Greenstone Shipping Co. v. Transworld Oil, Ltd.

• Decision Date: 21 March 1984
• Docket Number: Civ. A. No. 84-41 CMW.
• Citation: 588 F. Supp. 574
• Court: U.S. District Court — District of Delaware
• Parties: GREENSTONE SHIPPING CO., S.A. and A. Halcoussis & Company, Plaintiffs, v. TRANSWORLD OIL, LTD. OF HAMILTON, BERMUDA, Defendant.

588 F. Supp. 574

GREENSTONE SHIPPING CO., S.A. and A. Halcoussis & Company, Plaintiffs, v. TRANSWORLD OIL, LTD. OF HAMILTON, BERMUDA, Defendant.

Civ. A. No. 84-41 CMW.

United States District Court, D. Delaware.

February 29, 1984.

On Renewed Motion for Summary Judgment March 21, 1984.

Peter M. Sieglaff, and David A. Anderson, of Potter, Anderson & Corroon, Wilmington, Del., for plaintiffs; Richard W. Palmer, Michael B. McCauley, and Todd G. Atkinson, of Palmer, Biezup & Henderson, Philadelphia, Pa., of counsel.

Jacob Balick, of Balick & Yucht, Wilmington, Del., for defendant; Dante Mattioni, and Faustino Mattioni, of Mattioni, Mattioni & Mattioni, Philadelphia, Pa., of counsel.

MEMORANDUM OPINION

CALEB M. WRIGHT, Senior District Judge.

INTRODUCTION

Presently before the Court in this case is plaintiffs' Motion For Entry Of An Order Granting Plaintiffs' Claim For Freight Due on a voyage from Dairen, China to Seaview Petroleum Terminal in Paulsboro, New Jersey. For the reasons discussed below, the Court denies plaintiffs' motion.

This case arises out of a voyage charter party (hereinafter "Charter Party") entered into on August 25, 1983 between A. Halcoussis & Company of Piraeus, Greece (hereinafter "Shipowner") and Transworld Oil, Ltd. of Hamilton, Bermuda (hereinafter "Charterer"). The Charter Party provided for a voyage by the vessel M/T YPATIANNA with a cargo of crude oil from Dairen, China to a safe port on the Atlantic or Gulf Coast of the United States. See Clause 3 of Charter Party, Exhibit A attached to Defendant's Answering Brief (Dkt. No. 8). The Charter Party also provided that Charterer had the right to nominate and change the specific discharge ports and berths after loading was completed and the vessel was underway. See Clauses 4, 23 and 27 of the Charter Party. Pursuant to the terms of the Charter Party, Charterer nominated Seaview Petroleum Terminal as the discharge berth.

The ship loaded its cargo of Daquing crude oil¹ on September 15 and 16, 1983 and departed from Dairen on September 21, 1983. Because of various alleged problems along the way,² the ship did not arrive at Big Stone Beach Anchorage in Delaware Bay until December 15, 1983, at which time the Master tendered her Notice of Readiness. The parties dispute whether the ship was in fact ready to discharge at that time.³ In any event, discharging of the cargo did not commence until December 26, 1983. A discharge at Big Stone Beach Anchorage of approximately 175,000 of the 699,634.5 barrels of oil on the ship into barges was necessary in order to decrease the ship's draft so that she could proceed up the Delaware River to the Seaview Terminal berth nominated by the Charterer. This discharge took from December 26 through December 29, 1983, and the ship departed Big Stone Beach Anchorage on December 30, 1983.

Unfortunately, the ship ran aground shortly after she left Big Stone Beach Anchorage and it was necessary to have a barge come alongside and take additional oil so that the ship could get off the bottom. After this was done, the ship returned to Big Stone Beach Anchorage and did not depart for Seaview Terminal until January 3, 1984. Upon the ship's arrival at Seaview Terminal, discharge of the oil commenced. Because of various alleged problems,⁴ discharge was not completed within the period of time anticipated by the Terminal and the Terminal representatives advised the Master that the ship was to move off the berth by 0500 hours on January 7, 1984. According to Charterer, the ship's representatives then told the Terminal that all discharging could be completed by midnight and the Terminal agreed to let the discharging continue up to that time, provided the vessel would leave the berth by noon the next day. See Defendant's Answering Brief at 10 (Dkt. No. 8). However, the vessel could not complete the discharge within that time and at 1230 hours on January 8, 1984, the ship, under protest, departed from Seaview Terminal with slightly more than 57,000 barrels of oil still on board.

The ship proceeded to a berth at Pier 96 South in Philadelphia. No further discharge of the oil occurred until January 27, 1984, after Shipowner arranged to have a barge come alongside the ship to take the remainder of the oil and deliver it to Seaview Terminal. However, after approximately 20,000 barrels of oil were discharged into the barge, the ship's generators failed, resulting in a decrease in the inert gas level of the cargo tanks and an order by the U.S. Coast Guard to cease discharge operations until the required level was restored. See Exhibit C to Defendant's Answering Brief (Dkt. No. 8). After the Coast Guard order, discharge was not resumed and the barge left for Seaview Terminal.

