A.Turtle Offshore SA Assuranceforeningen Gard-Gjensidig v Superior Trading Inc, Court of Appeal - Admiralty Division, December 11, 2008, [2008] EWHC 3034 (Admlty)

Resolution Date:December 11, 2008
Issuing Organization:Admiralty Division
Actores:A.Turtle Offshore SA Assuranceforeningen Gard-Gjensidig v Superior Trading Inc
 
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Neutral Citation Number: [2008] EWHC 3034 (Admlty)Case No: 2007 FOLIO 574 AND FOLIO 1118IN THE HIGH COURT OF JUSTICEQUEEN'S BENCH DIVISIONADMIRALTY COURTRoyal Courts of JusticeStrand, London, WC2A 2LLDate: 11/12/2008Before :MR. JUSTICE TEARE- - - - - - - - - - - - - - - - - - - - -Between :A TURTLE- - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - -Sean O'Sullivan (instructed by Ince and Co.) for the ClaimantsElizabeth Blackburn QC (instructed by Duval Vassiliades) for the DefendantHearing dates: 17-21 and 24 November 2008- - - - - - - - - - - - - - - - - - - - -JudgmentMr. Justice Teare: Introduction1. A TURTLE was a semi-submersible drilling platform or rig which had been laid up at Macae, about 150 nautical miles north of Rio de Janeiro, for a number of years. MIGHTY DELIVERER was a ``pusher'' tug which had also been laid up for a long period. She was brought out of apparent retirement in 2006 to tow A TURTLE to Singapore via Cape Town pursuant to the terms (as amended) of the standard form of towage contract known as TOWCON. Unfortunately for all concerned the tug ran out of fuel in the South Atlantic. The towage connection was released and A TURTLE drifted away from the tug. She was later found on the shores of Tristan da Cunha. Salvage attempts failed and the wreck of A TURTLE was later removed from Tristan da Cunha and dumped at sea.2. In this action the owners of A TURTLE claim damages from the owners of MIGHTY DELIVERER for the loss of the rig and associated wreck removal expenses. The damages are estimated to be in the region of US$20m. The owners of the tug deny that they are liable for the loss of the rig and, if they are liable, seek to limit their liability to a sum estimated to be about US$1.6m. pursuant to the 1976 Limitation. They also have a counterclaim for 95% of the agreed freight in the sum of US$1,871,500 (5% having been earned on signing TOWCON and paid). A TURTLE3. The rig, which had been built in England in 1967 for use in the North Sea, was supported on 20 vertical columns of about 25m. in height which stood below water on four 75 metre long cylindrical pontoons. By reason of having been laid up the underwater structure of the rig had acquired substantial marine growth. 4. In about early 2005 Arusha Shipping Limited of Liberia (``Arusha'') purchased the rig from a subsidiary of Petrobas, the Brazilian oil company. In February 2006 Arusha sold the rig to A Turtle Offshore Inc. of Panama for a total price of US$5m. ``as is, where is'' in Macae, Brazil. Clause 18 of the MOA provided as follows:``The Sellers are to prepare the Vessel for tow in all respects as per their discussions with the Rio de Janeiro office of Noble Denton. The Sellers are to provide a fitness for tow certificate from Noble Denton. The Sellers are to arrange the disconnection of the Vessel from the present moorings and assist as required in connection to the towing tug whether this is the MIGHTY DELIVERER or a tug controlled by a third party.''MIGHTY DELIVERER5. The tug was built in Savannah in 1981 as a pusher tug, that is, she was designed for use in tug-barge combination units. Her length overall was 50.91m with a moulded beam of 16.16m. Her summer draft was 8.69m. She was powered by B&W diesel engines of 15,200 brake horse power. She required heavy fuel oil and gasoil (or diesel oil). The latter was required for use in a boiler to pre-heat the heavy fuel oil. As a pusher tug she had a high superstructure (to permit visibility over a long barge) and lacked a flared bow. 6. She was previously known as UNBELIEVABLE and had been purchased in or about February 2005 by Superior Trading Inc. (``Superior'') of the Marshall Islands. She was directed to Santo Domingo in the Dominican Republic for ``reactivation'' but as there was no dry dock there she could only be temporarily classed with the Panama Classification Society. She then towed a floating dry dock from the USA to Brazil and proceeded to Rio de Janeiro to undertake a complete reclassification process with the Russian Register towards the end of 2005. That process was completed in February 2006.7. There is no evidence that the bollard pull was tested as part of the reclassification process. The TOWCON Part 1 Box 18 stated that the certificated bollard pull of the tug was 180 tons. A bollard pull certificate issued by the Russian Maritime Register of Shipping dated 31 March 2006 stated that the pull of the towing winch was 1770 kn which, I was told, equated to a bollard pull of 180.5 tonnes. There is common ground that that was probably the maximum bollard pull. The tug's continuous bollard pull was stated by Noble Denton in their survey of the tug dated 18 February 2006 as 152 tonnes. It was common ground that that was probably arrived at by a ``rule of thumb'' calculation of dividing the continuous 15,200 bhp of the engine by 100. 