MT "Cape Bonny" Tankschiffahrts GmbH & Co KG v Ping AN Property and Casualty Insurance Company of China Ltd & Anor [2017] EWHC 3036 (Comm)

Case No CL-2013-000790

[2017] EWHC 3036 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Venue Royal Courts of Justice, Rolls Building, 7 Rolls Buildings, Fetter Lane, London EC4A 1NL

Date 04/12/2017

Before

MR. JUSTICE TEARE

Between

MT “CAPE BONNY” TANKSCHIFFAHRTS GMBH & CO KGClaimant

PING AN PROPERTY AND CASUALTY INSURANCE COMPANY OF CHINA LIMITED, BEIJING BRANCHDefendant

Robert Bright QC and Saira Paruk (instructed by Reed Smith LLP) for Claimant

Christopher Smith QC and Sean Snook (instructed by Rodgers Liu & Assoc. Solicitors (Asia) Pte. Ltd) for Defendant

Hearing Hearing dates: 9, 10, 11, 12, 16, 17, 18 and 19 October 2017

Judgment

Mr. Justice Teare :

Introduction 1-5 Outline of the dispute 6-7 The vessel 8-12 Investigations by MAN, the main engine designers 13-14 The evidence 15-31 Material events prior to the voyage 32-51 The breakdown and the damage found 52-53 The condition of the filters 54-82 The Owners’ case as to the cause of the damage to main bearing no.1 83-90 The Defendants’ case as to the cause of the damage to main bearing no.1 91-103 Spark erosion 104-106 Chain coupling bolts 107-109 Improper cleaning of the filters 110-112 The Court’s finding as to the cause of the damage to main bearing no.1 113-117 Unseaworthiness 118 Due diligence 119-122 The filters 123-127 The crankweb deflections 128-154 Conclusion on liability 155 Quantum disputes; the burden of proof 157-163 The hire of KOYO MARU 164-181 The diversion to Korea and the transhipment of the cargo 182-193 The hire of KOYO MARU after 1 August 2011 194 Conclusion on quantum 196-197

Introduction

[1]On 14 July 2011, in the course of a laden voyage from Argentina to China, CAPE BONNY, a Suezmax oil tanker built in 2005, suffered an engine breakdown. The timing of the breakdown was unfortunate; the vessel was seeking to avoid tropical storm or typhoon MA-ON. Towage assistance was required and on 18 July 2011 the vessel was taken in tow by KOYO MARU. The vessel was not permitted to enter a Japanese port of refuge or to discharge her cargo in the Chinese port of discharge. She was therefore taken to Yosu in South Korea where her cargo was transferred into another vessel by an STS operation on 2 and 3 August 2011. Due to the approach of another tropical storm or typhoon, MUIFA, KOYO MARU took the vessel out to sea on 3 August and returned on 9 August 2011. KOYO MARU was then released and the vessel was berthed for repairs.

[2]General average was declared and on 28 July 2011 the Defendants provided a guarantee on behalf of the cargo interests by which they promised to pay any contribution to general average “which may hereafter be ascertained to be properly due.” In due course, on 13 March 2013 an average adjustment was prepared which assessed cargo’s contribution to general average in the sum of about US$2.5m. The adjustment was later amended assessing cargo’s contribution to general average at approximately US$2.1m.

[3]Rule D of the York-Antwerp Rules provides as follows:

“Rights to contribution in general average shall not be affected, though the event which gave rise to the sacrifice or expenditure may have been due to the fault of one of the parties to the adventure, but this shall not prejudice any remedies or defences which may be open against or to that party in respect of such fault.”

[4]Although the usually calm waters of general average have recently been disturbed by the decision of the Supreme Court in Mitsui v BeteiligungsgesellshaftLPG Tankerflotte

[2017] UKSC 68

regarding Rule F of the York-Antwerp Rules there is in the present case no dispute as to the true construction of Rule D and how it operates. Rule D is explained in Scrutton on Charterparties, 23rded. at p.518 and in Lowndes and Rudolf on General Average 14thed. at D.02-03 and D.26. The object of Rule D is to keep all questions of alleged fault out of the adjustment and to preserve unimpaired the legal position at the stage of enforcement. A fault is a legal wrong which is actionable between the parties at the time when the sacrifice or expenditure is made.

[5]The Defendants have denied any liability under the guarantee, alleging that the casualty was caused by actionable fault on the part of the Owners of CAPE BONNY, namely, a failure by the Owners to exercise due diligence to make the vessel seaworthy and accordingly no amount was “properly due” from cargo interests. In the event that a contribution in general average is properly due there are quantum disputes concerning the engagement of KOYO MARU, the diversion to Korea and the STS operation. In this connection there was controversy as to who bore the burden of proof that expenditure was reasonably incurred, in the light of the Rule Paramount and Rules A and E.

Outline of the dispute

[6]The Owners accept that the vessel was unseaworthy at the commencement of the voyage by reason of the presence of metal particles in the luboil system, lying downstream of the luboil filters but not (at the commencement of the voyage) circulating within the luboil itself. The burden therefore lies upon the Owners, pursuant to the Hague-Visby Rules which were incorporated in the contract of carriage, to show that they exercised due diligence to make the vessel seaworthy before the commencement of the voyage. They say that they can discharge that burden of proof because the main engine failure was caused by sudden and catastrophic damage to the no.1 main bearing caused in turn by the metal particles which had been present in the luboil piping from the date of build (in 2005) -referred to as weld slag - breaking off from that piping during the voyage in a period of bad weather, working their way through the lub oil piping into the bearing assemblies over a period of weeks and then rapidly causing damage to the no.1 main bearing.

[7]By contrast the Defendants do not accept that the particles were weld slag. They say that the particles had been generated by spark erosion or by damage to the vessel’s chain drive gear or had been permitted to enter the engine by poor procedures when the crew were cleaning the filters. They further say that there was progressive wear to the no.1 main bearing shells caused by damaged luboil filters failing to remove the particles from the lub oil. They say that the damage to the no.1 main bearing was avoidable by due diligence. The crankweb deflections in May 2011 should have alerted the crew and managers to the problem, as should the trend in the Wear Particle Index (“WPI”) in the lub oil analyses. Failing to maintain in good condition the shaft earthing device (which should have prevented spark erosion) and the lub oil filters (which should have removed the particles from the luboil) was also a failure of due diligence as was the failure to use proper procedures when cleaning the lub oil filters.

The vessel

[8]The vessel is 274.47m. in length, of 81,076 tons gross and has 12 cargo tanks. She was built in 2005 by Hyundai, South Korea and is powered by a MAN B&W 6S70ME-C engine which develops a service rated output of 22,790 BHP at 87.9 rpm. She is classed with the American Bureau of Shipping.

[9]The vessel is owned by a German company and managed by Columbia Shipmanagement (“CSM”), one of the world’s largest ship managers. The headquarters of CSM is in Cyprus but it has offices in Hamburg and Singapore. The vessel was managed from the Hamburg office. The Hamburg office had a Safety Management System (“SMS”) which complied with the requirements of the International Management Code for the Safe Operation of Ships and for Pollution Prevention (the “ISM Code”). The Hamburg office managed a fleet of 83 vessels. The master, officers and crew of CAPE BONNY were Russian and East European.

[10]In view of the nature of the dispute it is necessary to mention certain parts of the main engine. The vessel’s main engine has six cylinders numbered 1-6, fore to aft. The crankshaft is driven via the piston, connecting rod and crankpin of each cylinder. The crankpins are the outermost part of the six crankthrows, each formed by a pair of crankwebs. Each section of the crankshaft main journal is enclosed and supported by a bearing of tin/aluminium and is separated from the bearing by a film of luboil. Luboil in the sump tank passes through a filter and a purifier before entering the gap between the crankshaft and the bearing.

[11]The lub oil filters (of which there were two) were designed to remove all particles greater than 40 micron from the oil. The purifiers were designed to remove even smaller particles. The filters consisted of six chambers with 18 cartridges (or candles) and also one paper cartridge for back flushing, a form of cleaning. Back flushing was controlled by a timer. It was set to occur every four hours. In addition, where the differential pressure between the lub oil outlet and the lub oil inlet was too great, indicating clogging of the filter, back flushing was initiated automatically. The engineers on board could manually activate further back flushing.

[12]MAN caution against opening up of the bearings because bearings made of tin/aluminium suffer from minimal wear and because opening up risks the introduction of foreign particles. “Inspection” therefore takes place by other methods, one of which is the taking of crankweb deflection measurements and, if required, measurements of the top clearance between the shaft and the bearings. The latter can reveal wear of the bearings.

Investigations by MAN, the main engine designers

[13]Following the salvage of the vessel (performed on commercial terms by KOYO MARU) and the discharge of her cargo the main engine was repaired in Korea. Representatives of MAN were present from 6 August to 26 September 2011 to assist with the repairs and to investigate the “root cause” of the damage to the no.1 main bearing. MAN produced a “root cause” report dated 20 October 2011. That report stated that such was the extent of the damage to the main bearing that the damage itself could not reveal the cause. Two main sources were suggested. The first was “foreign particles in the bearings”. It was said that such particles could not be excluded as the cause and “may have entered the engine during new building at the shipyard or during incorrect filter cleaning procedure, or as a combination of these sources.” The second was spark erosion, “where the electrical potential of the crankshaft discharges through the main or thrust bearings instead of via the earthing device mounted on the propeller/intermediate shaft.” However, MAN said that “considering the signs of spark erosion, it may not be a contributing factor.” MAN added that it may have been possible to detect the “maturing bearing failure” during the last deflection measurement in May 2011.

[14]It is clear from MAN’s report that the cause of the damage to the no.1 main bearing is not obvious. Indeed, given that the MAN representatives spent time on the vessel investigating the cause and were unable to reach a firm conclusion it is also clear that the identification of the cause of the damage to the no.1 main bearing is a difficult exercise. Even in 2016 when representatives of the Owners and MAN discussed the possible cause of the damage MAN spoke of a “probable theory” that there could have been progressive wear but said that welding slag “could not be ruled out”. Damage to filters when cleaning them incorrectly was “just one of more possible reasons”.

The evidence

[15]The parties to this general average dispute have been unable to resolve their differences. That is unfortunate because the cost of investigating and identifying the cause by means of litigation is no doubt considerable. Thus it falls to the court to make findings, on the balance of probabilities, as to the cause of the damage and as to whether it could have been avoided by the exercise of due diligence by the Owners. The trial lasted 8 days during which evidence was heard from seven witnesses of fact and four expert witnesses. It could well have lasted much longer had not counsel very properly kept to the trial timetable and, for that reason, severely limited their cross-examination of the expert witnesses.

[16]Mr. Smith, counsel for the Defendants, has submitted that each witness called by the owners was “evasive, disingenuous, deliberately unhelpful, inconsistent and/or (on some occasions) untrue”. I would in any event have commented upon the witnesses but in the light of Mr. Smith’s submission it is necessary to do so.

