Date: 20070720
Docket: T-2004-01
Citation: 2007 FC 761
[ENGLISH TRANSLATION]
Montréal, Quebec, July 20, 2007
PRESENT: Richard Morneau, Esq., Prothonotary
BETWEEN:
AFROCEAN
COMPANIA NAVIERA INC.
and
SOCIÉTÉ
D’ÉTUDE ET DE RÉALISATIONS
AGRO-INDUSTRIELLES
Plaintiffs
and
VILHENA
SHIPPING LTD.
and
THE VESSEL “ZODIO”
and
THE OWNERS OF THE VESSEL “ZODIO”
Defendants
REASONS FOR ORDER AND ORDER
[1]
The issue in this case is whether the charterer of the
vessel “Zodio” is entitled to an order from this Court recognizing its right to
be paid (its Entitlement), as well as the amount of that right under a
letter of undertaking (LOU) dated December 17, 2001, and issued by the
charterer’s insurers, the American Steamship Owners Mutual Protection &
Indemnity Association, Inc. (hereinafter the Club).
[2]
This letter of undertaking was issued by the Club after the
grounding of the vessel “Zodio” in order to have said vessel reinstated and to
guarantee payment of claims that various claimants might make following this
incident.
[3]
Litigation was initiated between the shipowner, Vilhena
Shipping Ltd. (hereinafter Vilhena), and the charterer, Afrocean Compania
Naviera Inc. (hereinafter Afrocean), regarding this incident involving the
“Zodio.”
[4]
As agreed between the parties, they brought their dispute
before the Chambre arbitrale maritime de Paris (hereinafter the Chambre),
which, by an award dated May 23, 2006, (hereinafter the Award), made what now
must be considered a final decision or award condemning in its formal judgment,
by the voices of these adjudicators, Vilhena to repay a total sum to Afrocean
that the latter assessed on the date of the motion of USD$579,308.16.
[5]
This amount, along with the Afrocean’s status of claimant,
is not disputed by Vilhena. The latter, however, objects to an order awarding
this amount to Afrocean since, in its view, any net amount owed to Afrocean by Vilhena
as a result of the Award must take into account any liability or involvement
that Afrocean must have with respect to an account of general average referred
to by the Award.
Analysis
[6]
There is no doubt, and this aspect is not disputed by
Vilhena subject to what is mentioned in paragraph 7 below, that the Award
allows Afrocean to consider that it meets the definition of “Entitlement” within
the meaning of the LOU. This definition reads as follows:
“[…] a claim or demand of a claimant against the Owners of
the M.V. ZODIO, personally or against the ship in rem, that has been
quantified and which has been adjudged due and owing on a final basis by way of
a non‑appealable court judgment or arbitration award, the finality and
non‑appealability of which shall be certified in a letter addressed to
the Federal Court of Canada by the Claimant’s solicitor […]”.
[7]
The focus of Vilhena’s argument in its reply record,
however, is found at paragraphs 26 and 27 of its written submissions, where it
states the following:
When determining the amount awarded to Afrocean by virtue
of the Award for the purposes of determining Afrocean’s Entitlement under the
LOU, the Award as a whole must be considered. The Entitlement must in other
words reflect not only the amounts that Vilhena was ordered to pay to Afrocean
by virtue of the Award, but as well as those amounts which Afrocean was
ordered to pay to Vilhena by virtue of the Award. Afrocean cannot at its
entire discretion pick and choose those aspects of the Award which it seeks to
translate into an Entitlement.
Thus, Defendants respectfully submit that a preliminary
hearing should be held before the Court adjudicates upon the Motion in order to
establish the amount that Afrocean was ordered to pay to Vilhena by virtue of
the Award on account of general average.
(Emphasis added)
[8]
For the reasons that follow, I cannot support Vilhena’s
claims.
[9]
First, and contrary to Vilhena’s view that the Court should
first hold a preliminary hearing on the amount owed to Afrocean, the Court
considers that the letter of undertaking provides for this possibility only if
there appears to be a dispute regarding the role of collocation between various
potential claimants.
[10]
Here, no such situation exists. All other claimants who may
potentially compete with Afrocean are in agreement with its motion under
review.
[11]
Second, in the Award, the Chambre liquidates the amounts
owing to Afrocean. However, and in contrast with the clear language that the
Chambre uses in its Award condemning Vilhena in its formal judgment to pay
certain amounts, when it comes time to address Afrocean’s involvement with
respect to the general average situation, the wording becomes much less prescriptive.
[12]
Specifically, although at page 19 of the Award the Chambre
states following with respect to Afrocean and the general average that was
stated, namely that [translation] “since
AFROCEAN did not, in the opinion of the adjudicators, provide proof of the
unseaworthiness of the vessel, it will have to bear the consequences of the
statement of general average,” the fact remains that having reached what must
be considered conclusive findings, i.e. its final judgment, the Chambre in its
Award is limited to approving a statement of general average and a related settlement
that occurred elsewhere than before the Chambre.
[13]
This statement of general average referred to by the
Chambre clearly makes reference to the amount relating to the entire general
average and not the portion of the general average attributable to Afrocean. The
Chambre specifically noted the following through its adjudicators:
[translation]
Approve the statement of general average and the resulting
settlement, for a total of CAD$990,049.89.
[14]
It is therefore clear, in my opinion, that if the Chambre
wished any form of compensation to occur under the Award between the specific
amount owned by Vilhena and any amount owed by Afrocean, the Chambre would have
used stronger and more specific language in its formal judgment.
[15]
Fourth, the wording of the definition of “Entitlement,”
reproduced above at paragraph 6, indicates that the letter of
undertaking is primarily intended to satisfy claims by claimants, such as
Afrocean, and not at the same time, by need of compensation or any other manner,
a claim from the shipowner. This definition does in fact include the wording “claim
… of a Claimant against the Owners …”.
[16]
Finally, Afrocean filed in support of its motion a document
entitled “Average Guarantee” signed by Groupama Transport, the very purpose of
which is to guarantee the involvement of any party in the general average. It
is highly likely that Vilhena should approach Groupama Transport.
[17]
For all of these reasons, I consider that Afrocean is
entitled to the order that it seeks and that I grant below.
ORDER
IT IS HEREBY ORDERED THAT:
1 - Plaintiff Afrocean Compania Naviera Inc., having a valid and
sustainable claim asserted against Defendants, as evidenced by the arbitral
Award issued by the Chambre arbitrale maritime de Paris dated March 23, 2006,
is entitled to payment under the terms of that Letter of Undertaking posted by
the American Steamship Owners Mutual Protection & Indemnity Association,
Inc. to stand as security to effect the release from arrest of the vessel ZODIO
in December 2001;
2 - The said American Steamship Owners Mutual Protection &
Indemnity Association, Inc. is hereby directed to pay to the Plaintiffs the sum
of US $579,308.16 by way of bank wire transfer to the United States dollar
trust account of Borden Ladner Gervais LLP or by way of US dollar bank draft or
cashier’s cheque made payable to Borden Ladner Gervais LLP in trust. In any
event, all transmission or other bank charges levied with respect to the
transfer of remittance of funds shall be assumed by the said American Steamship
Owners Mutual Protection & Indemnity Association, Inc.;
3 - The American Steamship Owners Mutual Protection & Indemnity
Association, Inc. shall pay interest on the said sum of US $579,308.16 at
a rate of 5% per annum from the date of this Order until payment;
4 - Costs on the motion are hereby awarded to Afrocean Compania
Naviera Inc.
“Richard
Morneau”
Email this Content