416. Canadian Pacific (Bermuda) Ltd v Canadian Transport Co Ltd (the “H.R.Macmillan”) [1973] 1 Lloyds Rep 27; [1974] 1 Lloyds Rep 311

Off-hire clause – interpretation of special clause relating to Munck gantry cranes – charterers held entitled to sue for damages in addition to benefits under off-hire clause(s).

The Facts

The vessel was let for 8 years on the NYPE Form.

The following were the salient terms:

“1.        The owners are to keep the vessel in a thoroughly efficient state in hull machinery and equipment including Munck gear for and during the service.

15.       In the event of loss of time for deficiency and/or default of men or deficiency of stores, fires, breakdown or damage to hull, machinery or equipment, grounding, detention by average accidents to ship or cargo, drydocking for the purpose of examination or painting bottom, or any other cause preventing the full working of the vessel, the payment of hire shall cease for the time thereby lost;  and if upon the voyage dispute be reduced by defect in or breakdown of any part of a hull, machinery or equipment, the time so lost, and the cost of any extra fuel consumed in consequence thereof, and all extra expenses shall be deducted from the hire.

23.       Vessel to work night and day, if required by charterers and all winches to be at charterers’ disposal during loading and discharging.

38.       With reference to clauses 15 and 23, in the event of a breakdown of Munck crane or cranes by reason of disablement or insufficient power, the hire to be reduced pro rata for the period of such inefficiency in relation to the number of cranes available.  Owners to pay in addition the cost of labour affected by the breakdown, either stood off or additionally engaged.  This does not exempt owners from liability for the cost of hiring shore appliances in accordance with clause 23”.

The vessel was equipped with 3 large Munck cranes designed for the loading and discharge of timber.

Three months after the vessel was delivered into service, the trolley of the number 1 Munck crane fell from its gantry onto the quayside, killing 2 persons and sustaining irreparable damage.

The remaining 2 cranes were withdrawn from service for inspection after which they were considered safe for use.

The vessel completed discharging at Tilbury, then loaded at Jacksonville and discharged at a West Coast Canadian Port.  Thereafter she loaded at 3 ports on Vancouver Island and finally returned to discharge at Tilbury, arriving back 3 months after the casualty.  The number 1 crane was restored and became operational.

The parties submitted their dispute regarding the principles to be applied in the computation of off-hire to 2 arbitrators.

Findings

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