[17]The first witness was Mr. Kapliev, the vessel’s “First Assistant Engineer”, a rank known in the past as the second engineer. He understood English but, being a Russian speaker, gave his answers in Russian through an interpreter. There were parts of his evidence which were said to be untrue, in particular, his account of the inspection of the filters immediately after the main engine breakdown. Whether his evidence as to what he did or observed over 6 years ago is accepted as true will depend upon an assessment, not just of his evidence, but of other evidence in the case, including the documentary evidence, and of the probabilities. For the present I record my assessment of Mr. Kapliev as a witness. By the end of his evidence I had gained the impression (in so far as one can when witnesses give their evidence through an interpreter (see The Atlantik Confidence

[2016] 2 Lloyd’s Reports 525

at paragraph 11) that he was a thoughtful witness who sought to answer the questions put to him. When, in the early part of his cross-examination, he was cross-examined about the “water in oil” alarms he gave evidence that the main engines and lub oil system were not in operation. That did not appear to sit well with the engine log, material entries of which (signed by him) appeared to suggest the contrary. He suggested, somewhat surprisingly and improbably, that they were in error. I pondered at that stage whether this suggested that he was an unreliable witness. But, after he had been re-examined and it had become clear that certain of the alarms meant that at particular times the main engine and lub oil system were not in operation, I concluded that this would be an unfair opinion to form of him as a witness. He gave oral evidence (not foreshadowed in his witness statements) that on 15 July 2011, after the main engine breakdown, he had examined the filters and concluded that they were not damaged. He stated that he did recall this and that he was not confusing this episode with other occasions on which he had examined filters. 15 July 2011 was the only occasion when he had been on board a vessel which had suffered an engine breakdown and so one would expect him to recall what he did on that occasion. However, the events occurred over 6 years ago and his recollection, though honestly formed, may not be reliable. All the evidence on this topic will have to be carefully considered, along with the probabilities, before findings on these matters can be made.

[18]Mr. Bogdanovsky also served on board CAPE BONNY as second engineer, though not at the time of the main engine breakdown. He gave evidence because the maintenance of the vessel when he served on board as second engineer was scrutinised and because he was on board during the repairs. He also gave evidence through an interpreter. His evidence as to manual flushing of the lub oil system in November 2010 was challenged as was his evidence as to whether the candles in the six cylinders of the lub oil filters were seen by him to be damaged in August 2011 when representatives of MAN were on board the vessel investigating the breakdown. As to the first of these topics he was accused of making up his evidence that in November 2010 he might have manually flushed the cylinders once, twice or even more than twice. However, it is to be noted that in his second statement signed in April 2016 he had referred to manual flushing “not less than twice for each chamber”. As to the second of these topics his evidence that in August 2011 he had examined the candles in the cylinders and found no holes or damage was doubted and subjected to scrutiny. However, this was evidence he had given in his second statement where he referred to “lifting the candles for inspection” and to his disagreement that the candles were damaged or holed. On neither topic did I form the impression that he was seeking to disguise to the court what had actually happened. On the contrary, he appeared to be striving to answer the questions as best he could. But, as with Mr. Kapliev, my ultimate assessment of what happened (and in particular on the reliability of his inspection of the candles in August 2011) must depend upon an assessment of all of the relevant evidence.

[19]Mr. Chumakov was the chief engineer at the time of the incident and gave oral evidence. Although he had the assistance of the interpreter he was able to answer almost all questions in English. Since his maintenance of the vessel was under challenge it is perhaps not surprising that he appeared to be familiar with the criticisms made against him and to have thought carefully about them. Thus, when a question was put to him, he was prone to argue the case with counsel rather than simply answering the question. This was, in the circumstances, not unexpected and so I did not think it appropriate to draw the conclusion that he had no answers to give to the questions put to him. But it did mean that from time to time he did not answer the question put to him. He thereby did himself a disservice but I certainly did not think that he was seeking to hide the truth or to be in any way dishonest in his evidence. On the contrary he appeared to me to be an intelligent engineer who sought to give his evidence honestly. But, as with the other engineers who gave evidence, one has to remember that the events occurred six or more years ago and that his recollection may be mistaken. The court’s findings must take account of, not only his evidence, but also the documents and the probabilities.

[20]Mr.Kuybarov was the chief engineer of the vessel when Mr. Chumakov was not. He also answered the questions put to him in English. I formed the impression that he, like Mr. Chumakov, was an intelligent engineer who sought to give his evidence honestly. I was particularly struck by the firm and clear manner in which he answered the questions put to him.

[21]Mr Stepanovs was an engineering superintendent who also gave evidence, again answering questions in English. Criticisms of his conduct as a superintendent had been made in the past by his own company (and others). He denied these criticisms with a degree of spirit which perhaps suggested a combative personality. But it is difficult to be sure of such judgments when a witness gives his evidence in a language which is not his first language. His answers to questions put to him did however suggest that he was a knowledgeable engineer. Some of those answers were said to be untrue. Whether they were true or untrue will depend upon an assessment of his evidence in the context of the other evidence in the case and the probabilities.

[22]Mr. Smith criticised all the engineers and Mr. Stepanovs for having a selective memory. Of course there were some matters which they recalled and others which they did not. That is to be expected when evidence is given of events some six years ago. The court must therefore be careful when being asked to draw adverse conclusions from what Mr. Smith terms a selective memory. Mr. Smith also criticised the witnesses for giving evidence which had not been foreshadowed in their witness statements. This is of course a reason for examining carefully whether what they have said can be true. But it is not a reason for immediately concluding that they have sought, dishonestly, to mislead the court. When a person whose conduct several years ago is subject to criticism it is often the case that, when cross-examined, they say things which have not been said before. Memory can play tricks especially when being cross-examined. It will be apparent from my assessment of the engineers and Mr. Stepanovs that I did not regard any of them as seeking to give untrue evidence, though their evidence may nevertheless prove to be unreliable.

[23]Mr. Clark is the Admiralty Manager at the Owners’ solicitors, Reed Smith, in their Hong Kong office. He was required to give evidence by the Defendants because he had not obtained a signed statement from the engineering officer on watch at the time of the engine breakdown and because it was suggested that the Owners’ managers had deliberately hidden evidence from a surveyor, Mr. Teale, who had visited the vessel. As to the first point Mr. Clark accepted that, by an oversight, he had failed to obtain a signed statement from the engineering officer on watch. As to the second point he could not speak for the Owners’ managers but he denied hiding evidence from Mr. Teale himself. I was left unpersuaded by Mr. Smith’s cross-examination or by his submissions at the close of the evidence that there was any reason to doubt that Mr. Clark was telling the truth on either point.

[24]Finally, Mr. Koerber, the technical director of CSM, gave evidence. He is German but answered questions in English without the need for an interpreter. He gave evidence about aspects of the repairs and his discussions with MAN and about the decision to hire KOYO MARU and to conduct an STS operation off Korea. His evidence of the former contained matters not mentioned in his statement and his recollection of the latter was incomplete. I did not find that surprising. I did not consider that there was any reason to doubt that he gave evidence to the best of his recollection. But he gave evidence about events over 6 years ago and his recollection may well have been faulty. Whether or not it was depends upon an assessment of the contemporaneous documents and upon the probabilities.

[25]Both parties called two expert witnesses.

[26]The Owners called Mr. Steffen Fischer to provide his opinion as to the most likely cause of the engine damage. Mr. Fischer is a marine engineer who served at sea between 1985 and 1996. He obtained a diploma as a mechanical engineer from the University of Rostock in 1993 and his Chief Engineer’s certificate in 1995. (There was evidence that he had served at sea as chief engineer but it can only have been for a very short time.) Between 1996 and 2008 he worked as a marine surveyor for the classification society GL. Since 2008 he has been employed as a technical surveyor for the Scandinavian Underwriters Agency. His opinion as to the most likely cause of the damage formed the basis of the Owners’ case. In addition to having studied the relevant reports and documents he examined the main bearing shells on 22 May 2015 and surveyed the vessel on 7 July 2015. The manner in which he gave his evidence (in English) showed that he was in command of the detailed evidence in the case. He answered all questions clearly and with confidence. He was exceptionally articulate and was almost always able to explain the reasons for his opinion. Where he could agree he did so and where he had no opinion to offer he said so. On several matters he disagreed with opinions expressed in writing by MAN. Where he did so he had clear and comprehensible reasons for doing so. His opinion as to the cause of the main engine breakdown was unshaken by cross-examination, though it is fair to bear in mind that the trial timetable allowed relatively little time for a detailed cross-examination. If I had a criticism of his evidence it would be that on occasion his intellectual self-confidence and belief in his opinions prevented him from viewing certain pieces of evidence as objectively as a good scientist should.

[27]The Defendants called Mr. Ken Shortall to express his opinion as to the cause of the damage. He is also a marine engineer. He served at sea from 1976 until 1991 up to the rank of Chief Engineer (though for how long as chief engineer I am not sure). He holds a B.Sc (Hons) from the Open University. From 1996 to date he has been a consultant with TMC. He gave his evidence, I thought, with clarity and honesty, though perhaps not with the fluency and confidence of Mr. Fischer. When he did not know the answer to a question he said so. His evidence was that it was inconceivable that at the time of delivery of the vessel from the yard there was weld slag which could have been left in the lub oil piping and which much later caused the damage in question. He thought it more probable that the damage was caused by spark erosion or a damaged lub oil filter which led to a failure of the bearing and which could and should have been identified by the rapidly increasing crankshaft deflections taken in May 2011. Cross-examination did not dissuade him from that opinion, though again the time available for cross-examination was limited.

[28]There was therefore a considerable difference between the opinions of two impressive engineering experts as to the likely cause of the damage to no.1 main engine bearing. The court must itself weigh the evidence and the competing arguments (with the assistance of the expert evidence) and form its own view having regard to the probabilities.

[29]Both parties also called experts on the duties of technical superintendents. I understood the subject matter of their evidence to be, primarily, the issue of due diligence at the superintendent level though it also concerned the conduct expected of the chief engineer. Perhaps inevitably, it was difficult in cross-examination to disentangle issues of causation from issues of due diligence.

[30]The Owners called Mr. Dimitrios Mountzouris. He is the managing director of Hellespont Steamship for which company he has worked since 2004; as a naval architect and marine engineer (2004-2006), site manager at new buildings (2006-2008), superintendent engineer (from 2008-2009) and Technical Manager (2009-2015). He has an M.Sc in naval architecture and marine engineering from the University of Athens and specialises in technical shipmanagement. When giving evidence he initially appeared somewhat defensive. That was perhaps understandable because it was suggested that not having qualified or served as a chief engineer he was not properly qualified to be a technical superintendent. Many technical superintendents have served at sea as chief engineer though this is not essential as CSM’s own manual shows. However, Mr. Mountzouris had never served at sea as an engineer officer (though he had spent time at sea as a cadet). His experience at Hellespont Steamship which included seven years as superintendent engineer and technical manager qualified him to give expert evidence as to the duties of a technical superintendent but he must be unusual in having been a technical superintendent without having served at sea as an engineer officer. In his evidence he expressed a firm opinion that scrutiny of reports from the chief engineer was not normal for a technical superintendent or manager. Unless a chief engineer reported a problem, in which case the superintendent should, he accepted, follow it up, the superintendent should, in the absence of a problem identified by the chief engineer, simply “file the reports”. I found this a surprising opinion to hold. It is well recognised and has been since 1984 (following developments in the law relating to the limitation of shipowners’ liabilities between 1960 and 1984) that shipowners themselves owe a duty to ensure the safe and efficient management of their vessels; see, for example, The Marion

[1984] 2 Lloyd’s Reports 1

at p.4 per Lord Brandon. That duty cannot be discharged by relying upon the master or chief engineer to exercise their own duty to ensure the safe and efficient management of their vessel. The ISM Code, pursuant to which all shipowners must have an SMS, reflects the shipowners’ own duty. Indeed, cross-examination of Mr. Mountzouris revealed that he did not in reality hold the opinion that a technical superintendent may simply “file the reports” in the absence of a problem identified by the chief engineer. When discussing the chief engineer’s reports relating to the luboil filters, the shaft earthing device and the crankshaft deflections it was apparent that he accepted that the superintendent had a duty to examine them critically even in the absence of a problem identified by the chief engineer. Thus it appeared to me that Mr. Mountzouris was willing to advance an opinion which(a) did not properly reflect the shipowner’s duty to ensure the safe and efficient operation of his vessels and

(b) was not one which he in fact could maintain. I therefore had difficulty in regarding him as a reliable witness as to the conduct expected of a technical superintendent. In so far as he expressed views as to what a chief engineer ought to do such views were not founded upon any experience of the role of chief engineer, or indeed any service as an engineer officer. Further, he was on occasion reluctant to accept the obvious; for example he insisted that there were always five Mondays in February, a matter relevant to the five reported weekly checks on the shaft earthing device. These matters persuaded me that it would not be safe to rely upon his evidence.

