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Os Claim Against VC for Outstanding Freight - Coursework Example

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O’s claim against VC for the outstanding freight depends largely on two factors. First, it must be determined whether or not VC breached the contract for the delivery of crude oil from Piraeus, Greece to Southampton, UK…
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Os Claim Against VC for Outstanding Freight
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Download file to see previous pages Secondly, it must be determined, if no breach of contract was found to have occurred, whether or not the contract was completed once the ship sailed from Piraeus. The underlying determining factors in both instances are seaworthiness on the part of the transporting vessel (Costa Lotta) and/or negligence on the part of Costa’s captain and crew. Generally seaworthiness refers to the state of the ship and places upon the ship owner a duty to provide a seaworthy vessel.1 Since O owns the Costa, it can be assumed that the ship itself is seaworthy in terms of structural soundness or “fit for purpose”2 otherwise the ship would not have chosen for the journey. The crew’s competence is relevant in determining the seaworthiness of the vessel. It was held in Wedderburn v Bell that whether a ship’s construction is sound or not is irrelevant if the ship’s crew is incompetent or lacks the skills necessary for navigating the ship for the duration of the chartered journey.3 In other words, the seaworthiness of a ship will also depend on the competence of the crew. It was held in Standard Oil v Clan Line that “a ship may be rendered unseaworthy by the inefficiency of the master who commands her.”4 Based on the facts of the case for discussion however, there is no evidence that the captain or his crew lacked the necessary skills to navigate the ship. There is also no evidence of negligence. The fact is, the Costa came across unusual weather and unanticipated delays which ultimately resulted in the loss of freight. By all accounts the master acted promptly and responsibly. The main question is therefore whether or not the contract for the delivery of the freight was completed once the ship sailed from Piraeus. The leading case on the issue is Bank of Boston Connecticut v European Grain & Shipping Ltd (The Dominique). In The Dominique the ship owner entered into a charterparty with the defendant in which payment for freight was due after the signing of the bills of lading. The bills of lading were signed and the ship was subsequently arrested and thus failed to complete the journey. It was held that the ship owner had a right to claim the freight once the bills of lading were signed. Thus the ship onwer’s right accrued prior to the ship’s arrest and the chaterparty’s termination. Therefore not only was the ship owner entitled to claim the freight, the chaterer was not entitled to offset damages arising out of the breach of a charterparty relative to the freight claim.5 The facts of The Dominique are entirely similar to the facts of the case for discussion. Payment for the freight was due once the ship sailed from Piraeus. Therefore O’s claim predates the perils at sea and the subsequent salvage operations. In this regard, O can successfully pursue a claim against VC for the outstanding freight. The action may be commenced by filing an action is rem. An action is rem is an action not against a ship, although it impacts the ship’s owner.6 The ship in question is the Jolly Roger owned by VC and purportedly arriving in the UK, which is the only asset that VC will have in the UK. The jurisdiction for filing an action in rem is facilitated by Section 20(2) of the Supreme Court Act 1981. In this regard, Section 20(2) of the 1981 Act provides that actions in rem may be pursued in any of the two following circumstances: (g) any claim for loss of or damage to goods carried in a ship; (h) any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship.7 In addition, the jurisdiction of the Admiralty Court may be invoked relative to an action in rem when: (a) the claim arises in connection with a ship; and (b) The person who would be liable on the claim in an action ...Download file to see next pagesRead More
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