between noon on 5 November 2006 and noon on 6 November 2006, Mr Noquial found no white metal debris in the filter.

The vessel discharged cargo at Dahej between 5 and 7 November 2009. The cargo from holds nos 2 and 6 was discharged first, and discharge from those holds was completed at 22.00 hours on 6 November 2006. The vessel did not discharge all the cargo: she was not permitted to discharge some cargo in holds nos 1, 3, 5 and 7 pending the provision of general average security required as a result of the vessel being held for ransom by the pirates. Discharge was therefore interrupted, and the vessel was ordered off berth by the harbour authorities. She shifted to Dahej anchorage about 2 miles off the jetty: the main engine was run for about 3 hours and, again, according to Mr Noquial, there was no problem in operating it or with the lube oil filter.

On 9 October 2009 an extension of time for the annual survey to 10 November 2009 had been agreed, and on 6 November 2009 BV and the Maritime Administration of St Vincent and the Grenadines agreed to a further postponement until 20 November 2009 or for a single ballast voyage to the Persian Gulf.

The log for the 24 hours period from noon on 8 November 2009 to noon on 9 November 2009 recorded that the duty engineer cleaned the filter of the lube oil pump of the main engine. I infer that it would have been recorded if metal debris had been observed, and it was not. However, the engine room log recorded for later on 9 November 2009: “During inspection of main engine, lube oil filter, found with various pieces of metal, all of them carefully collected/removed and filter cleaned. We will inspect again tomorrow after manoeuvring from anchorage to berth”. On 10 November 2009 this was reported to CSME, who advised as follows:

“1.

Since the vessel is scheduled to berth tomorrow, first thing in the morning take main engine deflection and revert with results.

2.

Upon vessel’s berthing proceed with visual inspection of main, crosshead and connecting rod bearings and take clearances as well.

3.

Provided that time is sufficient proceed to dismantle for inspection gradually main bearing, crosshead and connecting rod bearings of cyl no 5”.

On 11 November 2009 Dahej port authorities instructed the vessel to shift to anchorage south of Gopnath Point because bad weather threatened. The winds were from the east, more or less off her port beam, and were force 5 rising to force 6 to 7. As she proceeded south, at 10.52 she went at full ahead for 16 minutes, and on this occasion Mr Noquial ran the main engine at about 96 to 98 rpm: this was, as he explained and I accept, because he was worried about the weather and because some of the cargo had been discharged. He noticed smoke from the area of the thrust bearings, and immediately reduced the engine to 65 rpm. On 12 November 2009 she returned to anchorage at Dahej.

On 12 November 2012 further metal was found in the oil filters. This was recorded in the engine room log for the 24 hours to noon on 12 November 2009, but not reported to CSME until 14 November 2009, when at 14.44 Captain Medina and Mr Noquial wrote as follows:

“When the vessel pull out and going to outside anchorage area, main engine running at full ahead. Every one hour in a half [sic], changed lub oil filter due to pressure decrease. Found various pieces of metal. All of them collected/removed and filter cleaned for ready spare.

Main engine thrust bearing shaft connected to fly wheel, overheat and create smoke. But the thrust bearing temperature is normal. Reduce speed at 65 RPM. The smoke reduce and slowly disappear until the vessel arrived at anchorage area.”

According to Mr Noquial, this was reported only on 14 November 2009 because the vessel had poor communications. Curiously, the engine room log for the 24 hours to noon on 14 November 2009 has a similar entry about the smoke from the thrust bearing area and the discovery of “various pieces of metal” to that for 12 November 2009. Mr Noquial had no explanation for this that I could understand, but I see no sufficient reason to reject his evidence that the metal was found on 12 November 2009.

The vessel returned to Dahej Port limits on 12 November 2009 and dropped her anchor at 23.36. The engine room bell book records that on three occasions Mr Noquial was told to operate the main engine at full ahead for more than three hours, but he operated it, as he said and I accept, at only 70 rpm. Mr Noquial said that, because the engine was in use for manoeuvres, it was difficult thoroughly to inspect the main engine, but when they had a chance to inspect each cylinder, they found “numerous pieces of metal”. (He also said that after the grounding, he heard hammering from the crankshaft during manoeuvres, but I have rejected that evidence: see para 24above.)

On 14 November 2009 Mr Noquial took deflection readings for the crankshaft of the main engine, as CSME had advised should be done. However, he did not have the equipment to rest the crankshaft on all the bottom bearing shells, as the Sulzer engine manual advised if readings were taken in these circumstances. He did not inspect the holding down bolts on the main engine. Nor did he read the clearances of the crankshaft. The vessel sent a “deflection report” about the main engine crankshaft to CSME at 09.34 on 14 November 2009 (before reporting that metal had been found in the filter). All the readings reported to CSME were within the manufacturers’ tolerances, which categorised divergences up to 0.15mm as “good” and described deflections of between 0.15 and 0.3mm as “still admissible”. The largest deflection reported was of 0.15mm for the no 6 cylinder top. The total of the port and starboard deflections was 0.16mm for the no 5 cylinder and 0.15 mm for the no 6 cylinder.

In his witness statement Mr Noquial described the crankshaft as being “out of alignment” (whether because it was bent or because the bearings were damaged). When he was cross-examined, Mr Noquial said that, although it was not included in the deflection report, the main crankshaft had moved forward, and surmised that it had moved 20mm, although he was unsure about this. I do not consider this evidence reliable. (When Mr Noquial gave evidence about this, it was not clear whether he was speaking of his contemporaneous observations or about what he had later heard from others: I reject the submission that this reflects upon the honesty of his evidence.)

On 14 November 2009 the vessel resumed and completed discharging her cargo. After doing so and while the vessel was at anchor at Dahej, the topside tanks by way of holds nos 3 to 6 were partly de-ballasted in pairs (at different times) and re-ballasted after inspection. Later on 14 November 2009 Captain Medina discovered damage to the bulkhead between holds nos 6 and 7. He reported to CSME as follows:

1.

Cargo hold no. 7 from starboard side about 5 corrugated bulkhead heavily dented measuring Length about 8.30 mtrs, Height from tank top about 3.20 mtrs up to 9.30 mtrs.

Cargo hold no. 7 from portside about 5 corrugated bulkhead heavily dented measuring Length about 8.20 mtrs and Height from tank top about 3.30 mtrs up to 9.0 mtrs.

Cargo hold no. 7 starboard side shell plate framing welding bead crack frame no. 57 and about 6 frames deformed.

Cargo hold no. 6 Corrugated bulkhead lower portion about 7 corrugated dented connecting to tank top.

Cargo hold no. 6 shell plate framing port and starboard from frame no. 66 to 78 deformed.”

In response to the three reports of 14 November 2009 (about the metal in the filter, the deflection readings and the bulkhead damage) CSME instructed that the vessel remain anchored off Dahej for further inspection, in particular of all cargo holds, double bottom tanks and, subject to safe accessibility (“i.e. to be empty”), top-side tanks, giving priority to areas around holds nos 6 and 7.The vessel moved off Dahej to anchorage and dropped anchor at 03.48 on 15 November 2009. Captain Medina carried out a further inspection, and at 14.45 he sent CSME a report of damage by way of cargo hold no 5:

“1.

Starboard tank top and hopper heavily buckling almost waving, measuring the Length about 10.28 meters and width about 2.50 meters from tank top flooring.

2.

Tank Top flooring heavily buckling almost waving.

3.

Corrugated bulkhead after part crack Length about 54 cm and width about 3 cm and measuring from portside shell plate about 4.13 meters and from tank top flooring about 4.45 meters.

4.

Corrugated bulkhead forward part between cargo hold no. 4 and 5 all middle parts heavily dented.

5.

Vertical ladder at forward bulkhead welded part detached.”

Captain Medina said that inspections of the top-tanks would continue. He also reported to CSME soundings of the oil tanks:

“Fuel oil tank no. 5 portside (double bottom) found with sea water sounding 2.90 meters previous sounding was 0.02 meters.

Fuel oil tank no. 5 stbd side (double bottom) found with sea water sounding 1.90 meters previous sounding was empty.

Fuel oil tank no. 6 portside (double bottom) found fuel oil mixed with sea water sounding 0.53 meters previous sounding was 0.18 meters.

Fuel oil tank no. 6 stbd side (double bottom) found fuel oil mixed with sea water sounding 0.67 meters previous sounding was 0.33 meters.”

On 17 November 2009 Captain Medina and Mr Noquial sent a further report and said that hold no 5 had been inspected again, and gave measurements as follows:

During the discharge of cargo, draft surveys were taken, and the readings indicated that the hog (or sag) varied little: on 5 November 2009, there was no hog; on 6 November 2009 the hog was minus 27mm (that is to say, there was a sag of 27mm); on 7 November 2009 there were readings of hogs of 22mm and 15mm; and on 15 November 2009 the hog was 6mm. The changes were so small that Mr Colman thought that they were not “realistic”. Neither party relied upon them, and I disregard them.

On 3 December 2009 the vessel moved to Bhavnagar anchorage, and she was permitted to stay for 15 days to 18 December 2009 for inspection of the damage. Mr Moschos inspected her on 5 December 2009. Captain Bourdis was in attendance, and told Mr Moschos that he could not inspect the double bottom tanks because they were full of ballast water. Mr Moschos also understood from Captain Bourdis that on 15 November 2009 the tanks in way of both hold no 5 and hold no 6 were found to be open to the seas and full of sea water to sea level. It later became clear that only hold no 5 was open to the seas: although Mr Moschos was cross-examined about this misunderstanding at some length, I do not consider it significant to his credibility or anything else.

Mr Moschos inspected the bulkheads between holds nos 4 and 5, between holds nos 5 and 6 and between holds nos 6 and 7; the tank tops in way of nos 5 and 6 holds; the port and shell plating and the internal frames and brackets in way of nos 5, 6 and 7 holds; the deck plating on the port and starboard sides of the deck for the whole length of the vessel; and the deck plating between nos 5 and 6 cargo hold hatches.

On 6 December 2009 Mr. Moschos prepared calculations to give “an idea” of the cost of repairing the vessel. He reported orally by telephone late on 6 December or early on 7 December 2009, and on 8 December 2009 he prepared a draft of his first written report, and (I infer) sent it to CSME. After checking the draft, he sent a report dated 15 December 2009: it was, as Mr Moschos said and I accept, “in effect … the same report” as the draft of 8 December 2009. The report of 15 December 2009 was in evidence, but the draft of 8 December 2009 was not.

Mr Moschos reported that the damage found on his inspection included the following:

Mr Moschos also reported that he had been provided with draft readings taken on 6 December 2009, and that they indicated that the vessel was “out of alignment and set upwards in way of amidships by 0.5 metres”. He said that this corresponded with what he observed about the cargo holds and the main deck.

Mr Moschos’ report did not mention damage to the engine room, and he saw no damage there. However, he could not see below the floor plates because the bilges were full of water, and he could not see the lower parts of the pillars of the engine room or the bed that the main engine rested on. He saw the upper pillars, and, although he did not inspect them closely, I infer that, had there been significant damage, he would have noticed it.

With regard to the main engine, Mr Moschos reported that the crankshaft deflection readings taken on 14 November 2009 indicated “serious misalignment and possible bending”, and that the crankshaft showed “indications of movement towards aft and clearance of approximately 20 mm can be seen”. In cross-examination he qualified his assessment of 20 mm, and (as I understood a rather confusing sequence of questions and answers) he explained that the actual movement of the crankshaft was only 10 mm, but that the impact of movement on the thrust pads meant that they lost about 8mm of metal, resulting in a total clearance of nearly 20 mm. In his report he described the thrust pads as “destroyed” and said that the thrust bearing surface was severely scored “over its entire face fore and aft.”

He reported this of the generators: “The auxiliary machinery was working during [the time that the vessel was held by pirates] without any maintenance as this was prohibited by the pirates. Accordingly the reliability of the generators and auxiliary equipment cannot be relied upon. Note the port outer generator [sc the no 3 generator]has already seized during piracy period and is out of commission”. In cross-examination, Mr Moschos explained that he had been told by CSME before he went to Bhavnagar about the no 3 generator. He also said that his concern about the other generators was not because of anything that he had been told about them, but because he thought it likely that, whenever a vessel had been held by pirates, her engines and generators will have been mistreated. I accept Mr Moschos’ evidence about this: it is reflected in the language of his report (“Accordingly”), and nothing in the report or otherwise in the evidence indicated that Mr Moschos had any specific or reliable information about the nos 1 and 2 generators. Had he been told in general terms that they were unreliable, he would, I think, have sought details and his report would have reflected what he was told. (In reaching this conclusion, I recognise that, when he later sought quotations for repairs, Mr Moschos requested that they should include overhauling the generators, but I do not accept that this reflects information that he had about their state: it was natural to include this work, given the scale of works that were contemplated, and see para 25.)

Mr Moschos made this assessment of the position:

Mr Moschos thought that the damage to the hull structure was a result of the grounding, and that the main engine was damaged “during the efforts to refloat”. He considered that “As a consequence of the grounding the vessel broke her back and twisted and because of this during efforts to refloat the alignment between the main engine and the shafting was disturbed”, and that the cost of repairs would “well exceed” the insured value of $12 million. He explained in cross-examination that he was working on the basis (i) that the vessel would be repaired by what I shall call a “section method”, that is to say by replacing holds nos 5 and 6 entirely; and (ii) that some 2,000 to 2,200 mt of steel would be required, and that steelwork would cost $5 per mt.

Mr Moschos’ overall assessment of the position was that because of her unstable condition the vessel could not negotiate an open sea voyage, even assisted by tugs; and that, because of the high tidal streams, if she lost her second anchor, she would then be in serious danger of being stranded and the lives of the crew at risk. He wrote:

“The vessel has to be moved by 18 December 2009. She can go nowhere on her own and will require tug assistance. But the reality is, given her lack of longitudinal strength, that she cannot leave the Gulf of Khambhat. In all the circumstances, the obvious conclusion is that the vessel should be sold for scrap to a buyer at Alang - 20 or 30 miles south of her present location. Delaying the decision puts at substantial risk the residual scrap value presently in the vessel by avoiding salvage/wreck removal costs”

Having received Mr Moschos’ preliminary report, on 9 December 2009 the claimants served on the underwriters notice of abandonment: “Having assessed the extent of structural damage to the hull and main engine damages, Owners consider that the cost of repairs to the hull, alternatively the cost of hull and engine repairs will well exceed the insured value of the vessel …”. On 10 December 2010, the underwriters declined the notice, but agreed that the claimants should be treated as if proceedings had been issued when it was given.

On 11 December 2009, while the vessel was lying in ballast at Bhavnagar anchorage, she was inspected by Mr George Sarbanis, a Senior Surveyor with BV. He was not called as a witness, but he prepared a report dated 15 December 2009, which is in evidence and in which (unsurprisingly) he recommended that the vessel’s classification remain suspended. He could not conduct an underwater survey, but reported on the hull so far as he could. He said that:

The part of Mr Sarbanis’ report about machinery referred only to the main engine. He said that “Main Engine in each entirety seems to be damaged”; that the shafting system and thrust block had “moved aft by almost 20 mm”; that metals and “white ones” were spread round the crankcase, lube oil system, filtering, bearing and shafting bearings; and that the crankshaft case showed signs of white metal and smoked black areas. His report did not refer to the crankshaft being bent or to bearings being damaged.

On 18 December 2009 BV advised CSME that the vessel had been suspended from class since 13 December 2009, explaining that “due to reported defects, the Society considers that the ship is not entitled to retain her class”.

In January 2010 Mr Moschos was in China, visiting the yard of COSCO in Zhoushan in relation to another vessel, and while he was there he was sent Mr Sarbanis’ report. He concluded that (as he put it), “To carry out the repair anticipated by Class, the shipyard would have to have facilities for lengthening vessels”, and that the steelwork would cost less in the Far East than in the Gulf. (It is, as I understand it, uncontroversial, and certainly I conclude on the evidence, that generally steelwork is less expensive in the Far East than in the Middle East: see para 473.) Mr Moschos therefore asked COSCO to quote for the works. He provided the yard’s representative with photographs and also a copy of Mr Sarbanis’ report, and this was used as a basis for discussions with COSCO. They were not given a written specification.

According to Mr Moschos, COSCO considered that, in order to reinstate the vessel and to align her, it was necessary to cut out the centre section and to introduce a new section between the fore and aft sections: that is to say, it was necessary to adopt the section method of repair that he had recommended in his report. (In cross-examination he referred to cutting out a section comprising holds nos 4 and 5, but he clearly intended to refer to a section of holds nos 5 and 6.) COSCO, according to Mr Moschos, said that “that would comply with class recommendations, but it also would present a ship that is not hogged or misaligned or twisted even”. He denied that he had asked the yard to quote for repairs using the section method, and said that that was their opinion of what should be done.

On 15 January 2010 COSCO wrote to CSME that:

“the only efficient way to carry out the recommended repair in the double bottomed tanks i.e. replacement of bottom plate, bottom longitudinals, girders, floors, webs, tank top etc, in double bottom tanks and hopper tanks as well as replacement of hopper plate together with longitudinals is to prefabricate sections of the tank structure and then to fit outboard, including tank tops and side shell. Each double bottom tank will require 8 blocks.

Cutting and filling will take place in 4 or 6 places at the same time.

Taking into account the amount and scope of steel works in the tanks, trying to repair them by cropping and renewed of the steel structure in situ, much likely will result to deformation of the ship’s structure”.

Later that day, COSCO sent a quotation of $17,406,680 as a “lump sum price after discount” for repairs at their yard using the section method.

Mr Sarbanis had recommended by way of repairs that the bulkheads, tank tops, hopper plating and fuel oil tank areas be “cropped and renewed” as required. Mr Smith relied upon this to argue that Mr Sarbanis’ view was that the necessary repairs should be carried out by cutting out the damaged areas and renewing the damaged steel (that is, by “cropping and renewing”), and that it was not necessary to cut out and to discard an entire section of the vessel; and so he disputed that the section method, on which COSCO based their quotation, was necessary in order to comply with what BV recommended. However, Mr Sarbanis also wrote this with regard to the damage to the deck plating: “the whole affected deck plating with the associated internals to be examined and renewed as required”, and “The whole ship’s deck plating to be checked for alignment, ship’s longitudinal strength to be recalculated and restored as original. The whole ship’s original structure integrity which has been impaired due to grounding to be returned to its pre-damaged condition”. He added this explanation:

“Due to the nature of the damage i.e. extreme hogging/misalignment and twisting of the vessel’s hull, she has to be placed into a ship building graving dock for further investigation of the hull structure damages. Thus re-instate the longitudinal and the transverse strength integrity returning her in all respects to the pre-damage condition including but not limited to alignment of the vessel. All above repairs to be dealt with according to the Class requirements/supervision.”

I reject Mr Smith’s submission that the BV report recommended that the damage could be repaired by renewing and cropping damaged areas. As I read it, Mr Sarbanis thought that specific areas by way of the bulkheads and plating could be so repaired, but that this would, or at the very least might, not deal with the alignment of the vessel. Apparently, Mr Sarbanis associated this particularly with the condition of the deck, unsurprisingly because that is where alignment problems would be most apparent. It is clear from his recommendations about the deck and his note that Mr Sarbanis was not suggesting that alignment could be dealt with by renewing and cropping.

Mr Stathopoulos wrote to BV explaining the method of repair that COSCO proposed and inviting their comments, and on 18 January 2010 Mr George Andreadis, BV’s Marine Central Manager at their Piraeus office, replied with their observations:

“a)

It appears that there is extensive damage leading to permanent deformation at and around the main deck in the area of cargo holds five (5) and six (6). Similar damage also appears in the double bottom in the same area including the hoppers. Unfortunately this type of damage cannot be repaired. The only acceptable method is replacement of the affected/damaged area. This is due to the fact that the damaged area has been subjected to plastic deformation from to (sic) bending moments exceeding the capacity of the vessel. Due to the global nature of the deformation the only way to restore the vessel to her pre-accident condition is the refabrication and replacement of the damaged section.

b)

Given that almost 30% of the cargo hold area of the vessel will be cut at two sections, the repair process is a challenging task. Special attention needs to be paid on the logistics of the repairs and the welding sequence of the new section to avoid high residual stresses and welding induced distortion. These are by themselves challenging technical problems.

c)

We suspect that the main engine and the propulsion shafting arrangement of the vessel might also have been heavily damaged. This has to be verified and checked and proper corrective actions to be taken. It’s almost a certainty that the alignment of the propulsion shaft needs to be reworked due to its sensitivity to hull deflection.

d)

We are concerned on the matching/alignment of the new and old sections. This process necessitates extensive repairs at the old sections of the vessel as well, to achieve an exact match.

e)

The cost estimate of such repairs is beyond the scope of Classification. Nevertheless it is surmised that it will be extremely high.” (emphasis added)

The claimants contended that in this email BV stated that the only suitable and only “acceptable” method of repair was that contemplated in COSCO’s quotation, that is to say by cutting the vessel into three sections and replacing the middle section. They relied upon the email:

The defendants disputed this:

It is true, as Mr Smith pointed out, that BV’s role was strictly simply to appraise vessels in service in order to assess their compliance with its rules and to decide whether to issue a certificate. A classification society such as BV will not engage in an assessment of the design or build of a vessel or formally advise owners about the proper method of repairs. That said, Mr Smith acknowledged, in my judgment rightly, that I can properly rely on the BV report when I consider whether and how the vessel might be have been repaired, while recognising, of course, that Mr Sarbanis was not cross-examined upon it.

On 26 January 2010 Mr Moschos provided to CSME “his estimated analysis of cost involved in the repairs necessary to restore the vessel to her pre-damaged condition” based on the quotation from COSCO, expressing the opinion that theirs was “the only feasible way to repair the vessel”. He estimated that the cost of the repairs would be $21,676,680 (or $23,844,348 if an additional 10% were allowed for contingencies), the estimate including $1.5 million for temporary repairs so that she could be towed to COSCO’s yard and a further $1.5 million for towage. He referred to the possibility of repairs being done in Dubai or Bahrain, but (i) he expressed “substantial concerns” about whether there were the necessary facilities to construct and rebuild or weld in place new sections, and (ii) he estimated that the costs might exceed those of COSCO because of the “considerably higher” price of steel and because yards would probably be reluctant to commit their dry-docks for the necessary time.

Mr Moschos gave further advice about how much it would have cost to repair the vessel in a letter dated 30 November 2010 after he had obtained a quotation from Jurong Shipyard (“Jurong”), Singapore. Their quotation, dated 26 October 2010, was provided in response to a specification of MMM dated 7 October 2010, and by then the vessel was being scrapped at Alang: Mr Moschos did not tell Jurong this, and sought the second quotation from Jurong simply to help him to assess how much repairs would have cost. It was for S$28,044,932, the equivalent of about $21,575,000, and it included S$24,690,180 for steelwork repairs. On the basis of their quotation Mr Moschos estimated that the total cost, including the necessary temporary repairs and towage, would have been $28,895,000, or $31,784,500 if 10% were allowed for contingencies: as well as the repairs for which Jurong provided a quotation, Mr Moschos allowed $5 million for temporary repairs so that the vessel could be towed to the yard, another $1 million for towage and other incidental expenses of $1.32 million. Mr Moschos thought that COSCO might have provided a lower quotation if presented with Jurong’s price, but he still thought that the repairs would have cost about $28 million to $30 million.

Mr. Dimoulas of Tecnitas prepared for CSME a “Calculation of the Residual Strength after Grounding” dated 19 April 2010, in which he calculated that the residual structural strength of the vessel, and a “Calculation of Temporary Repairs for Towing” dated 23 April 2010, in which he calculated the temporary repairs required in order for the vessel to be towed from her position off Bhavnagar to a shipyard for permanent repair. He had considered the report of Mr Moschos dated 14 December 2009, the report of BV dated 15 December 2009, and a report of Dr Dingwall’s dated 12 February 2010, to which I refer below (at para 226). Mr Dimoulas also relied on photographs for what he called “consistency checks”. I shall consider Mr Dimoulas’ views further later in my judgment, but his conclusions included these:

On 23 and 29 April 2010 Tecnicas provided their reports to BV. BV then wrote to CSME stipulating what they considered to be the minimum temporary repairs that they would require if the vessel were to be towed in unrestricted navigation water. They reflected what Mr Dimoulas advised, and their requirements were:

By an agreement dated 16 July 2010 the claimants agreed with Product Plus International Ltd to sell the vessel for scrap on a “as is, where is” basis: that is to say, in her damaged condition at anchorage at Bhavnagar. On 2 August 2010 she was towed to Alang, and she was beached for scrapping on 8 August 2010. The beach was of sand and soft mud: the vessel was on soft mud, which made inspection difficult, particularly on the starboard side, and the aft of the vessel was inaccessible. Dr Jones explained that there were no rocks of any size on the beach: there was only rocky material of about the size of a brick and set in the mud, and this would not (as Dr Jones thought and I accept) have caused damage if the vessel came to rest on them. Mr Moschos gave similar evidence. There was debris on the beach from other vessels: Captain Gregory suggested that it might have caused damage to the bilge and lower shell plating, but Dr Jones saw no such debris underneath the “Irene EM”.