[31]The Defendants’ expert technical superintendent was Mr. Gary Rawlings who had served at sea for 21 years, including 10 years as a chief engineer. He served as a technical superintendent for two years (2006-2008) and as a fleet technical superintendent (from 2008 until 2012). He then worked in risk management for a P&I club (from 2012 until 2014) before becoming a consultant marine engineer at TMC from 2014. Having referred to the duties of a technical superintendent in the light of the ISM Code he was critical of the technical superintendence of CAPE BONNY. During the course of his cross-examination (which did not challenge his views as to the duties of a technical superintendent but concentrated primarily on the phenomenon of spark erosion, on the manner in which a shaft earthing device works and on the conclusions to be drawn from the vessel’s records concerning spark erosion and, to a much lesser extent, on the conclusions to be drawn from the crank deflections) he gave careful and fair answers. After I had reflected upon his answers and the manner in which he gave his evidence I concluded that there was no reason to doubt that the opinions he expressed were honestly held by him. He was also, of all the expert witnesses, the one with most experience to give evidence of the actions to be expected of a chief engineer.

Material events prior to the voyage

[32]Between 27 September and 5 October 2010 the vessel was in dry dock in Singapore. Mr. Stepanovs reported that the vessel left Keppel Shipyard fully classed without any conditions or deficiencies.

[33]On 12 November 2010 a lub oil sample (which had been drawn on 30 October) was analysed by Shell and provided to CSM who then sent on the report to the vessel. Shell reported that the oil was “Normal” and “suitable for further use” and that “the engine/equipment appears to be operating normally with no indications of abnormal wear or component stress”.

[34]On 19 and 21 November 2010 there was a six-monthly check of the auto-filters on board the vessel. Mr. Chumakov gave evidence that all filters were lifted and all filter candles cleaned and checked. The actual work was carried out by the second officer, Mr. Bogdanovsy, who described the work done in his statement.

[35]On 25 November 2010 there was a check of crankweb deflections on board the vessel. The vertical deflections (on which attention was focussed at trial) were -0.14mm for unit no.1 and -0.14mm for unit no.2. When considered against the history of crankweb deflections going back to 2005 the Defendants’ experts Mr. Shortall and Mr. Rawlings agreed that the November deflections did not indicate any significant wear or any significant change in the deflections.

[36]On 27 November 2010 a routine inspection of the chain drive found one bolt loose and 2 bolts sheared off. MAN carried out repairs in an anchorage off Honolulu, Hawaii in December 2010.

[37]On 4 March 2011 MAN attended on board at Long Beach, USA. It is unclear what was the subject of their attendance. Mr. Kuybarov’s quarterly report states that it was in connection with cracks found in welding for supports for “the second order moment compensator shaft”. Mr. Stepanovs said in his witness statement that it was to investigate possible cracks in way of unit no.1 pursuant to a MAN service letter which mentioned the possibility of such cracks. Whatever the subject matter there was no suggestion at the trial that anything of relevance was found. I was not referred to any report from MAN as to precisely what they opened up or found.

[38]On 12 March 2011 the pistons were inspected and the measurements taken revealed they were in satisfactory working condition.

[39]On 30 March 2011 a lub oil sample (which had been drawn on 3 March) was analysed by Shell and provided to CSM who sent it on to the vessel. Shell reported that the oil was normal and suitable for further use and that the engine equipment appeared to be operating normally with no indication of abnormal wear or component stress. The Wear Particle Index (“WPI”) was reported as 17 whereas in November 2010 it had been 5. The WPI is not an internationally recognised standard but is a test specific to Shell. Shell first tested the WPI on CAPE BONNY’s lub oil in November 2010 (though it had been used in connection with the stern tube before that). The reading of 17 in March 2011 was well below Shell’s warning level of 45. It is common ground that the WPI measures larger particles of iron and that because the running layer of the main bearing does not contain iron the WPI does not indicate bearing wear. Mr. Stepanovs noted the WPI reading because it was an additional measurement. He gave evidence that he did not regard the reading of 17 as indicative of a problem. It was substantially below the warning level of 45. He accepted, however, that the “main point” was that Shell described the oil as normal. Mr. Kuybarov, the chief engineer at the time, gave evidence that he noted the readings for aluminium and tin were normal and so there was no indication of main bearing wear.

[40]In April 2011 the vessel was at the anchorage in Caleta Cordova in Argentina awaiting loading. There were delays caused by shore-workers being on strike. Planned maintenance and some repair jobs were carried out, in particular to main engine cylinder no.4. The piston and rings were inspected. Between 19 and 21 April Mr. Stepanovs visited the vessel and carried out a crankcase inspection. He said all was in good order. He produced a long and detailed Technical Inspection and Visit report. I have not found any reference to a crankcase inspection in that report but it was not suggested that he did not carry out such an inspection. What was suggested was that if there had been minor wear he would not have expected to find any debris on the floor of the crankcase. He accepted that there were no signs of particles having not only looked but also having inspected the crankcase with his hands.

[41]On 16 May 2011 there was a check of the crankweb deflections on the vessel. The measurements were taken by the second officer Mr. Kapliev. He said that as a matter of routine he would also inspect the crankcase by sight, feel and smell. In cross-examination he accepted that he would not use his palm or finger to check the whole of the crankcase floor but that he focused on the area under the bearing. He said he looked for “sparkling” particles in the oil with the aid of a torch. He assumed that he must have been satisfied with what he found. It is apparent that he had no actual recollection of what he did or saw on this occasion.

[42]On this occasion the vertical measurement on no.1 unit was -0.28mm, compared with -0.14mm in November 2010 and on unit no.2 the vertical measurement was -0.21mm compared with -0.14mm in November 2010. It will be necessary to return to the significance of these readings. For the present I note the reaction of the chief engineers Mr. Kuybarov and Mr. Chumakov and of Mr. Stepanovs to whom Mr. Chumakov sent the measurements as part of his monthly report.

[43]Mr. Kuybarov was the chief engineer on 16 May when the measurements were taken but was in the course of handing over to Mr. Chumakov who had boarded the vessel on 13 May. Mr. Kuybarov said that he did not recall there being anything to be concerned about and that now, looking at the deflection report, he could see nothing that would have concerned him. The readings were within “acceptable limits”.

[44]Mr. Chumakov in his statement dated 21 April 2016, almost 5 years after the event, said that the change in the measurements from November to May suggested “a possibility of wear” but there was no real cause for concern because the deflection limit was 0.66mm. He said he made a mental note to follow up with a further measurement. In his oral evidence he said he found the readings “rather interesting, worthy of attention”. It is possible that he remembered these matters but it seems to me more likely that he was seeking to reconstruct what his thought processes would have been.

[45]Thus it seems clear that the measurements in May 2011 caused no concern on board the vessel. Certainly, when the report was sent to Mr. Stepanovs there was no recorded concern. In 2011 the reports were sent by post. They are now sent by e-mail. Thus Mr. Stepanovs would probably have received the report at some time in June 2011. He could not recall if he investigated the increase from -0.14mm to -0.28mm on unit no.1. He said that he may have considered that the readings were “within accepted parameters” and that he would have made a note to check the measurements on the next programmed occasion to see if a trend was developing. What seems clear is that nothing in the report caused him concern. For if it had, then, when the casualty occurred 2 months later, he would surely have recalled any concern he had had with the figures. It was suggested to him that he did not consider the readings at all but merely filed the report away because there were no comments made by the chief engineer. I do not find that he simply filed the report away. I accept his evidence that he considered the reading because, as he said, the information was important. Further, as technical superintendent he would have known that it was his responsibility to consider the monthly reports sent to him from the vessel. But it is also clear that the consideration he gave to the readings did not cause him any concern. He suggested in his evidence that the readings, when compared with the November readings were “quite strange” but not “a problem”. I doubt very much that this was his view at the time (because he has no clear recollection of what his view was) but his evidence suggests a realisation (now) that there was in fact something in the figures which ought to have caused him concern.

[46]Between 19 and 21 May 2011 there was a six-monthly check of the auto-filters on board the vessel. Mr. Chumakov gave evidence that this check involved opening one chamber from each filter for inspection without lifting the cartridges. He said he thought this sufficient because there had been a full cleaning and overhaul in November 2010, there had been no increase in the flushing cycles since then and there was no sign of sludge on the checker cartridge or candle. It will be necessary to return to the question whether this form of inspection complied with CSM’s operating system or was defective.

[47]Between 1 and 3 June 2011 cargo was loaded on board the vessel at Caleta Cordova.

[48]On 3 June 2011 the vessel left the loadport and commenced her voyage. On 12 June 2011 she called at Valparaiso for bunkers, departing on 13 June 2011.

[49]On 7 July 2011 a lub oil sample (which had been drawn on 11 June) was analysed by Shell on 11 July and provided to CSM who sent it on to the vessel. Shell reported again that the oil was normal. It caused no concern either at CSM or on board the vessel. The WPI index remained at 17 and there was no significant change in the tin or aluminium readings.

[50]Between 11 and 13 July 2011 the vessel altered course to avoid typhoon MA-ON.

[51]On 14 July 2011 at 0642 the vessel was advised by the Swedish Meteorological and Hydrological Institute to increase speed to pass further away from the typhoon. At 1830 that day speed was increased to 85 rpm.

The breakdown and the damage found

[52]The master of the vessel reported to the vessel’s managers late on 14 July 2011 that at 2230 LT (or 1230 UTC) on 14 July 2011, when the vessel was in the western Pacific some 650 miles from Japan and some 1947 miles from the Chinese discharging port, a main engine alarm (“Oil Mist Detection High”) had sounded and a main engine slowdown was activated. The crankcase was opened and “on the bottom of the crankcase metal chips of different size were discovered”. The temperature of main bearing no.1 was hotter than the others and when dismantled it was found that the upper and lower main bearing shells had “turned/shifted” and that the shaft was “cold-hardened”. The white metal of the upper bearing shell was “heavily worn”. The damage was not repairable at sea and so towage assistance was required.

[53]When the vessel was inspected prior to repairs MAN found that the lower shell of the main bearing no.1 was found “stuck” and turned 45 degrees clockwise and displaced 10mm forward. The journal was full of hairline cracks. Repairs were necessary to the journal, bearing support and bearing cap. A new bearing shell was designed, supplied and installed.

