English law – Implied safe berth warranties

The Court of Appeal considers an implied safe berth warranty in a voyage charterparty.

Introduction
In the recent case of The REBORN¹ the English Court of Appeal has held that there was no implied warranty of safety at the berth nominated by a charterer in respect of an expressly named port in a voyage charter when that port was not subject to any express warranty of safety either as to the port or the berth.  The decision arose out of alleged damage to the vessel whilst loading at the berth nominated by the charterer at the port of Chekka in Lebanon.  The decision upholds both the decisions of the arbitrators and the Commercial Court.

The charterparty
The charterparty, on an amended Gencon Form (1994 edition) contained, inter alia, the following:
"Box 10: Loading port or place (Cl.1) 1 Berth Chekka - 27ft SW Permissible draft."
"Clause 1: The said  vessel shall... proceed to the loading port(s) or place(s) stated in Box 10 or so near thereto as she may get and lie always afloat."
"Clause 20: Owners guarantee and warrant upon arrival of the vessel to and/or prior its departure from, loading or discharging ports (either in ballast condition prior to loading or laden prior to discharging) the vessel including, inter alia the vessel's draft, shall fully comply with all the restrictions whatsoever of said ports (as applicable at the relevant time) including their anchorages, berths and approaches and that they have satisfied themselves to their full satisfaction with and about the ports specifications and restrictions prior to entering into this charterparty."

The arguments
The charterers argued that there was no express warranty with regard to the safety of either the port or the berth and, in those circumstances, the loss would lie with the owners.  The Owners' argument was that it was for the charterers to nominate a berth (indeed, there was no actual argument on that particular point) as no berth was named in the charterparty and as there was more than one berth it was necessary that the nominated berth would be impliedly safe.

The Court of Appeal decision
The Master of the Rolls, Lord Clarke, gave the lead judgment.   He reviewed the leading authorities for determining whether a term is to be implied and concluded that the test was whether the implied term was necessary to make the contract work.  He stated: "As I see it, it will depend upon the circumstances and, in particular whether, having regards to the terms of the particular charterparty, it is necessary to imply the warranty".

On the basis of the facts of the matter he held that the fact that the charterers were to nominate the berth did not mean that they warranted that the berth would be safe.  Further he stated: "Read together [Box 10 and Clause 20] indicated that the owners agreed that they would either investigate Chekka, that is the berths at Chekka, or take the risk of any dangers getting to whatever berth was nominated".

The decision was summarised by the concurring judgment of Rix L.J.: "It appears to be accepted that a warranty of safety as to a port will encompass a warranty of safety as to its berths (...).  It seems to me that the corollary also applies: where there is no warranty of safety as to the port, there is unlikely to be any warranty of safety as to the berths in the absence of an express warranty.  Whether that is always the case, as for instance in a vast port such as Rotterdam, it is not necessary to decide.  But in the present case, it seems to me to be impossible to imply any residual term for which the owners contend".

Accordingly, the owners' appeal failed.

Conclusion
The court has taken considerable care in arriving at this decision and has made a useful review of the law concerning implied terms and, indeed, warranties of safety in charterparties.  However, the case does, by and large, turn on the specifics with regard to both facts and charterparty terms, such as, for instance:
- the fact that the world "safely" had been expressly deleted from Clause 1 was only a "pointer" (the term actually used by the Master of the Rolls); and
- the court makes it clear that they may have reached a different conclusion had the port been large and had numerous berths whereby an investigation with regard to the safety of each and every berth would have been totally unfeasible.

Notwithstanding that, the case has considerable significance to both owners and charterers.

Footnotes
1 Mediterranean Salvage & Towage Ltd v. Seamar Trading & Commerce Inc - The REBORN  [2009] EWCA Civ 531.