NYK BULKSHIP (ATLANTIC) NV V CARGILL INTERNATIONAL SA (THE "GLOBAL SANTOSH")

[2016] UKSC 20, Supreme Court, Lord Neuberger, President, Lord Mance, Lord Clarke, Lord Sumption and Lord Toulson, 11 May 2016

Charterparty (time) - Buyer and notify party's faulty discharging equipment causing delay in unloading - Off-hire clause containing proviso as to defaults by charterers and their agents - Cargo arrested for demurrage claim - Ship also mistakenly arrested

A time charterparty dated 11 September 2008 had been made on amended NYPE terms, stipulating inter alia that the vessel would be off-hire during any period of detention. Under the charterparty NYK Bulkship, the disponent owners, chartered Global Santosh to Cargill for one time-charter trip from Sweden to West Africa. The cargo was one of six shipments of cement sold by Transclear SA (a sub-charterer) to IBG Investment Ltd on C&FFO terms under a contract of sale dated 14 December 2007. IBG were the notify party on the bill of lading, which also specified the discharge port as "Port Harcourt (Ibeto Jetty)". IBG was responsible for the unloading of the cargo and was liable to pay Transclear demurrage under the sale contract if unloading of the cargo was delayed. At Port Harcourt on 15 October 2008 Global Santosh was arrested by mistake as a result of an arrest order procured by Transclear prohibiting discharge of the cargo for the demurrage owed under the sale contract. Following an agreement between the parties in respect of demurrage and a court order authorising the cargo's release, discharge of the cargo began on 15 January 2009 and was completed on 26 January 2009. Cargill withheld hire for the period. Before the arbitration tribunal, NYK unsuccessfully contended that the seizure and detention of the vessel as a result of the arrest order was occasioned by the personal act or omission of IBG or Transclear who were agents of Cargill. Personal acts or omissions or defaults of the charterers or their agents were exempt from the off-hire clause. Upon appeal, the judge held that IBG but not Transclear was a relevant charterer's agent for the purpose of the proviso. He referred the question of causation back to the tribunal. Cargill appealed and NYK cross-appealed.