The condition of the filters

[54]Immediately after the breakdown Mr. Kolesnikov, the relevant fleet manager at CSM, gave a number of instructions to the master and chief engineer by email, one of which was to “open lub oil fine filter and report condition of the cartridges”. On 15 July Mr. Chumakov replied as follows to that particular instruction:

“luboil autofilters opened and cleaned. Practically all white metal chips are collected in the filter sludge checkers. The checker cartridges were renewed.”

[55]It was suggested to Mr. Kapliev in cross-examination that when the filters were opened the candles had damaged mesh. He denied that suggestion and said that the filter elements were intact. “Not a single damaged filter element was discovered”. He said that “each candle was examined in a good light” and that the examination had to be thorough “because an accident had taken place and we needed to discover the cause.” He explained that a motorman took each candle out, washed it under Mr. Kapliev’s supervision and “I personally examined each” and then the motorman reinstalled each candle. The whole exercise took about three hours though he could not give a precise timing.

[56]Mr. Kapliev did not mention this inspection in his statement. He explained that in his statement he referred to what was damaged. “Perhaps I failed to mention the filters because I did not discover anything wrong with them.”

[57]Mr. Chumakov said in his statement that the cleaning of the filters took place “on about 16th. or 17th. July”. In his oral evidence he said he could not be specific as to the date. It was suggested to him that all the candles were not removed. He replied:

“What I know for sure, they were all removed and inspected …….Not to take inspection after damage like this is illogical.”

[58]There was in evidence a typed undated document entitled “Main Engine Breakdown (Main Bearing #1) 14.07.11”. It contained manuscript additions, some of which Mr. Stepanvos accepted were his. Mr. Chumakov said that he had produced the document but could not recall what he had done with it. The document had been listed as an email with MAN but Mr. Bright informed the court that it was in Mr. Stepanovs’ possession.

[59]The document recorded as follows:

“auto back flush filter – 40 mkm maintained 1/6m (19.05.11 and 21.05.11), cartridges gauze intact.”

[60]That appears to be a reference to the six monthly check in May 2011. The reference to “cartridges gauze intact” must be a conclusion from the limited inspection in May assessed in the light of the previous more extensive inspections and cleaning in November 2010 and the subsequent regular flushing. It cannot be an observation of all the candles because no candle was taken out in May. The report goes on to record:

“All filters and cartridges checked immediately after the breakdown. No visible defects. All metal chips remained in sludge checkers.”

[61]Mr. Smith submitted that in circumstances where the original report has not been found on board the vessel the Owners had failed to establish that this was a contemporaneous document. He further submitted that the evidence of Mr. Kapliev and Mr. Chumakov as to the inspection and cleaning of the candles after the breakdown should be rejected. It had not been mentioned in their written statements.

[62]The question whether the luboil filters were damaged before the engine breakdown is an important factual dispute in the case. Mr. Smith’s closing submissions dealt with the matter between paragraphs 106 and 144. Mr. Bright dealt with the matter more concisely in paragraph 64 of his closing submissions but nevertheless made 9 points on the question. I have considered all of the points which counsel have made but will confine my discussion to what I regard as the two or three more cogent points on each side of the argument and the responses thereto.

[63]The Defendants’ case that the filters were damaged relies primarily upon these matters. First, MAN reported in their “root cause” report dated 20 October 2011 that when the filters were opened up for inspection during the repairs “some of the filter candles had damaged mesh which will allow particles larger than 40 micron to pass.” Second, MAN recommended in their factual report (undated but I assume made at about the same time as the root cause report) that the candles be replaced because they “could not all be cleaned due to metal particles stuck from the incident.” The Owners subsequently purchased 342 filter elements. Third, metal particles were found in main bearings nos 2 and 3. GL analysed them and concluded that “it could be assumed that these particles originated from” main bearing no.1. That could only have happened if the filters were damaged allowing particles to pass through the filters.

[64]The Owners’ case that the filters were not damaged relies primarily upon these matters. First, there is contemporaneous evidence that the filters were opened and cleaned on 15 July. CSM’s fleet manager Mr. Kolesnikov instructed the master and chief engineer either late on 14 July or early on 15 July to “open lub oil fine filter and report condition of the cartridges”. On 15 July Mr. Chumakov replied stating “luboil autofilters opened and cleaned. Practically all white metal chips are collected in the filter sludge checkers. The checker cartridges were renewed.” Second, Mr. Kapliev gave clear and detailed oral evidence that the filters were inspected and that no damage was found. Third, Mr. Chumakov’s contemporaneous report recorded that “all filters and cartridges checked immediately after breakdown. No visible defects.”

[65]In response to the points relied upon by the Owners Mr. Smith’s main responses were these. First, the evidence of Mr. Kapliev that when the filters were examined on 15 July no damage was observed was given for the first time in oral evidence. No such evidence was given by him in his witness statement dated 10 August 2011 or in his supplementary witness statement dated 21 April 2016. Mr. Smith submitted that Mr. Kapliev’s “sudden recollection” was “prompted by a belated realisation on the Owners’ part that the integrity of the filters was important to its case”. I infer that Mr. Smith invited me to find that Mr. Kapliev’s evidence on this subject was made up. Second, all that Mr. Chumakov said in his witness statement dated 2 October 2011 was that the filters were opened up and cleaned and that some particles had accumulated in the sludge checker filters. Third, the Owners have not established that Mr. Chumakov’s alleged contemporaneous report was in fact contemporaneous.

[66]In response to the points relied upon by the Defendants Mr. Bright’s main responses were these. First, the email from MAN dated 12 August 2011 when referring to the filters said merely that there was “dirt (rust and paint chips) at the clean side of the filter when I removed a candle section from the open and clean filters”. Second, MAN have produced no photographs of the suggested damage to the filters. This was a point made by Mr. Koerber to MAN when the Owners and MAN met on 13 October 2011 (which appears to have been the first time when the suggestion of damaged filters was made). Third, the correspondence on 14/15 July 2011 between the vessel and Mr. Kolesnikov and Mr. Chumakov’s report are “very important” because they corroborate Mr. Kapliev’s evidence and enable the court to conclude that the filters were not damaged.

[67]My approach to this question of fact is as follows. There can be no doubt that there was an inspection of the filters on board the vessel on 15 July 2011. That inspection is established by the correspondence on 14/15 July 2011 between the vessel and Mr. Kolesnikov. The same correspondence establishes that the filters were opened and cleaned. Mr. Kolesnikov requested that the master and chief engineer “report the condition of the cartridges”. The response from Mr. Chumakov was that there were metal chips in the filter sludge checkers, which cartridges were, he said, renewed. Nothing was said about the other cartridges (or candles). The inference which can be drawn is that nothing untoward was found with regard to the condition of the filters apart from that which was stated.

[68]The other document relied upon by Mr. Bright was Mr. Chumakov’s report which stated that there were “no visible defects” immediately after the incident when the filters and cartridges (candles) were checked. Mr. Chumakov told the court on the first day of his cross-examination that he created that report. On the second day of the cross-examination he confirmed that he created it. It was not suggested to him that he had not done so. I accept his evidence that he created it. Mr. Smith has told me that the Defendants have “significant reservations” as to the authenticity of the document and he invited the court to share those reservations. But he did not submit that it was not created by Mr. Chumakov. The format and language of the document suggest that it is authentic. Although it was wrongly listed, although the Owners have been unable to locate the original on board the vessel, although the Owners are unable to explain how and when the document was passed from the vessel to CSM and although Mr. Chumakov made no reference to it in his witness statements I accept Mr. Chumakov’s evidence that he created it.

[69]But as to when he created it all he could say was that it was “sometime after the breakdown”. He thought it probable that he had created it at the request of CSM but he had no recollection of that or of what he did with it. The document contains two references to on board analyses of oil dated 18 July 2011 which shows that it must have been created after that date. Since the report was not mentioned in his witness statement dated 2 October 2011 it is unlikely that it was made before that. The document is entitled “Main Engine Breakdown” and appears to consider possible causes. The first main column is entitled “Cause”. One of the suggested causes is described as “Dirt contamination of oil – (LO being polluted by abrasive particles). Damage of filter cartridge.” The first suggestion by MAN of the filters being damaged was at the meeting on 13 October 2011, a meeting which preceded the issue of the root cause report on 20 October. Damage to the filters had not been mentioned by MAN during the repairs themselves. The reference in Mr. Chumakov’s report to “Damage of filter cartridge” as a possible cause is therefore an indication that the report was created after 13 October 2011, though it may have been created before that (but certainly after 18 July 2011 and probably after 2 October 2011) when Mr. Chumakov was himself considering possible causes. In the result the court is left in doubt as to when the report was created. Nevertheless the report supports the case that when the filters were checked immediately after the breakdown (as they undoubtedly were) no visible defects were found.

[70]There is therefore support for the evidence of Mr. Chumakov and Mr. Kapliev that the filters were examined and that no damage was found.

[71]The evidence of MAN in their root cause report is that some of the filter candles had damaged mesh which would allow particles larger than 40 micron to pass. However, precisely when this was seen is not stated. It had not been seen by 12 August 2011 when MAN sent an email to Mr. Koerber commenting upon the filters. When the filters were opened on 16 August 2011 Mr. Chumakov made no reference to any such damage being seen. Nor did Mr. Bogdanovsky who was on board from 11 August 2011. Further, MAN took no photographs of the suggested damage, a point made by Mr. Koerber when he first learnt of the suggested damage on 13 October 2011. The reference to damaged mesh in MAN’s report is therefore not as cogent as it might have been.

[72]However, if the particles found in bearings nos. 2 and 3 came from no.1 bearing then the probabilities are that some filter mesh was damaged for that would explain how particles from no.1 were able to migrate (in the lub oil) to nos. 2 and 3. There is evidence that particles were found in the nos. 2 and 3 bearing shells. MAN reported particles in all bearings and Mr. Fischer, the Owners’ expert, himself found “impressed foreign particles” in the lower shell of bearings nos. 2 and 3. GL examined the particles from nos. 2 and 3 and concluded that it could be assumed they originated from no.1. Mr. Fischer recognised that particles greater than 40 microns could not have passed through a “healthy filter cartridge” and Mr. Chumakov accepted that the only way debris from no.1 could pass into nos. 2 and 3 was through the filter. The presence of particles in nos. 2 and 3 of over 40 micron in size which originated from no.1 is therefore evidence from which it can be concluded that the filter mesh was damaged. It is difficult to see how this conclusion can be avoided.

[73]My findings therefore are as follows. There was damage to the mesh of some of the filter candles as reported by MAN. Those on board the vessel, in particular the second engineer Mr. Kapliev, did inspect the candles on board the vessel on 15 July 2011 as he explained in his oral evidence and found no visible damage. The reason why no visible damage was found must be that the damage to the mesh was difficult to observe. This does not surprise me in circumstances where the dimension of the damage was extremely small. There was evidence that it could only be observed by holding up the candle and shining a torch at it. Mr. Kapliev gave evidence that he inspected with the aid of a “good light” or “spotlight”. However, he had much work to do on 15 July and he and the other engineers were working for more than 18 hours. He missed the damage but the MAN engineers at some stage during the repair spotted that “some” of the filters had damaged mesh. This must have been on an occasion when MAN opened the filters unaccompanied by Mr. Chumakov or Mr. Bogdanovsky. Mr. Chumakov accepted that he did not witness all openings of the filters. For these reasons I have accepted Mr. Bright’s secondary submission that there was damage but that it was not easy to see.

