CSSA Chartering and Shipping Services SA v Mitsui OSK Lines Ltd

In a voyage charter requiring performance with utmost despatch, the shipowner has an absolute obligation to begin the approach voyage within a reasonable time. The time must be identified from the charter as a whole. The obligation is not postponed until completion of a previous charter unless clear words make that a condition.

Where no expected readiness or arrival date at the loading port is stated, an itinerary giving an expected arrival at the final discharge port under a previous charter may provide the relevant guide. It may operate as the equivalent of a loading-port ETA, allowing reasonable time for discharge. The approach voyage must then begin with utmost despatch, consistently with Monroe Brothers Ltd v Ryan [1935] 2 KB 28 and Evera S.A. Commercial v North Shipping Co Ltd (The North Anglia) [1956] 2 Lloyds Rep. 367.

Mitsui OSK Lines Ltd, the disponent owner of the vessel Pacific Voyager, appealed against Popplewell J’s decision in the Commercial Court, reported at [2017] EWHC 2579 (Comm). The vessel was performing a previous charter and was expected to discharge at Antifer before proceeding to Rotterdam under the new voyage charter.

After the vessel suffered serious damage while transiting the Suez Canal, the owner notified the charterer that repairs would take months. The charterer terminated after the cancelling date and claimed agreed damages. The central issue was whether the obligation to proceed to the loading port with utmost despatch had already attached, and whether the previous voyage’s itinerary, particularly the expected arrival at Antifer, identified the time when the approach voyage had to begin.

The appeal was dismissed unanimously. Longmore LJ gave the substantive judgment, with King LJ and Sir Rupert Jackson agreeing. The decision of Popplewell J was upheld.

1. Nature of the obligation. Every charterparty must be construed on its own terms, but earlier decisions on the same or similar wording provide authoritative guidance in the interests of commercial certainty. An obligation to proceed with utmost despatch must be given practical effect. Where no express sailing date is stated, the vessel must proceed forthwith or within a reasonable time identified from the other charterparty terms.
2. Use of the itinerary. The itinerary placed in the charter’s Position/Readiness section gave estimated arrival dates at the intermediate ports, including Antifer. Those estimates were contractual estimates, not guarantees, and the qualification IAGW/WP did not remove their significance. The Antifer ETA was equivalent, for this purpose, to an expected readiness or arrival date at Rotterdam. The obligation to commence the approach voyage attached at the end of a reasonable period for discharging at Antifer, which was on or about 28 January 2015.
3. Previous charter and exceptions. The words subject to the provisions of the charter did not alter the result. Consistently with Monroe Brothers Ltd v Ryan [1935] 2 KB 28 and The North Anglia [1956] 2 Lloyds Rep. 367, exceptions in the charterparty did not apply before the approach voyage began. Much clearer language would have been required to make commencement contingent on completion of the previous voyage or to transfer its delay risks to the charterer.
4. Unresolved alternative. The court left open whether, in the absence of any itinerary, a cancelling date alone could identify when the utmost-despatch obligation attaches.

The owner was ordered to pay the charterer’s agreed appeal costs of £64,386.01. The application for permission to appeal to the Supreme Court was to be dealt with by written submissions.

• Court of Appeal (Civil Division): The owner’s appeal was dismissed and the Commercial Court decision was upheld. [2018] EWCA Civ 2413.
• High Court, Queen’s Bench Division, Commercial Court: Popplewell J upheld the charterer’s claim for damages for breach of the obligation to perform the chartered service with utmost despatch. [2017] EWHC 2579 (Comm).