[1987] Vol.
2 LLOYD'S LAW REPORTS
QUEEN'S BENCH DIVISION (COMMERCIAL COURT)
Jan. 21, 1987
____________________
PRESIDENT OF INDIA
v.
N.G. LIVANOS MARITIME CO.
(THE "JOHN MICHALOS")
Before Mr. Justice Leggatt
Charter-party (Voyage) - Demurrage - Strike by port workers
- Vessel already on demurrage when strike began -
Discharge delayed because of strike - Whether charterers
relieved from liability for demurrage.
By a charter dated Dec. 1, 1983 the owners let their vessel
John Michalos to the charterers for a voyage from Vancouver
or Port Rupert Island to India. The charter was in the Pacific
Coast Grain form and provided inter alia:
6. If the cargo cannot be discharged by reason of a
strike . . . of any class of workmen essential to the discharge
of the cargo the days for discharging shall not count during
the continuance of such strike . . .
31. Lay or working days shall not count at ports of loading
during any time when the . . . loading of cargo . . . is delayed
by . . . strikes . . .
62. Charterers shall not be liable for any delay in . . .
discharging . . . which delay . . . is caused in whole or in part
by . . . strikes . . .
The vessel met difficulties upon arrival at the discharging
port where laytime expired at 01 35 hours on Mar. 15, 1984.
The vessel came on demurrage but at 06 00 hours on Mar.
16, 1984 a strike of port workers began at the discharge port.
No work was carried out in the port and no work of discharge
was accomplished until 06 00 hours on Apr. 11, 1984 when
the strike ended.
The issue for decision was whether the provision of cl. 62
operated to relieve the charterers from liability for demurrage
in the event of delay in discharging caused by the strike.
The disputes was referred to arbitration, and the umpire
found in favour of the owners. The charterers appealed
against the award.
-Held, by Q.B. (Com.Ct.) (Leggatt, J.), that (1) cl. 62 was
concerned only with causes which were beyond the control of
the charterers; the immediate cause of the delay was the
strike and it had not been argued that the strike was not to be
regarded as having been beyond the control of the charterers
on account of their prior default in not having completed
discharge during laytime; the strike was beyond the control of
the charterers and was prima facie within the scope of cl. 62
(see p. 190, col. 2; p. 191, col. 1);
(2) it was artificial to contemplate that the par-
[1987] Vol. 2 LLOYD'S LAW REPORTS
Q.B. (Com. Ct.) The "John Michalos"
188
ties intended that the occurrence of the relevant cause of
delay should allow laytime to continue running; cl. 62 was not
an extraordinarily inept attempt to extend the ambit of cll. 6
and 31 but was much more naturally to be read as a corollary
of cll.6 and 31; those latter clauses applied to interruption for
one reason or another of laytime and the former clause
applied to the period during which but for its provisions
demurrage would be payable; on the true construction of the
charter, cl. 62 did act to relieve the charterers from liability for
demurrage in the event of delay in discharging caused by the
strike; the appeal would be allowed (see p. 191, cols. 1 and
2).
____________________
The following cases were referred to in the judgment:-
Aktieselskabet Reider v. Arcos Ltd., (C.A.) (1926) 25
Ll.L.Rep.513; [1927] 1 K.B. 352;
Khian Captain, The [1985] 2 Lloyd's Rep. 212;
Suisse Atlantique Société d'Armement S.A. v. N.V.
Rotterdamsche Kolen Centrale (H.L.) [1966] 1 Lloyd's
Rep. 529; [1967] 1 A.C. 361;
Superfoss Chartering A.S. v. N.V.R. London Ltd., [1987] 2
Lloyd's Rep. 60.
____________________
This was an appeal by the charterers, the President of
India, against the final award of umpire in the arbitration
between the charterers and the owners N.G. Livanos
Maritime Co., the issue being as to whether the
charterers were relieved from liability for demurrage
because of the delay in discharging caused by a strike.
Mr. Angus Glennie (instructed by Messrs. Zaiwalla &
Co.) for the charterers; Mr. Michael Collins and Mr.
Steven Berry (instructed by Messrs. Elborne Mitchell)
for the defendants.
The further facts are stated in the judgment of Mr.