When Mr Carney saw the “Irene EM” at Alang on August 2010 she was (in his expression) “sandwiched” between two other vessels. By 25 August 2010 holes had been made in her side shells for the winching chains. On different occasions between August 2010 and January 2011 she was dragged up the beach by winches, bow first. She was scrapped in stages from September 2010, starting at her bow and working to her stern.

As well as that to which I have already referred, the evidence about the nature and extent of the damage to the vessel was from witnesses who inspected her at Bhavnagar and from inspections while she was being scrapped at Alang. It is convenient to set out the inspections in chronological order.

Mr Murray inspected the vessel for the hull and machinery underwriters on 7 December 2009. As he approached the vessel, he saw no sign of external damage. His evidence was that, when on board, he went into holds nos 5, 6 and 7: he said that his access was “limited to the areas that the Owners deemed relevant”, and he was told that there was no damage in holds nos 1, 2, 3 and 4. Captain Bourdis disputed this, and said that Mr Murray was permitted to carry out a thorough inspection. The issue is not important, but I do not accept (if it be suggested by the defendants) that the claimants unduly restricted the inspection. The only point put to Captain Bourdis in cross-examination was that he told Mr Murray that he did not need to go holds nos 1,2,3 and 4 because there was no damage there, but I reject that: there was, after all, damage in no 4 hold and there is no reason that Captain Bourdis should have said otherwise. Mr Murray specifically said that Captain Bourdis refused a request for the double bottomed tanks to be pumped in order to assess whether the tanks by way of holds nos 5 and 6 had been breached. I accept Captain Bourdis’ explanation that these were heavy fuel tanks and a pumping test could not have been done (i) because the fuel oil piping was not connected with the ballast piping and (ii) it would have risked oil pollution and was prohibited.

Mr Murray reported on 10 December 2009 as follows:

“It is not feasible to carry out an underwater survey at the present anchorage due to the very poor clarity of the water and thus it is not possible to ascertain the full extent of damage at this time.

Though it would appear from internal inspection that the damage extends from No 3 to No 7 hold and quite possibly beneath the engine room. However it is evident that the [fuel oil double bottomed] tanks no. 5 and 6 have buckled. In addition the transverse bulkheads and side frames have buckled in holds 4-7.

All plans etc were reportedly burnt whilst the vessel was under captivity and therefore the thickness of plates, framing spacing etc is unknown at this time but it is assumed that the damage extends across the full width of the vessel we can arrive at a likely renewal in the order of 80x27 metres, which assuming 18mm plate and allowing 25% of internals very roughly gives a steel renewal in the vicinity of 390 tonnes.

The main engine needs to be stripped down to ascertain the full extent of damage but clearly the journal bearings, thrust bearings/pads are damaged and it is possible that crankshaft is also damaged and that the engine may need realignment and re chocking. At the time of attendance no work/stripping down of the main engine had been commenced.”

The second paragraph that I have set out described more extensive damage to the bottom of the hull than the defendants accept was caused by the grounding. Mr Murray was cross-examined about it, including about the reference to possible damage beneath the engine room. He first said that he was referring to bulkhead damage, but it is clear that he was not: his report went on to describe damage to the bulkheads separately “(In addition”), and I reject his explanation that he made “a grammatical mistake”: it was (if a mistake at all) one of substance. Mr Murray then sought to explain that he wrote this part of his report because CSME had told him that the vessel had run aground from the stern, but again that is inconsistent with the report: it was describing his internal inspection. I recognise that Mr Murray apparently did not write the report on his own: his superior at Noble Denton, Captain David Jackson of their Middle East office in Dubai, later wrote to Captain Gregory and others on 13 January 2010 that it was written “almost entirely by myself, based on [Mr Murray’s] efforts and with a question and answer session between us”. Nevertheless, it is, to my mind, clear that after this first inspection Mr Murray thought (rightly or wrongly) that the bottom structure, including the structure under the engine room, was damaged. I can only conclude that his answers in which he sought otherwise to explain the report were not truthful.

Mr Murray made a rough estimate that the cost of repairs might be around $6.4 million, taking the cost of renewing 390 tonnes of steel in Dubai Drydocks to be about $2.75 million and allowing $2.5 million for engine repairs on “worst case scenario”. He assumed a cost of renewal works of $7 per mt, which he described in his evidence as a “high price”. It was not a reliable estimate: Mr Murray accepted that he had no training and little experience of estimating the costs of claims. More tellingly, the history of how he came to estimate the sum of $6.4 million shows that it is little more than a guess.

Mr Murray had originally suggested that Noble Denton recommend to underwriters a reserve of $2 million, on the basis that something in the range of 300 tonnes of steel would be renewed and that “If yard employed is in the Far East steel renewal costs should be in the range of USD 500,000”. He changed his estimate of $2 million because, as he put it in cross-examination, “Everyone laughed at my first advice” and he had “tried to minimise the cost for the owner”. On receiving a draft of his report, Captain Jackson advised him in an email dated 13 December 2009 that underwriters prefer the cost of damages to be overestimated rather than underestimated, commenting that he did not understand how Mr Murray had reached his assessment of 300 tonnes of steel, and suggesting that, without knowing the full extent of the damage and (as I understand the email) accepting for this purpose the assessment of 300 tonnes, the total costs would be “somewhere close to US$6,000,000”. I set out Captain Jackson’s comments because, although he had little information about the extent of the damage, (i) they give an indication of the kinds of costs that the claimants faced in addition to the actual costs of repairing the hull, and (ii) they are of interest when assessing the repair costs that might have been expected:

“1.

Clearly the vessel would have to be towed to the Far East which would be a 30 day tow with costs of a minimum of US $500,000.

2.

Steel renewals in Dubai the nearest port which could handle this are US$6 – 8 kilo which gives about $2,100,000 for steel renewals, even in China you won’t get better than US$3 per kilo which gives about US$1 million plus towage costs.

3.

A Sulzer RN76 is a large engine, repair costs given that we are going to have to strip the engine right down are easily going to be US$500,000 before we start talking line boring, crankshaft renewal etc. Probably US$2,500,000 is more likely.

4.

Dry-docking costs, 300 tonnes of steel is a minimum 30 day job, whilst engine repairs are more likely to be 90 days, US$350,000 is very conservative.

5 Superintendence for 90 days is US$90,000.

6.

Technicians for 90 days US$150,000

7.

Chuck in ventilation, staging, class, cranes, parts etc etc another US$500,000 minimum.”

I accept Mr Templeman’s submission that Mr Murray’s report and his estimate of repair costs of $2 million can be disregarded as evidence about what repairs were required or the cost of them.

In December 2009 Mr Carney instructed Mr Boyd to inspect the vessel for the ACR underwriters. The scope of his inspection was agreed in advance by the claimants. Mr Boyd went to Bhavnagar on 20 December 2009, and he inspected the vessel, attended by Captain Bourdis, on 21 December 2009. It was arranged that he should only conduct a damage survey, and he was not to interview the crew or to examine the log books, but CSME provided him with the vessel’s shell expansion and transverse section plans.

Although this was not apparent when he first saw the vessel, as they came close to her by boat Mr Boyd observed that she appeared to be hogged in way of nos 4, 5 and 6 holds, and that she had a heavy build-up of marine growth. He noted that her draught amidships was 13 ft. (The currents were too strong for the boat to go close enough for him to read the fore and aft drafts.) When he was on the vessel, he was not able to go into the tanks, but his observations were these:

On 21 December 2009 Mr Boyd sent Mr Carney a reporton his inspection. He said that the vessel would need to be dry-docked to determine the full extent of repairs that were required, and (although he offered some observations about what repairs appeared necessary) he could not give an accurate estimate of their cost until she had been dry-docked and the damage fully ascertained. However, he thought that the cost of steel repairs (including dry-docking and what he called “general services”) “could reach USD 6 million although this is considered to be almost a worst case scenario”. Mr Boyd assumed that the method of carrying out the repairs would be by way of cropping damaged steel and renewing it, but also he said this: “In respect of damage to the double bottom structure we would recommend that consideration be given to using block construction, although care has to be taken to prevent the hull from distorting when cutting out the damaged section”. He explained this method (which I call the “block method”) in cross-examination: the yard would cut away blocks of the hull (rather than each piece of damaged steel) and replace them with new blocks that had been fabricated. Essentially, while this would use more steel, it is potentially quicker and cheaper because of lower labour costs. Mr Boyd also gave a provisional estimate (pending further inspection) of $2 million for engine repairs. Although he worked out this assessment in a written calculation, he did not produce it and could not recall details of it.

In January 2010 Captain Ogg, who had been retained by the H & M underwriters went to Bhavnagar to interview members of the crew, and Mr Carney went with him to “find out more about the circumstances of the loss”. On 7 January 2010 Mr Carney and Captain Ogg visited the vessel with Captain Bourdis and Mr Cashman, but Captain Ogg was not instructed to survey the vessel and Mr Carney did not, he said, “carry out any detailed survey of the Vessel”. Their boat made a circuit of the “Irene EM”, and Captain Ogg observed that the hull was coated with hard marine growth. He did not notice that the vessel was hogged “to any discernible extent”, and, although Captain Bourdis suggested to him that the vessel’s back was broken, he saw no sign of this. However, when cross-examined, he accepted that “it may well be that she was hogged”.

Mr Carney said that he “could not see anything to suggest that the Vessel had suffered major structural damage”, but that the vessel “might have had a slight hog”, meaning, as he explained in cross-examination, a hog of 0.2, 0.3 or 0.4 metres. However, he added that it was not readily discernible and the vessel might not have been hogged at all. He denied that the hog was as much as 0.75 metres: he was confident that, as an experienced engineer, he would have noticed that. I do not find this evidence persuasive: it might be that Mr Carney was not observant about the vessel’s hog because he thought that a slight hog “is not abnormal in a vessel of that age”, that owners “deliberately hog their vessels so that they can carry slightly more cargo” by lightening some tanks and filling others, and that a hog of 0.4 metres was “nothing undue”. However this might be and whatever the reason, I conclude that Captain Ogg and Mr Carney were not looking to see whether the vessel was hogged, and I do not accept that their evidence about this is reliable.

Mr Carney observed “a small crack in way of one of the no 4 aft end hatch coamings”. He described the fracture surface as dirty and corroded, and the crack did not look recent. Captain Ogg gave similar evidence. Mr Carney and Captain Ogg looked into the cargo holds through open hatch covers, but did not go into them. They saw that the forward bulkhead in the no 5 hold and the corresponding aft bulkhead in the no 4 hold were buckled, and Mr Carney also saw that the aft bulkhead in hold no 6 was buckled (but does not recall corresponding bulkhead buckling in no 7 hold: he must have missed that or forgotten it). Captain Ogg said that on the starboard side of the no 5 hold there was horizontal creasing to the lower sloping hopper side place.

As I have said, the vessel could not be inspected underwater in December 2009 and these initial inspections did not establish whether she was strong enough to be towed a position for underwater inspection. Therefore, at around Christmas 2009 Captain Gregory of Noble Denton’s London office arranged for Dr Dingwall, a naval architect, to inspect her, and Dr Dingwall and Mr Murray visited the vessel on 9 January 2010. Again Mr Murray observed no buckling, deformation or cracking as they approached the vessel, but draught readings were taken and, when reviewed, they indicated a hog. Mr Murray’s evidence was that on this occasion he was allowed access to all the cargo holds, and the double bottom fuel tanks were sounded to assist Dr Dingwall with stability calculations. (Captain Bourdis would not pump the tanks because he did not want to alter the stability of the vessel.) Mr Murray saw no damage to the engine room, and none was drawn to his attention.

After this further inspection Mr Murray wrote another report dated 2 February 2010, and he reported that it could be seen looking down the length of the hull that the vessel was hogged: he explained that the report had been prepared in collaboration with Dr Dingwall, and he had not observed the hog himself: “Everybody was saying it was hogged and I looked at the paint and said, ‘Okay, this looks a bit hogged’, so I have to agree”. The report described the top tank plating for no 5 hold as being “set up by about 40cm sloping down towards the forward bulkhead” and for no 6 hold as being set up by about 20cm towards the starboard. He reported distortions to shell frames and brackets on both sides in holds nos 6 and 7. The report recommended that the estimate of repair costs be kept at $6.4 million.

In his statement, Dr Dingwall said that, as they approached the vessel, he observed a slight hog and that she was covered by marine growth. However, in cross-examination he said that he could tell that the vessel was hogged only when he was on the deck: he explained that, looking down the vessel from the bow, “you could not miss the fact that it was hogged” and that she had a slight twist. I accept that Dr Dingwall’s statement was inaccurate and that he saw the hog only when on the vessel. They circled the vessel in their boat and saw no signs of buckling, deformation or cracking. The sea conditions were benign and draught readings were taken that Dr Dingwall considered accurate to 5 cm. They were as follows:

Dr Dingwall concluded that the draught readings indicated a slight twist of the vessel in a clockwise direction looking from stern to bow, which he thought not uncommon in a vessel of the age and type of the “Irene E.M.” He also concluded, as he said in his evidence and in his report after the visit dated 12 February 2010, that the vessel was set up by about 0.4 m at midships, writing in his report, “This equates to 0.2% of its length and is not considered extreme or indicative of an unstable vessel”. I do not accept that this conclusion about how much the vessel was set up is reliable: first Dr Dingwall accepted that readings of this kind can only give a “general profile” of the vessel at the water line. Secondly, the statement supposes that the hog is evenly distributed along the length of the vessel and it was not: Dr Jones reported that the hog it was localised at midships, and I accept that. Mr Dingwall agreed (and it is obvious) that “If you get more of a bend amidships, the strain would be greater…”; that the maximum bending strain would be at the top and bottom of the hull girder: and that excessive bending would cause compressive buckling of the whole structure. (In view of this I need not consider further Mr Colman’s evidence that he calculated from the draught readings that the hog would have been only 0.2m to 0.3m if evenly distributed.)

Dr Dingwall inspected the main deck, the hatch covers and the cargo holds. He observed that some steel had been replaced, and he was told that this had been done in 2008. He found that the deck plating was generally in good condition, apart from some cracks that were corroded and apparently old. He described the state of the vessel, including the cargo holds, in his report of 12 February 2010, and the description is in largely identical terms to Mr Murray’s report of 2 February 2010. Strikingly, they both stated in materially the same words that in hold no 6 “the forward bulkhead was damaged across its entire width in an arch shape” and Dr Dingwall also stated that the shape was “similar to that found in Hold 5”: that bulkhead was not so damaged. I infer that one of them copied, or at least extensively drew upon, the report or a draft report of the other without carefully and critically reviewing it. I cannot give them the weight that two independent and mutually corroborative reports would have had.

The reports of Mr Murray and Dr Dingwall about the holds included the following:

With regard to the tank top plating:

Dr Dingwall reported that, in view of the accounts of the grounding and the deformation observed in the cargo holds, it was suspected that the bottom of the hull had suffered severe damage in terms of cracking and buckling of the plating in an area around amidships. He was also told, he said, that sea water had been found in the no 5 double bottom fuel oil tank, indicating a crack or hole in the bottom plating: “… it was reported to [him] that sea water has been observed on the sounding tape of no 5 [double bottom fuel oil] Tanks (port and stbd) suggesting seawater ingress through a crack or hole in the bottom shell plating”. He therefore made an assessment of the bottom hull plating, and concluded on what he regarded as a conservative basis that the grounding had rendered all the bottom hull plating and stiffening ineffective.

Dr Dingwall opined in his report of 12 February 2010 that the vessel could be towed subject to certain criteria being satisfied, including that:

I should explain the circumstances in which Dr Dingwall wrote his report. Some time after he visited Bhavnagar, Dr Dingwall went on holiday, but before doing so he had started work on a computer structural model and produced an initial structural analysis for it. The plan was for this work to be followed by a more elaborate structural analysis. However, while he was away Noble Denton were pressed for information that the underwriters could use to respond to what was described as “the ship owners’ further submission”. On 7 February 2010 (a Sunday) Captain Gregory sent an email to Dr Dingwall asking for a report the next day, apparently unaware that he was away. On 8 February 2010 Captain Gregory sent an email to Mr Garry Blowers, Dr Dingwall’s line manager, asking for the results of the computerised structural model and writing “We have lots of credibility at stake here. Don’t need anything fancy, just need to know if we have to roll over and die, or if there is a case here to argue”. (Mr Templeman suggested that this terminology indicates that Captain Gregory was looking for arguments that underwriters might deploy to answer the claim rather than making an objective assessment of the vessel and the damage to her. Although I make other criticisms of this kind about Captain Gregory, that reads too much into the email.) Later that day Mr Blowers produced a five page memorandum: it was, Dr Dingwall explained, the work of another naval architect at Noble Denton, Mr Valentine Martin. Captain Gregory was not impressed with it (in an internal email he called it a “shit job by Blowers”), but something of his attitude and concern for accuracy is, in my judgment, reflected in his comment that “[The claimants] won’t understand it anyway”. Nevertheless, Dr Dingwall used what Mr Martin produced as the basis for his report of 12 February 2010: indeed, that is the source of the two scenarios.

When Dr Dingwall produced his report and in the weeks that followed, Captain Gregory and others at Noble Denton considered how an underwater inspection might be carried out, recognising that it was impossible at Bhavnagar. They considered various possibilities, including that the vessel might be towed to Mumbai, to Goa, to Fujairah or to Colombo, but thought that Mumbai was “the best option” in that it had facilities for temporary repairs and was nearer: the tow would have been about 200 nautical miles or, at a speed of (say) 4 knots, about two days. (Mr Colman was more optimistic, and thought that it might have taken 36 hours “with benign wave conditions”, but Captain Gregory had knowledge of such matters, and is not likely to have exaggerated.)

On 9 February 2010 the underwriters asked CSME to arrange for the vessel to be moved to a place where she could be fully inspected, including underwater, and the main engine and propeller shaft could be opened. Local agents replied to Captain Bourdis that this would mean a long tow, possibly to the Persian Gulf. On 10 March 2010 this information was passed on to the underwriters.

On 29 March 2010 the underwriters wrote to CSME that Captain Gregory had advised that it might be possible to have an underwater survey and for the vessel to be dry-docked for inspection at Fujairah, Colombo or “possibly Mumbai as a minimum”. However, the conditions that Dr Dingwall identified would have to be satisfied, but Captain Bourdis did not enquire whether they could be because he was not persuaded that the vessel could be moved at all. He was advised by local agents later, in May 2010, that any tow would have been subject to the requirements of the Indian Directorate General of Shipping (“DGS”), the relevant government authority, set out in Merchant Shipping Notice no 13 of 2008 dated 12 September 2008 (the “MSN”), and that they would require a certificate from the vessel’s classification society. His evidence about this was challenged in cross-examination. I accept that Captain Bourdis had some conversation with the local agents broadly along these lines, but I am not persuaded that he recalled exactly what was said and I do not regard as reliable his evidence about a certificate being required.

On 31 March 2010 CSME asked BV to have a surveyor attend the vessel at Bhavnagar and issue a Certificate of Condition for towage from Bhavnagar to Mumbai, Colombo or Fujairah, stating their minimum requirements. BV responded that they could not issue a Certificate of Condition “without repairs enabling BV surveyor to ascertain ship satisfactory condition for the intended voyage and especially bottom area water-tightness”. When he gave evidence, Captain Gregory said that he considered that, since class had been suspended, BV’s approval for a tow to Mumbai or Bahrain would not have been required.

On 1 April 2010 CSME instructed their agents to enquire whether the Mumbai port authorities would accept a dead ship under tow with no crew on board, and on 3 April 2010 the agents, apparently having consulted the port authorities, repliedthat a dead ship would not be permitted at Mumbai and an underwater inspection could not take place there, and explained that “Generally underwater inspection is permitted at Mumbai inner anchorage, however being a dead ship underwater inspection will not be permitted at Mumbai port”. I interpret the reply as directed to what the agents understood was permitted at the inner anchorage and saying nothing about inspection at the outer anchorage. Furthermore, at the end of March 2010 an Indian naval vessel had capsized at the entrance to Mumbai port, and on 30 March 2010 Mr Murray reported that because of this the dock master had declined permission for docking the vessel at Mumbai dock, and only once it was cleared would a vessel of the size of the “Irene EM” be permitted into the dock “as a special case”. The agents’ reply of 3 April 2010 might well be explaining the temporary position while the port was obstructed, and not referring to a permanent policy of refusing inspection of dead ships.

According to Captain Gregory, Noble Denton’s Mumbai office advised him that Bhavnagar port authorities would have provided the necessary clearances for the vessel to be towed, and that, after inspection at Mumbai BFL anchorage (that is to say, the outer anchorage at Mumbai), the vessel could have been taken into Mumbai port for an emergency dry dock inspection. It is clear that Noble Denton did consider whether the “Irene EM” might be towed for underwater inspection at the outer anchorage. Captain Gregory and Mr Murray had exchanged emails about this:

Mr Murray gave this explanation of the first email, in which he referred to “greasing the authorities”: that he spoke about obtaining permission for underwater inspection in the outer anchorage with three contacts that he had: a ship-owner, a broker and an agent. The first to respond was the ship-owner, who told him that “we might have to bribe the authorities” and he based the reply of 10 February 2010 on this; but he was later told by his other two contacts, probably in the next two days, that bribes would not have to be paid. I reject this evidence as a far-fetched fiction: if he had been told that bribery was unnecessary, Mr Murray would probably have reported this to Captain Gregory promptly, but he certainly would have done so when he received the email of 24 March 2010 referring to “administration charges”. Mr Murray, I regret to conclude, was lying in this evidence, and the fact that he was compelled to accept that the later emails referred to bribery does not detract from this.

Captain Gregory accepted in cross-examination that in the emails of 10 February 2010 and 24 March 2010 the references to “greasing the authorities” and “administration charges” were about paying bribes to the port authorities. He said that he did not know whether the “perks” referred to on 5 May 2010 were also about bribery, suggesting that Mr Murray might have meant “a good lunch”, but I reject that: it beggars belief that anyone could have thought that a promise of lunch had to be confirmed “at the earliest”. I consider later in my judgment (at paras 427ff) whether it would have been legally possible to tow the vessel to Mumbai for inspection and temporary repairs.

Dr Jones first inspected the vessel on 8 May 2010. On approaching her, he observed what he described as a “distinct bend in the hull at midships” in that, whereas on both sides the deck was “essentially straight” forward and aft of the bend, at midships there was a pronounced angular rotation of the deck and the vessel was hogged and her stern therefore lowered: he later calculated from photographs that he took when he was on the vessel that the stern was about 1.5 metres lower than it should have been, and hence that the vessel was set-up amidships by 0.75 metre. On coming alongside at midships, Dr Jones saw buckled side shell plating at the waterline.

When he was aboard, Dr Jones observed the following:

Dr Jones’ observations when he inspected holds nos 5, 6 and 7 were these:

With regard to the main engine, Dr Jones saw the exposed journal surface at the aft end of one of the main bearings, and the exposed “land” (that is to say the band of the surface that had been in contact with the bearing) was about 10 mm wide. This indicated to him that the crankshaft had moved aft of its correct position.

The vessel was beached at Alang on 8 August 2010, and Mr Murray attended the yard on 8 and 9 August 2010. He saw a new gash to the starboard bow from contact with another vessel. He went again on 16 August 2010, and saw more damage on the upper shell plating on the port side from contact with the “Dubai Gate”.

Before the cutting work to scrap her began, the vessel was inspected at Alang by Mr Carney, Captain Gregory and Mr Murray, who visited the yard between 25 and 28 August 2010. (On 27 August 2010 Captain Gregory and Mr Carney were refused entry, the Gujarat state restricting entry to the site for foreigners: on 28 August 2010 they managed to get in.) The vessel had been dragged up the beach, but, according to Captain Gregory, she was still 50 metres seaward of her final position.

Captain Gregory’s evidence was that, when he inspected the vessel, the hull appeared straight, and he did not see hogging on the deck: he suggested that the beaching had alleviated the hog. Mr Carney gave similar evidence. Mr Murray too said that at Alang the hog was less than when the vessel was afloat, but, as I have said, he had not observed the hog for himself at Bhavnagar, and this makes me doubtful whether he would have seen it at Alang.

Before he went on to the ship, Mr Carney observed:

When they were on the vessel, Mr Carney and Captain Gregory saw cracking in the deck plating: Mr Carney did not recall seeing it on his visit to Bhavnagar in January 2010. Captain Gregory said that one crack was 2.73 metres aft of the no 6 hatch cover, and Mr Carney took three sample ultrasound readings of the plate thickness. The steel by way of the crack was only 4.73mm. Another crack was about 2 metres from the forward end of the no 5 hold, and here the steel plate by the crack was some 6.07 mm thick. All the cracking, according to Captain Gregory, was corroded and appeared old, and the readings indicated to Mr Carney (because the plate was thinner nearer the cracks) that the steel was wasted by corrosion. Mr Colman commented that the readings show that the plate was reduced substantially below the original thickness of 18 mm, and that, while this might have been partly due to local tensile loading after the incident, it is likely that the plate had thinned before it.

Mr Carney went into holds nos 3, 4, 5 and 6. Captain Gregory went into only holds nos 4 and 5, but he looked into other holds from the deck through manhole covers on the starboard side. They did not have access to the topside wing tanks because they were not ventilated.

