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2011 Supreme(SC) 658
2011 (8) Supreme 506
SUPREME COURT OF INDIA
Altamas Kabir and A.K. Patnaik, JJ.
Shipping Corporation of India Ltd. — Petitioner(s)
versus
Mare Shipping Inc. — Respondent(s)
Special Leave Petition (C) No.19461 of 2006
Decided on : 13-7-2011
IMPORTANT POINT
The concept of an arrived ship in shipping terminology requires that a vessel should reach a destination in a port where she could be safely berthed and thereupon be ready to either discharge or load cargo from and on to the vessel.
Headnote:Arbitration and Conciliation Act,1996-Section 34-Parties entered into a Charter Party in respect of Respondents’ vessel, “m.t. Prestige”, for carriage of minimum 8150 metric tonnes of crude oil from the Egyptian Red Sea port of Ras Sukheir to one/two safe anchorage(s)/lighterage points/SBM(s)/one/two safe port(s)one/two safe berth(s) anywhere in India- Clause 9 of Charter Party provided for settlement of all disputes arising out of Charter Party by arbitration-Dispute between parties- Special Leave Petition against Award of Arbitration , as well as judgments and orders passed by Single Judge and Division Bench of High Court confirming the Award- Issue in consideration whether on arriving at anchorage point at Port Vadinar, despite the destination point being the SBM mooring, it could be said that it was an arrived ship which was competent under the Charter Party dated 9.11.1999, to issue Notice of Readiness of discharge of its cargo- Master of the vessel was under an obligation to give Notice of Readiness on arrival at customary anchorage at the port of discharge- It is only after vessel sailed from Ras Sukheir that receiver, IOC, nominated Vadinar to be the port of discharge with the specific destination point being SBM within the port- In giving such Notice of Readiness upon arrival at the customary anchorage at Vadinar, the Master of the Vessel duly complied with the conditions of Clause 6 of Charter Party - Irrespective of whether a berth was available or not, lay time commenced upon the expiry of six hours after receipt of such notice- That the vessel could not be moored at the SBM was a different facet of story- As held by Arbitral Tribunal and subsequently affirmed both by Single Judge and Division Bench of High Court, the responsibility for the failure of the ship to moor at the SBM in Vadinar squarely lay on Charterers and the receiver as it was they who had nominated the SBM for the safe mooring of vessel- Special Leave Petition dismissed (Paras 45, 46)
Arbitration and Conciliation Act,1996-Section 34-Parties entered into a Charter Party in respect of Respondents’ vessel, “m.t. Prestige”, for carriage of minimum 8150 metric tonnes of crude oil from the Egyptian Red Sea port of Ras Sukheir to one/two safe anchorage(s)/lighterage points/SBM(s)/one/two safe port(s)one/two safe berth(s) anywhere in India- Special Leave Petition against Award of the Arbitration , as well as orders passed by Courts below- Fiasco at Vadinar was occasioned by the fact that no prior checking had been done by Charterers to ascertain as to whether with the mooring equipment on board the vessel she would be able to moor safely at the SBM for discharge of her cargo-Even the subsequent deviation of the vessel from Vadinar to Mumbai was not on account of any laches on the part of the Owners of the vessel who were awaiting instructions once the vessel had been asked to move away from the SBM- In fact, it took a notice from the Owners of the vessel and a week for the Charterers to galvanize themselves into action, which ultimately resulted in the Addendum No.1 dated 28.12.1999- Read with Clause 6 of the Charter Party, Addendum dated 28.12.1999 made it abundantly clear that Charterers had accepted responsibility for the failure of the vessel to discharge her cargo at Vadinar and had agreed to bear all expenses for the delay in diversion of the vessel from Vadinar to Mumbai, including the time spent at Vadinar port and expenses incurred towards pilotage, tugs and other port expenses- Apart from that, Clause 4(1) of Part II of Charter Party specifically provided that extra expenses incurred on account of any change in loading or discharging ports, had to be paid by Charterers, and any time thereby lost to the vessel shall count as used lay time- No reason to interfere with Award of the Arbitral Tribunal and decisions, both of Single Judge and Division Bench- Special Leave Petition dismissed (Paras 47 to 50)
Facts of the Case :
A.Parties herein in the instant case entered into a Charter Party in respect of Respondents’ vessel, “m.t. Prestige”, for carriage of minimum 8150 metric tonnes of crude oil from the Egyptian Red Sea port of Ras Sukheir to one/two safe anchorage(s)/lighterage points/SBM(s)/one/two safe port(s)one/two safe berth(s) anywhere in India. Clause 9 of Charter Party provided for settlement of all disputes arising out of Charter Party by arbitration. On dispute between parties an award was passed by arbitration.
B. Present Special Leave Petition has been filed against Award of the Arbitration , as well as the judgments and orders passed by Single Judge and Division Bench of High Court confirming the Award. Issue in consideration in present special leave petition was whether on arriving at anchorage point at Port Vadinar, despite the destination point being the SBM mooring, it could be said that it was an arrived ship which was competent under the Charter Party dated 9.11.1999, to issue Notice of Readiness of discharge of its cargo.
Findings of the Court :
A.Master of the vessel was under an obligation to give Notice of Readiness on arrival at customary anchorage at the port of discharge. It is only after vessel sailed from Ras Sukheir that receiver, IOC, nominated Vadinar to be the port of discharge with the specific destination point being SBM within the port. In giving such Notice of Readiness upon arrival at the customary anchorage at Vadinar, the Master of the Vessel duly complied with the conditions of Clause 6 of Charter Party. Irrespective of whether a berth was available or not, lay time commenced upon the expiry of six hours after receipt of such notice. That the vessel could not be moored at the SBM was a different facet of story. As held by Arbitral Tribunal and subsequently affirmed both by Single Judge and Division Bench of High Court, the responsibility for the failure of the ship to moor at the SBM in Vadinar squarely lay on Charterers and the receiver as it was they who had nominated the SBM for the safe mooring of vessel.