8. The same survey report stated that the speed of the engines was 180 rpm. However, at trial it was common ground that this was mistaken and that the engine speed is likely to have been in the region of 100-120 rpm. 9. The length of the tow line was stated in the survey report to be 870 m. In the Bollard Pull Certificate it was stated to be 900m. However, the entry in TOWCON made by Mr. Bush said that it was 700m. During the towage no more than 720m. was paid out and there is no evidence of any complaint from the master that he was unable to use the full length of the tow line. It is therefore unclear what the length of the towline was. What seems clear however is that there was no more than 720m. of available towline. If more had been available it would have been used. 10. The commercial managers of the tug are Bush Shipping Services Limited (``Bush Shipping'') whose chief executive is Mr. Philip Bush. He describes himself as a tug operator. In addition to MIGHTY DELIVERER he appears to manage or operate other tugs, including RUBY DELIVERER (owned by Bluebottle Navigation Inc.) and CHAMP (owned by Rushmore Marine). Bush Shipping have an office in London but there is a small staff, namely, Mr. Bush and his two daughters. Bush Shipping were also the agent for Arusha Shipping Ltd.11. Superior is beneficially owned by a Guernsey trust, the beneficiaries of which are Mr. Bush's family. 12. The technical managers of MIGHTY DELIVERER were a Greek company Seawave Maritime Inc. (``Seawave''). However, Seawave ceased to be the technical managers in about July 2007 as a result of a dispute with Bush Shipping. This dispute led to a number of tugs operated by Bush Shipping, including MIGHTY DELIVERER and RUBY DELIVERER, being arrested and sold in South Africa.13. Bunkering the tug was within the commercial manager's sphere of activity, not the technical manager's sphere of activity. It was therefore a matter with which Mr. Bush concerned himself.The evidence 14. Apart from a towage procedures document and some e-mails there was no evidence from Seawave. It is likely that this was because of the disputes which later developed between Bush Shipping and Seawave. Thus there was little evidence from the technical managers of the tug. There was also no evidence from the master of MIGHTY DELIVERER, Captain Sarafanov. It is not clear why the tug owners were unable to adduce even a statement from him. 15. The only factual witness tendered by the tug owners was Mr. Philip Bush. He had some factual evidence to give but not much. That was because he was in London (save for a routine visit to Brazil). No doubt because there was no evidence from Seawave Mr. Bush sought to give an account of the preparation for the towage and of the towage itself notwithstanding that he had little personal knowledge of the material events. Such evidence as he did give was not reliable. For instance, with regard to the preparation for the tow he referred to Seawave's calculations as to speed and passage time to Cape Town and asserted that Noble Denton was satisfied, on the basis of such calculations, that the tug's bunker capacity was sufficient to enable the tug to arrive at Cape Town at the speed range assumed. Yet there were no such calculations of Seawave in evidence and Mr. Bush did not profess to have seen any such calculations. He was also prepared to make statements which documents he had received from Seawave did not support. For example, although Seawave had informed him on 23 May 2006 that the last visual contact with the rig had been on 10 May 2006 he was prepared to say without explanation that visual contact was lost on 16 May 2006. With regard to the notification to the authorities that the towage connection to the rig had been released he was prepared to state that ``all relevant information was conveyed to the maritime authorities at Cape Town and the Tristan da Cunha administration''. But he did not explain why the authorities were only informed on 23 May 2006 when the rig had been released on 30 April 2006. Counsel suggested that there was no need to give prompt information because the rig was in a remote area. I do not accept this explanation. Mr. Bush did not suggest that he need not give immediate notice of the release because the rig was in a remote area. An unmanned rig adrift in the South Atlantic was a clear danger to shipping even if the area was remote. In any event, the relative proximity of Tristan Da Cunha demanded that notice be given to the Tristan da Cunha authorities. Further, Mr. Bush said that all relevant information had been conveyed when in fact Bush Shipping had given an untrue account of the circumstances in which the rig had been released. When asked about this in cross-examination, and about his failure to advise the rig owner promptly of the disconnection, he had no explanation. The probable explanation, in the absence of any other explanation, is that he did not wish to reveal to the rig owner that the tug had run out of fuel, fearing that this would bring criticism upon the tug owners. Finally...

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