Mr Carney saw no damage to hold no 3. In holds nos 4 and 5 the only significant damage that he saw was the buckling that he had already seen in January 2010 (see para 217): he observed that the damage to the forward bulkhead in hold no 5 was near the join of old and new steel, he saw no cracked or loose paint, and there was no damage to the aft bulkhead.

In hold no 5 Mr Carney did not observe any deformation of the topside wing tanks, and the longitudinal stiffeners on the underside of the main deck and the topside structure generally appeared undamaged. However, he saw damage in way of no 5 hold in that:

With regard to no 6 hold, Mr Carney said that he saw no damage to the forward bulkhead, but the aft bulkhead in no 6 hold was buckled at the bottom and there was also buckling in the shape of an arc further up it. The topside wing tanks were apparently undamaged.

Captain Gregory’s evidence was generally consistent with Mr Carney’s, but he thought that the tank-top of no 5 hold was set up by about 0.5 metres and observed some general waving or buckling of the top. He said that he inspected the external longitudinals of the top side wing tanks, and considered them “intact”. He also saw no deformation to the internal under-deck, the side longitudinals on the starboard top side wing tanks, the under-deck longitudinals or the portside top side wing tanks in holds 5 and 6.

Some double bottom tank covers were opened while Mr Carney and Captain Gregory were on the vessel, and the no 5 tank contained a mixture of oil and water. Mr Murray confirmed that they could not gain access to the double bottom tanks, but from the outside they appeared intact apart from a small hole by a crease around the turn of the bilge on the starboard side at the forward end of hold no 5 and a hole on the port side at the aft end of the hold.

The yard began to cut the vessel on 26 September 2010, and the work continued until January 2011. The scrapping worked along the vessel from the bow to the stern. On 29 September 2010, Mr Moschos, Mr Drikos and Mr Murray attended the yard and conducted an external inspection and also inspected the forepeak tank internally. Mr Moschos sought to reach an agreement with Mr Murray about the extent of the damage, and to put together a joint statement. They discussed the damage after inspecting the vessel: according to Mr Drikos, Mr Moschos “wrote down what we agreed with Mr Murray”; and according to Mr Moschos, Mr Murray accepted his suggestion that they agree upon a joint statement. Mr Moschos said that he made a note of what they had both observed, and that Mr Murray said that he disagreed with nothing in it. Mr Drikos, who was present during the discussion, typed a document that reflected their agreement for Mr Moschos and Mr Murray to sign, and he provided Mr Murray with a copy of it. However, Mr Murray told him at breakfast on 30 September 2010 that he had spoken to “his principal” at Noble Denton and was not authorised to sign anything.

The document read as follows:

Inspection was carried out today by N.S.Moschos, N Drikos for Owners and R. Murray for underwriters.

During this inspection the following grounding damages were found:

Stbd Side:

Fore Peak set in buckled and distorted from bottom and up to approx. 1.5 meter in height cracks on the shell plating internals in way bent/buckled.

The shell plating from bulbous bow to No. 7 Hold as far as could be seen is buckled and distorted to various degrees from bilge keel and below as far as could be seen.

In way of No.4/5 Hold the bottom shell plating found set up buckled and distorted to approx 1.5 meter in height.

Soft mud conditions could not allow further survey aft of No. 6 Hold but buckles and set ins could be seen looking aft from No. 6 Hold. …”

The defendants disputed that Mr Murray had made any agreement about the extent of the damage. Mr Murray accepted that Mr Moschos suggested that they prepare a joint statement and should send it to their principals in order to assist to resolve the claim, and Mr Moschos, with Mr Drikos, drew up a statement and asked him to sign it. However, he denied that he agreed with the contents of the document and that he agreed to sign it. He said that he told Mr Moschos that he needed to speak with Captain Gregory and was “uncomfortable … in becoming too drawn into a discussion” with Mr Moschos about the extent of the damage. In his witness statement Mr Murray said that, after Mr Moschos had shown him a copy of his “note”, he spoke to Captain Gregory, who advised him not to sign any document. In cross-examination, however, his evidence was that he spoke to Captain Greogry after seeing Mr Moschos’ handwritten notes and before seeing the typed document, and that he was then told by Captain Gregory that he could not sign any document. Accordingly, the next day he told Mr Moschos by telephone that he would not do so. He said that he knew the previous day when he and Mr Moschos were together that his instructions did not allow him to sign the document but, in order not to “burn bridges”, he said “in a polite manner … [that he] would need further update”. He was never shown the typed document.

Although this issue engendered indignation, in fact there was little difference between the witnesses about what happened, and in any case it is not important because Mr Murray accepted in cross-examination that the document accurately records the nature and extent of the damage that he and Mr Moschos observed when they both inspected the vessel on 29 September 2010. He disagreed with the document in that it described what was observed as “grounding damages”, but I would not place much weight on Mr Murray’s views about the cause of the damage in any event. Mr Murray was insistent in his evidence that he and Mr Moschos had not conducted a joint survey, but neither Mr Moschos nor the claimants suggested that they had. It is common ground that Mr Murray did not refuse to sign a document on 29 September 2010, but told Mr Moschos that he would not do so only on 30 September 2009: I infer that he was so mild on 29 September 2010 when he reserved his position, or at least intended not to commit himself to anything, that Mr Moschos understood that Mr Murray was going along with his proposal for a joint statement. I think it likely that Mr Murray said something that indicated his agreement with the document’s description of what damage the vessel had suffered by 29 September 2010. Whether or not Mr Murray saw the typed document (and I conclude that he probably did, because Mr Moschos’ account about this incident was generally more consistent and convincing than that of Mr Murray), I do not accept that he ever indicated agreement about the cause (rather than the nature and extent) of the damage.

Mr Moschos and Mr Drikos produced a report dated 18 October 2011 (the “MMM report”) on their findings from their inspections of the vessel at Alang between September 2010 and January 2011. Sometimes inspections were carried out on their behalf by two Indian surveyors, Mr Anil Vohra and Mr Varun Suvarna, because only Indian nationals were permitted entry to the shipyard, but it was not argued that this compromised the reliability of their report. I infer that the cutting process reached the frames by way of hold no 5 by about the beginning of December 2010. Mr Drikos was at the yard every day between 2 and 12 December 2010 carrying out internal inspections of the no 5 double bottom tanks and marking cracks on them: Mr Moschos also carried out internal inspections on 8 and 9 December 2010. Mr Drikos was also at the yard every day between 12 and 20 December 2010 inspecting the no 6 double bottom tanks internally and marking cracks. (I so interpret his evidence, inferring that in his schedule of attendances he mistakenly referred to marking cracks on the no 5 tanks rather than the no 6 tanks on 20 December 2010.) On 21 December 2010 he inspected nos 5 and 6 double bottom tanks with Mr Moschos and Dr Jones. The report of 18 October 2011 was very detailed and identified specifically the girders, plates and other parts of the hull that were judged to be buckled or otherwise damaged. It said that seven cracks were found on the bottom plating in hold no 5, five of which were open to the sea: that evidence was not challenged and I accept it.

On particular issues, Mr Moschos gave the following evidence:

The report also described the damage to the main engine observed by Mr Moschos and Mr Drikos when they inspected the main engine bearings, the crankshaft and the shafting arrangement at Alang. Their description is largely uncontroversial, and I need not deal with it in any detail.

Mr Murray made frequent visits to Alang in November 2010 – on 9 to 12, 15 to 17, 22 to 25, 27, 29 and 30 November 2010. His evidence about what he saw was much less detailed than that of Mr Moschos and Mr Drikos, and I cannot accept that his inspections were as thorough. I mention only that:

On 10 and 11 November 2010 Mr Carney and Captain Gregory visited Alang with Mr Murray and Mr Drikos in order to inspect the internal and double bottom structure in hold no 5. However, when they arrived the cutting had not reached no 5 hold. According to Captain Gregory, he saw new buckling and tank top distortion, which he thought was attributable to winching: it was not, he said, the buckling in the lower brackets that Dr Jones had observed at Bhavnagar in May 2010. I do not consider this evidence important because the buckling in this area that is attributable to the grounding was, in my judgment, reliably described by Dr Jones in his evidence about his May 2010 inspection. Otherwise Captain Gregory observed on this visit nothing that was significantly different from what had been seen in August.

At one point in his cross-examination Mr Carney said that on this visit he had gone into the double bottom tanks by way of hold no 5, but he did not “carry out a detailed inspection”. I do not accept that he went into them at all on this visit: he was confused between what he saw on different visits, as indeed he accepted he might be.

Mr Murray continued to visit the yard on December 2010 – on 1, 6, 8, 9, 20, 28 and 29 December 2010 - but the evidence about what he saw is no less vague than his evidence about the November visits. On 6 December 2010 he visited the yard with Mr Drikos, and by then the double bottom structure by way of the no 5 hold had been cut away from that for hold no 6. Mr Murray said that he went into the no 5 double bottom tanks, and Mr Drikos, according to Mr Murray, pointed out indentations, crack and welding detachments to the no 5 hold. Mr Murray considered that they were caused by material being dropped during the cutting process, and that no buckling was deeper than 10 to 15 cm. His evidence was challenged because Mr Drikos denied in his statement that Mr Murray inspected the double bottom tanks in his presence, but I do not regard this apparent conflict of evidence as significant. In the end Mr Murray accepted that Mr Drikos might not have been there when he went into the double bottom, and in any case Mr Drikos might have been referring only to earlier visits. I accept Mr Murray’s evidence that he went into the double bottom tanks, but probably Mr Drikos was not with him at the time. He said the double bottom structure by way of no 5 hold was not as badly damaged as had been anticipated: “It was expected [from the observations of the vessel at anchorage] that the bottom shell would be compressed and be touching the tank top. However that was not to be the case”. I do not consider that this evidence is reliable: I cannot reconcile it with the document drafted by Mr Moschos in September 2010 (see para 253), which Mr Murray did not sign but with which, he said, he agreed as far as the description of damage is concerned.

Mr Carney and Captain Gregory returned to Alang to inspect the vessel with Mr Murray on 8 December 2010: Mr Moschos and Mr Drikos were there, and Mr Moschos showed Mr Carney and Captain Gregory round the vessel. Again, there is a question about whether they went into the double bottom tanks. In his cross-examination, Mr Moschos said that the defendants’ surveyors “never went into the tanks at Alang” to inspect the damage to the double bottom structure, although he invited them to do so. Mr Carney first gave evidence that he could not remember on what visits he had gone into the tanks, but that he has done so “as soon as those access holes were cut open”: that cannot be right – apart from his visit in August 2010 before work started, he was at Alang only in November 2010 on the abortive visit when the cutting work had not progressed as he and Captain Gregory had expected, and on 8 December 2010, about a week after Mr Drikos had first internally inspected the nos 5 double bottoms. Then Mr Carney said that he believed that he had gone into the tanks in Mr Moschos’ presence when he visited in December 2010.

Despite this inconsistency, I accept that Mr Carney and Mr Murray went into the bottom structure on 8 December 2010: to my mind it is probable that Mr Drikos was with them, and Mr Moschos was unaware of it. I also accept Mr Moschos’ evidence that he tried to show the defendants’ surveyors particular examples of damage such as he described in the report of 18 October 2011, and they declined to allow him to do so. Indeed, when his evidence in cross-examination was clarified, Mr Moschos really said no more than this: that he invited Mr Carney and Captain Gregory to inspect a particular area of the tanks (where two photographs that he took showed buckling), and that they replied “We have seen what we have seen, we don’t need to see any more”. According to Mr Carney, Mr Moschos indicated areas of damage in no 5 hold that he said were caused by the grounding and that he (Mr Carney) expressed his disagreement, and I accept that.

According to Mr Carney, the beach was littered with scrap metal, and the decks and holds had been further damaged by pieces of metal dropped as cutting progressed and by work on other vessels nearby: he saw damage that he had not observed previously, including further damage to the no 5 tanktop, and some buckling damage to the starboard hopper tank which extended intermittently over three longitudinal frames. Mr Carney thought it was probably caused by debris on the beach, but this seemed to me to be speculation: there might have been damage from the cutting process, but there was no convincing evidence that debris on the beach caused significant damage.

As for damage to the double bottom structure, Mr Carney said in his statement that he saw some deformation by way of the no 5 cargo hold, and that the worst damage was between frames 94 and 97 on the starboard side. He also saw that the tank top was deformed in that area and longitudinal stiffeners were “occasionally twisted” and had a few cracks. The damage that he observed tapered to starboard towards the aft bulkhead and extended some 1.75 metres into hold no 6. He saw other “scattered” damage, with less on the port side. In cross-examination he gave a picture of more extensive damage: “The structure was no longer recognisably steel structure for the double bottom of a ship, it had been deformed, twisted, buckled, holed”.

Captain Gregory too said that he saw new damage: creasing to the no 5 hold tank top and further damage at the hopper buckle to internal frames of the no 5 starboard hopper. He also described damage that he attributed to the winching, such as distortion to the double bottom longitudinals beneath the buckled tank tops, creasing to no 6 aft hopper tank and creasing to the engine room bulkhead.

By 28 and 29 December 2010 the cutting process had reached the no 6 double bottom structure. Mr Murray said that he observed no damage to the bottom shell, and that hold no 6 was “in an overall satisfactory condition”. But he saw:

Mr Carney made clear that on no occasion when he inspected the vessel did he see “any signs of any general failure of the Vessel’s double bottom or longitudinal structure”. He described what he saw at Alang as follows: “During low tides about half the vessel’s length just forward of the engine room sat completely unsupported on the beach. This occurred twice daily for several hours for at least a month after the cutting commenced. During this time it was possible to observe the Vessel’s bottom plating. The double bottom structure remained intact and showed no failure in way of No 5 and 6 holds or elsewhere ie there was no evidence to suggest that the bottom structure had collapsed”. He also said that when he saw the vessel at Alang, she was not hogged.

The defendants’ surveyors spent much less time inspecting the damage to the nos 5 and 6 double bottom tanks than Mr Drikos, and their inspections were less painstaking. Mr Carney and Captain Gregory were at Alang for only one day in December 2010, during which they inspected other parts of the vessel as well as the bottom structure. Mr Murray spent more time at Alang, but his evidence about what he saw lacked detail.

Mr Murray’s last visits to Alang were in January 2011. On 15 January 2011, the crankshaft was lifted from the vessel and dropped on to the beach, which broke open the bearings allowing the journals and shells to be seen. This operation was observed by Mr Moschos and Mr Drikos, Dr Jones and Mr Carney. Noble Denton later arranged to subject it to a “hardness test” carried out by Industrial Non-Destructive Testing of Bhavnagar: it was found to be “within range” and no “hotspots or abnormal hardness were observed”.

In emails in and after February 2011 Captain Gregory and Mr Murray considered what repairs to the vessel might have cost, but they clearly were not seeking to be precise and their attitude was partisan On 22 February 2011 Captain Gregory asked Mr Murray for his “guesstimate”, and continued “What about USD 5 million? For a CTL they need USD 12 million: can’t see that”. Captain Gregory said that he had made a “back of the envelope” estimate before suggesting the sum of $5 million, although he also said that it was based on his assessment that 257 mt of steel repairs would be required. Mr Murray replied “I would hit below the belt at USD 4 to 4.5 million although agree that 5 Mill is a very safe figure”.

On 6 April 2011 Captain Gregory wrote to Mr Murray that he was “being pressed for a cost repair breakdown”, and said:

“Told them USD 5 million a few weeks ago, and they need it ‘soonest’, as always, to include numbers in the Defence pleadings. So if you could send it before your leave, that would be great. Do you have something you could put together on a spreadsheet giving the cost breakdown, then add contingency to come up with a number (less than 5m if possible), that we will say ‘say USD 5 million’.”

In an email of 13 April 2011 Captain Gregory said that he “ball-parked” it (by which, I take it, he meant that he put forward his figure of $5 million) on the basis of 200 mt of steel repairs, assuming a cost at Dubai of $7 per mt and allowing a contingency of 25%. Mr Murray responded that $5 million was “a good figure to play around with various allowances”. Later in April 2011 Captain Gregory considered how much steelwork should be supposed in estimating the cost of repairs: on 28 April 2011 Captain Gregory wrote that he had used 200 mt, which he thought “very generous”, although Mr Murray had used a figure of 100 mt in a report and an earlier estimate was 490 mt. Mr Murray replied that he referred to 100 mt only for repairs by way of hold no 5 and that he thought the figure of 200 mt “low”. Later that day Mr Murray put forward estimates in which “Steel renewal reduced to 275 tons”, and apparently assumed a rate of $6 per mt. In a report dated 5 May 2011 Captain Gregory put forward an estimate of $5 million for the cost of repairing the damage done by the grounding. His report was written, as I infer although Captain Gregory did not accept this unequivocally when he was cross-examined, at the request of Clyde & Co, the defendants’ solicitors, for the purposes of the litigation, and Mr Murray subscribed to it. It was based on the repairs being carried out at ASRY and, although I understand that the defence was served before May 2011, an early version of the report was the basis of the case pleaded by the defendants (to which I have referred at para 46). The pleaded case that repairs could have been done for about $4,391,250 allowed:

The sum for hull repairs, $1,670,500, apparently supposed that 257 mt of steel would be repaired, being for renewal of steel in the double bottom sections of holds nos 5 and 6 (100 mt), to tank tops (50 mt) and side shells (50 mt) in these areas and to the bulkheads (57 mt). Captain Gregory explained his calculation as follows: “Because of the additional damage that was done during the beaching, winching in, and scrapping process we have taken a “broad-brush” approach and allowed for the renewal of the whole of the double bottom section at hold 5, areas of side shell in this vicinity, hopper tank plating and hold bulkhead renewals. Accordingly we have allowed for 257 tonnes of steel renewals, which is generous”.

Captain Gregory accepted that the assessment that the repairs would entail steel repairs of 257 mt involved “an element of guesswork”: I can see no rational basis for it. In his witness statement Captain Gregory said that he reached the figure by working from the amount of steel that COSCO had allowed in their quotation (1,985 mt) and then reducing it because the amount of steel allowed in the Jurong quotation (1,400 mt) seemed more accurately to reflect the total weight in the area of holds nos 5 and 6. However, when he was cross-examined, he said that he did not receive the Jurong quotation until November 2012 and that he had not used it when he estimated 257 mt of steel repair, but that his statement described a later “cross-checking exercise”. The exercise itself and the error in the witness statement seem to me odd, but more importantly it does not justify or support the 257 mt figure.

Nor can I understand any other sensible basis for this figure. For example:

The sum of $1,670,500 also supposed that repairs would cost $6.5 per mt: according to Captain Gregory, the price of $6.5 was supplied to him by Mr Murray. Mr Murray’s oral evidence was that the figure did not come from him, but was Captain Gregory’s figure, and Captain Gregory increased an estimated cost of $6 million to $6.5 million. This was inconsistent with Mr Murray’s second witness statement of 25 January 2013: Mr Murray’s evidence there was that he was aware of ASRY replacing 423 mt of steel on another bulk carrier in “late 2007” for $4.69 per mt, and “we” thought the rate of $6.5 “reasonable” in view of the (anticipated) lower amount of steel for renewal. Mr Murray also said that in January 2010 he had had a conversation about the likely cost of steel repairs with “a broker from Interlinks Marine”, who had thought that he would be able to negotiate a rate of $2.5 per mt. However, that is not reflected in any document or in the exchanges with Captain Gregory, and I cannot believe that he would not have shared such information if it had really been indicative of the cost of steelwork for the “Irene EM”.

I am sceptical whether the estimated cost of repairs at $5 million was originally based on 257 mt of steel repairs, but however the calculation was made, the explanations for it given by Captain Gregory and Mr Murray were so unsatisfactory that I can place no credence on it as evidence of what repairs would have cost.

The claimants’ primary case is that the damage to the vessel was caused by perils of the seas covered by the policies. The meaning of perils of the sea is governed by the 1906 Act, section 30 of which provides that, subject to irrelevant exceptions, the terms and expressions in the schedule 1 to the Act shall be construed as there provided, and schedule 1 to which includes a “Rule for Construction of Policy” that: “The term “perils of the seas” refers only to fortuitous accidents or casualties of the seas. It does not include the ordinary action of the winds and waves.”

Section 55(1) of the 1906 Act provides that “Subject to the provisions of this Act, and unless the policy otherwise provides, the insurer is liable for any loss proximately caused by a peril insured against, but, subject as aforesaid, he is not liable for any loss which is not proximately caused by a peril insured against”. A proximate cause is one which is proximate to the loss in terms of “efficiency”, not the cause that is the last (or a cause that is late) in time before the loss: Global Process Systems Inc and anor v Syarikat Takaful Malaysia Berhad, (The “Cendor Mopu”), [2011] UKSC 5 at para 19 per Lord Saville. The question whether a cause is a proximate cause is “to be answered applying the common sense of a business or seafaring man”, (per Bingham LJ per T M Noten BV v Harding, [1990] Ll L R 283, 286-7), that is to say, as I understand this point (despite Bingham LJ’s use of “or” rather than “and”), applying the common sense that it is to be attributed to both underwriters as businessmen and the insured as “seafaring” men.

The claimants’ primary argument is not that the vessel grounded as a result of a peril of the sea, so that resulting loss or damage was (proximately, albeit indirectly) caused by a peril of the sea, but that the grounding was itself a peril of the sea, and for that reason in itself the resulting damage was caused by a peril of the seas. In support of this analysis Mr Templeman cited Arnould, loc cit, which states at para 23-18, “If the ship be wrecked or stranded by being driven ashore, or on rocks and shoals in mid-sea, by the action of the winds and waves, it is a clear case of loss by perils of the seas”. He also cited the speech of Lord Herschell in The “Xantho”, (1887) 12 App Case 503, 509, which was endorsed by Lord Mance in The “Cendor Mopu”, (loc cit) at para 70: “It is beyond question, that if a vessel strikes upon a sunken rock in fair weather and sinks, this is a loss by perils of the sea”. Thus, Mr Templeman emphasised that the claimants do not have to show what caused the grounding in order to show that there was a peril of the sea: just as, in Lord Herschell’s example, the vessel striking on the rock was a peril of the sea, so here the impact of the bottom of the ship on the seabed is a peril of the sea.

Mr Smith did not, I think, accept this analysis: certainly the defence pleaded that the grounding was not caused by a peril of the sea, which does not engage with it. But I accept that the claimants’ submission is in line with authority and correct. However, I also think it inconsequential, at least in this case: it cannot seriously be disputed that the vessel grounded because of the current, and an alternative analysis is that the action of the current was a peril of the seas. It does not matter whether the current was to be expected: since in the schedule to the 1906 Act the adjective “ordinary” qualifies “action” and not “winds and waves”, the action of wind and waves can be a “peril of the seas” whether or not the conditions could reasonably have been anticipated: The “Miss Jay Jay”, [1985] 1 Lloyd’s Rep 264,271, The “Cendor Mopu”, (loc cit) at para 39.

Whichever analysis be preferred, the circumstances in which the vessel grounded are important because, in order to show that the damage was covered by the policy, the claimants still have to establish:

The defendants did not suggest that the “Irene EM” was deliberately grounded. It does not follow that the grounding had an element of chance that is necessary for a fortuity. In The “Xantho” (loc cit at p.509) Lord Herschell said that: “there must be some casualty that could not be foreseen as one of the necessary incidents of the adventure. The purpose of the policy is to secure an indemnity against accidents that may happen, not against events which must happen”. However, if I am right (at para 161) to accept the 10.00 contention and to conclude that the grounding had occurred before any attempt to use the engines, it follows, I think, that the grounding was a fortuity: the grounding would not have been inevitable because of the state of the engines (or for any other reason). This is so whether or not the vessel would not have grounded but for negligence (or other fault short of intentional grounding of the vessel) on the claimants’ part.

I also conclude that, if I am right about when the vessel grounded, as a matter of common sense the grounding, or, if it be preferred, the fact that the current grounded the vessel as it did, was a proximate cause of the damage (in terms of efficiency as well as in terms of time). The grounding might not have occurred, and, as I conclude, would not have occurred had Mr Gomez kept a proper watch, but this in itself does not affect the position, even if Mr Gomez’s failure is itself to be regarded as a proximate cause of the damage (see para 297). The defendants contended that, if the 10.00 contention is upheld, then the negligence of the crew was “sufficiently serious and effective to displace any fortuitous element to the dragging as the proximate cause of the grounding”. This submission does not answer the claimants’ case: the question is not whether a peril of the seas was the proximate cause of the grounding, but whether it was a proximate cause of damage: if the claimants have established that a fortuitous grounding was a proximate cause of the damage to the vessel, it is no answer to their claim that there was another proximate cause. Section 55(2) of the 1906 Act provides that “… unless the policy otherwise provides, [the insurer] is liable for any loss proximately caused by a peril insured against, even though the loss would not have happened but for the misconduct or negligence of the master or crew”.