Justice Leggatt.
JUDGMENT
Mr. Justice LEGGATT: By leave of Mr. Justice
Staughton, the appellants appeal against the final award
of the umpire in the arbitration out of which these
proceedings arise, Mr. Bruce Harris. The appellants ask
that the award be varied in relation to the matters set
out in the notice of motion.
By a charter on the Pacific Coast Grain Form (with
amendments) dated Dec. 1, 1983 the owners, who are
respondents to this appeal, chartered to the first
appellant, the President of India, the vessel called John
Michalos for a
189
Leggatt, J.
voyage from Vancouver or Prince Rupert to India. The
vessel met difficulties upon arrival at the discharge port,
where laytime expired at 01 35 on Mar. 15, 1984. The
vessel accordingly then came on demurrage, but shortly
thereafter at 06 00 hours on Mar. 16, 1984, a strike of
port workers began at the discharge port. The
consequence was that no work at all was carried out in
the port, and in particular, of course, no work of
discharge was accomplished until the strike ended at 06
00 hours on Apr. 11, 1984, exactly 26 days after it had
begun.
The clauses of the charter-party which are relevant to
this appeal are cll. 6, 31 and 62.
Clause 6 reads -
If the cargo cannot be discharged by reason of a
strike, lock-out or stoppage of labour from any cause of
any class of workmen essential to the discharge of the
cargo the days for discharging shall not count during
the continuance of such strike or lock-out. A strike or
lock-out of the receiver's men only shall not exclude
him from any demurrage for which he may be liable
under this Charter if by the use of reasonable diligence
he could have obtained other suitable labour and in
case of any delay by reason of the before-mentioned
causes, no claim for damages shall be made by the
receivers or owners of the cargo, the owners of the
ship, or by any other party under this Charter.
Clause 31 reads -
Lay or working days shall not count at ports of loading
during any time when the supply or loading of
stiffening, or the supply or bringing by rail, craft or
otherwise to port of loading or alongside the vessel, or
the loading of the cargo, or intended cargo, or any part
thereof, is delayed by the Act of God, war, restraint of
princes, rulers, or people, force majeure, blockade,
quarantine, earthquake, inundations, storm, floods,
rain, snow, ice, fire, riots, strikes, lock-outs, civil
commotions, political disturbances or impediments,
holidays (ecclesiastical or civil), cessations or
stoppages of labour, epidemics, perils of the seas,
railway accidents or impediments, or any other
hindrance of whatsoever nature beyond the
Charterers' control. It is further declared that in the
event of any war being or becoming existent between
the nation to whose flag the chartered vessel belongs
and any European or Asiatic power, or the United
States of America, in the case of a vessel in the ports
of Portland or Astoria, Charterers have the option of
cancelling this Charter at any time before
[1987] Vol. 2 LLOYD'S LAW REPORTS
Q.B. (Com. Ct.) The "John Michalos"
the vessel has commenced to load, provided that they
give notice to the owners that they cancel within
fourteen days after declaration of war; and in the case
of vessel arriving after war has been declared,
Charterers have the option of cancelling this Charter,
at any time not later than fourteen days after
declaration of war, or forty-eight hours after notification
of arrival has been given to Charterers by the Master,
Owners or Agents, whichever shall last expire.
Clause 62 reads -
Charterers shall not be liable for any delay in loading
or discharging including delay due to the unavailability
of cargo which delay or unavailability is caused in
whole or in part by an Act of God, war, hostilities,
political disturbances, rebellion, mobilization,
revolution, insurrection, acts to public enemy, civil
commotions, sabotage, acts of Government (including
but not restricted to any preference, priority, allocation
or limitation order and any export or import control),
fires, floods, force majeure, earthquake, storms,
landslides, frost or snow, bore tides, explosions or
other catastrophies, epidemics, quarantines,
restrictions, strikes, embargo, blockade, railway
accidents or impediments and any other causes
beyond the control of Charterers.
The question of law arising upon this appeal is whether
the provision of cl. 62 of the charter-party operates to
relieve the appellants from liability for demurrage in the
event of delay in discharging caused by the strike, it
being common ground in this appeal that by the time the
strike began the vessel was already on demurrage.
