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Emeraldian Limited Partnership v Wellmix Shipping Company Limited & ors (the"VINE") [2010] EWHC 1411 (Comm)

On 16 June 2010, the High Court (Teare J) handed down judgment in favour of shipowners, Emeraldian Limited Partnership who claimed demurrage against charterers, Wellmix Shipping Co Ltd and their guarantors, Guangzhou Iron & Steel Corp Ltd.

The delay to the VINE followed two earlier incidents involving other vessels resulting in damage to the berth. Repairs to the berth commenced shortly before the VINE arrived and she was prevented from berthing for about 5 weeks.

The first main question was whether the delay counted as laytime or whether laytime was interrupted by virtue of various laytime exceptions. The judge held, as a matter of construction, that the relevant delay did fall within the particular exceptions in the charter. In particular, the judge held that there is no general principle that the relevant event must be beyond the control of the charterers to fall within a laytime exception, though held that different considerations applied where the delaying event was caused by an actionable fault on the part of charterers. In the circumstances, the delay, prima facie, counted as laytime.

The second main question was whether the delay was caused by a breach of Charterers' safe port warranty and, if so, the effect of that breach on Owners' claim. The judge held, as a matter of principle, that if there had been a breach of the safe port warranty Charterers could not escape a liability in damages for resulting delay (measured at the demurrage rate), relying on The Count [2008] 1 Lloyd's Rep 72 and Inverkip Steamship v Bunge [1917] 2 KB 193. On the facts, the judge held that there was a breach of the safe berth warranty because, inter alia, there was no system in place for advising masters of dangers and inadequacies of the berth. This rendered the "set-up" of the berth unsafe. The Owners' claim succeeded on the ground that the delay in berthing was caused by the unsafety of the berth and that the demurrage rate is the agreed rate of damages for delay.

The claim against the guarantors raised issues of authority and Chinese foreign exchange laws. On the question of actual authority in particular, the judge held that there had been a lack of proper disclosure by guarantors. Therefore, the judge drew adverse inferences, finding that the relevant individual who signed the guarantee had the necessary authority to bind guarantors. Guarantors were liable to guarantee the Charterers' liability.

Owners were represented by Michael Coburn QC and Charlotte Tan, instructed by Holman Fenwick Willan LLP.