St Shipping And Transport Pte Ltd v Space Shipping Ltd, Re CV Stealth

A charterparty prohibition against undertaking a voyage exposing a vessel to capture or seizure may operate as a continuing obligation. A risk arising after the initial voyage order can engage the clause if the charterer could still give effective substitute orders. The charterer’s knowledge of the increased risk is unnecessary. An appeal under the Arbitration Act 1996 cannot recast challenges to factual findings as questions of law. Where contractual consent to appeal reflects section 69, the appellant must establish that the legal question will substantially affect the parties’ rights; a merely possible or academic effect is insufficient.

The charterers appealed under section 69 of the Arbitration Act 1996 against a partial final arbitral award concerning a vessel detained in Venezuela. The arbitrator held that the charterers were liable under indemnities and a prohibition on voyages exposing the vessel to capture or seizure, and that the vessel was not off-hire.

The charterers argued that the prohibition was assessed only when the voyage order was given, that the arbitrator had erred in law, and that the charterparty’s appeal clause removed the need for permission. The central issues were whether a question of law arose and whether any such question would substantially affect the parties’ rights.

1. Clause 28. The prohibition on undertaking a voyage that would expose the vessel to capture or seizure was a continuing obligation. Although the court did not need finally to decide whether the relevant risk was assessed prospectively when the voyage order was given, a risk arising while the vessel was en route could engage the clause where the charterer could still give fresh orders capable of avoiding it. The principle was analogous to the continuing safe-port warranty in Kodros Shipping Corporation v Empresa Cubana de Fletes (The “Evia” (No 2)) [1982] 2 Lloyd’s Reports 309.
2. The arbitrator’s findings established that the vessel had been ordered to load cargo intended for unlawful export, that the charterers’ communications with the agents led to the unauthentic authorisation, and that the resulting link caused the detention. Those findings supported the conclusion that the increased risk existed when the order was given. The charterers’ knowledge of that risk was unnecessary, consistently with Ullises Shipping Corp v Fal Shipping Co Ltd (The “GREEK FIGHTER”) [2006] EWHC 1729 (Comm).
3. The challenge was an impermissible attempt to dress an appeal against factual findings as an appeal on law. The court must read an award fairly, but parties remain bound by the tribunal’s findings of fact absent an irregularity justifying relief under section 68. The approach in Pace Shipping Co Ltd v Churchgate Nigeria Ltd (The “PACE”) [2010] 1 Lloyd’s Reports 183, Zermalt Holdings SA v Nu-Life Upholstery Repairs Ltd [1985] 2 EGLR 14, Geogas SA v Trammo Gas Ltd (The “BALEARES”) [1993] 1 Lloyd’s Reports 215 and Demco v SE Banken Forsakring Holding Aktiebolag [2005] 2 Lloyd’s Reports 650 was applied.
4. Under section 69, contractual agreement to an appeal does not extend to academic questions. The applicant must establish that determination of the question will substantially affect the parties’ rights, not merely that it may do so. The burden lies on the party asserting that permission is unnecessary. The approach to such contractual consent in Poseidon Schiffahrt GmbH v Nomadic Navigation Co Ltd (The “TRADE NOMAD”) [1998] 1 Lloyd’s Reports 57 was followed.
5. Permission to appeal was required and was refused on all grounds. The remaining arguments concerning clauses 13, 21 and 27 were academic and, in any event, would not have succeeded.

The judgment concerned an application for permission to appeal from a partial final arbitration award under section 69 of the Arbitration Act 1996. The court refused permission on all grounds.