[74]Mr. Smith submitted that the filters had been damaged since at least September 2010. This submission was based upon an analysis of the flushing records of both filters. He said, first, that for the months of September to November 2010 both filters experienced significantly more backwashing than would have been the case had there been only the timed (6 per day) backwashes. The extra flushing was said to have been caused automatically by the presence of contaminants within the luboil. He said, second, that in the same months the backwash count for the no.1 filter was significantly less than for no.2 which, he said, that must have been because the candles in no.1 were damaged, thus allowing particles to pass through. Third, he said that from December onwards there were the same number of backwashes for both filters which he said showed that by this time no.2 must also have been damaged.

[75]Mr. Bright said that in the light of the experts’ agreement that the crankweb deflections showed no evidence of wear up to and including November 2010 the explanation for the number of backflushes cannot be filter damage. In September and October the explanation may be that the vessel was in dry dock and so both filters may not have been running all of the time. In November the explanation is likely to have been attributable to a solenoid problem to which Mr. Chumakov referred in evidence. With regard to the position from November 2010 the number of backflushes “settled down”, with no extra backflushes which suggested that there was no substantial wear until shortly before breakdown.

[76]Drawing conclusions from the number of backflushes is difficult for at least two reasons. First, although the document which recorded the backflushes was appended to Mr. Fischer’s report the number of backflushes recorded in it for September to November 2010 did not receive much, if any, analysis from the experts. It was only when its provenance was made apparent during the trial (it had been sent by Mr. Chumakov from the vessel to Mr. Stepanovs in May 2015) that attention was focussed upon it by counsel. The expert evidence was not concerned with it. Second, not all of the logs of the vessel for the period September to November 2010 were in evidence and so I was left in doubt as to whether the vessel was at sea for all of that period save when in dry dock. (F1 Vol.9 contained some logs but not a continuous run.) Caution is therefore required when analysing the conclusions to be drawn from the number of backflushes.

[77]The records of back flushes effected by the filters suggest that in September to November 2010 something unusual had happened with regard to the number of back flushes. By comparison with the number of timed back flushes expected there appeared to be fewer on filter no.1 in September and October (even allowing for the time in dry dock) and more on filter no.2 in October. If the vessel had been at sea for approximately 26-27 days in September one would expect there to have been 156-162 (timed) back flushes when there were in fact only 127 back flushes on filter no.1 (but 159 back flushes on filter no.2). If in October the vessel had been at sea for about 25 days one would expect there to have been about 150 (timed) back flushes. On filter no.1 there were in fact slightly less, 141 back flushes, but on filter no.2 there were rather more, 179 back flushes. Thus no.1 was not operating as planned (there were fewer timed back flushes than one would expect) and no.2 was also not operating as planned (there were more back flushes than one would expect). The additional back flushes could have been caused by clogging of the filters (which would lead to a change in differential pressures and hence additional automatic back flushes). The reduced number of back flushes on no.1 was suggested to have been caused by a damaged filter (thereby allowing particles to pass through). However, the precise number of days at sea or when the engine was running has not been assessed by reference to the logs and so it would be unwise to draw any particular conclusions from the records for September and October 2010. Further, it was not explained to me why damage to filter no.1 enabling particles to pass through would reduce the number of timed back flushes.

[78]In November one would expect 180 timed black flushes (if the vessel was at sea for 30 days) but there were 205 back flushes on no.1 and 245 back flushes on no.2. Thus on both filters there had been additional back flushes (either automatically generated by clogging or by manual flushing as suggested by Mr. Bogdanovsky).

[79]In his oral evidence Mr. Chumakov stated, when asked about the record of back flushes for November 2011, that he had found a failed solenoid valve as a result of which the filter had failed to back flush and so he had effected additional manual backflushing. This could explain the reduced number of black flushes on no.1 filter in September and October. But he had not stated this in his written evidence and this episode had not been spoken to by Mr. Bogdanovsky. Mr. Chumakov accepted that he had thought of this explanation having considered the readings for the November backflushing. It was suggested to Mr. Chumakov that his evidence was an invention. I am not persuaded that it was an invention. However, the incident may not have occurred at this time because the explanation is unlikely, it seems to me, to account for all of the recorded additional backflushing in November 2010. His recollection in 2017 that the incident happened in November 2010 may therefore not be accurate. (Mr. Bright suggested at footnote 59 to his closing submissions that the explanation was supported by the underlying documents but the references he gave do not, I think, support this submission.)

[80]Following the cleaning and check of the filters at the end of November the figures suggest a return to more normal usage, approximately 180 on each per month. Thus in December the figures were 173 for both filters, in January 2011 184 and 185, in February 170 and 166, in March 185 and 189, in April 180 and 180, in May 188 and 187 and in June 181 and 181. These figures suggest that whatever had been the problems in September-November had been successfully tackled by the cleaning in late November 2010 because the number of back flushes, certainly from January onwards, were what one would expect from the timed backflushes.

[81]Mr. Smith suggested that the figures for December-June were to be explained by both filters now being damaged, no.2 having been damaged during the cleaning in late November. I would not draw this conclusion from the figures. One cannot safely draw the conclusion from the September – November figures that no.1 was damaged in the manner suggested (damaged mesh); and the figures from December onwards are more suggestive of normality than abnormality.

[82]However, for the reasons I have given some of the filters were found to contain damaged mesh during the repair period in August-September 2011. There is no reason to suggest that they were damaged after the breakdown. Mr. Koerber suggested that they were damaged during flushing or manual cleaning during the repairs but there is no other evidence to support this; certainly none from the crew. His evidence in this regard must have been mistaken. It is more likely than not that the filters were in a damaged state before the breakdown. In those circumstances a possible cause of the breakdown must be that damaged filters allowed particles to enter the main bearing no.1. I shall return to this question of when the filters were damaged after I have considered the respective cases on causation.

The Owners’ case as to the cause of the damage to main bearing no.1

[83]The Owners’ case is that the foreign particles were “weld slag” which broke off during the voyage from Argentina. The only evidence said to be positively in support of this case is derived from the chemical properties of the particles recovered from the engine.

[84]There were metallurgical analyses which were commented upon by the experts (even though they were not metallurgists). The analyses were, in particular, a report from GL dated 5 July 2012 and a report from MAN dated 23 November 2012. In his Addendum to his Supplemental Report Mr. Fischer expressed the opinion that the particles found and analysed “cannot have originated from the wear processes as alleged by Mr. Shortall.” My understanding of his opinion is that no titanium was found in certain of the analyses. Mr. Shortall considered that the conclusion drawn by Mr. Fischer was unsafe, for several reasons. First, there was reason to believe that trace elements under 1% would not have been reported. Second, the manufacturers’ specification in fact showed the presence of titanium in the bearing metal. Third, the weld flux contained 45% titanium, 25% iron and 15% manganese. Yet there was no evidence of iron or manganese. On the contrary there was evidence of aluminium which is not to be expected in weld slag. Mr. Shortall considered that it was more likely that the titanium originated from the main bearing.

[85]In cross-examination Mr. Fischer accepted that titanium of less than 0.5% could not be detected. That being so it does not follow from the failure to find titanium that there cannot have been any titanium in material examined. But it is also to be noted that the metallurgists examining the material concluded that the particles found came from no.1 bearing. Thus Mr. Fischer, although not a metallurgist, challenged the metallurgists’ conclusion. In cross-examination he accepted this but, so far as I could see, had no really cogent reason for his different opinion. Moreover, had the particles been from weld slag one would have expected to find 45% titanium and evidence of iron and manganese.

[86]I was therefore not persuaded that there was metallurgical evidence in support of the Owners’ case. The highest that Mr. Bright put the submission was that the metallurgical analysis was consistent with the particles being weld slag. I suppose that is right but it seems to be unlikely given the absence of a substantial percentage of titanium and no evidence of iron or manganese.

[87]There are other reasons why the slag theory is improbable. They are set out, at considerable length, in Mr. Smith’s closing submissions between paragraphs 50 and 83. They may be summarised as follows. First, MAN recommended TIG welding and such welding does not leave weld slag. Second, there are finishing, smoothing, cleaning and flushing standards which would make the retention of weld slag inconceivable. Third, if there was weld slag left from the building process in 2005 it would have shaken free long before 2011.

[88]Mr. Fischer’s response was as follows. First, in 2005 when the vessel was built, piping work was outsourced to a large extent and the sub-contractors were not approved for TIG welding. Second, although there are standards, in practice they may not be applied. Third, the breaking off of weld slag is a fatigue process which would take time. The final act in that process occurred on the voyage in 2011.

[89]I do not accept that the matters relied upon by the Defendants and their expert render the weld slag theory inconceivable. However, I do accept that the weld slag theory (although Mr. Fischer has had experience of it before) is improbable. Even if TIG welding were not used the relevant welding standards would make the retention of weld slag unlikely. Of course, from time to time mistakes are made with the welding process which give rise to casualties but they are unlikely because the quality assurance system in the yard seeks to avoid them. It may be that it can take time for weld slag to be weakened by fatigue before breaking free but 6 years seems a long time for such a process. Thus MAN have advised in a production recommendation concerning lub oil piping that weld slag may cause damage and “after a short period in service” such damage could cause the whole system to malfunction. Similarly Mr. Matis of CSM stated on 19 October 2011 that if the particles which caused the damage had been present since building “the damage would have been shown shortly after the commissioning of the engine and not after 29,000 hours operation.” (It is however to be noted Mr. Matis said that his technical knowledge was not extensive.)

[90]The Owners’ theory has been considered by MAN. As recently as 2016 MAN stated in a meeting with the Owners that welding slag could not be ruled out and that the Owners’ theory is plausible. I agree with both statements but would add that the weld slag theory, though possible, is improbable. Further, there is no evidence in support of it.

The Defendants’ case as to the cause of the damage to main bearing no.1

[91]The Defendants’ case, as it was put by Mr. Smith in his closing submissions, is that at the commencement of the voyage the no.1 bearing suffered from wear and that such wear was the cause of the breakdown. Mr. Smith submitted that the vessel was unseaworthy on account of the presence of wear. It is admitted that the vessel was unseaworthy by reason of the presence of particles but not that she was unseaworthy by reason of the no.1 bearing suffering from wear.

[92]The evidence that the no.1 bearing suffered from wear is derived from the crankweb deflections as measured in May 2011 when viewed against the history of such deflections over the vessel’s life and from the MET analysis commissioned by the Owners.

[93]The last top clearance measurements of the main bearings before the breakdown were taken almost a year earlier, on 3 August 2010. They did not indicate wear. Further, the Defendants’ experts agreed that there was no sign of any significant wear from the crankweb deflection readings up to and including the November 2010 measurements. The crankweb (vertical) deflections on no.1 unit measured in May 2011 showed an increase from -0.14mm in November 2010 to -0.28mm. When one looks at the history of crankweb deflections going back to 2005 it is apparent that such a change was unusual. The drafts of the vessel and the temperature of the engine were broadly the same on both occasions. Thus the engineering experts agreed that the readings in November 2010 and May 2011 were “directly comparable”. It was suggested that swell might affect the readings but there is no evidence of any particular swell in May 2011 when the measurements were taken. It was also suggested that the measurements may not be accurate because of the difficult nature of the exercise. But there is no evidence that those taking the measurements in May 2011 thought, at the time, that the measurements may have been inaccurate. If they had have done so it is likely that they would have taken them again.