On January 31, 1984, Shipowner, by telex, requested permission to move the ship from Pier 96 South to the Publicker Terminal at Pier 106 South and to discharge into a shore tank. See Exhibit D to Defendant's Answering Brief (Dkt. No. 8). Charterer agreed to let the vessel move, without prejudice to their rights under the Charter Party. Charterer expressly stated by telex, dated February 1, 1984, that "Charterer will not repeat will not nominate the berth at Publickers and will not accept any responsibility for a move by the vessel owner to said berth." Charterer also expressly stated in that telex that "discharge into a Publicker tank shall not be construed as either a delivery of the cargo or a discharge of the cargo for the purposes of determining when freight is due and payable." See id. Nonetheless, on February 2, 1984, the ship shifted to the Publicker Terminal and started discharging. Discharging continued through February 3, 1984 and then the vessel returned to Pier 96 South. According to Shipowner, approximately 32,000 barrels were discharged into the Publicker Terminal, leaving 5081.1 barrels on board which have been certified as unpumpable by two independent marine surveyors. See Exhibits D and E attached to Plaintiffs' Motion For An Order For The Payment Of Freight (Dkt. No. 4). According to Charterer, approximately 8,135 barrels of oil remain on board and are pumpable when heated to the 120 degrees Fahrenheit specified in the Charter Party.⁵See Defendant's Answering Brief at 21 (Dkt. No. 8). In any event, after discharge into the Publicker Terminal was completed, Shipowner telexed Charterer and informed him that freight was owed in the amount of $1,294,031.13, payable telegraphically to William & Glyns Bank, Piraeus, Greece. When the Charterer refused to pay freight, Shipowner filed this action.⁶

DISCUSSION

While plaintiffs have characterized their motion as a motion to direct defendant to pay freight due, it is clear to the Court that the relief requested by plaintiffs is a ruling that plaintiffs are entitled to freight as a matter of law. Since this is the case, the Court will treat this motion as it would treat any other motion for summary judgment and will only grant the motion if there is no genuine issue as to any material fact. Fed.R.Civ.P. 56(c). Any doubt as to the existence of genuine issues of fact will be resolved against the moving party and any reasonable inferences from the facts will be resolved in favor of the party against whom the judgment may be entered. See Peterson v. Lehigh Valley Dist. Council, United Bhd. of Carpenters and Joiners, 676 F.2d 81, 84 (3d Cir.1982); Hollinger v. Wagner Mining Equipment Co., 667 F.2d 402, 405 (3d Cir.1981).

The central issue in determining whether plaintiffs are entitled to freight as a matter of law is whether plaintiffs, as Shipowners, have fulfilled their obligation of delivery to the destination nominated by defendant, as Charterer, under the terms of the Charter Party.⁷ If there was a proper delivery, then freight is due and payable, regardless of any claims Charterer may have for shortage or cargo damage. See Compagnie DiNavigazione Mauritius Rome v. Kulukundis, 182 F.Supp. 258, 263 (E.D.N.Y.1959), aff'd., 277 F.2d 161 (2d Cir. 1960) (liability to pay freight is "an independent obligation and is not discharged because of failure to deliver the cargo in good condition"); Compania Naviera Puerto Madrin S.A. Panama v. Esso Standard Oil Co., 1962 A.M.C. 169-70 (S.D.N.Y.1961) (freight is an independent covenant and payable regardless of damage to cargo). See generally Aries Tanker Corp. v. Total Transport, Ltd., 2 Lloyd's Rep. 256 (1976). If there was no proper delivery, then freight is not due and payable until Shipowner completes its obligations of delivery under the terms of the Charter Party.

Both parties agree on the general principle that, in the absence of any contractual agreement to the contrary, freight is not due and payable unless and until the goods are delivered to the destination nominated by Charterer. Alcoa S.S. Co. v. U.S., 338 U.S. 421, 422, 70 S.Ct. 190, 191, 94 L.Ed. 225 (1949); The Harriman, 76 U.S. 161 (9 Wall) 19 L.Ed. 629 (1869); U.S. v. Waterman S.S. Corp., 397 F.2d 577, 578 (5th Cir.1968); Amoco Transport Co. v. S/S Mason Lykes, 550 F.Supp. 1264, 1271 (S.D.Tex.1982); Trans-Oceanic Peace Corp. v. India Supply Mission, 325 F.Supp. 474, 476 (S.D.N.Y.1971). The parties also agree that the destination nominated by Charterer in this case was Seaview Petroleum Terminal in Paulsboro, New Jersey. However, the parties cannot agree on whether Shipowner's obligations to deliver the cargo to that destination have been fulfilled.

In arguing that Shipowner has failed to fulfill its delivery obligations, Charterer relies primarily on Clauses 4 and 7 of the Charter Party. Clause 7 provides, inter alia, that "Freight shall be payable immediately telegraphically after completion of discharge." Clause 4 provides, inter alia, that the vessel shall be discharged at any berth ordered by Charterer. Charterer concludes that, since discharge of the cargo at the nominated berth has not been completed, the terms of the Charter Party have not been met and no freight is due.

Shipowner...