Novologistics Sarl v Five Ocean Corporation the "Merida"

A voyage charterparty must be construed as a whole, without assuming that one part has precedence over another. Wording identifying a specified berth, or expressly giving charterers the right to nominate a berth, ordinarily indicates a berth charterparty. A later clause referring to ports and berths will not convert it into a port charterparty where it can sensibly be construed as adding or reiterating safe-port and safe-berth warranties. A clause providing for shifting time to count may be neutral, but it is also consistent with a berth charterparty. Post-contractual communications have no legal relevance to construction.

The charterers appealed under the arbitration legislation from an award concerning a voyage charterparty for the carriage of steel plates from Xingang to Cadiz and Bilbao. The arbitrators held that the charterparty was a port charterparty and awarded the owners demurrage for the vessel’s delay waiting for a berth at Xingang. The appeal raised a single question of law: whether the charterparty was a port or berth charterparty, and consequently whether the waiting time was for the charterers’ account.

1. Appeal allowed. The charterparty was a berth, not a port, charterparty. The owners’ claim for demurrage therefore failed.
2. The court applied the approach in Kershaw v Kendrick: an arbitral award should be read as a whole and fairly, without minute textual analysis; some deference is appropriate where arbitrators’ industry experience assists them on construction, but the court may reverse an award where the arbitrators have reached the wrong legal answer. The applicable approach was not equivalent to a requirement that the award be Wednesbury unreasonable.
3. The charterparty had to be read as a whole, with no automatic precedence given to any particular provision. The opening term identified the contractual destination as a good and safe berth at Xingang and expressly referred to charterers’ berth. That wording, considered in the light of the authorities, pointed to a berth charterparty.
4. Clause 2[1] did not negate the opening term. It was preferably construed as introducing a safe-port warranty and reiterating safe-berth warranties. On that construction there was no inconsistency: the opening term dealt with contractual destination and delay risk, while clause 2[1] dealt principally with safety obligations. Treating clause 2[1] as converting the charterparty into a port charterparty would deprive the opening term of meaning and produce an unexplained fundamental alteration.
5. Clause 2[2], concerning the costs and time of shifting and warping, was principally neutral. If it had to be treated as informative, its provision for time to count was consistent with a berth charterparty, because absent an express provision no time would ordinarily count before berthing. The post-contractual agents’ email was irrelevant and could not be used in construing the charterparty.
6. The matter was to be dealt with by an appropriate order, with counsel assisting on the order and costs.

• Arbitration: The arbitrators’ final award dated 20 April 2009 held that the charterparty was a port charterparty and awarded the owners US$502,267.24 in demurrage, interest and costs.
• High Court (Commercial Court): The appeal was allowed. The charterparty was held to be a berth charterparty and the owners’ demurrage claim failed.