[94]Mr. Smith relied upon the mention by MAN in their root cause report of “the maturing bearing failure” and upon their comment that there was a “worn down main bearing”. However, in circumstances where the bearing had been so damaged that it was not possible to determine the cause of the damage from its condition these comments can only be derived from the crankweb deflection readings in May 2011. In February 2016 MAN was unable to agree that the bearing was “worn down”, merely that it was “worn”.

[95]Whether bearing no.1 was worn depends upon the inference to be drawn from the May 2011 crankweb deflection measurements. That depends upon whether a change of -0.14mm in the crankweb deflection for the no.1 unit means that there is likely to be wear in the no.1 main bearing. A textbook on engineering (Reeds General Engineering Knowledge Vol.8 at p.214) suggests that there is a conventional understanding of the relationship between deflections and bearing clearances and MAN advises that the taking of deflections is a means of “inspecting” bearing wear. In order to determine the likely relationship or correlation in this case between deflections and clearances Mr. Fischer engaged MET of Rostock to perform a finite element analysis of the crankshaft to examine the effect of changed crankweb deflections at cylinder unit no.1 on top clearances of main bearing no.1. The first conclusion reached by MET was that the crankshaft was perfectly aligned to the hull. The second conclusion reached by MET was that a change of crank web deflection on cylinder unit no.1 from -0.14mm to -0.28mm would result in a change of main bearing displacement downwards by 0.1mm. Mr. Fischer commented that because the MET analysis was set to the lower edges of the crankwebs for simplification reasons the resulting change in top clearance might in fact be less than 0.1mm.

[96]The next question is to assess what a change of top clearance of about 0.1mm indicates. The increased clearance suggests wear. But how significant is that wear ? In order to assess that it is necessary to consider the advice in MAN’s operational and maintenance manuals. The operational manual advises (at chapter 708, paragraph 5.7) that bearing wear is negligible under normal service conditions. The operational manual further advises (at paragraph 7.1.7(c)) that where there is “an increase of clearance since previous reading larger than 0.05mm” the bearing must be dismantled for inspection. Finally, the operational manual advises (at paragraph 7.8) that “average bearing wear rate on service experience is 0.01mm/10,000 hours. As long as the wear rate is in the region of this value, the bearing function can be regarded as normal.”

[97]In May 2011 the main engine had run for some 27,000 hours. The engineering experts were in agreement that having regard to the limited number of hours run by the main engine no or negligible wear was to be expected.

[98]The maintenance manual advises (at chapter 905-2.1 paragraph 11) that where the difference between the actual clearance measurement and the measurement recorded in the adjustment sheet (which I was told was the shop trial measurement) must not exceed 0.1mm. “If it does see Volume 1, Operation, Chapter 708”.

[99]Mr. Fischer was cross-examined about the MET results and what they indicated about wear. He described the MET finite analysis as “the most deep investigation you can do on this crankshaft”. He accepted that the increase of about 0.1mm suggested by the MET analysis was “more than” the increase of 0.05mm at which MAN say the bearing should be opened. He accepted that if there had been an increase of about 0.1mm “there would have been wear”. Yet he did not agree that there was wear in May 2011 because, he said, this is a “theoretical calculation”, though he accepted that it was “reliable”. He said that a “calculation cannot say it is wear. Wear is a finding which we have onboard in practice.”

[100]Mr. Fischer was right to say that the calculation was theoretical. However, in this case observation of the bearing cannot assist because of the extent of the damage. Instead the court is being asked to infer from the theoretical finite element analysis and the guidance given by MAN that, on the balance of probabilities, no.1 main bearing suffered from wear in May 2011. I infer from MAN’s advice that an increase of more than 0.05mm merits inspection of the bearing that such an increase is likely to be the result of an abnormal degree of wear, though it is of course possible that it may not be abnormal. It must therefore follow from the MET analysis that it is likely that there was an abnormal degree of wear because the analysis suggested that there would have been an increase of about 0.1mm., double the increase which merits inspection of the bearings. I suspect that Mr. Fischer’s reluctance to accept that the MET analysis suggested wear was because it did not fit with his opinion that the cause of the damage to main bearing no.1 was weld slag which had broken free during the voyage.

[101]Mr. Bright relied upon the advice in the maintenance manual that the difference between the shop test and the measurement must not exceed 0.1mm. He submitted that “in circumstances where no change has been experienced since the shop test, the maximum change allowed since the last reading is 0.1mm.” Since the change indicated by MET was no more than 0.1mm there was no call for an inspection of the bearings. However, I do not consider that this circumstance enables the court to ignore the significance of a change of more than 0.05mm between one reading and the next. The operations manual requires the bearing to be dismantled for inspection in such circumstances and that must be, it seems to me, because it is an indicator of abnormal wear. Although it was Mr. Fischer’s opinion that the two advices by MAN “caused confusion” the advice in the operations manual surely cannot be ignored. It was Mr. Shortall’s opinion that it took precedence and that there was no confusion because one concerns changes from the new build value and the other concerns changes from the previous reading. I agree.

[102]I therefore find on the balance of probabilities that there was abnormal wear in bearing no.1 in May 2011. That conclusion is not reached by excluding slag weld as a cause of the breakdown and being left with bearing wear (a form of reasoning not permissible for the reasons explained in the Popi M

[1985] 2 Lloyd’s Reports 12

). It is based upon the evidence of the crankweb deflections, the MET finite element analysis and the advice in the MAN guides which, as Mr. Fischer accepted, are designed to enable the crew and technical managers to “assess abnormal bearing wear”.

[103]The next question to be considered is what caused that wear. Mr. Smith said in his closing submissions that the initiating cause may not matter for the purposes of deciding liability. But since a number of causes were discussed in evidence and since the identification of the cause may be relevant to the question of due diligence I consider that the court should address the question whether, on the balance of probabilities, the cause can be identified.

Spark erosion

[104]MAN found evidence of spark erosion on the main bearings but it was not typical of an “active process”. In their root cause report MAN doubted whether spark erosion was a contributing factor. In correspondence with Mr. Koerber in September 2015 spark erosion was referred to as having been “dismissed from lack of clear indications”.

[105]Mr. Rawlings accepted in cross-examination that the evidence suggested that it was unlikely that there was any spark erosion after the dry-docking of the vessel in September/October 2010. He also accepted, as did Mr. Shortall, that the crankweb deflection readings in November 2010 did not indicate any significant wear or change. However, Mr. Rawlings could not rule out spark erosion as a cause and Mr. Shortall explained that even if the spark erosion had occurred in the past it is likely to have caused damage to the no.1 main bearing which would deteriorate, especially if the filters were damaged.

[106]In the light of this evidence I conclude that whilst it is possible that spark erosion may have contributed to the engine breakdown it has not been established that it is more probable than not that it was a contributory cause.

Chain coupling bolts

[107]These bolts were found sheared off on 27 November 2010 but the date when they did so is not known. Mr. Smith submitted that it is self evident that the failure of the bolts would cause debris to be introduced into the luboil and that such debris would cause damage to the bearing shells if allowed to reach them as a result of the filter cartridges (or candles) being damaged. In his oral submission he added that the increase in the WPI from November 2010 to March 2011, from 5 to 17, was consistent with there being particles from the sheared bolts in the luboil.

[108]In response Mr. Bright pointed out that there was no rise in the level of iron (Fe) and that it is impossible to say whether the rise in the WPI was more than a variation within a normal range. Mr. Shortall did not suggest it was a root cause, merely a “potential contributory factor”.

[109]My conclusion is that whilst it is possible that the debris from the sheared bolts found its way into the lub oil (as a result of damaged filters) I am unable to say that it is more probable than not that the foreign particles found after the breakdown were from the sheared bolts.

Improper cleaning of the filters

[110]MAN reported that during the repair external dirt on the filter was not removed before opening the filter with the result that particles entered the filter when it was opened up. In addition valves were not closed thereby enabling dirty oil to enter the filter and ventilation was not stopped as a result of which particles entered the filter. Mr. Smith submitted that if this was how the crew routinely cleaned the filters then it would explain how particles entered the luboil.

[111]MAN’s observations were not challenged. Instead Mr. Bogdanovsky described the circumstances in which the inspection took place during the repairs as “unusual”. Mr. Chumakov, who instructed Mr. Bogdanovsky to do the work but did not witness it, described the circumstances as “extraordinary”. Mr. Koerber, when discussing the breakdown with MAN in Copenhagen, described the circumstances in which the inspection took place during the repairs as “special”. Those appear to me to be fair descriptions of the circumstances in which MAN requested the filters to be inspected during the repairs. I do not therefore think it fair to infer that the crew would commit the same errors when carrying out inspections during normal circumstances notwithstanding Mr. Smith’s point, put to all witnesses, that after the repairs the vessel would of course set to sea and would require clean filters. The filters would, as Mr. Bright submitted, be flushed clean before the vessel was put to sea.

[112]I therefore do not find that foreign particles entered the luboil because of defective inspection procedures.

The Court’s finding as to the cause of the damage to main bearing no.1

[113]In circumstances where it is admitted that there were foreign particles in main bearing no.1, where it is more likely than not that some of the filter candles had damaged mesh before the breakdown and where it is more likely than not that the main bearing no.1 suffered from abnormal wear in May 2011 it is, in my judgment, more likely than not that the cause of the main engine breakdown in July 2011 was that foreign particles which should have been removed from the luboil were not removed and accordingly were able to cause damage to main bearing no.1.

[114]It is difficult to say when precisely the mesh was damaged. For the reasons I have already given the number of backflushes from January to June 2011 do not suggest damage. However, some mesh was damaged and in May 2011 there was abnormal wear to main bearing no.1. That suggests that the mesh was damaged some time before May 2011. I do not consider that one can be any more specific than that.

[115]It is also difficult to say where the particles came from. I cannot make findings as to that on the balance of probabilities though it is possible that they were caused by spark erosion or from the failure of the chain coupling bolts.

[116]Neither the difficulty in saying when the mesh was damaged nor the difficulty in saying where the particles came from deters me from reaching the conclusion that the cause of the main engine breakdown in July 2011 was that foreign particles which should have been removed from the luboil were not removed and accordingly were able to cause damage to main bearing no.1.

[117]I accept that there is no evidence that the luboil purifiers, whose role was to remove very small particles from the luboil, were defective. However, it was accepted by Mr. Bright that if there were continuing wear and accordingly a constant generation of particles then the purifiers would struggle to remove the particles. Thus the presence of working purifiers does not mean that the cause of the breakdown cannot have been the damaged filters allowing particles to remain in the luboil. However, Mr. Bright made the further point that if there had been a constant generation of particles they would have shown up in the Shell luboil analyses and they did not. I accept that nothing untoward was shown by the Shell luboil analyses but I am not persuaded on that count to conclude that the cause of the main engine breakdown was not the damaged filters. As Mr. Koerber said, if there were damaged filters, this would be an “obvious” cause of the breakdown.