B. Fiasco at Vadinar was occasioned by the fact that no prior checking had been done by Charterers to ascertain as to whether with the mooring equipment on board the vessel she would be able to moor safely at the SBM for discharge of her cargo. Even the subsequent deviation of the vessel from Vadinar to Mumbai was not on account of any laches on the part of the Owners of the vessel who were awaiting instructions once the vessel had been asked to move away from the SBM.
C. In fact, it took a notice from the Owners of the vessel and a week for the Charterers to galvanize themselves into action, which ultimately resulted in the Addendum No.1 dated 28.12.1999. Read with Clause 6 of the Charter Party, Addendum dated 28.12.1999 made it abundantly clear that Charterers had accepted responsibility for the failure of the vessel to discharge her cargo at Vadinar and had agreed to bear all expenses for the delay in diversion of the vessel from Vadinar to Mumbai, including the time spent at Vadinar port and expenses incurred towards pilotage, tugs and other port expenses.
D. Apart from that, Clause 4(1) of Part II of Charter Party specifically provided that extra expenses incurred on account of any change in loading or discharging ports, had to be paid by Charterers, and any time thereby lost to the vessel shall count as used lay time. No reason was found to interfere with Award of the Arbitral Tribunal and decisions, both of Single Judge and Division Bench. Special Leave Petition was dismissed
JUDGMENT
Altamas Kabir, J.
1. The Special Leave Petition arises out of the Judgment and Order dated 24.10.2005 passed by the learned Single Judge of the Bombay High Court in A.P.No.531 of 2003 affirming the Award of the Arbitral Tribunal dated 8.9.2005, and the judgment and order dated 20.1.2006 passed by the Division Bench dismissing A.N.No.1158 of 2005 filed by the Petitioners herein.
2. On 9.11.1999 the Petitioners and the Respondent(s) entered into a Charter Party in respect of the Respondents’ vessel, “m.t. Prestige”, for carriage of minimum 8150 metric tonnes of crude oil from the Egyptian Red Sea port of Ras Sukheir to one/two safe anchorage(s)/lighterage points/SBM(s)/one/two safe port(s)one/two safe berth(s) anywhere in India. The vessel was described in Clause 41 of the Charter Party as being fitted with “AK Tongue Type Bow Chain Stopper of min SWL 2000 Mts.”
3. Clause 9 of the Charter Party provided for settlement of all disputes arising out of the Charter Party by arbitration under the Arbitration & Conciliation Act, 1996, and the Maritime Arbitration Rules of the Indian Council of Arbitration (ICA).
4. The vessel arrived at Ras Sukheir at 4.00 a.m. on 19.11.1999 and tendered Notice of Readiness (NOR). The loading commenced at 10 p.m. on 20.11.1999 and was completed by 3.15 p.m. on 21.11.1999. The total lay time provided for loading and discharge of cargo was 72 running hours. Out of the said lay time hours, the lay time used at Ras Sukheir was 37 hours and 30 minutes. On account of a mishap involving the vessel’s anchor and the submarine pipe-lines, the vessel was delayed at Ras Sukheir for fourteen days and could leave the port only on 4.12.1999. On 6.12.1999 while the vessel was sailing, the Respondents nominated Vadinar Single Berth Mooring (SBM) for discharge of the cargo. Port of discharge had not been nominated earlier. The vessel arrived at Vadinar and the Master tendered NOR at 8 p.m. on 15.12.1999. Since the vessel had only one chain stopper/Bow Panama Chock, which had been specified in the Charter Party, the vessel could not be safely moored at the SBM and the Master was asked by the Receiver, Indian Oil Corporation on 21.12.1999 to take away the vessel from the Vadinar SBM.
5. On 21.12.1999 a message was sent to the Petitioners’ Agents, M/s. J.M. Baxi & Co. by the Manager of the Respondents drawing attention to the fact that the vessel could not be berthed at the SBM and requesting that immediate steps be taken to berth the vessel. In the absence of any positive response to the said letter, the Respondents’ lawyer, Mr. Prashant Pratap, sent a legal notice to the Petitioners on 24.12.1999 indicating that the vessel continued to await discharge incurring demurrage for which the Petitioners were held responsible. The Petitioners were also informed that on account of the detention of the vessel at Vadinar, there was a serious possibility of the vessel missing its next engagement.
6. Finally a decision was arrived at on 28.12.1999 and Addendum No.1 to the Charter Party dated 9.11.1999 was drawn up and signed by the Owners and the Charterers containing the following further conditions agreed upon, namely,
a) m.t. Prestige will be diverted by the Charterers from Vadinar to L.P.O. Mumbai for discharge.
b) Charterers will pay freight basis Ras Sukheir/LPO Mumbai where cargo will be discharged into a daughter vessel and Charterers will pay all the expenses of the daughter vessel, M.T. Maharaja Agrasen.
(c) Charterers will bear the cost of deviation of m.t. Prestige basis Ras Sukheir/LPO Mumbai v/s Ras Sukheir/Vadinar/LOP Mumbai which included time at the demurrage rate.
d) The extra cost of bunkers incurred as a result of the deviation will be on Charterers’ account, subject to the Owners submitting documentary evidence.
(e) All direct expenses incurred by the Owners at Vadinar towards pilotage, tugs and other port expenses and Agency fees, will be settled by the Charterers.
(f) Demurrage to be settled as per Chart