It is not disputed that, given the 10.00 contention, Mr Gomez was seriously negligent, and as a result he did not do anything to prevent the vessel drifting on the current before she grounded or was about to ground, but I cannot accept that the causal impact of his negligent omission was so potent in terms of efficiency as to displace as proximate causes of the damage the events that he did not prevent, the action of the current that made the vessel drift and the grounding itself. After all, as A L Smith LJ said in Trinder Anderson & Co v Thames and Mersey Insurance Company, [1898] 2 QB 114, 123, “That the negligent navigation of a ship by a person other than the assured affords no defence to an action on the policy of marine insurance against perils of the sea where the loss is immediately occasioned by a peril of the sea is clear, the reason, in my opinion, being that what is insured against is a peril of the sea, which is none the less a peril of the sea through being brought about by negligent navigation”.

I therefore conclude that, on the basis of the 10.00 contention, the damage to the vessel was caused by a peril of the seas and covered by the policies (subject to the defence based on clause 4.3, which I consider at para 322), but I would have reached the same conclusion if the claimants had not established the 10.00 contention. Mr Smith submitted that the vessel’s anchor was aweigh for the whole period that the vessel was moving north, and that she did not drag her anchor at all. I shall therefore consider the position on the basis that the grounding occurred later on 30 October 2009, after the anchor had been weighed and (let it be supposed, despite the evidence about the use of the engine to which I have referred at para 141) the vessel attempted to use her engine, which either failed completely or did not have enough power to hold her against the current. It is possible to imagine other scenarios in which the vessel might have grounded on 30 October 2009, but comparable reasoning would apply to them and I need not deal with them separately.

However, before considering whether in those circumstances the grounding would have been a fortuity and the damage caused by a peril of the sea, I shall deal with another argument that the defendants advanced. Mr Smith submitted that it is incumbent upon the claimants to demonstrate the circumstances of the grounding, and otherwise the claim must fail because the claimants have failed to discharge the burden of proof that is upon them.

There is no dispute that the claimants have the legal burden of proof, subject to two qualifications that are not relevant here, and are that:

The relevant burden of proof being upon the claimants, Mr Smith invoked the speech of Lord Brandon in Rhesa Shipping Co SA v Edmunds (The “Popi M”), [1985] 1 WLR 948, in which the House of Lords allowed the appeal of underwriters against a judgment in favour of the owners of a ship that was said to have been totally lost by reason of perils of the sea. Lord Brandon said this (at p.951B/C): that, in approaching the question whether on the Judge’s primary findings of fact it could be inferred that she was so lost,

“… it is important to bear in mind that two matters should be borne constantly in mind. The first is that the burden of proving, on a balance of probabilities, that the ship was lost by perils of the sea, is and remains throughout on the shipowners. Although it is open to underwriters to suggest and seek to prove some other cause of loss, against which the ship was not insured, there is no obligation on them to do so. Moreover, if they chose to do so, there is no obligation on them to prove, even on the balance of probabilities, the truth of their alternative case. …”.

Mr Smith submitted that therefore, in order to prove that the damage to the “Irene EM” was caused by an eventuality covered by the policies, the claimants have to show on the balance of probabilities “that the alleged grounding probably occurred how, when and where they say it did”: that is to say, as I understand his submission, that the grounding had occurred by about 10.00 before the vessel used her engine (or tried to do so).

I cannot accept this formulation of what the claimants have to prove. The concept of the burden of proof in this context is concerned with a party having to prove its case on an issue of fact, and when questions about it arise the precise determination of issues is critical (as is observed in Cross and Tapper on Evidence (12^th Ed, 2010)). The relevant issues of fact here are whether the grounding was fortuitous (and so a peril of the seas) and whether it was a proximate cause of the damage to the vessel. In order to discharge their burden on these issues, the claimants have advanced a primary contention about the circumstances of the grounding (the 10.00 contention), or, as it might be said to reflect Mr Smith’s submission, about “how, when and where” she grounded. But it does not follow, and I do not accept, that they would have failed to discharge the burden on them if the vessel might equally have grounded later (and after she had tried to use her engine) but that the claimants have shown that in this scenario too the grounding was fortuitous and a proximate cause of the damage. The claimants would still have discharged the burden of proving their case on the issues, because they would still have proved that the grounding was fortuitous and that it was a proximate cause of the damage. This is precisely what Lord Brandon said: he formulated the burden on the claimants as being to prove “that the ship was lost by perils of the sea”, and observed that the underwriters might, should they so choose, “suggest and seek to prove some other cause of loss, against which the ship was not insured” (emphasis added).

Therefore I come to consider whether, in the alternative circumstances described in paragraph 286, the grounding was a fortuity. Mr Smith submitted that it was not because an incident of the kind that occurred is not an event which may happen but an event that must happen: “even in fine weather and fair seas, sooner or later every powerless vessel will drift into something”. The tacit assumption that Mr Smith made, I think, was that the vessel was drifting without any prospect of operating the engines and without any possibility of assistance from elsewhere. I need not consider whether in those circumstances it was inevitable that a vessel would ground because the “Irene EM” was not in that position. On the defendants’ own case the main engine and the generators had had recurrent problems and had been repaired. In the alternative scenario, the fortuity was that the current carried the vessel aground before repairs were done.

There is another answer to this point: the damage was caused by the grounding that in fact occurred: it is not enough for the defendants that a grounding was inevitable because a grounding would have inevitably caused damage of the kind that was in fact done. Of course, in The “Miss Jay Jay”, (loc cit) at p.272, Mustill J said that “A decrepit ship might sink in perfect weather tomorrow, or it might not sink for six months. To this extent a loss tomorrow is not inevitable. But if the ship does sink, there is no external fortuitous event which brings it about.” However, as I understand the judgment, Mustill J did not mean that in these circumstances there would be no fortuitous event, but that the fortuity would not be a proximate cause of the loss. I infer this from Mustill J’s previous sentence: “When a vessel succumbs to debility, the claim fails, not because the loss is quite unattended by fortuity, but because it cannot be ascribed to the fortuitous action of the wind and waves”.

This leads to the question whether, in the alternative scenario, the grounding (or the fact that the current carried the vessel aground) was a proximate cause of the damage. Mr Smith argued that the fact that the engines were (it is supposed) inoperative or ineffective against the current was so much more dominant as a cause of the grounding as to be, as a matter of common sense and in terms of efficiency, the proximate cause of the damage and to displace the grounding itself (or the current) from being in any real sense a proximate cause of it. Again, he relied on the judgment of Mustill J in The “Miss Jay Jay” (loc cit) at p.272:

“Where a ship sinks through its own inherent weakness, there is no loss recoverable under the ordinary form of policy. It is not enough for this purpose that the vessel is unseaworthy. The loss must be dissociated from any peril of wind or water, even if those form the immediate context of the loss, and constitute the immediate agency (for example, the percolation of water through an existing flaw in the hull) by which the loss takes place.”

Adapting that observation to the facts of this case, Mr Smith submitted that similarly, where a ship drags and grounds through her own inherent inability to stem the (predictable and predicted) tidal currents, no loss is recoverable under the ordinary form of policy. But it is not enough for these purposes that the vessel is unseaworthy, and the loss must also be dissociated from any peril of the wind or water, even if these form the immediate context of the loss and constitute the agency (for example, the fact that the vessel was moved by the tide and was unable to stem the tide) by which the loss takes place. But, as is illustrated by Mountain v Whittle, [1921] 1 AC 615, if the loss or damage is associated with a peril of the seas (in that case a high breast wave that reached defective seams in the hull, and so entered the vessel), the debility of the vessel does not displace it as a proximate cause. Even if the failure of the engines meant that the vessel could not resist the current, I do not consider that the current and the grounding can be regarded, in common sense, as dissociated from the damage and merely the agencies through which it came about.

In my judgment, therefore, if the claimants had not established the 10.00 contention, I would still have concluded that they have established that the damage was caused by a peril of the seas.

Having reached this conclusion, it is unnecessary to decide the claimants’ alternative case that the defendants are liable because the damage (i) was caused by negligence of the master, officers or crew and (ii) did not result from want of due diligence by the claimants or CSME. However, I shall deal with the alternative case.

The alternative case is that Mr Gomez (and others on the “Irene EM”) failed to observe on the morning of 30 October 2009 that she was dragging her anchor until she had grounded or was about to do so. It depends upon the claimants establishing the 10.00 contention, and they have done so. In these circumstances the negligence of Mr Gomez (and possibly others) is not in dispute: the defendants pleaded that the master, officers and crew “negligently failed to keep a sufficient outlook and/or monitor accurately the Vessel’s position so as to become quickly aware if and when the Vessel dragged her anchor”. The two questions are:

The question whether negligence of Mr Gomez was a proximate cause of the damage arises only if it was not caused by a peril of the seas. In these circumstances and on this assumption, I would conclude that the damage was caused by Mr Gomez failing to observe that the vessel was moving and to alert Captain Medina promptly; that this was negligent (or a want of due diligence), and that the negligence was a proximate cause of the grounding and the resultant damage. Indeed, I think that this too is not contentious: although I reject the defendants’ submission that the negligence displaced the peril of the seas from being a proximate cause of the damage, it is implicit in it that the negligence was a proximate cause of the damage.

The defendants pleaded numerous allegations that CSME failed to exercise due diligence when the vessel was at Salalah and during the voyage, and went on to assert that “Had the Claimant taken the steps identified above at Salalah and/or in any event after being advised … that the vessel had dragged her anchor on 18 October 2009 the Vessel would not have suffered the alleged grounding on 30 October 2009”. In his final submissions Mr Smith accepted that some of allegations were “unlikely to be relevant”: I do not understand how it was ever thought otherwise and how they were properly pleaded. I shall seek to pick out and deal with the remaining allegations.

The defendants’ main argument, as it seems to me, concerns the response to the vessel dragging her anchor on 18 October 2009 and the following days. CSME’s Safety Management Manual stated that the designated person, in this case Captain Bourdis, was responsible for recording all reports of “Hazardous Occurrences”, and that “Hazardous Occurrences” were “All undesired events which, under slightly different circumstances, could have resulted in harm to people, damage to property or loss to process [sic] are regarded as Hazardous Occurrences”. The defendants pleaded that the claimants should have ensured that Captain Medina was instructed to complete the ISM form after the dragging incidents on 18 to 20 October 2009 and ensured that the incidents were “fully investigated”; and that, had this been done, the claimants “could and should have taken action to prevent a recurrence, such as carrying out necessary repairs to the main engine and ordering an increased level of vigilance in monitoring the Vessel’s position and readiness to use the main engine”. The defendants recognised at trial that the contention about repairs to the main engine is beside the point, and so too, as I see it, is the contention about “an increased level of … readiness to use the main engine”: the grounding did not happen because the engineers were slow to respond to a call for the main engine.

In any case, I am not persuaded of the criticism of CSME. Captain Bourdis said, and I accept, that in his experience as a DPA he had never received such a report from a master. It was put to him that all dragging incidents should be so reported because all are “hazardous events”, and, having learned of the incident on 18 October 2009, CSME should have insisted having an ISM form completed and assessed what had happened in light of it. I do not accept that such forms are invariably required after a dragging incident whatever its nature and circumstances, or that CSME was informed of anything about these incidents that should have led them to challenge Captain Medina’s decision not to send one. As Captain Bourdis pointed out, the focus of the report of 19 October 2009, although it referred to the fact that “the vessel was dragging” at about 07.15 on 18 October 2009, was on the burnt-out motor of the windlass, and there is no relevant evidence that later dragging incidents were reported at all.

What of the defendants’ complaint that CSME failed to exercise due diligence in that they did not, in response to these events, order more vigilant monitoring of the vessel’s position? Mr Luukas’ evidence was that the position should have been checked every 15 minutes rather than every hour, and that, had a proper investigation been conducted into what happened on 18, 19 and 20 October 2009, it is “most likely” that the grounding on 30 October 2009 would have been prevented. I reject that suggestion. First, I am not persuaded that Captain Bourdis (or any one else at CSME) failed to exercise due diligence in response to the incident. Captain Bourdis thought that the dragging incident was a navigational matter within Captain Medina’s ambit of responsibility, and not something in which he should have interfered: that Captain Medina was in a better position to decide what watches should be maintained, and how frequently the vessel’s position should have been taken, and that he should not direct such matters from Piraeus. I consider that that answers the complaint: I see nothing about the incidents of 18 to 20 October 2009 that should have led CSME to give Captain Medina instructions in such matters. CSME’s safety management manual said that, after the cause of a hazardous occurrence had been determined, “the Managing director, the responsible Person of the department or the Master concerned in co-operation with the Designated Person will decide upon the measures taken to prevent reoccurrence”(emphasis added), but this did not require Captain Bourdis to become involved in Captain Medina’s sphere of responsibility without good reason.

When he was cross-examined, Mr Luukas said that Captain Medina should have been instructed to complete an ISM report because the windlass had been burned out on 18 October 2009. Accordingly he was asked why completion of the form would have made any difference with regard to the later grounding. He replied:

“If, for example, the incident was associated with the watch-keeping activities on the bridge being too slack, they had taken bearings every hour and that was related - the investigation of the near miss report revealed that that was an issue, then completing the report would allow you to put in corrective action so it doesn’t happen again”.

He assumed that the incident was indicative of slack watch-keeping because the vessel dragged her anchor for two miles, but there is not enough evidence about what happened on 18 October 2009 to draw this inference. In any event I am not persuaded that this would or should have been apparent to CSME from an ISM report about damage to the windlass.

As I understood Mr Luukas’ answers in cross-examination, although his own view was that the vessel’s position should have been taken every 15 minutes, he did not suggest that CSME should have instructed Captain Medina to introduce such a regime. He accepted that all that CSME could have been expected to do was to exhort Captain Medina to “increase the vigilance on the bridge”. I am not persuaded that Captain Bourdis or CSME failed to exercise due diligence in not so exhorting Captain Medina. Moreover, it is speculation to suppose that such an exhortation or expression of concern about watch-keeping would have prevented the grounding on 30 October 2009. The Second Officer was on duty at the time of the dragging incident on 18 October 2009, and Captain Medina would have had no obvious reason to instruct Mr Gomez to improve his watch-keeping. Finally, for whatever reason Mr Gomez apparently did not take the vessel’s position between (say) 08.15 and 09.45, and so did not comply with the instructions that he had been given; there is no reason to think that he would have complied with instructions to take the vessel’s position more frequently.

Mr Luukas made other criticisms of the response to the dragging incidents of 18 to 20 October 2009, and they are reflected in the defendants’ pleaded case. It is alleged that the claimants failed to exercise due diligence in that they did not ensure that:

I reject these complaints:

I therefore reject the defendants’ allegations about the response to the dragging incidents of 18 to 20 October 2009, but they have other arguments: they allege that the vessel was not in a condition to undertake the voyage from Salalah to Dahaj because the nos 1 and 2 generators did not have enough power to meet the seagoing load required by SOLAS, because the engine was in a poor condition, because they lacked equipment and spare parts, and because the hull was fouled, which, coupled with deficiencies in the engine, prevented the engine from passing through the barred speed range; and so they say that Captain Medina was negligent in undertaking the voyage and CSME failed to exercise due diligence in allowing the vessel to sail. Mr Smith did not submit that, because the vessel would not have left Salalah at all but for the claimants’ failure to exercise due diligence, they were therefore responsible for the vessel being off Dahej and so for the grounding. That would be unarguable: the law would not consider that a sufficient causal link between the failure and the damage: see South Australia Asset Management Corp v York Montague Ltd, [1997] AC 191, 219D-F per Lord Hoffman. (Mr Templeman submitted that the proviso requires that the want of due diligence be a proximate cause of the loss or damage, but to my mind that does not arise for decision and I express no view about his submission.)

I have already rejected the submission that the hull should have been cleaned of marine growth: see para 78. I must deal with the complaints about (i) the generators, (ii) the engine and (iii) equipment and spares.

First, generators: here Mr Luukas said that, since the outgoing crew had not completed the usual handover forms at Salalah, the new crew should have been given more time “to familiarise themselves” and could have completed the forms themselves with the help of superintendents. In cross-examination it became clear that his criticism was really that Mr Noquial should have been given more time to carry out a general inspection of the engine room, to test the generators and electric motors, to conduct a full load test on them, and to test the fuel systems. Mr Luukas also said that CSME should have arranged for service engineers to carry out tests, or to assist the crew to carry out tests, and for engineers from BV to attend the vessel.

I see no reason that CSME should have had service engineers or BV’s engineers inspect the vessel or conduct tests: there was and is no reason to think that Mr Noquial and Mr Papanikolas were not capable of testing the generators (or the vessel’s machinery more generally). The vessel would not have been permitted to remain on berth at Salalah for this purpose: Mr Luukas said that engineers would have taken four or five days over the service, and suggested that they might have gone with the vessel to anchorage off Salalah. I am unable to accept that Captain Medina was negligent in allowing the vessel to sail without these procedures, or that the claimants or SCME failed to exercise due diligence in not arranging them.

Should Mr Noquial and Mr Papanikolas have done more to test the nos 1 and 2 generators before the vessel sailed, or at least while she was still at anchorage off Salalah? And specifically should they have conducted a full load test? And did CSME fail to exercise due diligence because they did not insist on this? It is not clear from the evidence of Mr Noquial and Mr Papanikolas quite what testing of the generators they did do, but they did not conduct full load tests. In my judgment they should have done, and CSME should have required them to do so. They could have been done, and the tests would not been impossible or unduly onerous: Mr Edmonds accepted they would not have taken a long time. After all, there were no maintenance records, and there was an obvious risk that during her captivity the vessel’s generators had not been maintained and might have been misused by the pirates. (Mr Smith submitted that in cross-examination Mr Edmonds initially said that such tests should have been done, but the next day “sought to backtrack from that answer”. In fairness to Mr Edmonds, I expressly reject that criticism: he had said, when asked whether there should have been load tests, “With hindsight, I suspect, yes, it should have been done”, but he was concerned the next morning that he might not have made it clear that he expressed that view with the benefit of hindsight. In fact, he had been clear all along, and he never criticised CSME for not conducting full load tests. He was not “backtracking”.)

However, it does not assist the defendants that the claimants failed to exercise due diligence with regard to the generators unless they have established (i) that no 1 generator or no 2 generator was defective, and (ii) that their failure caused the grounding. I have concluded that they have not established the second point, and I also conclude that they have not proved the first. The defendants submitted generally that the generators were in an unreliable state and specifically that neither of the operating generators, no 1 and no 2, was capable of generating enough power to meet the seagoing load. They said that this is the only credible explanation for both generators being run both before the vessel was detained by pirates and, in Mr Smith’s submission, more significantly, by Mr Noquial on the voyage to Dahaj. It is not disputed that the use of two generators increases both fuel consumption and wear and tear: Mr Papanikolas and Mr Edmonds both accepted that.

There was no evidence about why the chief engineer ran both engines on the voyage from Aqaba in April 2009. As I said at para 93,Mr Noquial explained that he ran both generators because if one cut out the other would not start automatically, and that otherwise he would have used only one auxiliary engine. Mr Luukas said that an “autostart” is usually found in vessels with an unmanned engine room, where an engineer would have to come from his cabin or elsewhere to start an engine if one cut out, but this in itself is not, in my judgment, a reason to reject Mr Noquial’s evidence or to assume that the previous chief engineer had found that a single generator could not produce enough power or was concerned that it might be unable to do so. It might well be that Mr Noquial’s decision was unnecessary (even when the vessel was navigating in the waters of the Gulf of Khambhat) or extravagant, but that not the point. I accept his explanation as truthful, and I decline to speculate about the reason that the generators were operated as they were when the vessel sailed from Aqaba.

Moreover, even if I had not reached this conclusion, it would not follow and I would not conclude that either or both of the operating generators was defective or incapable of generating enough power for seagoing purposes: Mr Noquial might well not have been confident that the generators were reliable because there were no proper records and because they had not been fully tested after the vessel had been held by pirates, but this does not mean that the generators were in fact defective. As I have said at para 109, it cannot be inferred from the 2008 Condition Report what power the generators could produce; nor that it can be inferred from the work on the generators during the voyage and the blackout on 18 October 2009 that the generators were generally defective or unreliable.

Next, the main engine: the defendants submitted that the vessel should not have sailed for the Gulf of Khambhat before (i) the no 3 cylinder had been repaired and (ii) the vessel had been inspected at least to the standard of the condition survey as described in CSME’s condition manual. As I have concluded, Mr Noquial, with Mr Papanikolas’ assistance, did repair the no 3 cylinder off Salalah, and so that complaint is not made out. As a result of the repairs the vessel did not have a spare gasket, but in the event she did not need one.

It was said that:

Mr Templeman fairly described the complaint as “inherently vague”. I accept Captain Bourdis’ evidence that a survey of this kind would normally take three to four days and Mr Edmonds’ evidence that there was no obvious need for one. The vessel would not have been allowed to remain on berth while she was surveyed, and in view of Mr Edmonds’ evidence I cannot accept that CSME ought to have had her surveyed at anchorage. Indeed, Mr Edmonds doubted whether the vessel would have been permitted to immobilise her engine for planned works during a prolonged stay at anchorage, and the defendants have not established otherwise.

Again, even if the defendants had proved that CSME did not exercise due diligence over the main engine, they would still have had to prove that the main engine was defective, that this caused the grounding and that, had CSME exercised due diligence, the defects would have been remedied. They have not done so. The main engine shuddered and vibrated when Mr Noquial tried to take her through her critical range, but, as I have concluded, neither this nor any other failure of or deficiencies in the machinery caused the grounding.

The defendants’ next complaint was that the claimants should have ensured “that the Master, Officers and Crew were given time and means to familiarise themselves with the Vessel before she sailed from Salalah”. Again, the allegation is vague, but, if and in so far as it is pursued, its focus is that Mr Noquial was not given sufficient opportunity to familiarise himself with the vessel: there is no evidence and the defendants did not argue that by the time the “Irene EM” sailed anyone else was insufficiently familiar with her. I reject any suggestion that Mr Noquial’s predecessor as the chief engineer should have been detained in order to conduct a more extended hand-over procedure: the defendants have not indicated what information should have been imparted but was not. In any case, Mr Noquial was selected because he was familiar with the vessel’s make of engine, he had training in the Philippines with the rest of the crew and a general introduction to the vessel in Salalah on 25 September 2009, and Mr Papanikolas, who knew the vessel very well, fully explained the operation of the main engine to him. Accordingly, there is no evidence that he was not familiar with the vessel by the time that she sailed, or that, if he was not, that was because he did not have the time and the means to familiarise himself with it. If the complaint be that handover forms were not completed, it is inconsequential. I reject this complaint of want of due diligence, and in any case there is no possible argument that the grounding or the damage was caused because Captain Medina, Mr Noquial or any other officer or crew member was unfamiliar with the vessel.

The defence makes general allegations that the claimants did not ensure that the engine room staff had the spares and equipment that they required to operate and to maintain the engine, and that they were guilty of want of due diligence in that regard. As far as equipment for operating the engine is concerned, I have explained sufficiently why I reject the allegation at para 82. The complaint about not having a spare gasket is inconsequential. The defendants did not pursue any other complaint about want of spares.

Finally, the defendants alleged that the claimants failed to exercise due diligence in that they did not ensure that other alleged deficiencies were remedied, including the lube oil pump and the motor of the jacket cooling water pump, but Mr Smith accepted in his closing submissions that these allegations could not succeed.

If I had not concluded that the damage was covered by the policies because it was caused by a peril of the seas, I would have concluded that it was caused by the negligence of Mr Gomez and that the proviso to clause 6.2 of ITCH does not provide an answer to the defendants.

The defendants advance the clause 4.3 defence (whether the damage was caused by a peril of the seas or by negligence of the master, officers or crew) as follows:

If I am right about the 10.00 contention, the vessel did not ground because her generators were defective, and even if she grounded later, in my judgment the generators played no part in the incident. If mechanical deficiencies in the vessel in any way caused the grounding, I would infer that the main engine was operating but not powerful enough to do the job. Mr Smith accepted that in these circumstances the clause 4.3 defence cannot succeed: clause 4.3 does not impose a warranty on the assured: see Arnould’s Law of Marine Insurance and Average (loc cit) at para 19-34. He did not argue that the grounding and damage would not have occurred simply because, had BV been given proper information, the vessel would not have sailed to Dahej at all. (As I explained at para 306, that would not be a sufficient causative link between the complaint and the damage). As Mr Smith said when applying for permission to amend the pleading, the clause 4.3 defence would answer the claim only if the damage resulted from a peril of the seas but there were also mechanical problems on the vessel “so we have two proximate causes”. However, lest my conclusion about what caused the damage be wrong, I shall consider Mr Templeman’s other submissions about the defence.

First, have the defendants showed that the information in BV letter was wrong? They plead that an attachment to the letter wrongly gave the total sea load as 350 kw and the capacity of the nos 1 and 2 generators as 480 kw each, and the letter wrongly stated that the two operating generators had enough capacity to meet the requirements of regulation 41 of SOLAS II-1.

