An interesting award was issued on 27 July 2007 by the Chamber Arbitrate Maritime de Paris ruling for the first time on the following issues.
Alleging shortage and damage to cargo upon completion of discharge at Matadi, cargo interests arrested the vessel and sought security from owners. Although owners denied liability for the alleged damage as the bills of lading were issued by the time charterers, they were obliged to deliver a LOU in order to lift the arrest.
Cargo interests brought arbitration proceedings against owners on the basis of the bills of lading before the Chamber Arbitrate Maritime de Paris. Owners asked the arbitrators to dismiss the action on the grounds that they are not the carrier since the bills of lading were issued by the time charterers.
Cargo then acknowledged that owners were not the carrier. However, changing the basis of their claim, cargo maintained that they had an action in tort against owners and that owners were liable for damages due to the fact that the they had not complied with their obligation under the charterparty.
Owners responded that the Chamber Arbitrate had no jurisdiction with respect to a action in tort against them, since the LOU referred only to a claim under the bills of lading and that, in any case, even if the arbitrators retained jurisdiction, with respect to a claim in tort they had absolutely no jurisdiction to decide if owners have or not complied with their obligations under the charterparty as only arbitrators in London can decide on that issue. In addition, since cargo interests could not prove fault by the owners, their action in tort must be dismissed.
Arbitrators in their award, did accept their jurisdiction with respect to the action in tort on the reference to the bills of lading mentioned on the LOU is purely indicative and does not determine the nature of the hypothetical action which cargo interest may have against owners.
However, arbitrators dismissed cargo interests’ tort action against owners an the following grounds:
- Cargo interests could bring a claim in tort against owners only if they can not bring an action under the bills of lading against the carrier who issued them, which was not the case in the relevant matter.
- Only arbitrators in London have jurisdiction to decide if owners have or have not complied with their obligation under the charterparty with the time charters.
- Even if the Chamber Arbitrate had such jurisdiction, which is not the case, it must be pointed out that owners had no obligation to carry and to deliver rice, their only obligation under the charterparty is to deliver a seaworthy vessel, and to provide a competent crew. In this matter cargo interests were unable to bring evidence that owners did not comply with their contractual obligations, therefore they cannot be held liable for shortage and damage to cargo.
With thanks to Henri de Richemont of Richemont Nicolas & Associés, Paris, for preparing this article.
