Frontier International Shipping Corp v Swissmarine Corporation Inc

In a voyage charterparty, words providing that strikes and other causes interrupt laytime only when beyond the consignee’s control apply to both the specified events and the general words. The event must also prevent or delay discharge. The construction depends on the language used in its contractual setting. Authorities concerning similar wording in different forms or commercial contexts may illustrate linguistic possibilities but do not determine the meaning of the clause. A detailed factual inquiry into the cause and controllability of a strike may be required.

Frontier International Shipping Corp appealed under the Arbitration Act 1996 from an award upholding Swissmarine Corporation Inc’s claim for demurrage. The dispute arose under a voyage charterparty for the carriage of coal to Mexico. A strike by employees of the receivers and consignees delayed discharge. The arbitrators held that the charterers could rely on the strikes exception only if the strike was beyond the control of the consignee, and found that requirement unsatisfied.

The central issue was whether the words beyond the control of the consignee qualified only the general words concerning other causes or also qualified the specified events of strikes, lockouts and civil commotions.

1. Appeal dismissed. The arbitrators’ construction of clause 9 was correct.
2. The natural construction of clause 9 was that the words beyond the control of the consignee applied to strikes, lockouts and civil commotions as well as to any other causes or accidents. The word other was capable of referring back to the specified events. It was commercially sensible to interrupt laytime only for events beyond the consignee’s control. The clause also required the event to prevent or delay discharge.
3. The amendment making the charterers liable for discharge-port demurrage did not alter that construction. The charterparty was based on a form which focused on the consignee’s role at the discharge port. The parties could have referred instead to events beyond the charterers’ control, as they did in clause 44, but had not done so.
4. The commercial objections did not justify a different construction. A lockout or strike could involve employees of stevedores or other employers, and a strike by the consignee’s own employees might arise from political grievances beyond its control. Whether a strike was beyond the consignee’s control was a question of fact. A detailed investigation could be required, just as it could be when relying on an unspecified cause.
5. The reasoning in Stathatos Steamship v Cordoba Central Railway Company [1931] 40 Ll.L.Rep.274 did not resolve the construction issue because that issue had not been argued there. The Mareva AS [1977] 1 Lloyds Rep.368 and Mamidoil-Jetoil Greek Petroleum Company SA v Okta Crude Oil Refinery [2003] 1 Lloyds Rep.1 illustrated the possible backward reference of the word other, but concerned different contracts and contexts.
6. If the construction had been wrong, the award would have been remitted for a finding on the length of delay caused by the strike. The arbitrators had not treated the charterers’ alleged failure to take reasonable mitigating steps as independently defeating reliance on the clause.

• High Court (Commercial Court): appeal from the arbitration award dated 23 April 2004 dismissed. Permission to appeal had been granted by Cooke J on 17 August 2004.