Unseaworthiness

[118]The usual test of unseaworthiness is whether a prudent owner would have required that the defect in question should be made good before sending his ship to sea. If he would then the ship is not seaworthy; see Scrutton on Charteparties 23rd.ed.para.7-025. Had the Owners known that main bearing no.1 was suffering from an abnormal degree of wear I consider that they, acting as prudent owners, would have required that the bearing be repaired. The presence of abnormal wear exposes the bearing, and hence the main engine, to the risk of breakdown and a prudent owner would require that that risk be removed before the ship was sent to sea. These conclusions are supported by the evidence of Mr. Shortall, the Defendants’ expert, who said that had the clearances been checked “it is highly likely that the bearing would have been repaired before the voyage in question.” Although this comment was based upon MAN’s assessment of the relationship between crankshaft deflections and bearing clearances the same conclusion must follow from MET’s assessment of that relationship. In any event, in addition to the presence of wear, there was also the presence of foreign particles (which it is admitted rendered the vessel unseaworthy) and the presence of damaged lub oil filters. There can be no doubt that the presence of all three rendered the vessel unseaworthy at the commencement of the voyage.

Failure to exercise due diligence

[119]The duty of due diligence imposed by Article III r.1 of the Hague-Visby Rules to make the vessel seaworthy is the equivalent of the common law duty of care. Thus, if an inspection conducted by the crew failed to reveal a defect there will be a failure to exercise due diligence if(1) the examination was, in the circumstances, of a character such as a skilled and prudent shipowner should reasonably have made and

(2) if so, whether the examination was carried out with reasonable skill, care and competence; see Scrutton on Charteparties 23rd.ed.para.14-047.

[120]The burden of proving due diligence lies on the Owners as carrier pursuant to Article IV r.1 of the Hague-Visby Rules. But no onus as to due diligence arises except after proof of unseaworthiness and damage resulting therefrom; see Scrutton on Charterparties 23rd.ed.para 2—072. I have found that the cause of the main engine breakdown in July 2011 was that foreign particles which should have been removed from the luboil were not removed and accordingly were able to cause damage to main bearing no.1.

[121]This finding gives rise to two questions on due diligence. First, did the Owners exercise due diligence to ensure that the filters were in seaworthy condition at the commencement of the voyage ? Second, did the Owners exercise due diligence when considering whether the deflection readings in May 2011 indicated abnormal wear of main bearing no.1 ?

[122]It is unnecessary to consider whether the Owners exercised due diligence to maintain the shaft earthing device in good condition because it has not been proved on the balance of probabilities that the particles were caused by spark erosion. Also, it is unnecessary to consider whether the Owners exercised due diligence to maintain the chain drive gear in good condition because it has not been proved on the balance of probabilities that the particles were caused by the shearing of the chain coupling bolts.

The filters

[123]Between 19 and 21 May 2011 there was a six-monthly check of the auto-filters on board the vessel. Mr. Chumakov gave evidence that this check involved opening one chamber from each filter for inspection without lifting the cartridges. This check was numbered C095 in the vessel’s planned maintenance schedule. Job no. C095 required the following:

“1. Consult manufacturers’ instructions. 2. Open and overhaul/clean/replace filter elements or candles according to observed operating condition ………”

[124]Mr. Chumakov was responsible for the form of the inspection on this occasion, though the work itself was done by Mr. Kapliev. Mr. Chumakov said in evidence that by opening a chamber it was possible to look at the condition of the candles. However, it was clear from other evidence that an examination of the candles required the candles to be lifted up so that they could be examined in the light of a torch. Mr. Bogdanovsky referred to unscrewing each candle and Mr. Kapliev referred to using a spotlight. Having regard to the size of particles which the filter is designed to block (above 40 micron in size) I do not find this surprising. This form of inspection was not carried out in May 2011. Mr. Chumakov said, when cross-examined, that there was no need to make a full inspection. He had in mind that there had been no increase in the number of back-flushes. He said he also had in mind that the manufacturers’ instructions did not require inspections every six months. Finally, he had in mind that the last inspection had been in November 2010 and so he was “pretty sure” the filters were in good condition. When he prepared the report which I have already mentioned at some date after 2, alternatively, 13 October 2011 he reported that on 19 and 21 May 2011 the cartridge gauze was intact.

[125]Since the Owners’ planned maintenance schedule required an inspection every six months I do not consider that the Owners can realistically maintain that a six monthly inspection was not an inspection required of a reasonably prudent shipowner notwithstanding that the manufacturers’ advice was different. (According to Mr. Mountzouris the manufacturers only required dismantling for inspection every 5 years. That seems surprising given the importance of checking the condition of the filters.) Although C-095 required the person conducting the inspection to have regard to “observed operating condition” I do not consider that an engineer could realistically determine “the observed operating condition” of the candles without lifting out and inspecting at least some of the candles. That was not done. I accept the evidence of Mr. Rawlings that the method adopted meant that the candles were not visible for close-up inspection. The number of timed black flushes was normal but such inferences as may be drawn from that are not “the observed operating condition” of the filters. Finally, given the requirement to inspect the filters every six months it can hardly be appropriate not to inspect the candles on the basis that they were properly inspected six months earlier.

[126]I have therefore concluded that a skilled and prudent chief engineer would have ensured that a proper visual check was made of at least a representative sample of candles in May 2011. Mr. Chumakov and Mr. Kapliev did not carry out such an inspection. Mr. Chumakov’s comment in his later report that the cartridge gauze was intact was a belief formed on the basis of an inadequate inspection. It must follow that the Owners are unable to prove that they exercised due diligence to make the vessel, in particular the filters, seaworthy before the commencement of the voyage in June 2011.

[127]The next question is whether that breach of duty was causative. It would only be so if the inspection which ought to have been carried out in May 2011 would, on the balance of probabilities, have revealed that some of the filter candles had damaged mesh. It is possible that the inspection would have revealed that. However, it is not inevitable. For the representative sample of candles chosen for inspection by lifting out and examining in a good light may not have included those which were damaged. The MAN report was that “some” of the filter candles had damaged mesh. In those circumstances I am unable to find that on the balance of probabilities the damage would have been detected. It follows that this failure to exercise due diligence was not causative of the engine breakdown.

The crankweb deflections

[128]The first question is whether a skilled and prudent chief engineer would have conducted bearing clearance measurements in May 2011. The advice of MAN in their maintenance manual was “if there is too large a difference in the crankshaft deflection readings (autolog) check the clearance in the individual bearings” (see chapter 905-2.1 page 4(21) paragraph 8).”

[129]I have found that the crankweb deflection readings taken in May 2011 caused no concern either on board the vessel or in the Owners’ office. The question is whether that was the reaction of a prudent chief engineer or technical superintendent or whether the only action which a prudent chief engineer or technical superintendent would have taken would have been to take the bearing clearances because there was “too large a difference” in the deflection readings. When cross-examined about this matter the engineers on board the vessel referred to the crankshaft deflection limits in MAN’s operations manual at plate 70816. The permissible reading on the foremost crankweb was 0.66mm. Realignment was recommended at 0.99mm. The absolute maximum permissible was 1.32mm. The suggestion made was that the reading of -0.28mm on unit no.1 was well within the recommended limits. Thus Mr. Chumakov said that “too large” referred to a reading which approaches the upper limit. Mr. Kuybarov said that if there was an increase in the deflection readings which took one above the limit of 0.66mm that would give rise to a concern but there would be no cause for concern if the readings were much lower than the limit, even if “we see some changes”. However, these recommended limits concern the question whether the crankshaft is properly aligned and, if it is not, at what point it should be realigned. This was accepted by Mr. Bright who submitted that the “the structure of the Manual makes it plain that the evaluation of the deflection readings in this regard is to do with the crankshaft alignment not bearing wear”. The approach of the engineers on board the vessel was therefore flawed.

[130]How then is “too large a difference” to be judged ? Mr. Bright made three submissions. First, he said that the relevant difference was between the readings for the various units on any one occasion (not the difference between the readings for the same unit on different occasions) because the recommended limits concern alignment of the crankshaft in relation to which the relevant difference must be that between the readings for the various units on any one occasion. Second, if that is not right, since there are no specific limits or guidance for judging wear, a chief engineer or technical superintendent cannot be criticised if he reaches a view, based upon all the information available to him, that there was no cause for concern. Third, if one looks only at the previous readings and (in the case of the technical superintendent) at the readings on sister ships the change of -0.14mm on the no.1 unit between November 2010 and May 2011 does not look out of the ordinary.

[131]I am unable to accept Mr. Bright’s first submission. Although it is supported by a mechanical construction of the reference to the “autolog” it makes no sense in the context of taking crankweb deflections as a means of detecting wear. Indeed Mr.Fischer said in his oral evidence that the difference was with regard to the last measurement.

[132]With regard to Mr. Bright’s second submission it is correct to say that there are no specific limits or guidance by reference to which an engineer or superintendent can determine whether there is “too large a difference” with the last measurement. In those circumstances, where the difference is on the border line, it must be possible for different views to be reasonably held as to whether there is “too large a difference”. Whether all prudent engineers and superintendents would have concluded that the increase of -0.14mm on the no.1 unit and of -0.07mm on the no. 2 unit was “too large a difference” or whether some could reasonably consider that it was not has to be assessed on the evidence in this case. One such consideration in that regard is the subject of Mr. Bright’s third submission, namely, whether the difference does not look out of the ordinary.

[133]In examining the evidence in this case it is inevitable that one must begin with the May 2011 readings in the context of the previous readings of crankweb deflections on CAPE BONNY. At a late stage in the trial preparations all of the readings going back to 2005 were made available and were studied by the experts. The following comments were made about them.

[134]Mr. Rawlings noted that prior to May 2011 the deflection readings for the no.1 unit in ballast condition varied between -0.12 and -0.14mm and for no.2 unit between -0.08mm and -0.14mm. The maximum change between two consecutive readings did not exceed 0.06mm. In that context he described the change in no.1 unit between November 2010 and May 2011 of -0.14mm and in no.2 of -0.07mm as “unexplained and significant”. When cross-examined he said that these readings “would have rung alarm bells straight away” and that they would have given “a clear indication that there was something wrong”. Mr. Shortall said that it was “obvious that there is a problem with no.1 and possibly no.2, definitely no.1 bearing and clearances should have been taken. I don’t think there is any doubt about that.”

[135]Mr. Mountzouris, although he expressed the opinion that one should compare the deflection readings with the readings taken in shop trials, nevertheless accepted that the increase on no.1 from -0.14mm to -0.28mm indicated that something may be going on. Mr. Fischer accepted that the readings for the ballast condition over six years showed very little change. When asked about the change from November 2010 to May 2011 of -0.14mm to -0.28mm he accepted that on first view it looked like a considerable change but then said that having regard to his experience it was not a considerable change.

[136]I found the evidence of the Defendants’ experts on this topic clear and persuasive. By contrast I was unimpressed by Mr. Mountzouris. His apparent insistence that the measurements should only be compared with the shop trials and not with previous readings did not inspire me with confidence in his views. Mr. Fischer, who accepted that readings should be compared with previous readings, did not, it seemed to me, have any good reason for not regarding the change of 0.14mm, in the context of the history of deflection readings, as a considerable change.

[137]Mr. Bright, in his closing submissions, pointed to readings on unit nos.2 and 4 in August 2007 and December 2009 when there was a change of 0.06mm and a change of 0.07mm. He said that these changes did not in fact correspond to any top clearance changes and asked rhetorically, if those readings were not too large, why is a change of 0.14mm. too large ? That question was put to Mr. Rawlings but it did not dissuade him from expressing his view that the change of 0.14mm and 0.07mm in units 1 and 2 between November 2010 and May 2011 would ring alarm bells and indicate that something was wrong.