Although the charterer was the first appellant, the other
two appellants were added as parties in order that no
remedy should fail for want of parties.
The umpire dealt with the question arising on this
appeal in pars. 22 to 28 of the reasons for his award. He
explained that the amount of demurrage payable in
respect of the period of 26 days for which the strike
lasted was, as a matter of inference, the sum of U.S.
$88,000. He went forward to explain why he found
difficulty in resolving this particular issue, about which
the arbitrators had of course disagreed. In so doing it
appears that both expressed substantial reservations for
their respective opposite views. The arbitrator said that
he found the problem difficult and added that he could
not pretend to be anything like wholly sure that he had
got the right answer to it. Having set out the rival
arguments he said at par. 28:
190
Leggatt, J.
 I think there may be liabilities other than that for
demurrage which could be covered by clause 62. I
bear in mind also the general basic rule once on
demurrage always on demurrage, and the normal
approach which is to say that exceptions to a prima
facie liability for demurrage must be clearly expressed.
This clause is a charterers clause inserted for their
benefit and must therefore be read against the
respondents where there is doubt or ambiguity. Whilst I
have little doubt that the charterers who used this
clause intended to affect the counting of laytime and
probably demurrage, on balance I do not think, bearing
in mind the considerations that I have just mentioned,
this assumed objective is achieved. Not without
considerable hesitation myself I have therefore
concluded the owners are right on this part of the case.
He went on to make a consequential award in favour of
the owners.
It is common ground that the umpire's approach, which
he expressed in the form of the maxim "once on
demurrage always on demurrage" was correct. A recent
exposition of the principle is to be found in the judgment
of the Master of the Rolls in Superfoss Chartering AS v.
NVR London Ltd, [1987] 2 Lloyds Rep. 60 p. 65.
Mr. Glennie on behalf of the charterers contends that
cl. 62 contains three important indications that it is
intended to operate in the way in which the charterers
say it should, that is to say, so as to relieve them from
liability in certain circumstances. First, it is couched in
terms of liability, secondly, it is not a mutual exceptions
clause, but only protects charterers from liability for
breach, and thirdly, it only protects charterers from
liability where that liability is for delay in loading or
discharging. For these reasons it is argued that the
clause should be construed as operating by way of
exceptions to demurrage, and so is capable of doing so
when the vessel already is on demurrage, as was the
case here when the strike began. In aid of this
contention it is said that no question of liability arises
unless laytime has expired. For that proposition Mr.
Glennie relies on the comments of Mr. Justice Saville in
The Khian Captain, [1985] 2 Lloyd's Rep. 212, at p. 214.
He also points out that, in a charter-party which contains
stipulations as to laytime and demurrage without any
terminal point being expressed, the only liability on
charterers for delay in discharging which it is reasonable
to contemplate is a liability for demurrage. Observing
that cl. 62 is a typed addition to the standard form of
charter-party, it ought to be construed as serving some
useful
[1987] Vol. 2 LLOYD'S LAW REPORTS
Q.B. (Com. Ct.) The "John Michalos"
purpose in relation to strikes in particular. Moreover, it is
to be construed by reference to the other two clauses
which I have read, both of which in one form or another
deal with interruptions to laytime if the events specified
in those clauses occur.
For the respondents Mr. Collins starts from the same
point: that once a vessel is on demurrage no exceptions
will operate to prevent demurrage continuing to be
payable unless the exceptions clause is clearly worded
so as to have that effect. According to his submission cl.
62 of the present charter-party does not have that effect
because not only does it not say so expressly, but it is
not to be construed as impliedly exempting the
charterers from liability for demurrage. Mr. Collins
sought to identify by references to other clauses, such
as cl. 59, cl. 63 and cl. 68, when viewed in conjunction
with cl. 29, other circumstances to which cl. 62 might be
regarded as applicable, although it is to be noted that in
all of his examples the damages for detention which
would have been payable would have been so by
reason of breach on the part of charterers. He also
refers to the case of Aktieselskabet Reider v. Arcos Ltd.,
(1926) 25 Ll.L.Rep. 513; [1927] 1 K.B. 352 as an
example of a case in which damages were payable
other than in the nature of demurrage. He similarly
argues that in such a case cl. 62 would have efficacy.