Their complaint about the total sea load is that the figure of 350 kw did not include the requirements of “habitability consumers” or the anchor windlasses. However, it did not purport to do so: the attachment to the letter specifically identified the equipment whose load was included in the 350 kw “total load” covered, and made clear that the loads of the windlass and equipment to make the vessel properly habitable were not: that the letter presented the total load as what was required for “normal operational conditions for propulsion and safety”. The letter also stated that the provision for these services was “in accordance with SOLAS II-1/Reg 41”, but I do not interpret that to mean that the attachment demonstrated compliance with the regulation. After all, the letter was to BV, who would have been familiar with SOLAS requirements, and it would have been obvious to an informed reader that the total load of 350 kw did not include everything covered by the regulation. (According to Captain Bourdis, Mr Noquial told Captain Ogg when he was being interviewed that the vessel’s seagoing load was only 200 kw during the voyage from Salalah to Dahej, but it was not clear from this fragmentary evidence quite what was being discussed and I disregard it.)

The defendants’ argument is not assisted by the noon reports from the vessel between 23 March 2009 and 13 April 2009. They showed that the vessel used two generators to supply loads of between 435 kw and 530kw. But, as Mr Templeman said, they simply reflect the loads of equipment that was being used from time to time, and not the loads covered by regulation 41 nor the loads of equipment to which the attachment referred.

I also reject the complaint about the stated capacity of the nos 1 and 2 generators. I have already explained (at para 109) why the 2008 Condition Report does not support this allegation, and (at para 312) why I draw no inference about their capacities from the fact that the vessel used both generators simultaneously (both before and after the vessel was taken by the pirates.)

Clause 4.3 obliged the claimants to report to BV that generator no 3 was inoperative, and they did so by the BV letter. Were the claimants obliged under clause 4.3 to report anything to BV about the nos 1 and 2 generators? The defendants’ case is that they were obliged to “provide [BV] with accurate information as to the capacity of the Vessel’s remaining generators and her ability to comply with SOLAS II-1/regulation 41”. The regulation provides:

“1.1

A main source of electrical power of sufficient capacity to supply all the [electrical ancillary services necessary for maintaining the ship in ordinary operational and habitable conditions] shall be provided. This main source of electrical power shall consist of at least two generator sets.

1.2

The capacity of these generating sets shall be such that in the event of any one generating set being stopped it is still possible to supply those services necessary to provide normal operational conditions of propulsion and safety. Minimum comfortable conditions of habitability shall also be ensured which include at least adequate services for cooking, heating, domestic refrigeration, mechanical ventilation, sanitary and fresh water”.

Thus, the defendants’ pleaded complaint is not strictly that CSME gave inaccurate information in the BV letter, but that the claimants did not give BV (in the letter or otherwise) information that they were obliged to supply.

Two questions arise about whether the claimants were obliged to provide BV with information about the capacity of the generators and vessel’s ability to comply with the regulation.

The obligation was to report matters that might result in BV making a recommendation. I accept that, if the vessel’s generators were in such a condition that she did not comply with SOLAS requirements, then that was a matter (or “condition”) that might have resulted in this and so was to be reported. BV’s Rules for the Classification of Steel Shipsreferred to “primary” and “secondary” essential services: the “primary essential services” covered the equipment listed in respect of the “continuous” load in the attachment to the BV letter, and the “secondary essential services” covered what was listed in respect of the “intermittent load”. In a section about “Machinery, Electricity, Automation and Fire Protection” and under the heading “System Design”, the Rules provided that:

“A main source electrical power is to be provided, of sufficient capability to supply all electrical auxiliary services necessary for maintaining the ship innormal operational and habitable conditions and for the preservation of the cargo without recourse to the emergency source of electrical power”,

and that:

“The main source of electrical power is to consist of at least two generating sets. The capacity of these generating sets is to be such that in the event of any one generating set being stopped it will still be possible to supply those services necessary to provide: a) normal operational conditions of propulsion and safety … b) minimum comfortable conditions of habitability … c) preservation of the cargo …. Such capacity is, in addition, to be sufficient to start the largest engine without causing any other motor to stop or having any adverse effect on other equipment in operation”.

Thus, if the generators did not satisfy regulation 41, they also did not meet the requirements of BV’s Rules. However, as I have explained, I am not satisfied that the vessel failed to comply with regulation 41, and I am therefore not satisfied that BV might have made any recommendation because of the capacities or condition of the generators, or that the claimants were obliged to make a report under clause 4.3.

It is not alleged that the BV letter was not honest, or that the claimants did not give BV information that they had. Mr Templeman submitted that clause 4.3 does not impose an absolute obligation on an assured: that it is to be interpreted as requiring only that the assured report truthfully on what they know. I am sceptical about this interpretation of the clause: on its face, the wording of clause 4.3 suggests to me an absolute obligation, and certainly it might oblige an assured to report what he ought to know. But my decision does not depend on this question, and I think it better decided when it arises on the facts of a case. In my judgment the claimants were not in breach of the clause however it be interpreted.

The final issue about the clause 4.3 defence is how BV would have responded if they had been given the information that the defendants allege they should have had. Mr Rule’s evidence was that BV would not necessarily have prevented the vessel from sailing if one of the two operating generators lacked the capacity for all the loads services stipulated in regulation 41, but that they would have discussed what generating capacity the vessel had and what loads could be met by each generator, and then taken a decision whether to allow her to sail. He did not say that BV would have allowed her to sail if on proper examination it was dangerous to do so, but that they would not have had a “knee-jerk” reaction and adhered to the letter of the SOLAS requirements without understanding the nature and extent of the problem. This seems to me realistic, and I accept Mr Rule’s evidence. If I am right in my assessment of the condition of the generators, then BV would not have required further repairs or an additional generator before allowing the “Irene EM” to sail.

Before examining the extent of the damage, I recognise here (as I have before: see para 136) that it is a remarkable feature of the claimants’ case that, although they say that the grounding caused such damage that the vessel was an (actual or constructive) total loss, those on board at the time apparently did not feel its impact, and the damage was not discovered for some two weeks, after the vessel had refloated and discharged her cargo. However, the vessel grounded, as I have found, after low water on 30 October 2009 and remained aground until 1 November 2009. She was therefore stranded for four low waters, when her bottom structure would have impacted on the seabed. The grounding caused damage not only in the first impact but at the succeeding low waters, and I accept Dr Jones’ view that this is probably when the “worst of the damage/deformation would have occurred”. The tidal range was increasing between 30 October and 1 November 2009 from neaps to springs and at each low water the water depth was reduced. (According to Mr Colman, the tidal range increased from 2.4 metres on 30 October 2009 to 3.85 metres on 1 November 2009. He assumed – to my mind unreliably – that the ranges at Bhavnagar are applicable to where the vessel was grounded, but his figures illustrate the point.)

The inspections at Bhavnagar were incomplete in two ways: the double bottom tanks were not fully inspected, and there was no underwater survey. The defendants criticised the claimants for not opening up the double bottom tanks and not permitting underwater inspection, but it does not matter whether they could have allowed more inspection, or even whether they should have done so. Possibly more evidence might have been obtained, but it was not said that the claimants prevented inspections in order to hide the extent of the damage and exaggerate it. I have to decide whether the claimants have proved that the vessel was a total loss on the evidence that is available.

The claimants’ pleaded case at the start of the trial was that that because of the grounding the vessel “suffered catastrophic damage to her structure and bottom plating over almost her entire length. The damage was most severe in way of cargo holds no 4,5,6,7 and portside underneath the engine area. She also suffered damage to her main engine/crankshaft”. This is exaggerated, and Mr Templeman did not argue otherwise. In particular, when the vessel was inspected at Bhavnagar, it was apparent that:

There was also no evidence of significant damage to the side-shell plating as a result of the grounding incident. Dr Jones observed a small area of buckling at the waterline, but he acknowledged that might have resulted from contact damage, or have been caused otherwise than by the grounding.

The most important issues between the parties about the damage done by the grounding are these:

Mr Smith submitted that the extent and impact of the damage to the double bottom structure is the crux of the dispute about whether the vessel was an ATL or a CTL. It is undoubtedly critical to whether she was an ATL: here the claimants’ argument was that, as Dr Jones explained in his evidence, when the vessel grounded, vertical as well as longitudinal forces were applied to the hull: if the vessel was stranded amidships with her stern and bow unsupported, the vertical load would have pushed her upwards amidships and imposed a bending moment on the whole structure; and primarily the damage to the double bottom structure resulting from the vertical load would have determined the vessel’s stability. But, on the claimants’ case, the question whether she was a CTL depended essentially upon the allegation that the grounding caused misalignment. However that may be, before I come to those issues, it is convenient to deal with the damage to the bulkheads, to the side shell frames and by way of the engine room.

First, the bulkheads: there is no real dispute about the damage caused by the grounding to the transverse bulkheads. The bulkhead between holds nos 4 and 5 was heavily buckled over nearly the whole width in an arched configuration, at about a third to half way up: I rely in particular on the evidence of Mr Moschos (at para 179), and Dr Jones (at para 237), but I do not think that the evidence of Mr Boyd, Mr Murray and Dr Dingwall was significantly different. The bulkhead between holds nos 6 and 7 was buckled at about one third to two thirds of its height, but not buckled higher up in the middle; and the feet of alternate corrugations on the no 6 hold side were also buckled: again I refer in particular to the evidence Mr Moschos (at para 179) and Dr Jones (at para 237), but again I do not understand that others who inspected the damage reported anything significantly different. Mr Colman accepted in his first report that “Forces in the bulkheads will have been created by the vertical grounding force” and that “it would be reasonable to conclude that the buckling of the bulkheads was attributable to the grounding …”. The claimants have, I conclude, established this damage was caused by the grounding. It appears that further damage was done to the feet of the bulkhead between holds nos 6 and 7 in the beaching process, but that is irrelevant for present purposes.

There is no dispute that there was some damage to the side shell frames: there is some difference about its extent. With regard to distortion of the side shell frames in no 5 hold, Mr Moschos and Mr Sarbanis reported damage to the side shell frames, Mr Moschos specifically referring to the lower brackets. Dr Jones’ evidence was more specific about which frames were bent and how they were bent. I accept his evidence: he was obviously a reliable witness, and he could not have imagined or been mistaken about this damage. I conclude that Mr Carney understated the damage when he described “a few bent side shell frames but ... nothing particularly unusual”. His observations were not, to my mind, detailed (when he was cross-examined, he vaguely said that the bent frames were “scattered around the cargo hold”), and I do not consider his evidence about this reliable. Mr Boyd fairly acknowledged in cross-examination that he might have disregarded damage in the hold, and have assumed that it was not connected with the grounding. I therefore conclude that in hold no 5 five frames on the port side and 12 frames on the starboard side were damaged and buckled in the lower brackets.

The damage to side shell frames in no 6 and no 7 holds is less controversial. Again, Dr Jones gave careful evidence about which frames were damaged and the nature of the damage. In so far as the defendants’ evidence was different, I prefer Dr Jones’ detailed observations. I therefore conclude:

I also accept Dr Jones was right in his view that the damage to the frames was caused by the grounding. Mr Boyd thought that it might have been old damage, but, as I have said, he simply did not notice the damage, or at least much of it. Dr Jones’ evidence about this is more reliable.

The claimants alleged that the grounding also caused damage to “T” pillars in the engine room: they pleaded that “5 main supporting T pillars in the engine room were bent and distorted”. Mr Moschos observed on his inspection of the vessel at Alang that five pillars, three on the portside, one in the centre and one to the starboard, were buckled and distorted. As I understand the photographs, at least some of the damage would have been to the pillars above the engine room floor. There is no evidence that this damage was observed at Bhavnagar. When Mr Moschos inspected the vessel at Bhavnagar, he could not see below the engine room floor because of water in the bilges, but he agreed in cross-examination that he saw no damage to the pillars above the floor plates, saying that he did not inspect them closely. Dr Jones, who also did not go below the floor when he inspected the vessel at Bhavnagar, saw no damage to the engine room pillars, and he was sure that he would have noticed if they were bent. The claimants nevertheless submitted that the damage to the pillars was probably caused in the grounding, arguing that it is consistent with other grounding damage by way of the bottom of the engine room and misalignment of the shafting arrangement. I cannot accept that: I consider it improbable that these pillars were damaged before the vessel was at Alang, and certainly the claimants have not proved that they were.

However, again this question seems to me ultimately inconsequential. The claimants did not rely upon the cost of these repairs in support of their argument that it would have cost more than $12 million to repair the grounding damage. Mr Smith suggested that, because the pillars were not damaged, the inference is that the grounding caused no damage elsewhere by way of the engine room or the engine; that is a non sequitur, and I reject it.

Mr Smith also did not dispute that the vessel was hogged amidships by about 0.4 metre. According to Mr Boyd, there was a length of deck of about 40 metres which was damaged to some extent, but the main damage was over a length of about 10 metres, and I conclude that the picture that he presented was at least broadly accurate. Dr Jones calculated the set-up at 0.75 metre at deck level from Mr Moschos’ photographs, but he accepted that his method of calculation was less reliable than assessing the set-up at the waterline from draft marks. In the end it is not important whether the deck was set up by more than about 0.4 metre: the vertical force from the grounding would, on any view, have been absorbed to some extent before any impact on the structure of the deck, and there is no way of assessing the nature or extent of the vertical force by reference to the set-up. Mr Templeman accepted that the “extent of the hog may be most accurately characterized as 0.4 metres at the waterline amidships”, and rightly declined to engage in an inconsequential debate about whether this is properly described as “extreme”. The only possible relevance of this debate is that Mr Sarbanis in his report of 15 December 2009 explained that BV required that the vessel be put in a graving dock because of “extreme hogging/misalignment and twisting ...”, but it is clear from his report that he was referring to the damage to the deck plating, which he himself reported to be set up by 0.4 or 0.5 metre.

I also conclude that the hull was misaligned because it was twisted. This was the evidence of Mr Moschos and Dr Jones, and their evidence was corroborated by the report of Mr Sarbanis. It was also corroborated by Dr Dingwall, who gave evidence of a twist what would be in a clockwise direction looking along the vessel towards the bow. (Mr Smith observed that the claimants have not specifically pleaded an allegation that the vessel was twisted, but realistically recognised that this should be brought into account. It was clear throughout the trial that the claimants relied upon the hull being twisted, and no objection was raised to them doing so.)

As I have said, Mr Carney sought to explain why he might not have noticed a slight hog and said that hogging “is not abnormal in a ship of that age”. He insisted that in his experience ships do hog or sag and sometimes, he added, owners “deliberately hog their vessels so that they can carry slightly more cargo”, by lightening some tanks and filling others. A hog of 0.4 metres was, in his opinion, “nothing undue” and “nothing to worry about” in terms either of operation of the vessel or of stresses on the vessel or of its implications for the repairs that were required. Mr Carney expressed these views with great confidence, but I did not find them helpful: he was not called as an expert witness, and he had no expertise as a metallurgist and no formal qualifications as a naval architect: he was dismissive of the views of Dr Jones and Mr Moschos, but did not engage with their reasoning. Nor was his evidence consistent with that of Mr Dimoulas: “For the vessel in her undamaged state and at the given loading condition the expected hogging would be 8.8cm. The fact that much greater hogging has been observed is an indicator of damage”.I reject Mr Carney’s evidence about this. Not can I accept that the twist to the hull was explained by Dr Dingwall’s evidence that “a slight twist in vessel hull … wouldn’t be too uncommon in a vessel of this age and type”.

Both Mr Dimoulas and Dr Jones gave evidence that the distortion of a vessel was nothing to do with her age. Mr Dimoulas said that asymmetrical loading can cause a bulk carrier to twist, but that this does not explain the twist in the “Irene EM”. Dr Jones commented in his report that steel does not “creep with time” and that “A ship’s hull can only bend permanently in hogging if the deck of the vessel has been extended by tensile plastic deformation and the bottom has been shortened by compressive plastic deformation and/or plastic buckling”. I am not persuaded that Mr Carney was properly distinguishing between elastic and plastic bending, but in any case and despite Mr Carney’s experience with steel ships, I prefer Dr Jones’ evidence about this.

The claimants’ case is that the misalignment, by way of both hogging and twisting, was a result of the grounding. I accept the evidence of Captain Bourdis that the vessel was not hogged at Salalah, and the conclusion that the hogging resulted from the grounding is indicated by other damage that was undoubtedly so caused. The claimants have, in my judgment, proved that the vertical force from the grounding impacting on the double bottom structure caused a permanent hog and the twisting, together with associated damage including the buckling of the bulkheads and the distortion of tank tops and hopper tanks in hold no 5. This does not mean that longitudinal forces played no part in the buckling or “hinging” at midships: Dr Jones accepted that both vertical and longitudinal forces operated on the vessel. The hull would undoubtedly have allowed some elastic deflection, and when the vessel grounded, this would have manifested itself in a hog rather than in sagging. However, Mr Dimoulas explained that:

Although Mr Smith rightly accepted that the vertical force from the grounding contributed to the misalignment, the defendants say that the predominant reason for the misalignment, or at least the hogging, could not have been a vertical force of this kind and was a longitudinal bending moment. They submitted that the damage to the hull structure would not have been caused by the drop in tides that the vessel experienced between high and low waters while she was stranded, relying on the evidence of Mr Colman about this. This question is not only relevant to causation (that is, to the question what the damage resulted from the grounding), but also affects the assessment of the residual strength of the damaged vessel: the question what wave conditions the vessel could have withstood despite being damaged, and so whether she had sufficient residual strength to be towed for repairs. If, as the defendants submitted, the hog is largely explained by a longitudinal bending moment rather than by plastic damage resulting from vertical forces to the bottom structure amidships, then the hogging is not itself what Dr Jones called a “diagnostic” of the residual strength: the damaged steel would still retain its strength (or much of it).

Mr Colman calculated the ultimate bending strength of the undamaged hull by using the Common Structural Rules (“CSR”), published by the International Association of Classification Societies, and he concluded that it was 370,000 tonne metres, and that, whereas up to a bending moment of about 350,000 tonne metres its behaviour would be largely linear and elastic, beyond that the structure would suffer plastic deformation. He calculated the drop in the water level that might have resulted in a force on the vessel’s bottom equal to the ultimate bending strength, and came to the view that, if it is to be supposed that the hogging is explained by the grounding, some “quite extreme” assumptions must be made about the nature of the grounding and also the sea bed, in that stranded ships typically sink into the mud of the sea bed rather than rest on a small and resilient hump that might inflict more damage.

Mr Templeman criticised Mr Colman’s starting point of an ultimate bending strength on the basis that the CSR provide a calculation of longitudinal bending strength, without allowing for vertical loading beyond what is inherent in any bending moment: that is to say, it did not allow for the impact of any vertical load additional to that introduced by the calculation of the longitudinal bending strength itself. He submitted that this methodology cannot be valid if the structure is already compromised by vertical loading. I do not understand that this is controversial: Mr Colman acknowledged it. The question is how significantly it affects Mr Colman’s reasoning.

None of the witnesses had made a calculation of the grounding load that allowed for plastic deformation or buckling. Mr Dimoulas had experience of making such calculations and had found that they are very sensitive to the underlying assumptions, and he considered them unreliable. Because the effect of the vertical force depended on localised damage combined with longitudinal bending, he rejected the suggestion that the bending moment would be more “significant” than the vertical force. Dr Jones also said that he had not sought to calculate what force might be sufficient to cause damage to the double bottom structure: he acknowledged that it would call for a very specialised expertise that he did not profess to have, but he also observed that it would require “a fully detailed knowledge of the deflections and deformations of every element of the whole structure”. This is simply not available. Mr Colman too had not made a calculation of this kind, although he said that in another case he had carried out a “full-scale plastic buckling bending calculation”, and Mr Smith submitted that this demonstrated that he had greater expertise in this area than the claimants’ witnesses. I do not accept that: Mr Dimoulas had carried out such calculations, and indeed I understand that he had done so on a number of occasions, whereas Mr Colman referred to his experience of only one other case. Mr Dimoulas’ experience made him wary of the results: Mr Colman did not explain how reliable he considered the calculation that he had previously made.

Mr Colman’s evidence was that it would not greatly have affected his calculations if the hull were already damaged by vertical force: he considered that it would bend “a bit more”, but that the bending moment to achieve yield would be “about the same” as that predicted by a CSR calculation. He considered that the CSR took a very conservative view of buckling strength and predicted how components would buckle. I did not find this evidence convincing: I cannot accept that the nature and extent of existing buckling or other deformation can be so readily put aside. I prefer the evidence of Mr Dimoulas, which was corroborated at a less specialised level by Dr Jones, that the calculation is more sensitive than Mr Colman would accept. I conclude that I cannot accept Mr Colman’s calculation because it took no account of any plastic deformation or buckling in the structure before the low water in which the load caused the damage in question. Given that, as I have concluded is probably the case, the vessel was stranded on successive low waters from 30 October 2009 to 1 November 2009, by the time of the last and lowest tide she would already have sustained such plastic deformation as she suffered on the initial grounding and at previous low waters.

There is another difficulty about the CSR calculation on which Mr Colman relied. The evidence of Mr Carney and Captain Gregory indicated that before the grounding the steel plating of the deck was considerably thinned from its original 18 mm: see para 244. While this local thinning in itself would not have significantly reduced the ultimate capacity of the vessel overall, in my judgment it suggests that other plating throughout the vessel might have thinned, and then, as Mr Colman put it, “damage may have occurred in significantly less demanding conditions (ie less reduction in water level) than those used in the generalized grounding calculation”.

Mr Templeman also challenged the reasoning whereby Mr Colman applied his calculation to assess whether the grounding could have done damage to the hull girder and so significantly reduced her ultimate bending strength. For this purpose it was assumed that the vessel stranded on a hump amidships: that the ship’s stern and bow were not aground, and that therefore they had no support. Mr Colman concluded that, in order to cause a bending moment of 370,000 tonne metres, the water level would have to have dropped by some 6.5 metres, far more than that indicated by (i) the tide data and (ii) the soundings taken by the vessel on 30 October 2009; and that a drop of 3.85 metres, which was the greatest drop while the vessel was stranded between 30 October 2009 and 1 November 2009, would have caused a bending moment of only some 255,000 tonne metres.

This stage of the reasoning involved major assumptions: Mr Colman himself accepted that the relevant information is limited. First, he relied on the soundings that Captain Medina reported as taken on 30 October 2009, but himself pointed out that they do not provide direct evidence of the load applied to the vessel, which might have been sinking into the mud: in any case, I have explained (see para 131) why I consider them unreliable. Secondly, Mr Colman’s reasoning depended on the tides that were local to the grounded vessel, but the only evidence about tides was the Admiralty tide table for Bhavnagar and the Second Officer’s calculations about the tides at Dahej, which are, at best, questionable: see para 150. Next, the loading calculation depends on the seabed where the vessel grounded. The Admiralty chart described the general area of the grounding as “mud”, and the records indicate no rocks in the locality. However, according to Captain Medina the area was last surveyed between the years 1836 and 1857, and, even if that is wrong, there is no evidence that it was surveyed recently. Moreover, as Mr Colman explained and I accept, the damage to the starboard hopper tank in no 5 hold must have been caused by “something very solid”, most likely a rock, under the bulkhead running along the side of the hopper. This being so, there might well have been other rocks or rocky surfaces in the vicinity. On any view, the evidence was vague, and there is no real basis for making any assumption about the topography or about the seabed on which the vessel grounded. None of the individual assumptions made by Mr Colman was unreasonable, but cumulatively they mean, to my mind, that his reasoning is not robust.

Mr Colman’s reasoning does not persuade me that I should reject the views of Mr Dimoulas and Dr Jones about the cause of the misalignment of the vessel. Before leaving this question, it is fair to acknowledge that in his reports Mr Colman presented his views with admirable balance, and properly referred to the limitations inherent in his argument.

I add that there was some suggestion, I think, that because the defendants’ witnesses, Mr Carney, Captain Gregory and Mr Murray, did not see a hog when they inspected the vessel at Alang, therefore the hog when she was afloat was elastic deformation. I do not consider that their evidence about this was sufficiently reliable to be persuasive.

How much damage to the double bottom structure was caused by the grounding?The claimants’ pleaded case alleged damage in the nos 5 and 6 double bottom tanks, and is as follows:

“In no 5 double bottom tank, the tank top and hopper plating were set up and most internal strengthening members (including longitudinal frames, girder, floor plates, hopper tank web frames, floor plates and stiffeners) were distorted and/or buckled. In way of frames 94-112 [sc. the frames of hold no 5] all structural strengthening members were severely buckled across the width of the vessel, with numerous and severe cracks and welding detachments. In no 6 double bottom tank, the bottom and tank top plating were set up, and most internal strengthening members were distorted and/or buckled.”

The claimants’ contentions about the extent of the damage to the double bottom structure that was observed at Alang were supported by the detailed MMM report. In response, the defendants disputed that the damage was as extensive as there described, relying on the evidence of Mr Carney, Captain Gregory and Mr Murray of what they saw on inspections at Alang in August and December 2010, which, they said, is corroborated by photographs taken at Alang, in particular photographs of the no 5 hold taken by Mr Murray at about the beginning of December 2010. They specifically pleaded that, when the vessel was scrapped, the bottom structure under the buckling by way of the starboard lower hopper in hold no 5 was found to be intact.

