10/12/2012

Yilport Konteyner Terminali Ve Liman Isletmeleri AS v Buxcliff KG and Others

Subject: Shipping Other Related Subjects: Port Services; Contract Terms

Keywords: Collisions at sea; Containers; Indemnities; Ports; Undertakings; Unloading

Summary: The Defendants’ container ship was damaged in a collision with another vessel and needed to discharge her cargo of 3,341 containers before she could be repaired. The Claimant port agreed to discharge her cargo against letters of undertaking and indemnity given by the Defendants. Due to uncertainties as to the extent of damage to the vessel and her containers, no price was agreed between the parties before discharge took place.

The court held that the Claimant was not bound to charge its usual rates for unscheduled vessel calls, but that its standard terms allowed it to apply a reasonable charge. Given the duration and unusual complexity of the discharge operation, it had been reasonable for the port to impose an uplift of 70% on its usual charges, and also to pass on to the Defendants certain exceptional costs arising from the discharge.

The wording of the Claimant’s standard terms did not, however, give it a discretion to charge whatever it saw fit (within the bounds of Wednesbury unreasonableness). Nor was the liability of the vessel’s P&I club, under the letter of indemnity given to the Claimant, co-extensive with the owner’s and manager’s liabilities under the letters of undertaking given to the Claimant.

Members of Chambers: David Lewis and Rupert Hamilton for the Claimant