Safe port – vessel delayed in leaving river port for open sea by siltation – test of commercial frustration applied – port not unsafe
The facts
The vessel was chartered on the Baltimore Grain Form C to load a full cargo of soya at Destrehan on the Mississippi, destination Europe. The clause read: “…. One (1) two (2) safe berths, one safe port US Gulf… understood New Orleans, Destrehan, Ama, Myrtle Grove Resame, count as one (1) port.”
The vessel completed the loading at Destrehan but was delayed by various factors from proceeding directly to the open sea, including the grounding of three other vessels.
During the course of these delays, seasonal siltation took place causing further substantial delay.
The owners argued that the siltation constituted Destrehan an unsafe port and they claimed damages for delay.
Findings
The two arbitrators appointed, John Selwyn and Alexander Kazantzis, held in favour of the charterers and stated a special case for the Commercial Court. Although delay by siltation had not been in the contemplation of the parties, they considered themselves bound by Knutsford v Tillmans to hold that non-frustrating delay did not render the port unsafe.
Donaldson J overturned the award. The Court of Appeal (Roskill and Geoffrey Lane LJJ and Sir David Cairns – main judgement by Roskill LJ) restored the arbitrators’ award. Donaldson J introduced the criterion of a “commercially unacceptable” delay.
Commentary
Had the vessel not been delayed by the grounding of the other vessels, she would have left the port and proceeded to the open sea in safety ie before siltation took place. This was the point argued by Hobhouse QC: that the unsafety only ensued after the vessel had left the port and was therefore irrelevant to the interpretation of the safe port warranty.
Ogden v Graham and Axel v Brostrom suggest, on the other hand, that in determining unsafety, a reasonably foreseeable danger e.g. siltation or congestion as per Khian Sea qualifies.
Unsafety causing delay as opposed to physical damage remains actionable. This was held in the Count where the court felt obliged to distinguish this case on its facts.
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