Carboex v Louis Dreyfus Commodities

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Carboex SA v Louis Dreyfus Commodities Suisse SA

English High Court: Queen's Bench Division (Commercial Court): Field J.: [2011] EWHC 1165 (Comm: 12 May 2011


Charles Kimmins QC and Socrates Papadopoulos, instructed by Thomas Cooper, for the appellant, Carboex

Sioban Healy QC and Jessica Sutherland, instructed by Reed Smith, for the Respondent, Louis Dreyfus


An exclusion contained in a charterparty, which provided that time should not run for the purposes of demurrage where delay in discharge had been caused by a strike, could be relied upon by a charterer where the vessel's unloading was delayed by congestion after a strike, regardless whether the vessel had arrived whilst the strike was in progress or after it had ended.

Note: the decision in this case has been affirmed bythe Court of Appeal - see the Case Note at [[1]]


The appellant charterer, Carboex, appealed against an arbitral tribunal's award for demurrage allegedly due to the respondent ship owner, Louis Dreyfus in respect of four vessels that Carboex had chartered on an amended version of the AmWelsh form of voyage charter for the carriage of coal from Indonesia to Spain. Clause 9 of the charterparty stated that, in the event that strikes, or any other causes beyond Carboex's control, prevented or delayed discharge, then time did not count unless the vessel was already on demurrage.

The discharge of cargo from each of the four vessels was delayed by reason of congestion at the port arising from a strike. The first two vessels had arrived at a time when the strike was still in progress. The last two vessels had arrived after the strike had ended. No vessel was delayed in discharge by strike action occurring after it had berthed.

The arbitral tribunal had held that Carboex could not rely on cl.9 because the strike had ended by the time the vessels berthed. In doing so, the tribunal relied on the judgment of the House of Lords in the case of Central Argentine Railway v. Marwood [1915] AC 981, which – in the Tribunal’s view – was authority for the proposition that the clause in question did not apply to a vessel prevented from berthing because the berths were occupied by other vessels, even where the reason for this congestion was a strike.


The judge allowed the appeal on the following grounds.

1. It had been decided in Reederij Amsterdam NV v President of India (The Amstelmolen) [1961] 2 Lloyd's Rep. 1 – a case involving the Centrocon Strike Clause - that a "whether in berth or not" clause – such as that contained in the charterparty in the present case - did no more than start the laytime clock ticking, and – contrary to the submissions of the owners - the exceptions clause, cl.9 in the present case, was to be construed as a free-standing provision.

2. On their ordinary meaning, the words of cl.9 covered delay in discharging caused by congestion due to the after-effects of a strike that had ended. They also covered delay in discharging caused by congestion due to a strike where the vessel arrived after the strike had ended.

3. In a detailed analysis of the judgments of their Lordships in the Marwood case, the judge determined that the ratio decidendi of that case was not that adopted by the arbitrators (see above). The judge held that the owners succeeded in Marwood in large part because the charterers “could not show that the strike caused the delay in discharging because they could not show that, but for the strike, discharge would have been achieved within the allowable laytime.”

The judge noted that his approach to the interpretation of cl.9 was consistent with that of the Court of Appeal in Leonis Steamship Co v. Rank (No.2) [1908] Com. Cas. 295 and Reardon Smith Line v. MAFF [1962] 1 QB 42 and that of Scrutton J. in London and Northern Steamship Co Ltd v. Central Argentine Railway [1913] 108 LT 527. He also referred to Cooke on Voyage Charters where the authors expressed the view that “the approach normally adopted in interpreting the effect of strike exceptions is to hold that delay caused by congestion in the aftermath of a strike is excused.”

The judge therefore concluded that the arbitral tribunal had erred in law in deciding that charterers did not have the protection of cl.9. The award was, accordingly, set aside.