Accordingly, upon his first argument cl. 62 is not to be
construed so as necessarily to relieve the charterers
from liability to pay demurrage, and that being so is not
sufficient to achieve the purpose for which the
charterers here contend. By way of alternative Mr.
Collins argues that the effect of cl. 62 on its true
construction is to protect charterers from liability in
demurrage insofar as any of the specified events cause
the expiry of laytime to be deferred, or alternatively,
cause the charterer to overrun laytime.
All the examples which Mr. Collins is able to devise of
situations in which cl. 62 might apply, but which would
not involve a cause of delay arising after the expiry of
laytime, depend, as I have already remarked, on the
charterers' fault, but cl. 62 is concerned only with
causes which are beyond the control of charterers. So
none of the situations relied on would come within cl.
62. Mr. Collins is obliged to retort that the delay in the
present case was itself attributable to the charterers'
default because if discharge had been completed during
laytime no delay could have occurred during demurrage
days. But it seems to me that the immediate cause of
delay was the strike, and it has not been argued that the
strike is not to be regarded as having
191
Leggatt, J.
been beyond the control of the charterers on account of cially credible. All are fanciful and remote, and out of
their prior default. In my judgment this strike was accord with the terms of the charter-party, which on its
beyond the control of the charterers and so was prima true construction in my judgment impels the conclusion
facie within the scope of cl. 62, whereas the other that cl. 62 did act to give to the appellant charterers the
causes of delay relied on by Mr. Collins would not have protection they expect of it. The umpire, presumably
been. founding on the wording of the charter-party, had little
Although he did not cite it in the sense of reading from doubt that the charterers who use this clause intended
the report, Mr. Collins also referred, as I have indicated, to affect the counting of laytime and probably
to Reider v. Arcos as an example of a case in which it is demurrage, and he refrained from specifying what
possible to obtain more than demurrage payments for liabilities other than for demurrage such as he thought
the detention of a vessel. But that case for this purpose might exist could be covered by clause 62. Not
is nullified by dicta of the House of Lords in Suisse surprisingly in these circumstances, he did not reach his
Atlantique Société d'Armement S.A. v. N V. conclusion without considerable hesitation. In my
Rotterdamsche Kolen Centrale, [1966] 1 Lloyd's Rep. judgment, for the reasons I have given, the umpire's
529; [1967] 1 A.C. 361, per Viscount Dilhorne at pp. 539 conclusion was wrong and the appeal will be allowed.
and 389, per Lord Hodgson at pp. 549 and 407, and per
Lord Upjohn at pp. 555 and 418A.
Mr. Collins's alternative argument is that cl. 62
operated to protect the charterers from liability in
demurrage insofar as the relevant cause of delay
overruns the expiry of laytime or results in the charterer
overrunning laytime. He argues that this is a
commercially sensible arrangement. The answer to this
contention which Mr. Glennie makes is in my judgment
correct, namely that it is artificial to contemplate that the
parties intended that the occurrence of the relevant
cause of delay should allow laytime to continue running,
observing that cl. 6 provides for interruptions in laytime
caused by strike, and cl. 31 provides for interruptions in
laytime during loading. Since the events specified in cl.
31 in relation to loading are virtually the same as those
specified in cl. 62 it would follow that to that extent cl. 62
was otiose, and since cl. 62 is a typed clause it would
further follow that it must have been erroneously drafted
without regard to the existence of cl. 31. Similarly, there
would be no need, if Mr. Collins's construction were
correct, for cl. 62 to refer to strike, having regard to the
scope of cl. 6. In my judgment cl. 62 is not an
extraordinarily inept attempt to extend the ambit of cl. 6
and cl. 31, but is much more naturally to be read as a
corollary of cll. 6 and 31. Those latter clauses apply to
interruption for one reason or another of laytime and the
former clause applies to the period during which but for
its provisions demurrage would be payable.
Mr. Collins also argued rather faintly that cl. 62 might
apply to delay in the form of a slowing down of
discharge rather than the complete cessation of work. I
do not regard that, or any of the other liabilities which it
is suggested might constitute the basis of cl. 62, as
commer-