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#contract #law #terms
An early indication of the reception of Belize was given by the Court of Appeal in Mediterranean Salvage and Towage Ltd v Seamar Trading and Commerce Inc (The Reborn) [2009] EWCA Civ 531. The dispute in the case arose when the Reborn, while under charter to Seamar Trading, sustained damage while loading at Chekka in the Lebanon. Seamar had nominated the loading berth and it seemed that the damage to the vessel was caused by a hidden underwater projection at the berth. There was no express provision in the contract that required the charterers to warrant the safety of the berth and the question was whether, in the context, such a term should be implied. The Court of Appeal, following both the panel of arbitrators and Aikens J, held that no such term should be implied. There are two threads in the court's reasoning. First, applying the Belize approach, it is pointed out that in the context of chartering, the default position is that the integrity of the vessel is at the owner’s risk (see, e.g., Rix LJ at para 61). It follows that, if the risk is to be shifted to the charterer, then this needs to be signalled very clearly. Here, no such signal had been given. Posing the Belize question, would the charterparty be reasonably understood to mean 'when read against the relevant background, that the charterers warranted the safety of the berth at Chekka from risks not affecting the port as a whole or all the berths in it or arising from the specification and restrictions of the berth' (Sir Anthony Clarke MR, at para 45)? To which, the short answer was 'no'. Secondly, there are strong indications, particularly in Sir Anthony Clarke's judgment, that necessity continues to set the standard for implication (see, e.g., paras 27 and 30). To the extent that such references to necessity simply relate to what does and does not follow logically from the fact that the charterers have the choice of nominating the loading berth, this is unproblematic: we can agree that the charterers having this choice does not entail that they warrant the safety of the berth that they choose – and hence that no term to this effect is to be implied. However, if necessity is presented, instead, as a general test for the implication of terms, to operate alongside Belize, that is potentially problematic.
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