Port charterparty – test for “arrived ship”
Grain was shipped from the United States to the United Kingdom. Nominated discharging ports were London, Avonmouth, Glasgow, Belfast, Liverpool / Birkenhead (counting as one port), or Hull at charterers’ option. The charterers chose Liverpool.
The charterparty provided that notice readiness could be given “whether in berth or not”.
The vessel arrived at the Mersey Bar light-vessel and pilot station in the afternoon where she lay overnight. The following day she moved up river to the heart of the Liverpool waterfront when notice of readiness was given. The charterers accepted notice of readiness on condition that the vessel was allowed to remain where it was at the time that the notice was tendered.
However, the port authorities ordered the vessel back to the Mersey Bar which was the customary place for vessels waiting for berth. The bar anchorage was 17 miles from the nearest discharging berth.
The charterers denied that the vessel was an arrived ship and contended that the notice of readiness was premature.
The Mersey bar was within the fiscal, legal and administrative area of the port of Liverpool.
The umpire (Mr Roger Davies) decided in favour of the shipowners after the two arbitrators appointed had disagreed. He stated a special case for the court.
The Commercial Court, (Donaldson, J) felt obliged to hold, on the authority of the Aello, that the vessel was not an arrived ship at the Mersey bar.
The Court of Appeal (Lord Denning M.R., Buckley and Roskill LJJ – Lord Denning MR dissenting) confirmed the decision of Donaldson, J.
Roskill and Buckley LJJ regretted having to dismiss the appeal but considered themselves bound by the judgment of Lord Justice Parker in the Court of Appeal in the Aello as affirmed by the House of Lords.
Lord Denning M.R. distinguished the Aello and expressed his agreement with the umpire.
The House of Lords (Lords Reid, Morris of Borth-Y-Gest, Diplock, Simon of Glaisdale and Viscount, Dilhorne) were unanimous in their rejection of the “commercial area” test of Lord Justice Parker. The Aello was overruled and judgment was given in favour the owners.
Lords Roskill and Buckley held that the WIBON clause was not effective to make the vessel an arrived ship if the vessel was not within the port.
Lord Morris found himself in the unfortunate position where had concurred with the majority in the Aello.
In all the judgments, (save for that of Lord Diplock) the facts of Leonis v Rank (No. 1) were minutely examined for guidance despite the vast difference in the port conditions. In Leonis, the vessel lay but a few lengths away from the loading spot, whereas in this case the distance between the customary anchorage and the berth was 17 miles.
Lord Morris pointed out in his judgment that the real challenge in Leonis v Rank was the charterers’ contention, current at the time, that the ship only arrived once it reached a berth despite the destination clause naming a port only.
The irony of this case is that the Lords used the accessibility principle to quash the “commercial area” test but continued to support a physical test, namely, port limits.
This content is restricted to site members. If you are an existing user, please login. New users may register below.