170. Vardinoyannis v The Egyptian General Petroleum Corporation (The “Evaggelos Th”) [1971] 2 Lloyd’s Rep 200

Safe port – port becoming unsafe after the vessel’s arrival – charterers not liable

The facts

The vessel was time chartered during a period of hostilities between Israel and Egypt to trade in the war zone.

Clause 12 read as follows:

“The cargo or cargoes shall be laden and discharged in any dock at any wharf or place the charterers may direct where the vessel can always lie safely afloat.”

The employment and indemnity clause read as follows:

“The Captain (although appointed by the owners) shall be under the orders and direction of the charterers, as regards employment, agency or other arrangements… the charterers hereby indemnify the owners from all consequences or liabilities that shall arise from the Captain… complying with their agents’ orders.”

In terms of clause 48, the charterers undertook to pay an extra monthly sum towards war risks extra cover in addition to the monthly hire.

During the course of the charter, the vessel was exposed to shell fire while discharging at a jetty in the Suez roads. The vessel was unharmed and continued to trade between Aden and Suez.

The parties had agreed to extend the charter by 6 months when the vessel was hit by Israeli shell and became a constructive total loss.

The owners claimed for the loss of the vessel.

Findings

The two arbitrators appointed by the parties, RA Clyde and C Barclay dismissed the claim but stated a special case for the Commercial Court.

Donaldson J emphasised that the safety of the port was a question of fact. Agreement on extra war risks cover was not waiver of a safe port obligation.

He referred the case back to the arbitrators for a finding on the proximate cause of the loss of the vessel in view of the employment and agency clause giving the owners an indemnity against loss caused by the charterers’ orders: if the proximate cause was the order of the charterers and not the Israeli gun fire, the charterers would be liable.

Both the arbitrators and Donaldson J interpreted the “safely afloat clause” to refer only to maritime dangers.

Donaldson J was prepared to recognise an implied safe port provision, in principle. On the facts, there was none.

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