Mediterranean Salvage & Towage Ltd v Seamar Trading & Commerce Inc

Where a voyage charterparty names a specific port but does not expressly warrant berth safety, a safe-berth warranty is not automatically implied merely because the charterer may nominate one berth from several within that port.

The implication of such a term depends on necessity, business efficacy and the charterparty’s express wording. A named port, an owner’s express assumption of responsibility for port restrictions, and the removal of safety wording may make an implied warranty inconsistent with the contract. The charterer remains under an implied obligation not to nominate an impossible berth, such as one which cannot accommodate the vessel’s agreed draft.

The claimant owners appealed under Arbitration Act 1996, section 69, from a declaratory arbitration award concerning damage allegedly sustained by the vessel REBORN at a loading berth in Chekka.

The charterparty named Chekka as the loading port, permitted the charterers to nominate the berth, contained an owners’ warranty concerning port specifications and restrictions, and deleted the word “safely” from part of the standard Gencon wording. The arbitrators held that no absolute duty to nominate a safe berth was implied. The issue before the court was whether that conclusion involved an error of law.

1. The appeal was dismissed. The arbitrators had not erred in law.
2. The implication of a safe-port or safe-berth warranty is governed by necessity, with business efficacy and the officious-bystander test serving as aids. The court must examine the charterparty as a whole. A warranty is less readily implied where the charter names the port or berth, and more readily implied where the charterer selects from a range of unidentified ports or berths.
3. This was a berth charterparty. The charterers had an implied right and obligation to nominate a berth. Their nomination operated as an election, so that the nominated berth was treated as if identified in the charterparty from the outset.
4. The express terms defeated implication of a warranty that the nominated berth would be prospectively safe as to dangers unique to that berth. The owners had agreed to load at the identified port of Chekka, warranted that they had satisfied themselves about the port’s specifications and restrictions, and had accepted wording under which the vessel was to proceed to the nominated berth without the qualification that she could “safely” get there. An implied safe-berth warranty would therefore be plainly inconsistent with the express terms.
5. The decision in Vardinoyannis v The Egyptian General Petroleum Corporation (the Evaggelos Th.) [1971] 2 Lloyd’s Rep 200 was distinguishable. Its observations on implication were obiter, and concerned a time charter involving unidentified ports and an express safety qualification.
6. Following the caution in Aegean Sea Traders Corporation v Repsol Petroleo SA (the Aegean Sea) [1998] 2 Lloyd’s Rep 39, the implication and scope of any safety term depend on the particular charterparty. Even without a safe-berth warranty, the charterers could not nominate an impossible berth. The only relevant limitation here was that the berth had to accommodate a vessel drawing 27 feet salt water.

Arbitration: The arbitrators answered “No” to the question whether the charterparty contained an absolute duty on the charterers to nominate a safe berth at Chekka.

High Court (Commercial Court): On an appeal under Arbitration Act 1996, section 69, Aikens J dismissed the appeal and upheld the arbitrators’ conclusion.