The MMM report was the product of a detailed inspection of the vessel, frame by frame and member by member. It identified individual members that were seen to be buckled, distinguishing those judged to have been “heavily buckled” from others which were simply “buckled”. Mr Moschos specifically stated in his evidence that, while the vessel was being scrapped, he inspected the area below the buckling by way of the no 5 hold starboard lower hopper tank, and it was heavily damaged, and that the “Underwriters’ surveyors did not comprehensively inspect this area during scrapping”.

Although a few individual observations in the MMM report might be mistaken, I could not reject its thrust, and so the claimants’ case about the general picture of the extent of the damage, without concluding that it was a dishonest concoction by Mr Moschos and Mr Drikos, and that both were dishonest witnesses. I decline to do so. I also accept Mr Moschos’ evidence that the area under the no 5 hold starboard lower hopper tank was heavily damaged: a photograph that he took of Mr Drikos walking under the ship at Alang confirms the extent of the set up under the tank. I consider that, at worst, Mr Moschos might at times have used extravagant language in order to make his point. I prefer to rely on his evidence rather than that of the defendants’ witnesses, who, I am driven to conclude, did not conduct a detailed and careful inspection of this damage, who understated the damage that they did see and who too readily attributed what they saw to the scrapping procedures.

I recognise that photographs of the vessel at Alang apparently show parts of the vessel’s bottom structure were intact, and in particular that the vessel’s bottom structure was nowhere set up across the full width of the vessel; and that the numerous photographs in evidence do not illustrate damage on the scale described in the MMM report. But I am not persuaded that I should therefore reject its description of the damage to the double bottom structure that was seen on internal inspection. Some photographs taken by Mr Moschos show distortion to longitudinal members. In others, particularly photographs taken by Mr Murray on 1 December 2010, the steel appears to be bent relatively slightly (as far as can be seen from the photographs taken from a greater distance than those on which Mr Moschos relied), but Mr Moschos rightly pointed out that some buckling can be seen. More importantly, they do not show that steel further inside the double bottom area was not buckled, and therefore do not fundamentally falsify the MMM report.

This leads to the question whether the damage described in the report was caused by the grounding. On the face of it, in that the vessel was hogged when she was beached, her fore and aft sections would be more vulnerable to beaching damage than her midship. Moreover, it might be of some significance that in January 2011 Mr Moschos and Mr Drikos inspected the bottom plating of three other vessels that had been beached at Alang and found no structural damage. Nevertheless, some damage to the bottom plating and structure was caused by the beaching of the vessel. It was specifically put to Dr Jones that damage to the double bottom structure was so caused by way of holds nos 1, 3 and 4, and I accept this at least with regard to holds nos 1 and 3. But the important question is whether the grounding caused significant damage to the bottom structure by way of the nos 5 and 6 holds.

The double bottom structure could not be inspected while the vessel was at Bhavnagar, but it was observed that the no 5 double bottom tanks were open to the seas, which shows that there were cracks or holes in the plating. After their inspection, Mr Murray reported on 2 February 2010 and Dr Dingwall reported on 12 February 2010 that the tanks appeared breached on port and starboard sides and “water was observed on the sounding tape”: see para 225.

I have examined the damage to the side shell frames caused by the grounding and Dr Jones regarded its appearance as “a diagnostic of the bottom structure of the ship having been pushed up”. So too was the damage to the bulkheads. It was also observed at Bhavnagar (i) that the no 5 hold hopper tank plating was heavily buckled on the starboard side: the distortion was variously described as “heavy” (by Mr Sarbanis, Mr Boyd and Dr Jones), as “severe” (by Mr Moschos) and as “significant” (by Dr Dingwall and Mr Murray); and (ii) that there was some buckling of the port side hopper tank. No such damage was observed when the vessel was inspected at Aqaba or at any time before 30 October 2009, and I conclude that it was caused by the grounding.

The claimants’ essential argument that the grounding caused significant damage amidships to the double bottom can be stated simply: that, given the damage observed at Bhavnagar, in particular, the hog, the set up to the tank tops (including the hopper tanks), the compressive damage to the bulkheads, and the damage to the shell frames, there must have been corresponding damage to the double bottom structure. It is, as Dr Jones put it, a matter of “inference rather than direct measure”, but, Mr Templeman argued, the inference is compelling notwithstanding the bottom plates were not inspected.

There is no significant dispute about the damage to the bulkheads and I have dealt with the shell frames, the hopper tanks and the hogging, but I must say something more about more the tank tops.

It is common ground that the tank top plating in nos 5 and nos 6 holds were set up, and Mr Colman accepted that this probably was a result of vertical pressure due to the grounding. There is some difference about the extent of the distortion, and, although I do not consider it important, I should deal with it.

I take hold no 5 first. Mr Smith relied on the report of 17 November 2009 (see para 174) that the height of the set-up was 0.27 metre, but there was no evidence about what this measurement was or how it was taken. As Dr Jones observed, it is puzzling how a measurement could possibly have been as precise as this purports to be. Although the report was made by Mr Noquial as well as Captain Medina, he was not asked about it in cross-examination. I reject the submission that I should prefer this report to the evidence of the witnesses.

Mr Moschos reported that the tank top plating was set up by about 1.5 metres over its whole area, and Mr Sarbanis reported that it was set up by about 1.3 metres. Dr Jones said that it was set up over much of its area and the maximum deflection was about 1 metre or 0.9 metre. The defendants’ witnesses reported less distortion: Mr Carney said that he saw it set up by 0.3 metre at Alang; Mr Murray reported a set-up of about 0.4 metre (although, rather obscurely, he also wrote that a “projected” buckle of 0.5 metre turned out to be “a maximum of 100-150 mm”); Captain Gregory and Dr Dingwall said that the tank top was set up by about 0.5 metre.

The evidence and discussion of it was dogged by uncertainties. First, how could a distortion of this kind be measured? Mr Moschos tried to assess it from a photograph that he took, and Dr Jones worked from Mr Moschos’ photograph to make a calculation of his own. Mr Dimoulas and Mr Colman both criticised this method: Mr Colman suggested that measurements could be made more accurately by using string, but Mr Boyd considered this method “valueless”, and on 5 December 2009 Mr Moschos had tried and failed to use it. In any case it does not assist to assess the evidence that a method that nobody adopted might have been preferable.

Further, it is not clear whether the witnesses were measuring the same distances: Mr Carney explained in cross-examination that his estimate, or as he put it his “observed opinion”, of 0.3 metre was the deformation of greatest set up “relative to the major part of the number 5 tank top”. On the other hand, Mr Moschos and Dr Jones were speaking of the maximum deflection, given that the whole or greater part of the tank top was set up to some extent.

I conclude that a large part of the tank top was set up and that probably the maximum set-up was at least about a metre above the proper level, as Dr Jones described. If the defendants’ witnesses were describing that measurement, I reject their evidence of how much it was.

I come to the similar issues about hold no 6. The claimants pleaded that the tank top was set up by “between 0.3 and 0.5 metres and domed near the aft end of the hold”. The 0.3 metre measurement reflects Dr Jones’ report that this “appeared to be” the maximum deflection of the floor of the hold. The 0.5 metre measurement reflects Mr Moschos’ report that the tank top was set up over its whole area “to a maximum height of approximately 0.5 metres”, and Mr Sarbanis’ report was in similar terms.

Mr Smith submitted that I should reject the evidence that the whole area was deformed: the reports of Mr Murray of 2 February 2010 and of Dr Dingwall of 12 February 2010 stated that the tank top was set up only on the starboard side and not on the port side. However, Mr Boyd reported on 21 December 2009 that it was set up “over the full width”, and I conclude that the plating on no 6 hold was set up over a wide area as a result of the grounding. Generally I regard Mr Moschos’ observations as more reliable than those of Mr Murray and Dr Dingwall, and there is no reason that Mr Boyd should have exaggerated the damaged area. (I suspect that Dr Dingwall might have uncritically adopted Mr Murray’s description of this damage - see para 222; but he was not asked about that and my conclusion is not based on this suspicion.)

Because I reject the evidence of Mr Murray and Dr Dingwall about the area of the set up, I also regard as unreliable their assessment that the set up was “about 20 cms”. Again, I prefer Dr Jones’ evidence about this. His observations of fact were generally impeccable, and his assessment was closer to that of Mr Moschos. I find that the set up was at least 0.3 metre: nothing turns on whether it was rather more than that.

In answer to the claimants’ argument that, in view of the damage that was observed at Bhavnagar, there must have been corresponding distortion to the double bottom structure, the defendants relied on evidence that:

I am persuaded by the evidence of Dr Jones that the absence of damage to side shell plating does not evidence the extent of damage to the double bottom structure. Dr Jones accepted that, if the deck had been set up by as much as 0.75 metre, he would have expected damage to the plating, but I have concluded that it was probably set up by something like 0.4 metre. More importantly, Dr Jones observed that the very fact that the bulkheads were buckled and compressed shows that any vertical force from the grounding was met by a reaction from the bulkhead above the buckling, and this might have absorbed the impact and prevented the side frames from being deformed plastically.

The necessary corollary of the misalignment of the deck is, I conclude, that there must have been damage to the topside tanks. It was not observed on the inspections, and photographs show no distortion of the topside tanks in no 5 and no 6 holds. However, it necessarily follows from the deck being misaligned that they were distorted: as Dr Jones put it in cross-examination, “It is a matter of geometry; if the top of the vessel is bent, then the structure below that deck must be bent, and that is simply a matter of fact and deduction … regardless of the cause”. The defendants argued that the fact that no distortion of topside tanks was observed shows that the distortion of the deck was not caused by a vertical force acting on it, but that misses the point: Dr Jones did not opine about whether the deck was bent by a vertical force or (at least mainly) longitudinal forces (as Mr Colman thought it was). The argument that the topside tanks were damaged does not depend on the cause of this damage, and I see no answer to Dr Jones’ point. The photographs are puzzling, but they are not of a quality for me to reject Dr Jones’ reasoning without identifying a flaw in it. He explained that, if the bulkheads had been lifted, the topside tanks could have rotated as a result, and this might be why the longitudinal members were not visibly bowed or buckled. Dr Jones’ evidence was, I add, corroborated by Mr Dimoulas, who similarly understood that the corollary of the set up to the deck was necessarily corresponding damage to the topside tanks.

Mr Smith relied on answers that Dr Jones gave in cross-examination about a photograph taken by Mr Murray at Alang on 11 November 2010, which appears to show buckling of the port side plating at about the bulkhead between holds nos 4 and 5. He agreed that, assuming that the whole width of the hull was similarly “hinged”, he would expect the longitudinals across the bottom of the hull to be bent. However, a photograph of the starboard side of the vessel taken by Mr Murray on 9 August 2010 shows no corresponding “hinge” on the starboard side. Mr Smith therefore invited the inference that the buckling and any corresponding damage to the longitudinals was caused while the vessel was at Alang.

To my mind the most to be inferred from the photographs is that there was some beaching damage to the long double bottom structure. Dr Jones acknowledged beaching damage in his first report, and he and Mr Colman agreed in their joint memorandum, that “additional damage was done to the hull during beaching”. I accept that, as the defendants submitted, when the vessel was first beached extensive areas were apparently undamaged: for example Dr Jones said that “on the starboard side of the vessel, when the vessel was initially beached, there was no visible grounding damage”; and I also accept that, apart from the scrapping process itself, the vessel suffered further damage through different mechanism including contact damage and when she was hauled up the beach by chains. Dr Jones thought that visible damage on the starboard side of the vessel might have been caused by steel that had been on the beach as she was carried up it by the tide. It does not follow that none of the damage first observed at Alang was caused by the grounding, particularly by way of the double bottom structure that was not inspected previously. Nor does this answer the claimants’ contention that the clear inference from the damage that was seen at Bhavnagar is that the double bottom structure was also damaged by the grounding.

I conclude that, on the balance of probabilities, much of the damage to the double bottom structure described in the MMM report was caused by the vessel grounding on 30 October 2009, but no more detailed conclusion is possible.

There is not significant dispute about what damage was found when the main engine was dismantled at Alang in January 2011. In their report of 18 October 2011 Mr Moschos and Dr Drikos recorded the following damage, which Mr Murray also observed. (In some ways Mr Carney’s description of the engine suggested less damage than Mr Murray saw, but in so far as they differ, I prefer the claimants’ evidence to that of Mr Carney.) I summarise the description of the engine as follows:

The claimants’ primary case is that the grounding seriously misaligned and bent the crankshaft, and that as a result the main engine was damaged, in particular by way of the main bearing shells and the thrust bearings. Mr Moschos and Mr Drikos reported that “The Main Engine crankshaft was displaced by about two (2) centimetres from its correct position and was seriously misaligned and bent”. I accept that the crankshaft moved in the crankcase; that conclusion is supported by evidence of Mr Noquial and by Dr Jones’ observations in May 2010. But the important question is whether the crankshaft was bent because the vessel grounded.

The evidence of Mr Moschos and Mr Drikos that the crankshaft was bent was contradicted by Mr Carney, who thought that it was straight. Mr Murray gave evidence that he could not tell when he inspected the crankshaft on the beach whether it was bent. In so far as they were describing the state of the shaft when they saw it on the beach, I accept the evidence of Mr Moschos and Mr Drikos, and prefer it to that of Mr Carney, but that leads to the question whether the shaft was bent before the scrapping process.

The defendants submitted that the deflection readings taken on 14 November 2009 show that the engine was not misaligned. I do not consider them reliable: they were not taken in according with the manufacturers’ instruction that, when measurements were taken, the crankshaft should rest on all the bottom bearing shells, and that after accidents, such as groundings, “this condition must be established by pressing the crankshaft down”. Further, the crankshaft might have been bent even though the shaft appeared to turn easily on the turning gear (see para 213): as Dr Jones explained (and I accept), the engine might have been turned although the crankshaft was bent plastically with wear on the bearings. However, there is simply no evidence that the crankshaft was bent before the engine was dismantled at Alang. There is a clear mechanism whereby it might have been bent at Alang: it was dropped by a crane on to the beach. In my judgment the claimants have not discharged the burden of showing that the damage to the crankshaft was a result of the grounding.

This does not mean that the claimants cannot prove that the grounding caused damage to the engine. First, even if the crankshaft was not permanently distorted by the grounding, it might have moved elastically and the engine might have been damaged as a result when it was operated after the grounding. Mr Moschos considered it inherently likely that the engine was damaged when the vessel grounded because its clearances were so small that bearings on the crankshaft would have been damaged, if the bed plate of the engine were set up at all and the crankshaft jolted. This reasoning would be more compelling if there were evidence that the bed plate was set up or that the vessel grounded by the stern, but there is no convincing evidence of this. (Mr Smith, on the other hand, submitted that because there is not convincing evidence of damage to the bottom structure under the engine room or to the engine room pillars, it is therefore unlikely that the shaft within the main engine was damaged. I do not consider that there is evidence to support this submission: the absence of damage by way of the engine room simply neutralises this part of Mr Moschos’ evidence.)

More fundamentally, the claimants’ main argument about damage to the engine, and in particular to the bearing shells and thrust bearings, did not depend on identifying a mechanism which caused damage to the engine, but depended on the nature of the damage and timing. The nature of the damage had not been fully investigated before the trial started. In his report of 5 February 2013 Dr Jones understood that the bearing shells appeared dark in places where white surface metal had been stripped away and underlying black steel was revealed; and that the bearings had what he called “pancakes” of white metal that had been transferred on to the shells from elsewhere in the bearing. On 28 February 2013, the tenth day of the trial, Mr Luukas examined bearings, which were still in India, near Alang: only one top main engine bearing was still available, but there were more bottom main engine bearings. He found that:

Mr Luukas’ views about the probable cause of this damage have changed during the proceedings. He originally considered that it was because the engine was operated in the barred speed range. I think that in the end Mr Luukas did not persist in that view, and in any case I reject it: the engine was so operated on 11 November 2009, only after metal was first found in the filters. It was not operated in the barred range during the passage from Salalah to Dahej, except for about two minutes after the second repair to the no 3 cylinder: I accept Dr Jones’ evidence, which was not effectively challenged, that this was not long enough to have caused the damage, and prefer it to an answer elicited from Mr Noquial in cross-examination that he would expect bearing damage if he ran the engine in the barred range for two minutes. Indeed, if this was how the damage was caused, it was most likely done during the attempts to refloat the vessel: Dr Jones was cross-examined on the basis that in the manoeuvres Mr Noquial kept the rpm below 70, but in fact he said, and I accept, that he tried to increase the rpm above 70 but desisted because of vibrations.

In fact, however, the damage was not because the engine was operated in the barred speed range: as Dr Jones explained and I accept, operation in the barred speed range would have caused torsional damage to the crankshaft rather than damage to the bearings. Mr Luukas agreed that tortional vibration stresses would damage the shafting itself rather than the bearings, but he also said that in his experience “Lateral vibrations are sometimes detected when an engine passes through – or, in particular lingers, in within the critical speed range”. I am not persuaded by this evidence because I cannot understand the mechanism whereby such damage would have occurred, there is no proper evidence that the engine was used to pass through the critical range for any significant periods (still less that it “lingered” in it), and in the end Mr Luukas accepted in cross-examination that this was not the “predominant factor” that caused this damage, and only said that it could have contributed to it. In my judgment, it can be disregarded as a cause of the engine damage.

Mr Luukas then preferred to think that the damage probably resulted from long-term wear and tear and he originally supported this by reference to earlier analyses of the main engine lubricating oil, including analyses dated 21 August 2008, 13 January 2009 and 15 April 2009 of samples drawn on 7 June 2007, 31 July 2008, 25 December 2008 and 2 April 2009, because they “variously refer to increased levels of iron, copper and lead suggesting abnormal wear and recommended inspection of bearings”. (In fact the reports recommended checking “possible sources eg bearings etc”.) However, Mr Luukas later learned that the bearing material was largely tin. The analyses therefore did not support Mr Luukas’ explanation, as he accepted in cross-examination.

In turn, the claimants relied on the analyses as indicating that the bearings were not worn before April 2009. They do indicate this, but I do not consider it significant: after April 2009 the vessel had been held by pirates for five months, during which time the hull became heavily fouled, and this would have put extra strain on the main engine and extra pressure on the thrust pads during the voyage to Dahej. There was no evidence about how long it would have taken for the bearings to suffer the damage through wear, but presumably the extra pressure and strain might well have accelerated it. I am not persuaded by Mr Templeman’s submission that “If bearing wear had been occurring prior to the grounding incident, these analyses would have revealed increased tin content”.

Before he saw the bearings, in a report dated 4 February 2013, Mr Luukas expressed the view that the widespread scoring appeared inconsistent with debris coming through the oil ways, and that the delamination appeared “to have been caused by fatigue following long-term wear-and-tear or due to imbalanced loadings, including vibration loadings”. However, on inspecting the bearings he adopted this view, recognising that the delamination was localised in way of the oil holes. Although Mr Templeman was able to make some forensic play with Mr Luukas’ various other suggestions before reaching this opinion, I see no real reason therefore to dismiss it. On the contrary, to my mind it is a most likely explanation for the damage.

I should refer to two points made by Dr Jones:

In the end Mr Templeman’s submission came down to a point of timing: that there was no sign of engine damage before the grounding, and the simple fact that the first evidence of damage was on 9 November 2009 is sufficient to demonstrate the grounding caused it, or at least sufficient to place on the defendants an evidential burden of showing otherwise and that another explanation for the damage is more probable. I accept the claimants’ starting point: I have rejected the defendants’ various arguments that there were significant deficiencies in the engine before the grounding. However, I cannot accept that the timing itself is sufficient for the claimants. Over the 10 days after the grounding the engine ran without signs of a problem, in particular during the manoeuvring to refloat the vessel, on 5 November 2009 and on 7 November 2009. Mr Luukas said that, if the grounding caused metal damage of the kind observed on 9 November 2009, there would have been “catastrophic damage and destruction at several locations of the engine”, and the engine probably could not have been operated again. I do not need to decide whether this overstated the position, and do not do so. It is sufficient that, while I might have accepted Mr Templeman’s submission if the damage had been detected within a day or two of the grounding, the period between the grounding and the first signs of damage is too long, I think, for the argument to be persuasive. In my judgment, the claimants have not shown that damage to the engine was caused by the grounding.

Although the claimants presented as their primary case their submission that the vessel was a constructive total loss, I find it more natural and convenient to consider first whether she was an ATL. Under section 57 of the Marine Insurance Act 1906, a vessel (or other subject-matter insured) is an ATL if she is “destroyed, or so damaged as to cease to be a thing of the kind assured, or where the assured is irretrievably deprived thereof”. The claimants pleaded that the “Irene EM” was an ATL because she had ceased to be “an operational vessel, and had become a dead ship, in that she could not be operated or restored to an operational condition”, and Mr Templeman argued that therefore she had “ceased to be a thing of the kind assured”. On the face of it this seems an unlikely proposition in view of what happened after the grounding: the vessel proceeded to Dahej, waited her turn to berth, discharged part of her cargo, went off berth, shifted anchor in winds rising to force 7 in order to avoid bad weather, returned to berth, completed discharge, and on 15 November 2009 moved off berth to anchorage. In other words, in the two and a half weeks after the grounding on 30 October 2009, she carried out commercial operations. However, it is unsurprisingly not suggested that, once the damage was discovered, the claimants could continue to operate the “Irene EM” unless and until she had been repaired.

Mr Smith accepted that, if the vessel could not legally be moved from Bhavnagar except in order that she might be scrapped, the “Irene EM” was an ATL, because it would, as Mr Smith put it, be a sufficient change in the characteristics of the vessel to mean that she was no longer “a thing of the kind insured”. He was right to accept this: I agree that the vessel was an ATL if it was physically or legally impossible to carry out repairs that would restore her as an operating vessel. The case is different from that considered by Potter LJ in Fraser Shipping Ltd v Colton, [1997] 1 WLR 586, where the insured subject-matter was already a dead ship under tow and heading for break-up: there the damage did not alter her essential identity. Here, if the “Irene EM” could not be operated, her essential commercial identity was lost, and, as Lord Esher MR put it in Asfar v Blundell, [1896] QB 123, 128: “…if the nature of the thing is altered, and it becomes for business purposes something else, so that it is not dealt with by business people as the thing which it originally was, the question for determination is whether the thing insured, the original article of commerce, has become a total loss. If it is so changed in its nature by the perils of the sea as to become an unmerchantable thing, which no buyer would buy and no seller would sell, then there is a total loss…”.

On the other hand, the vessel was not an ATL if it was physically and legally possible to repair the damage, even if it would be prohibitively expensive to do so (although there might then be a CTL): that, I think, is what Rix LJ meant when he said in Masefield AG v Amlin Corporate Member Ltd (The “Bunga Melati Dua”), [2011] EWCA 24, that “the doctrine of constructive total loss in marine insurance law has meant that the test for an ATL has been applied with the utmost rigour”. That was a case about whether there was an ATL of a vessel because her owner had been “irretrievably deprived thereof”, but the principal that the test whether there has been an ACT is what is impossible, not what is commercially impractical, applies generally and not only in cases of irretrievable deprivation. Indeed, Mr Smith submitted that in essence the claimants’ case is one of irretrievable deprivation, and I am inclined to think that he is right: in Geo Cohen & Sons & Co v Standard Marine Ins Co Ltd, (1925) 21 Ll L Rep 30 the plaintiffs, represented by Mr A D Bateson KC and Mr H Claughton Scott KC, presented a case somewhat similar to this as one of irretrievable deprivation, and that approach was not questioned by Roche J.

At the start of the trial the claimants’ case that the vessel was an ATL was presented on the basis that it was impossible safely to move the ship except for scrapping. As Willes J said in Barker v Janson, (1868) 3 CP 303, 305:

“If a ship is so injured that it cannot sail without repairs, and cannot be taken to a port at which the necessary repairs can be executed, there is an actual total loss, for that has ceased to be a ship which never can be used for the purposes of a ship; but if it can be taken to a port and repaired though at an expense far exceeding its value, it has not ceased to be a ship, and unless there is a notice of abandonment there is not even a constructive total loss”.

The claimants’ argument is:

The defendants did not dispute the first proposition. They denied other two, and specifically pleaded that the vessel had enough residual strength to be towed to “a place such as Bahrain in order to undergo permanent repairs provided the tow was carried out carefully”. It was also canvassed during the trial that she might have undergone permanent repairs in Dubai. However, I need not consider separately the possibility of towage to Bahrain or Dubai: the defendants relied on the evidence of Dr Dingwall and, more particularly, Mr Colman in support of this part of their case, and both acknowledged that the vessel could not have towed to Bahrain unless and until there had been an underwater survey, and the defendants’ argument, as I understand it, is that she could have been towed to Mumbai for that purpose. The position about repairs in Dubai is, I think, similar.

