Scindia Steamship Navigation Company Ltd Bombay v Nippon Yusen Kaisha Ltd

Under a time charter, detention includes a physical or geographical constraint preventing the vessel from performing the service required by the charter. A port authority’s order requiring a vessel to leave its berth and remain at anchorage until security is provided is detention, even if the vessel could sail elsewhere. The owners must provide the security where the charter expressly requires security to prevent detention for any reason.

Expenses of storing or removing damaged cargo after discharge are not expenses of discharge under a clause requiring charterers to discharge cargo. A vessel may nevertheless be off-hire for delay not caused by the charterers’ act, omission or default.

The owners time-chartered the Jalagouri to the charterers under an amended 1946 NYPE form. Damaged cargo could not be discharged at Kandla because the port authority required security for its storage or removal. The vessel was ordered off berth until acceptable security was provided.

Arbitrators held that there was delay but no detention, and that the charterers were responsible for providing security under the discharge clause. Rix J allowed the charterers’ appeal, holding that the vessel was detained, that the owners had to provide security, and that the charterers were not responsible under the discharge clause. The central issues before the Court of Appeal were the meaning of detention and the scope of the charterers’ discharge obligations.

1. Appeal dismissed. The vessel was detained within clause 72 and was off-hire under clause 53 until security was provided. It was also delayed within clause 53, providing an independent basis for the off-hire conclusion.
2. Clause 72 covered detention or threatened detention for any reason and required the owners to provide security to prevent detention under any circumstances. Applying the ordinary meaning of detention and the approach in The Mareva AS (1977) 1 Lloyds Reports 368, the vessel was kept from proceeding with discharge, ordered away from the berth, and kept waiting at anchorage. That was a physical and geographical constraint on the vessel’s movements in relation to the service required by the charter.
3. The charterers’ clause 8 obligation to load and discharge cargo concerned the physical acts and expenses of cargo handling. Security for the costs of storing or removing damaged cargo was not a cost of discharge. The clause did not become wider merely because the port authority made provision of that security a condition of discharge. The charterers therefore committed no act, omission or default causing the delay for the purposes of clause 53.
4. Lord Justice Tuckey stated that where costs are properly costs of discharge, the charterers may have to meet them initially even if the underlying cause is an owners’ breach, leaving a later claim for recovery. That observation was not necessary to the result concerning the security demanded in this case.
5. Lord Justice Brooke and Lord Justice Henry agreed with Lord Justice Tuckey. The appeal was dismissed with the respondents’ costs.

1. Arbitration: The arbitrators held that the vessel was delayed but not detained, that the charterers had to provide the security under clause 8, and that the vessel was not off-hire.
2. High Court: Rix J allowed the charterers’ appeal, holding that the vessel was detained, that the owners had to provide security, and that the vessel was off-hire under clause 53.
3. Court of Appeal: The court dismissed the owners’ appeal and awarded the respondents their costs.