Carboex SA v Louis Dreyfus Commodities Suisse SA

In a berth charterparty containing a WIBON provision, the allocation of congestion risk and the construction of a strike exception are distinct questions. WIBON ordinarily starts the laytime clock despite the absence of an available berth. It does not control the meaning of a separately worded exceptions clause. A strike exception covering delay in discharging may extend to congestion caused by the after-effects of a strike, including where the vessel arrived after the strike had ended, provided the strike caused the relevant delay.

The claimant appealed under section 69 of the Arbitration Act 1996 against an arbitral award concerning demurrage under a contract of affreightment for four vessels carrying coal to Spain.

The charterparty contained a standard strike exception and a bespoke WIBON provision. The tribunal held that the strike exception did not protect the charterers against delay caused by berth congestion resulting from a strike, relying principally on Central Argentine Railway Ltd v Marwood [1915] AC 981. The central question was whether the strike exception applied where the vessel was unable to berth because of congestion caused by a strike, including after the strike had ended.

1. The appeal was allowed. The tribunal had erred in law in answering “No” to the two preliminary questions. The correct answer to each, and to the reformulated question, was “Yes”.

2. WIBON provisions address when laytime begins. They do not, without more, determine the construction of a separate exceptions clause. The risk of congestion may ordinarily fall on charterers under WIBON, but that risk can be displaced where the exceptions clause properly covers the relevant congestion.

3. The reasoning in The Amstelmolen [1961] 2 Lloyd’s Rep 1 was binding. The exceptions clause had to be construed as a free-standing provision, without allowing the WIBON wording to alter its ordinary meaning. The approach was consistent with Reardon Smith Line Ltd v East Asiatic Co (1938) 62 Ll. L.Rep. 23.

4. The ratio of Central Argentine Railway Ltd v Marwood [1915] AC 981 was confined to the meaning of “such time” and the failure to establish that the strike had caused the relevant delay on the agreed facts. It did not establish that WIBON necessarily excluded congestion caused by a strike from the operation of a strike exception.

5. On its ordinary meaning, the words referring to strikes which prevent or delay discharging covered delay caused by congestion resulting from the after-effects of a strike which had ended. They also covered delay where the vessel arrived after the strike had ended. This conclusion was supported by Leonis Steamship Co v Rank (No. 2) [1908] Com. Cas. 295, London and Northern Steamship Co Ltd v Central Argentine Railway Ltd [1913] 108 LT 527, and Reardon Smith Line Ltd v MAFF [1962] 1 QB 42.

6. The award was set aside. Consequential orders were to be addressed separately.

High Court (Commercial Court): The appeal under section 69 of the Arbitration Act 1996 was allowed. The arbitral award dated 11 June 2010 was set aside, with consequential orders reserved.