The crucial question, therefore, is whether the vessel could have been towed to Mumbai for underwater inspection and any necessary repairs, but the claimants did not submit that the vessel was in such a state that she would necessarily sink or otherwise fail to reach Mumbai. Mr Templeman’s argument was that she could not be towed there safely. This introduces an ingredient into the test of what is an ATL that is not, as far as counsel were aware, considered in the authorities and might be thought not readily reconciled with the rigorous test for an ATL of impossibility. It also introduces a question about the test of safety that the court should adopt: about what risk means that an insured cannot safely restore a vessel (or other subject-matter insured) to be “a thing of the kind assured”. Despite these questions and the apparent dearth of authority, I have sympathy for Mr Templeman’s argument: there must come a point where the dangers to life or other risks associated with repairs are so great, and the chances of successful salvage so small, that it would be unrealistic to contemplate repairs. However, I do not need to engage with these questions. Mr Smith accepted that the question was whether uninsured but otherwise prudent owners would, if properly informed, have taken the risk involved in having the vessel repaired, and Mr Templeman did not dispute this. I am prepared to adopt this test and, as I conclude, even on this basis the ATL claim fails. I do not consider that the test could be more favourable to the claimants: on a more favourable test they could not say that “all hope or possibility of having an operational vessel has been lost”: see Arnould (loc cit) at para 18.03.

By the amendment, the claimants introduced an alternative argument that asserted legal impossibility, and was as follows:

The claimants have a further argument: that the vessel could not have been taken to Mumbai because the port authorities there would not have accepted her.

Mr Smith submitted that the relevant date for assessing whether the vessel was an ATL is 9 December 2009, when the claimants tendered their notice of abandonment. Mr Templeman did not dispute this. Although the question is not free of legal difficulty (see Arnould (loc cit) at para 28-04), I am prepared to consider the matter on that basis: undoubtedly the question whether the vessel was an ATL turns upon an objective assessment of the position, regardless of the claimants’ perception of the position however reasonable it might have been, and therefore nothing turns on whether the date for assessment is 9 December 2009 or some later date.

As I have explained, the claimants submitted that it was not possible safely to have the vessel towed to Mumbai for underwater inspection and any necessary temporary repairs. This was based on the report of Mr Dimoulas of 19 April 2010 and his evidence in support of the advice that he gave in it: specifically, it was based on his evidence that the vessel only had sufficient residual strength for navigation in calm water conditions.

Mr Dimoulas considered two possible conditions of the damaged hull: (i) that the bottom plating and stiffeners, the double bottom plating and stiffeners and the double bottom girders together with half the width of the hopper plating and stiffeners were damaged; and (ii) that the damage was similar except the whole width of hopper plating and stiffeners and also bilge plating and stiffeners were damaged. He then considered whether in each condition the vessel would have withstood a wind bending moment in accordance with BV’s rules for navigation in difference conditions, namely (i) calm water, (ii) sheltered areas, (iii) coastal areas, and (iv) unrestricted navigation.

A tow to Mumbai would have involved what the BV rules would have categorised as unrestricted navigation. The rules stipulated that a vessel was in coastal waters if she was within 20 miles of the shore and within a maximum of 6 hours sailing time of a port of refuge. Captain Bourdis said that the vessel would have had to have taken the “Safety Fairway” routing shown on Admiralty Chart no 2736 (Mumbai to Dwarka), which would have taken her 40 to 50 miles off the Indian coast, and that at Mumbai outer anchorage she would have been more than 20 miles off the coast. Mr Colman thought that the tow could have been confined to coastal waters by clinging to the coastline past Pipavav, but he agreed that it would have been difficult and extended the tow, and in any case the evidence that the anchorage would have been outside coastal waters was unchallenged and uncontradicted: I accept it. But the vessel would not have had to withstand extreme rigours of unrestricted navigation. What matters is whether the vessel could have safely been towed in the conditions likely to be encountered on the Safety Fairway route, and whether the claimants have shown that she could not have been.

It is convenient before assessing Mr Dimoulas’ evidence to consider the defendants’ evidence about this, which was given by Dr Dingwall and Mr Colman. As I have said (at para 226), Dr Dingwall recognised that, if the double bottom floors were wholly ineffective, the “Irene EM” would not have had the residual strength safely to undertake even a short voyage; his view that she might have been towed to Mumbai was based on his opinion that it was “closer to reality” to suppose that the double bottom floors were “wholly effective”. Dr Dingwall was a witness of fact, and it seems to me that he was here expressing views that should have been presented only through an expert. Nevertheless, I treat his views as admissible: when he was cross-examining Dr Dingwall, I warned Mr Templeman that he was asking him about matters of expertise, and he said that, if I treated Dr Dingwall’s evidence as that of “an expert to a greater or lesser extent as a result of [the] cross-examination …, then that is a consequence [he would] live with”.

However, this evidence is of limited value for two reasons. First, Dr Dingwall’s views about how the vessel was damaged are based on incomplete information: he could not, of course, inspect the double bottom structure, and he accepted that in the end his view about her condition was no more that a “gut feeling … that the whole of that double bottom had [not] gone”. However, as Dr Dingwall acknowledged, given the other hull damage it is no more realistic to suppose that the strength of the double bottom floors was not compromised at all by the grounding. Both extreme scenarios were unrealistic, and Dr Dingwall’s instinctive view that some of the double bottom structure remained, assuming it to be correct, does not help to say which is “closer to reality”.

Secondly, as I said in paragraph 227, the circumstances in which Dr Dignwall’s report was produced make me cautious about accepting it as reliable. It was produced under pressure of time, and developed from a memorandum of Mr Martin, which was itself produced in response to a request from Captain Gregory to know whether there was “a case to argue”. In his evidence, Dr Dingwall described his report as intended as “a starting point for discussions”. It was not a computerised structural analysis of the kind that he initially undertook and was, to use his own expression, “simplistic”. The evidence did not say whether the more elaborate computer model was developed after Dr Dingwall’s initial work, and if so what it indicated: apparently Dr Dingwall did not continue to work on this case after producing his report of 12 February 2012, and he did not know what (if anything) had been done by others.

The claimants have another point: Dr Dingwall’s opinion was that, if the vessel could be towed at all, it would only be if certain conditions could be satisfied (see para 226), and Mr Templeman argued that they could not be have been met. I need deal with these points only briefly:

Mr Colman recognised that the residual strength could be calculated only by making an assessment, if not an assumption, about what damage the vessel had suffered, and therefore did not seek to calculate it. He reasoned as follows: the vessel remained at anchor at Bhavnagar for some 9 months until August 2010, and apparently during that time she suffered no further damage from the forces to which she was exposed. While she was there, her topside tanks were de-ballasted to allow inspection, and her still water bending moment when she was in what he called “inspection condition” proved sufficient for her to survive at anchor. Mr Colman calculated it at 88,026 tonne metres: the calculation, which was made by reference to frame 101 in the centre of hold no 5, was not presented as precise, but as “a good starting point”. He then calculated that, if she were re-ballasted (by a change of ballast in her top side tanks, emptying nos 1, 2 and 7 and filling to 80% nos 3, 4, 5 and 6), her still water bending moment could have been reduced to 45,172 tonne metres, and it could have been reduced further if the no 6 double bottom tank were flooded.

Mr Colman’s reasoning supposed that the vessel did not suffer further damage while she was at anchor between November 2009 and August 2010, including when she re-ballasted. I consider that this assumption is justified: Mr Colman considered, and I accept, that if she had suffered further damage when she re-ballasted, this would have been observed by the crew.

Mr Colman then considered whether, in that condition (which he called her towage condition), the vessel could have been towed to Mumbai, which he considered would take “36 hours in a short weather window with benign wave conditions”, and whether, after survey and assessment, it would then probably prove “a practical proposition” to tow her to Bahrain for permanent repairs. (As I have said at para 228above, it might have taken rather longer than 36 hours, but that is not important.) The crucial issue between the parties turned out to be about the first stage in his conclusions, but the focus of Mr Colman’s reports was on the second stage: for this he used data provided by Noble Denton to analyse statistically the wave conditions for a voyage over eleven days to Bahrain in December, January, February or March, and to estimate the predictable exposure to wave bending moments for long crested and short crested waves which the vessel might have encountered. His conclusions were that, with a reduced still water bending moment, the tow to Mumbai “should not have presented any problems”, even without a neutral still water bending moment (as Dr Dingwall had stipulated); and that towage to Bahrain would have been “a practical proposition” once a proper survey and assessment had been carried out to compute her residual strength.

Mr Templeman’s main criticisms of Mr Colman’s reasoning focused on the calculations of the still water bending moments.

To my mind, Mr Colman’s reasoning was an inherently uncertain exercise in that it essentially involved extrapolating from how the damaged vessel responded to conditions at anchor and forming a view about how she would respond to a sea voyage, which Mr Dimoulas (explaining why he had not adopted this approach himself when assessing the risks of a tow to Mumbai) described as “a more dynamic situation”. The questions about the calculations of the still water bending moments add to the uncertainties. That said, Mr Colman’s reasoning and his conclusion about a tow to Mumbai did not depend upon precise calculations and there was generous scope for imprecision. Moreover, his conclusions were reinforced by the simple fact that the vessel continued to operate after the grounding without incident: these considerations go against Mr Dimoulas’ opinion that the vessel could not have been moved to Mumbai safely.

I therefore return to Mr Dimoulas’ evidence about this. He concluded that the damage to the vessel was consistent with, and probably the result of, excessive force caused by her grounding on some sort of shelf by way of hold no 5, and that this resulted in hogging beyond elastic deformation of her structure. The bottom plating and stiffeners, the double bottom plating and stiffeners and the tank top stiffeners were, he concluded, all deformed correspondingly, and could not sustain any compression loads. He calculated the still water bending moment of the vessel in the condition in which she was at Bhavnagar to be 66,000 tonne metres (or more precisely 65,951 tonne metres, which Mr Dimoulas rounded up for calculation purposes). This was converted to kiloNewton metres (by multiplying by 9.81) to give a moment of 647,460 kNw. He made a rough calculation that the vessel’s condition was such that she could withstand only about another 190,000 kNm above the still water bending moment. The BV rules stipulated that the Vertical Wave Bending Moment was to be 1,325,101 kNm for unrestricted navigation, 80% of that (1,060,000 kNm) for coastal areas and 65% (876,135 kNm) for sheltered areas. Accordingly, Mr Dimoulas concluded that in neither of the conditions that he considered (see para 408) could she be relied on to withstand towage in coastal areas or unrestricted waters, and that it would be safe in sheltered areas only if she was in the former condition (that is to say, only half the width of her hopper plating and stiffeners was damaged).

Mr Dimoulas assumed in both cases that neither the bottom plating and stiffeners nor the double bottom plating and stiffeners nor the double bottom girders contributed anything to the residual strength of the vessel: that is to say that across (at least) one cross-section of the ship the double bottom section could withstand no compressive force at all, as if it were entirely missing across the width of the ship. Mr Dimoulas made this assumption on the basis of his assessment of the damage and his experience of seeing comparable damage previously: in particular, he based it on seeing that the tank top was damaged, that the double bottom plating was domed, that the girders and other members below were deformed and “tripped”.

It is a curious feature of Mr Dimoulas’ evidence that his calculation of a still water bending moment of 66,000 tonne metres was made by reference to frames 80 to 84 of the vessel in hold no 6, describing this as “the location of worst damage” and an application of “the worst bending moment I could find”. It would have been more natural, I think, to have considered the position by reference to hold no 5, where he supposed the impact of the vertical force to have been greatest. I need not explore this further because, as I see it, there are other more important criticisms of his evidence. In my judgment, the claimants simply have not justified this assumption, and I consider it inconsistent with the evidence, in particular in two respects.

First, the assumption supposed that the damage to the double bottom structure extended right across the width of the vessel. There is no evidence that it did, this assumption is inconsistent with the photographs and the evidence of Dr Jones, and it is not supported by any evidence. In cross-examination Mr Dimoulas referred to the damage to the hopper tanks, and said that, because the port tank as well as the starboard tank was damaged, the girders had probably been damaged across the width of the vessel. However, he also accepted that the extent of the damage to the respective tanks indicated that there was less damage to the internal members on the port side. He explained, and I accept, that even a slight deformation would reduce the girders ability to withstand a compressive force, but I do not accept that the claimants have proved that all the girders, particularly those on the port side, were entirely ineffective.

Secondly, it was assumed that the damage was entirely attributed to a vertical force and that the effect of the longitudinal bending moment was insignificant. This has not been shown: I have concluded that vertical forces played a part in the misalignment of the vessel, and that therefore the hog demonstrated that her residual strength was compromised. But it does not follow, and the claimants have not demonstrated, that none of the damage to the double bottom structure was attributable to a longitudinal bending moment, and so they have not demonstrated that none of the damaged parts of the double bottom structure had made any contribution to the vessel’s residual strength.

It might be said that the claimants were not in a position while the vessel was at Bhavnagar to know this, and so could not have been confident that the vessel could be towed. But they did know that there was relatively little damage to the port hopper tank.

There is another fundamental answer to Dr Dimoulas’ reasoning. It was based on the requirements of BV’s rules, but they are not concerned with vessels under tow: see para 38. The reasoning does not engage with the possibility, which Captain Gregory contemplated, that the vessel might have been moved by a salvage team comprising a salvage master and a riding team of four, and, with regard to the water in the double bottom structure by way of hold no 5, that the tanks could have been pumped out and filled with compressed air to maintain the pressure and to prevent cracks from propagating. The claimants have not proved the risks of a salvage team moving the vessel.

I conclude that the claimants have not shown that the vessel was an ATL because she could not safely be towed to Mumbai.

I come to the claimants’ other arguments that the vessel was an ATL because it would have been impossible to obtain the requisite permissions (i) for her to be towed from Bhavnagar to Mumbai, and (ii) for her to be accepted by the Mumbai authorities.

Would the authorities have permitted the tow? The claimants argued that the vessel could not have been towed to Mumbai because the permission of the Bhavnagar Port Authorities would have been required, it would not have been given unless BV certified her condition, and BV would not have done so. The defendants disputed this because, they said, the claimants have not established that BV would not have certified her condition; even if BV would not have provided the requisite certificate, others, including IRS and Nobel Denton, could have inspected her and provided it; and in any event, the requirements could have been relaxed.

I shall not adjudicate upon the defendants’ first point. Even though the BV rules do not stipulate conditions for a vessel to be towed, I am inclined to think that the correspondence with BV is sufficient to shift to the defendants an evidential burden to show that BV might have been persuaded to relax the stance adopted on 31 March 2010, but (as I said in para 53), if the claim had depended on this, I would have given the defendants the opportunity to do so or to make further submissions on the point.

However, I accept the defendants’ second argument: the MSN provides, with regard to voyages between ports or places on the Indian coast, that the IRS had been “delegated to issue permission … including towing plan approval”. It also provides that there should be surveys and inspections “for issuance of permission” carried out by “the recognised inspection bodies”. It goes on to describe what the surveyor is to inspect and check, and continues “The vessel being towed … shall also be inspected in accordance with the checklist”; and it adds in parenthesis “Please refer Form B”. The checklist in form B lists eighteen “survey items”, including “vessel/s is/are seaworthy for the intended voyage”, and the “Guidance Notes” for this survey item said “Check general condition and integrity of hull and deck. If in damaged condition, inspection and certification for the intended voyage should be given by the classification society”.

I cannot interpret the MSN as stipulating that, if the classification society does not inspect and certify a damaged vessel for the intended voyage, the IRS has no power to permit a voyage even by a vessel that has been inspected by other reputable surveyors and certified as fit to undertake it. The contrary is indicated by:

This conclusion is consistent with Mr Murray’s evidence that the IRS is an “inspection body”, and that Noble Denton are recognised and authorised by the DGS to issue permits for towage. The claimants have not pleaded or argued that, if other inspectors might properly have certified the vessel, they would not have done so, and there is no evidence to support any such suggestion. I therefore reject the argument that the vessel was an ATL because she could not have been towed legally to Mumbai.

I add this, although it is not the basis of my decision. The fact is that the vessel was towed to Alang, a distance of 15 to 20 miles, and I infer, in the absence of evidence to the contrary, this was permitted by the relevant authorities. There is no evidence about what inspections were carried out before the tow and what certification was given. Without any explanation about this, I would have been reluctant to infer, as the claimants invited me to do, that a voyage to Mumbai would not have been similarly permitted. It might be that, as the defendants submitted might be done, the certification requirements were relaxed, but that is speculation and I prefer to put my decision on this point simply on the basis that BV’s certification was not required.

This leads to the question whether, if the vessel had been towed to Mumbai, the Port Authorities there would have accepted her. It would not have been straightforward to have the vessel taken to Mumbai for underwater inspection and repairs in Mumbai dry-dock while the Indian naval vessel was capsized at the port entrance. However, this obstruction did not close the port, and the problem was a temporary one. On 5 May 2010 Mr Murray was told that the naval vessel had been cleared and the dry dock could accommodate a vessel of the size of the “Irene EM”.

Mr Templeman, however, submitted that permission to have the vessel inspected and temporarily repaired at Mumbai could only have been obtained if public officials had been bribed and so could not have been obtained lawfully. He relied on the exchanges between Captain Gregory and Mr Murray, to which I referred at para 233, and the emails between CSME and their local agents on 1 and 3 April 2010. I accept that Captain Gregory and Mr Murray were contemplating bribery, and it might be that permission could thereby have been obtained more quickly and easily, but the exchanges do not establish that otherwise it would have been impossible to obtain it. As for CSME’s exchange of emails, I have explained that (i) I interpret them as being only about inspection at Mumbai inner anchorage, and (ii) I am not persuaded that they explained the authorities’ permanent policy, rather than the position while the port entrance was obstructed. But in any case I do not accept that this single exchange provides a sufficient evidential basis for Mr Templeman’s submission.

I therefore reject the claimants’ arguments that the vessel was an ATL.

Under section 60(1) of the 1906 Act, “Subject to any express provision of the policy, there is a constructive total loss where the subject-matter insured is reasonably abandoned on account of its actual total loss appearing to be unavoidable, or because it could not be preserved from total loss, without an expenditure that would exceed its value when the expenditure had been incurred”. Section 60(2) provides that, “In particular, there is a constructive total loss – (ii) In the case of damage to a ship, where she is so damaged by a peril insured against that the cost of repairing the damage would exceed her value of the ship when repaired. In estimating the cost of repairs, no deduction is to be made in respect of general average contributions to those repairs payable by other interests. But account is to be taken of the expense of future salvage operations and of any future general average contributions to which the ship is liable if repaired”.

The claimants’ case was that the cost of repairing the damage would have exceeded $12 million, her agreed value: they did not rely on the first limb of sction 60(1) or contend that the vessel was a CTL because she was abandoned on account of her ATL appearing to be unavoidable. The defendants disputed that repairs would have cost $12 million, but (subject of course to issues of liability) accepted that, if they would have done so, the claimants are entitled to recover on the basis that the “Irene MV” was a CTL: they raised no other answer to the CTL claim. The proper approach to the question of what was the cost of repairs is, as I understand the law, what would be their cost to a prudent uninsured shipowner. In Roux v Salvador, (1836) 3 Bing NC 266, 286 (cited in Arnould (loc cit) para 28-020,) Lord Abinger CJ put it in terms of whether “… a prudent man, not insured, would decline any further expense in prosecuting an adventure, the termination of which will probably never be successfully accomplished”.

The claimants contended that the only proper way to repair the damage caused by the grounding to the hull was by the section method: to cut away the mid-ship section of the hull (from forward of no 5 hold to aft of no 6 hold) in a graving dock, to build a replacement section and to assemble it with the original fore and aft sections. This was the conclusion of Mr Moschos in his report of 15 December 2009 (at para 184), the basis upon which COSCO quoted on 15 January 2010 for the cost of repairs (para 194), and the method that BV said in their email of 18 January 2010 was the only “acceptable” method of repairing the vessel (para 197).

Before Mr Templeman made his closing submissions in reply to Mr Smith, the claimants conceded that their contention that the vessel was a CTL depended on them establishing that the only proper method of carrying out repairs was the section method, and they had not pleaded or otherwise presented an alternative case. At the end of his closing submissions in reply, Mr Templeman said that he was not sure that the concession was correct, and sought to demonstrate, by adapting repair costs put forward in Mr Smith’s closing submissions, that, even if another repair method were adopted, the costs would (just) have exceeded $12 million. Mr Smith did not reply to this new contention, and I would need persuading that it is open to the claimants to advance it on the pleadings and fair for them to advance it in view of how the trial proceeded. In view of my other conclusions, I need not decide this. Had the case turned on it, I would have given the defendants the opportunity to respond to Mr Templeman’s argument.

The claimants relied for their main contention on the quotation for repairs given by COSCO as contemporaneous evidence of the cost of the necessary repairs. Their quote of a lump-sum price for repairs was for $17,406,680. It was presented on the basis:

The claimants did not seek exactly to justify every individual component of COSCO’s quotation. For example, Mr Moschos’ evidence was that the amount of steel required for the repairs would have been 2,400 mt, being 1,400 mt for the replacement section, 500 mt for other bottom plating and another 500 mt for renewals in other areas adjacent to the replacement section.The thrust of their argument is that the quotation demonstrates that the cost of repairs to the hull alone would comfortably have exceeded $12 million, and that there is additional comfort that they would do so:

It is convenient first to comment upon these considerations. I cannot exactly calculate how much should be allowed for work on the engine, but it is not, I think, controversial that some work would have been necessary because of the grounding, notwithstanding that the claimants have not shown that specific damage was caused. All the estimates of costs included some allowance for this, and the pleaded defence included an allowance of $392,500 for engine repairs.

Mr Moschos’ evidence was that he asked COSCO to give their quotation on the basis that it would include costs for dismantling the main engine and checking its alignment, and also allow for the crankshaft to be replaced. I observe in passing that the $3 million is not far removed from the $2.5 million that Captain Jackson anticipated in his email of 13 December 2009, but the sum of $3 million must be reduced: this follows from my conclusion (at para 388) that the claimants have not shown that the crankshaft was damaged as a result of the grounding. There is some basis for an argument that the $3 million should not be reduced by more than $1 million on this account and that $2 million should still be allowed: Mr Luukas’s evidence was that “for a new crankshaft you would probably be looking at $750,000”, and Mr Boyd’s preliminary view in his report of 21 December 2009 was that $2 million should be allowed for engine repairs, a figure that did not allow for replacing the crankshaft. However, in cross-examination he described that sum as a “very, very rough estimate”, and I accept that it cannot have been more than that on the basis of the information that he had.

The $392,500 for engine repairs allowed in the pleaded defence was based on what Mr Murray and Captain Gregory allowed in their report of 5 May 2011. It included $70,000 for replacing the thrust shaft bearing and thrust pads and other sums relating to the propeller and stern tube. Only $200,000 was allowed for work relating to the main engine, and it contemplated little more than having the six units of the main engine stripped and the bearings replaced as necessary. I reject that estimate as unrealistically low: Mr Luukas put the labour costs involved in stripping down the engine at $500,000 without making any allowance for parts and on the basis that it would not be necessary to strip the engine down to the crankshaft. (Mr Luukas was referring to the cost of work at a Chinese yard, but the evidence was that generally repairs would have been more expensive in the Middle East.) I accept Mr Templeman’s submission that the costs of dismantling and testing parts of the main engine would have been considerably more than accepted in the defence. I cannot not assess them exactly, but on a conservative basis allow $1 million.

The cost of temporary repairs: the pleaded defence, again based on the report of 5 May 2011, allowed a total of $200,000 for an “Inspection in clear water and temp repairs (patching)”. However, this included no real allowance for repairs: an estimated cost of $191,350 for underwater inspection at Mumbai was rounded up by some $9,000 to allow for the epoxy repairs to fill in cracks. Given that the bottom structure by way of hold no 5 had five cracks that were open to the sea, I do not accept that this was a realistic allowance.

Mr Boyd made an allowance for temporary repairs of $500,000 “for budgetary purposes”, and he described this as a generous allowance “based on the damaged that [he] observed at Bhavnagar”: he explained in cross-examination that this represented an allowance of 50 tonnes of steel at $10 per tonne.

Mr Moschos initially, in his report of 26 January 2010, allowed $1.5 million for temporary repairs, which represented an allowance for 300 tonnes of steel at $5 per tonne. The rate of $5 per tonne is not extravagant and was not criticised: it is half of what Mr Boyd allowed. Mr Moschos considered that 300 tonnes of steel would be required because he expected that the longitudinals would be buckled and that it would be necessary to compensate for the loss of longitudinal strength by welding a number of “I sections” along the deck on both sides of the vessel from bow to stern. However, after reading Mr Dimoulas’ reports Mr Moschos concluded that more extensive temporary repairs would be necessary to reinforce the residual strength, including “reinforcements … on bottom and deck plating”. Because Mr Dimoulas estimated that the repairs would require 945.5 tonnes of steel, Mr Moschos increased his estate of the approximate cost of this work to $5 million. Although on the face of it this is a dramatic increase, Mr Moschos had a rational and considered basis for his figures. As he explained in his report of 23 April 2010, the greater part of the steel that Mr Dimoulas calculated would be required, nearly 700 tonnes of the 945.5 tonnes, was for I beams welded to the top of the double bottom plating (continuously through the bulkheads), for which he had not made allowance in his earlier estimate. Another 154.9 tonnes was attributed to the need for I beams welded on top of the deck plating by continuous fillet welds.

The extent and so the cost of temporary repairs depend upon what residual strength the hull had, and so upon the extent of the damage to the double bottom structure. As I have explained, I conclude that the claimants have not proved that the damage to the bottom structure was as extensive as Mr Dimoulas supposed (particularly with regard to whether the members were deformed across the whole width of the vessel), but, as I see it, the vessel would still have to be strengthened by I sections before the vessel was towed for permanent repairs, and the amount of steelwork that would be required would not have been much less than Mr Dimoulas estimated. The figure of $5 million was not presented as an exact calculation, but it seems to me that the claimants, through Mr Moschos’ evidence, have justified a sum of, say, at least $3.75 millon for temporary repairs.

Mr Moschos’ evidence was that $1.5 million should be allowed for towage if permanent repairs were carried out at Zhoushan. This was the estimated cost of a tow of approximately 45 days. It excluded port dues and agency fees at the ports and did not include insurance either for the tow or during repairs. In cross-examination Mr Moschos was not able to explain the sum beyond saying that it was provided to him by the claimants and he adopted it. Mr Smith argued that it was apparently based on a quotation obtained by the claimants on 15 January 2010 from Five Oceans Salvage and that, given that the daily rate for hiring a tug was $12,500 per day (excluding fuel, luboil, port dues and agency fees), the calculation should have produced a sum of $1.4 million rather than $1.5 million. The difference is insignificant, and I can assume (without deciding) that this reduction should be made.

When estimating how much it would cost to have the vessel repaired in Bahrain, Captain Gregory allowed $1 million to tow the vessel. Mr Boyd would allow $600,000 for a tow to Dubai. Both these sums included a salvage master and crew and included pumps and some other incidental expenses, but apparently did not include agency fees, port dues or insurance. The longer tow to China would have cost much more, and, making what I can of the evidence, I conclude that it would have cost at least $1.25 million.

Mr Moschos allowed incidental costs of $1,270,000:

These figures were not, understandably, examined in any detail, and in view of the rough and ready nature of these calculations I need only say that the sums are not obviously extravagant as estimates of the costs to which they related. Mr Smith submitted that some of these items, namely office expenses, costs for consulting and attendances, and adjusters’ fees, would not have been recoverable from insurers, and so should not be brought into account when deciding whether the vessel was a CTL. This point was not expanded in submissions before me, and no authority was cited about it. On a simple reading of section 60 of the 1906 Act, the relevant costs are not defined by what would be recoverable from insurers: subject to the policy terms, in cases of damage to a ship what matters is “the cost of repairing the damage”. The policies in this case referred to “the cost of recovery and/or repair of the vessel”. However, my decision does not depend upon this point, and I do not determine it: it is better decided in a case in which there have been full submissions from the assured and the underwriters.

I observe that Mr Moschos did not include costs of supervising the repair works, although the defendants themselves allow $100,000 for this in their pleaded case. This was apparently estimated on the basis that the vessel would be in dock for only 60 days, and presumably would have been more for the work contemplated by COSCO.

I do not attach much significance to the quotation from Jurong. It included a cost of S$16.8 million for renewing 1,400 tonnes of mild steel, which represents S$12 per tonne, roughly the equivalent of a little more than $9 per tonne (according to the rate of exchange used by Mr Moschos in his report of 30 November 2010, which was not challenged and which was endorsed by Mr Boyd). Mr Templeman submitted that this provided comfort that COSCO’s rate for steelwork is not extravagant. I am cautious about relying on the Jurong quotation even for this limited purpose: it was not provided until October 2010, and it was sought only for the purpose of the litigation and to bolster the COSCO quotation. Mr Boyd’s evidence was that, in view of the amount of steelwork involved, the claimants ought to have been able to negotiate a “substantial discount”, and Mr Moschos said that he believed that, if presented with the Jurong quotation, COSCO would have reduced theirs (although he thought that the “final cost of repair” would still have been some $28 million or more). I do not accept that the Jurong quotation would corroborate COSCO’s quoted rate for steelwork if the rate does not otherwise withstand the defendants’ criticisms. Mr Smith had other observations about Jurong’s quotation (including the sums relating to generators, and other criticisms about machinery repairs), but I can pass over them since the claimants relied on it only in relation to steelwork rates.

Unless the claimants are entitled to advance an alternative case (see para 440) that the vessel was a CTL, they have to prove that the only proper way to repair was the section method. On the face of it, it might seem an extravagant method of repairing in that it would have involved replacing undamaged steel, such as undamaged parts of the deck. Mr Moschos’ evidence, however, was that it was necessary in order to correct the misalignment, that is to say the twist as well as the hogging. The defendants accepted that the twist had to be corrected, notwithstanding Dr Dingwall’s description of it as “slight”, but they did not accept that it would have been necessary or reasonable to adopt the section method in order to do so.

The defendants’ witnesses referred to two other methods of repair:

There is no persuasive evidence from the expert witnesses about what method of repairs was required to restore the “Irene EM” to her pre-grounding condition or an operating condition. Mr Colman said in his first report that he did not consider that the costs of repairs and towage would have been as much as the claimants asserted “as the extent of the necessary renewals would have been far less than two complete hold sections of the Vessel”. When he was cross-examined, Mr Colman confirmed that he had formed this opinion on the basis of photographs that he had seen, and readily accepted that others who had inspected the vessel, including Mr Moschos, were better placed than he to express an opinion about this. He stated that the vessel’s hog and any twist could have been removed by the crop and renew method or the blocks method, and that he thought it unnecessary to replace steel forward of the bulkhead between holds 4 and 5 or aft of the bulkhead between holds 6 and 7. However, as I understood his answers, here too his opinions simply reflected his assessment of the extent and nature of the damage based on photographs and without taking account of the oral evidence; and here too he would defer to those who had inspected the damage.

What did the witnesses of fact say about the crop and renew method? Mr Carney said in cross-examination that he had experience of twisted vessels being repaired by cropping and renewing, and that classification societies had agreed to this method of repair, but he was not an expert witness and Mr Templeman (properly and with my encouragement) refrained from cross-examining him as such. In any case Mr Carney’s evidence was not directed to the damage to the “Irene EM” and was too general for his opinion to be persuasive.

More importantly, in my judgment, the proposals for repairs that Captain Gregory and Mr Murray put forward would not have corrected misalignment of the vessel’s hull, and they really accepted this. Mr Murray accepted that, if the vessel was twisted as Dr Dingwall had observed, repairs by the crop and renew method would not have remedied this. As I understood his answers, Captain Gregory also accepted in cross-examination that his proposals would have replaced damaged steel and no more. (Q. “So if you are talking about cropping and renewing a total of 257 tonnes of damages steel members, that is not going to correct either the hog or the misalignment of the vessel’s hull, is it? It will replace damaged steel, but do nothing more”. A. “That is for replacing damaged steel, nothing more.”) He went some way to retract this answer in re-examination: he said that he thought it “most unlikely” that after crop and renewal repairs the vessel would have remained hogged, and that it was “unlikely” that she would have been twisted. But he immediately qualified his answer about whether the twist would have been corrected, and it was clear that he had not given the matter much thought. In my judgment, his repair method was not directed to dealing with misalignment, and I cannot place any weight upon his answers in re-examination about this.

In any case, I do not consider reliable the evidence of Captain Gregory and Mr Murray about the cost of repairs to the vessel. I have already explained why I have reservations about the reliability of their evidence generally, but Mr Templeman submitted that there is specific reason to reject their evidence about the cost of repairing the vessel: that I should not accept it because their exchanges show that Captain Gregory initially adopted the position that the repairs would cost $5 million, Mr Murray was asked to provide a justification for that figure and he did so. Mr Murray denied this when he was cross-examined, but in view of the correspondence (which I have set out at para 276) I reject Mr Murray’s denial. I have already indicated that I agree with Mr Templeman’s submission: see para 277. The credibility of Mr Murray’s evidence about repairs is further reduced because, as he engagingly said in cross-examination of his first thoughts about the cost of repairs, “Everyone laughed at it in the industry”. I recognise that the immediate focus of this evidence was the cost of repairs rather than the method, but the two questions are inseparable when it comes to assessing the reliability of witnesses’ views.

Mr Templeman sought to cast doubt upon Mr Boyd’s evidence about the blocks method on the grounds that he had originally contemplated the crop and renew method, and estimated the cost of using the blocks method only in his supplementary report of 25 January 2013. There is nothing in that: Mr Boyd’s report of 21 December 2009 suggested that consideration be given to repairing the double bottom structure by renewing “blocks” where steelwork was damaged, and by the time of his witness statement in January 2013, he had more information, in particular from (i) photographs taken by Dr Jones, Mr Moschos and Mr Murray and (ii) Captain Gregory’s report of 5 May 2011.

Mr Templeman had another argument that I should reject Mr Boyd’s evidence about the blocks method: when he contemplated the crop and renew method, he had estimated that 778 tonnes of steel would have to be replaced. In his report of 25 January 2013 he still maintained that his “original estimate of 778 tonnes of steel repairs remains valid as a conservative estimate of the amount of likely steel renewal work”, notwithstanding that the blocks method would involve more steel being replaced. This does not undermine Mr Boyd’s evidence: he explained that the extent of the damage was less than he had supposed when he made his initial estimate and he applied the savings to off-set the extra volumes involved in the block method. This perhaps illustrates that Mr Boyd’s assessments were was far from exact, but that is inevitable, and Mr Boyd recognised this by rounding up his assessment of 778 tonnes to 1,000 tonnes in his report to underwriters on the cost of repairs.

I therefore reject these attacks on how Mr Boyd came to put forward his estimate of the cost of repairs in his supplementary witness statement. It must be considered on its merits, or more precisely, I must consider whether nevertheless the claimants have proved that they are entitled to have the cost of repairs assessed on the basis of the section method and that the block method would not have been appropriate. Their argument is that the misalignment could not have been remedied by cutting out a block from the bottom structure and replacing it with a new block to fill the space. Both the block that was cut away and the upper structure and other parts of the vessel with which its replacement was to be fitted were twisted. Mr Templeman argued that there were, therefore, three possibilities:

The defendants replied to this argument with two (linked) points:

I conclude that these points do not answer the claimants’ argument. The question, as I see it, is how the claimants would reasonably have gone about repairing the damage, judging them by the standards of owners who were uninsured and behaving prudently. Mr Moschos inspected the vessel and concluded that the only feasible repair method was the section method. His evidence was challenged on the basis that parts of the double bottom structure were intact, but not on the basis that, if the double bottom structure were repaired, then the misalignment to the upper structure might be corrected because it was entirely elastic. I do not doubt that the hogging was caused by a combination of plastic and elastic deformation, but I have concluded that the principal reason was plastic deformation caused by the vertical forces from the grounding.

I add this, although my decision does not depend upon it. There is no convincing evidence that, if the claimants had carried out further investigations before embarking upon section method repairs, they would have been able to determine whether any deformation to the upper structure was plastic or elastic. (I do not understand that Mr Sarbanis’ note was directed to this. Mr Murray referred in cross-examination to investigations “get[ting] actually what was the actual condition when it was in dock” but this was a general observation and not directed to the misalignment.) As I infer from the evidence, the claimants would have had to decide what repair method should be adopted on the basis of the information available to them, and the reasonable decision would have been to adopt the section method because otherwise they could not have had a reasonable degree of confidence that the repairs would prove effective.

I have some sympathy for Mr Smith’s submission that Mr Moschos’ evidence was insufficient to establish this part of the claimants’ case and to discharge the burden of proof. I have found it difficult to engage with this issue without expert evidence. Mr Moschos said, and I accept, that, when asked to prepare their quotation, COSCO “put … in their computers, their naval architecture department, computers, they take the input of the report that I gave them and the plans and they design a new section that would present an aligned vessel and in their opinion in order to do that they have to replace steel that appears undamaged, and would be necessary to be renewed in order to achieve full alignment”. But this is a frail surrogate for expert evidence. However, in my judgment this is not ultimately fatal to the claimants’ case. As Mr Templeman said, the question how the vessel should be repaired cannot be divorced from the issues about what damage she actually suffered, and realistically I doubt whether an independent expert who had not seen the damaged vessel could have gone further than Mr Colman in expressing an opinion about this. And I find some comfort for my conclusion in Mr Sarbanis’ report and BV’s email of 18 January 2010, in which they required that the vessel be repaired by the section method “Due to the nature of the damage i.e. extreme hogging/misalignment and twisting of the vessel’s hull”, and said that only then could she be an operating vessel: see para 198.

Mr Templeman based another argument on this email: that, if she were not repaired by the section method, the “Irene EM” would not have been given classification, that therefore she could not have been insured, and so that she could not have been operated. In other words, for practical purposes the position adopted by BV and stated in the email took out of the claimants’ hands any decision about how the repairs might be done. I reject that argument: as I have said (at para 197), I accept Mr Templeman’s interpretation of what BV meant in their email, but it does not follow that after further inspection of the damage, in particular the damage to the double bottomed structure, they would not have agreed to another method of repair; nor that, if the claimants had adopted another method of repair, BV would not have accepted the vessel back into class when they saw the results. While the claimants were contemplating the section method, BV had no reason to object to it even if they thought that the claimants were being more cautious than necessary. It does not mean that, if the claimants had re-assessed the damage and had proposed less expensive repairs, BV would not have considered them. After all, it was not for a classification society to insist on particular repairs: their role was to survey the vessel after repairs had been done and to decide whether to accept the vessel back into class. Of course, it was sensible for the claimants to seek BV’s views about what repairs might be acceptable to them, and for BV to give them guidance. But in the end, if the vessel was to be repaired, it was for the claimants to decide what repairs would (i) restore the vessel to her pre-incident condition and (ii) meet classification requirements. Indeed, if the claimants had had the vessel properly repaired to their surveyor’s satisfaction but BV declined to classify her, the claimants were entitled under BV’s rules to challenge the decision.

The claimants’ argument that the vessel was a CTL is based on the cost quoted by COSCO for having the vessel repaired by them in China. The defendants contended that the vessel could have been repaired at less expense in Dubai or in Bahrain. Mr Moschos’ evidence was that, as he had said in his report of 26 January 2010, he sought a quotation for repairs from COSCO rather than a yard in the Gulf mainly because they would have the necessary facilities and because steelwork prices would be lower in the Far East. Accordingly, the claimants said:

Mr Moschos explained, and I accept, that COSCO mainly constructs new buildings, and therefore had facilities to carry out section method repairs. It is not disputed that they did. However, Mr Boyd said in his supplementary statement was that “Dubai Drydocks [had at the relevant time] three graving docks with sufficient capacity to take the Vessel” and “the necessary expertise to carry out repairs”. He also said that ASRY had a 500,000 dwt graving dock that could have taken the vessel. I do not doubt that evidence as far as it goes, but it is not sufficient for the defendants’ purposes. First, it is not clear that Mr Boyd had in mind repair works using the section method: his statement considered other methods, and his evidence about the facilities at Dubai Drydocks and ASRY is most naturally to be understood as directed to repairs by other methods. Mr Murray gave evidence in his supplementary statement that Dubai Drydocks and ASRY both had facilities for carrying out the crop and renew repairs, and that ASRY also had experience “of converting vessels and as such would have been able to fabricate a new mid-section comprising of Hold No 5 and 6 if necessary”: he exhibited material from ASRY’s website illustrating this. I accept Mr Murray’s evidence about ASRY, but its implication was that he did not dispute that Dubai Drydocks did not have either the experience or the facilities for such repairs. I infer that they did not.

However, this does not entirely answer Mr Moschos’ evidence or the claimants’ case about whether the necessary repairs could have been done in the Gulf. Mr Moschos acknowledged that there were graving docks in Dubai and Bahrain, but, as I infer from COSCO’s quotation, the works would have taken something like six months. Mr Moschos said that, even if they had the facilities to carry out section method repairs, the Gulf yards would not have wished to devote them to a single contract at the expense of their general repair business. I accept that evidence. Mr Smith challenged it on the basis that the Dubai Drydocks had three graving docks but as I have concluded they did not have the facilities: it was not suggested that ASRY had more than one dock.

I therefore do not need to consider whether, if the repairs had been carried out in the Gulf, they would have cost more than $12 million. But even if I am wrong and a Gulf yard would have made its facilities available, I infer that this would have been reflected in higher charges. In any case, Mr Moschos’ evidence was that the Gulf yards in Dubai and Bahrain “are the most expensive yards in the world”: this might not be literally true, but it satisfies me that the claimants could not have had the necessary repairs done more cheaply in the Gulf than in the Far East. The evidence relied upon by the defendants about the rates charged in the Gulf remains relevant only for testing whether COSCO’s quotation sufficiently proves what would have been charged in the Far East.

I have considered the cost of engine repairs and other costs that the claimants would have incurred if they had had the vessel repaired by COSCO. I must consider their quotation for hull repairs. Their total quotation for $17,406,680 comprised, as well as an allowance of $3 million for mechanical and electrical work,

The defendants presented arguments that I should not accept the COSCO quotation as reliable evidence of the cost of repairs generally or the cost of repairing damaged steelwork in particular. They submitted:

The sum of $1,520,780 was in respect of the docking and other facilities for 180 “good weather days”. The defendants did not contend that the COSCO quotation over-stated how long repairs would take, or advance any specific argument about this sum. I see no justification for taking a figure of less than $1 million.

The sum of $9,415,000 was based on steelwork of 2,690 tonnes at $3.5 per tonne. Are the amount and the rate justified?

The 2,690 tonnes comprised (i) 1,985 tonnes for fabricating a new midship section by way of holds nos 5 and 6, including replacement of the double bottom top tank section, hopper and topside tanks, side shell sections and hatch coamings tank and bulkheads; (ii) 580 tonnes for the bottom section forward of hold 5 and (iii) 125 tonnes for the bottom section aft of hold 6. The defendants said that that the proper measure of the new section itself is 1,400 tonnes and that there is no justification for allowing for any other steelwork forward or aft of holds nos 5 and 6. In the specification provided for Jurong, MMM stated that for “the refabrication and replacement of the whole of No 5 and 6 holds section … it is estimated that about 1,400 tons of steel is required”. Mr Boyd gave evidence that he had had this tonnage checked by “one of my naval architect colleagues”, Mr James Anderson, who considered it “about right”. The defendants submitted that claimants cannot justify a higher figure.

Mr Moschos explained, and I accept, that the tonnage of 1,985 tonnes was assessed by COSCO’s naval architect department, who used the information that he provided and “put it in their computer”. He did not himself participate in calculating the tonnage. It might be that COSCO made allowance for additional works to other parts of the upper structure forward of hold no 5 or after of hold no 6 (additional repairs for other parts of the double bottom structure being included separately by COSCO). However that might be, I accept the defendants’ contention that the claimants have not showed that the replacement section itself involved more than 1,400 tonnes of steelwork.

Having rejected COSCO’s assessment that the replacement section involved 1,985 tonnes of steelwork, I am unable to regard as reliable their assessment that a total of 705 tonnes of further steelwork was required for work on the double bottom fore and aft of the replacement section. However, I cannot accept that no other steelwork needed to be repaired in the double bottom section: for example, steelwork was needed to repair the damage to the shell side frames by way of hold no 7. In the specification Jurong were asked to submit a quotation on the basis that in all 500 tonnes of further steelwork were required. The claimants have not produced evidence to support this tonnage figure or from which I can assess with any accuracy what further steelwork would have been required if the section method were adopted, but on the most conservative basis I cannot believe that it would have been less than 200 tonnes.

I am not persuaded by the defendants’ various attacks on COSCO’s rate of repairs of $3.5 per tonne. Mr Boyd said that, assuming the hull damage to involve 1,400 tonnes of steelwork, the repairs by the blocks method could have been done at Dubai for $5,166,000, on the basis that the cost would have been some $3.7 per tonne (or $4.1 per tonne less a discount of 10%). I do not adopt that as a measure of the cost of repairs in China using the section method: rates for the Gulf cannot be transferred uncritically to the Far East and rates for one method of repair cannot be transferred uncritically to repairs by another. But this alone casts doubt upon the defendants’ submission that a realistic price would have been $1.38 per tonne.

However, I am sceptical of this part of Mr Boyd’s evidence. The rate of some $3.7 per tonne is lower than what Mr Boyd originally assumed in his estimate of 21 December 2009, when that he took a rate of $5.5 per tonne, which he described as “fairly generous”. He later revised his views in light of his experience of another casualty repaired by way of crop and renew at Dubai Drydocks in December 2009 and January 2010, and he allowed a 10% discount because the repairs of the “Irene EM” (largely, disregarding the deck repairs) were of grade A steel rather than high tensile steel. However, he had had involvement with the repairs to the other vessel when he originally estimated the cost of repairs, and in cross-examination he had no convincing explanation as to why he would not have taken due account of this and no convincing reason for reducing it to $4.1 per tonne (before discount).

What then is the basis upon which the defendants say that $3.5 per tonne is too high a price? They did not adduce expert evidence about the market price for repairs at the relevant time, but relied upon (i) prices discussed in internal emails within Noble Denton in February and March 2010; and (ii) information that Mr Murray gave about rates charged by yards for other repairs of other vessels.

The exchanges are these:

Mr Murray’s evidence was that:

I do not find this evidence persuasive. Mr Templeman fairly observed that the other COSCO quotations were for different repairs to different ships and different times, and no doubt were affected not only by fluctuating rates for the cost of steel but also by how busy they were and how anxious they were for the work. Captain Gregory and Mr Murray themselves adopted a rate of $6.5 per tonne for steelwork in their report of 5 May 2011. Captain Gregory said that he relied wholly upon Mr Murray to provide an appropriate rate for steelwork, but neither he nor Mr Murray provided any coherent explanation for the rate used in their report if prices were as low as the defendants now suggest.

The defendants’ pleaded case adopts $6.5 as the “unit steel price” for repairs at ASRY. Mr Murray said that prices in Dubai were higher than at ASRY, but the pleaded case is broadly consistent with the rates for Dubai stated by Captain Jackson in his email of 13 December 2009: see para 210. Captain Jackson also said that rates in China were no better than $3, and here too his advice is consistent with COSCO’s quotation. This seems to me more telling evidence than that on which the defendants relied. After all, Mr Murray’s initial views about how much the repairs would cost were dismissed within Noble Denton.

In his second statement Captain Gregory expressed his opinion that “a realistic rate for a Chinese repair yard in 2010 for steel weights in excess of 1,000 tonnes would have been some USD 1.00/kg”. Although he apparently had been based in Singapore for 16 years and said that he was “very familiar with both yards”, he was not giving expert evidence. In any case I am not persuaded by his views: he gave no reason for his opinion (beyond expressing an expectation that COSCO would agree to “a significant discount”); it is inconsistent with Captain Jackson’s contemporaneous view; if he thought prices were so very much lower in China than the Gulf, he would surely have referred to this when estimating the cost of repairs; and I do not regard Captain Gregory as a reliable witness on a matter like this.

Mr Boyd too gave evidence about rates charged in China. He expressed an opinion said to be based on his “experience” that the rate of $3.5 was “exceptionally high for a Chinese yard” but, as I said at para 29, he had no experience of Chinese yards and I attach no weight to his opinion in itself. However,

I accept that this evidence is more directly relevant than other evidence on which the defendants relied, but I am not persuaded by it that the rate charged by COSCO is significantly above the market rate for the repairs by the section method. The rate quoted by COSCO was for specific work: it included, for example, work on the internals of the holds and tanks, some (limited) high tensile steel renewals and “small pieces which are to be charged on a per piece basis”, all of which, according to Mr Moschos’ undisputed evidence, attracted additional charges. Apparently none of the other rates presented by Mr Boyd or Mr Murray are directed to repairs by the section method and there is no evidence about whether such repairs are more or less expensive than if another method is used. Mr Boyd did not suggest that Braemar’s Shanghai office was provided with COSCO’s quotation or given information about the damage that was to be repaired or the method that was to be used or details of what was required, but I infer that they had considerably less information about the repairs required than Captain Jackson did. I am persuaded that, for the purposes of assessing the cost of steelwork, the price of $3.5 quoted by COSCO should not be reduced by more than 10%,

I have sought to examine the cost of repairs in some detail as best I can on the basis of only limited evidence. In my judgment, the claimants’ pleaded claim about what repairs would have cost is exaggerated, and the costs would have been much closer to $12 million than the claimants allege. Conscious that the burden of proof is on the claimants, I must consider whether the evidence is sufficient to establish that they would have exceeded that amount. Despite the limited evidence, I conclude that they have done so, even making conservative assumptions in the defendants’ favour throughout and ignoring some items that the claimants might properly bring into account. I illustrate this follows:

The conclusion that I have reached about the cost of repairs as a result of this examination of such information as is available is the same as I would, if necessary, have reached on a broader and more impressionistic approach. After all, the claimants’ case is based on a quotation from a reputable shipyard, and it could not credibly be argued on the evidence that it was not honestly sought and honestly provided. If my conclusions about other expenses such as temporary repairs and towage are correct, the vessel would have been a CTL if the costs were little more than a third of the price quoted. The defendants’ evidence about the cost of repairs was simply not of a quality to undermine so completely the evidence of the quotation.

I conclude that the damage to the vessel resulting from the grounding on 30 October 2009 was covered by the insurance. I also conclude that the vessel was a CTL. I reject the alternative argument that she was an ATL. The claim therefore succeeds, and the claimants are entitled to judgments against the appropriate defendants in a total of $18 million together with statutory interest, subject to giving the credit to which I referred in paragraph 2 of this judgment.