[138]Mr. Bright also referred to readings taken on CAPE BASTIA, a sister ship, which revealed changes of 0.1mm and in one case (unit no.3 in 2011) to a change of 0.13mm which, he said, were not associated with changes in bearing clearances. Mr. Rawlings pointed out that the change of 0.13mm involved a change from a negative reading to a positive reading which would be unusual and would not indicate wear (because wear is associated with a negative reading; it is not associated with positive readings). He also pointed out that the changes of 0.1mm were not instances of what occurred on CAPE BONNY between November 2010 and May 2011 when there were changes of a similar magnitude on adjacent bearings. This point could also have been made in relation to the other two readings highlighted by Mr. Bright in relation to CAPE BONNY.

[139]Mr. Bright invited the court to conclude that, in the light of his analysis of the data from CAPE BONNY and her sister ship CAPE BASTIA, the change of 0.14mm does not appear to be out of the ordinary and was therefore not “too large a difference”.

[140]I do not consider that his analysis leads to that conclusion. First, Mr. Bright was unable to point to a change in readings on adjacent crankwebs of comparable size and direction to that which was experienced in May 2011. Second, Mr. Rawlings was unshaken by Mr. Bright’s analysis. Third, the conclusions, if any, which could be drawn from the historic data of crankweb deflections and bearing clearances were not the subject of expert evidence from either Mr. Fischer or Mr. Mountzouris.

[141]My conclusion, having considered the expert evidence together with the additional points made by Mr. Bright, is that the difference in readings for units nos.1 and 2 on CAPE BONNY between November 2010 and May 2011 was certainly significant and called for an explanation. So far as the history of deflection measurements on CAPE BONNY was concerned a change of 0.14mm (from -0.14mm to -0.28mm) was unprecedented. Further, it was associated with a change on the adjacent no.2 unit, albeit of 0.07mm (from -0.14mm to -0.21mm). Mr. Rawlings (though not perhaps Mr. Shortall) had considerable experience of serving at sea as chief engineer. He plainly thought the difference “too large”. Mr. Fischer had some experience of serving at sea as chief engineer but it cannot have been as extensive as that of Mr. Rawlings. Mr. Mountzouris had none. Their opinions were much less persuasive than those of Mr. Rawlings and Mr. Shortall. I therefore accept the evidence of Mr. Rawlings and Mr. Shortall that the differences were such that bearing clearance measurements ought to have been taken. The differences were too large because they were unexplained and significant.

[142]But could another view reasonably be held ? The engineers on board the vessel held a different view but their view was flawed, being based upon the alignment limits which did not concern wear. Mr. Stepanovs in the Owners’ office was not concerned but the basis of his view is unclear.

[143]Mr. Bright in his closing oral submissions referred to Mr. Mountzouris’ opinion as expressed in his report that in the light of the absence of clear (or any) criteria in the MAN manual as to how to judge whether the differences were “too large” this was a case where the prudent engineer or superintendent might have adopted one of two reasonable courses of action. The one was to consider the deflections acceptable and the other was to conclude that the deflections warranted further investigation. He himself would have regarded the differences as “interesting, but not a cause for alarm or concern” and would have suggested a second reading after completion of the loaded voyage to China.

[144]I have already said that I was not impressed by Mr. Moutzouris as an expert witness in this case. It cannot be ignored that he had had no experience as a chief engineer. His insistence in cross-examination that the deflection readings were to be compared with the shop trials was not a view supported by Mr. Fischer. Moreover, if there was sufficient concern about the deflection readings in May 2011 on board the vessel to merit a further reading at the end of the next laden voyage I have great difficulty in understanding why such concern did not merit a further reading by the engineers before the voyage commenced. (By contrast, if Mr. Stepanovs only received the May deflection readings from the vessel in June after the voyage had commenced, he could not require further readings until the vessel reached a port.)

[145]In this connection Mr. Bright also relied upon Mr. Shortall’s evidence in cross-examination which Mr. Bright said amounted to an acceptance that another engineer could reasonably hold a different point view from that held by Mr. Shortall so that there was room for more than one school of thought. I am not sure that he really did agree with Mr. Bright that a chief engineer on board CAPE BONNY in May 2011 could reasonably have decided that the deflection readings gave no cause for concern. He stressed that one must look at the information available to the chief engineer on board the vessel. In re-examination he said very clearly that when one had regard to the history of the deflection readings from new there was no room for two different schools of thought.

[146]The views of MAN provide some evidence that a different view could reasonably be held. In the root cause report of October 2011 the authors said that “it may have been possible to detect the maturing bearing failure during the last deflection measurement in May 2011”. The language used does not suggest any confidence that the main bearing failure would or ought to have been detected on that occasion. In the 2016 discussions Mr. Nojgaard of MAN said “The manual states that an impressive change should call for action, but what is that ? That cannot be stated clearly.”

[147]He was then asked what would MAN have recommended had the crew approached them. He replied:

“It is hard to say – it may be different from MDT CPH to MDT Hamburg etc.”

[148]Mr. Henrik Christensen of MAN is recorded as saying:

“Presented to the deflection figures, I would not say it was clear that main bearing no.1 was damaged. ……….”

[149]He agreed that one could now be sure that there was wear leaving the last port “but I am not sure I would have concluded that knowing only the deflections”

[150]There was no oral evidence from MAN and so their views could not be tested. The record of the February 2016 discussions suggests that MAN were aware not only of the change to the no.1 unit deflection readings but also of the change to the no.2 unit deflection readings. However, there is nothing to suggest that they were aware of the deflection readings going back to 2005 which, in the opinion of Mr. Rawlings, showed that the May 2011 changes were “unexplained and significant”. The full set of readings was only disclosed in this action in September 2017. If, as appears likely, MAN’s views expressed in February 2016 were without regard to the full history of readings, their evidential value is reduced. In these circumstances, and bearing in mind that MAN’s views were not the subject of cross-examination, I consider that the views of Mr. Rawlings remain compelling and persuasive.

[151]Mr. Bright made a further point, namely, that the engineers on board could properly also take into account the luboil analyses by Shell and that visual examination of the base of the bearings by Mr. Kapliev (as recommended by MAN and as he said he conducted) probably did not reveal evidence of wear. But even when those matters are taken into account, as Mr. Rawlings accepted they should be, the differences between the November 2010 and May 2011 deflection readings remained “too large” because they were significant and requiring an explanation. It was in answer to the question that if the luboil analysis and visual inspection did not suggest anything amiss such matters could be taken into account in concluding that the differences were not “too large” that Mr. Rawlings answered, firmly, that he could not agree. The “numbers” would have rung “alarm bells”. The readings were “a clear indication that there was something wrong”.

[152]I also accept, as did Mr. Rawlings, that it was appropriate for Mr. Stepanovs to have regard to the record of sister ships. But Mr. Bright was unable to point to an occasion when there had been a comparable event of two adjacent units experiencing a change in the same direction of -0.14mm and -0.07mm.

[153]Whilst I accept that in circumstances where a judgment has to be made as to whether the difference between consecutive readings is “too large” there is room for reasonable disagreement I am unable to accept that the differences in this case, on two adjacent units, were, having regard to the full history of the deflections, on the border line such that there could be reasonable disagreement as to whether the differences were “too large”. My reasons for reaching that conclusion are in essence that the expert evidence of Mr. Rawlings and Mr. Shortall in this connection was clear and compelling and that neither Mr. Mountzouris nor Mr. Fischer was able to articulate a persuasive reason for concluding that it was reasonable to regard the differences as being of no concern. The doubts of MAN in February 2016 are not compelling because it does not appear that MAN was aware of the full history of the deflection readings. Had the engineers on board the vessel properly considered whether the differences were “too large” and concluded that they were not without making the mistake of referring to the alignment limits their views would have merited close study. But their assessments were flawed.

[154]I have therefore concluded that a prudent engineer or superintendent would have decided, in the light of the May 2011 deflection readings, that bearing clearance measurements should be taken. The failure to do so was a failure to exercise due diligence to make the vessel seaworthy. Although there was some discussion as to whether there was an opportunity to take such measurements in May 2011 Mr. Bright unsurprisingly accepted that if it was appropriate to take such measurements time would have to have been found for that to be done “rather than imperil the crew or the cargo”. The chief engineer ought to have done so before the vessel left port and commenced her voyage. For the reasons I have already given, had the measurements been taken, the best evidence (the MET report) is that they would have revealed an increase in clearance of significantly more than 0.05mm which would have indicated abnormal wear thus necessitating a repair before the voyage could safely be undertaken. The failure to exercise due diligence was therefore causative of the subsequent engine breakdown.

Conclusion on liability

[155]For these reasons the general average expenditure incurred by the Owners was due to an actionable fault and it follows that the cargo interests are not liable to make a general average contribution. The claim against the Defendants must therefore be dismissed.

[156]In those circumstances it is unnecessary to deal with the issues on quantum but since they have been the subject of evidence and argument I shall deal with them as shortly as I can.

The quantum disputes; the burden of proof with regard to reasonableness

[157]The Rule Paramount, which precedes the lettered York-Antwerp Rules provides:

“In no case shall there be any allowance for sacrifice or expenditure unless reasonably made or incurred.”

[158]Rule A of the York-Antwerp Rules provides:

“(1) There is a general average act when, and only when, any extraordinary sacrifice or expenditure is intentionally and reasonably made or incurred for the common safety for the purpose of preserving from peril the property involved in a common maritime adventure. ”

[159]In Lowndes & Rudolf 14th.ed. at p.75 paragraph PRE-25 it is stated that “the sacrifice or expenditure will be deemed to have been reasonably made or incurred unless the contrary is established, and the master will be given the benefit of the doubt.”

[160]For this reason Mr. Bright submitted that the Owners did not bear the burden of proving that the expenditure was reasonable. It was for the Defendant to show that the expenditure was unreasonable.

[161]Mr. Smith did not accept that the law was accurately stated in Lowndes & Rudolf and relied upon Rule E of the York-Antwerp Rules which provides:

“1. The onus of proof is upon the party claiming in general average to show that the loss or expense claimed is properly allowable as general average.”

[162]Mr. Smith therefore submitted that the burden lay on the Owners to prove that the expenditure was reasonably incurred.

[163]I consider that the burden of proving that the expenditure was reasonably incurred lies upon the Owners. That is the effect of Rule E and of the Rule Paramount. Rule E does not expressly deal with the question of reasonableness but states a general rule which must encompass that question. The Rule Paramount makes clear that the person claiming a contribution in general average must allege and therefore prove that the expenditure or sacrifice was reasonably made. The comment in Lowndes and Rudolf on which reliance is placed probably refers to the fact that in circumstances where the benefit of the doubt is given to the master and hindsight is to be ignored (see Lowndes and Rudolf at paragraph A.94) there will often be an evidential burden upon the cargo owner to show that his actions were unreasonable. Mr. Smith submitted that this would not be the case where a manager takes the decision to incur expenditure. I do not accept that. With improved communications the position now is that, whereas in the past the master took the necessary decision to incur, for example, towage assistance, today the master is able to communicate with his owners and it is they, rather than the master, who take the relevant decision. But owners and managers when taking such decisions are also entitled to the benefit of the doubt if the circumstances are such that a prompt decision to obtain towage assistance is required. There is no reason why in such circumstances hindsight should be taken into account.

The hire of KOYO MARU

[164]The decision to hire KOYO MARU, a 10,000 bhp salvage tug owned by Nippon Salvage, was taken by Mr. Koerber who had sought assistance from Samuel Stewart, the towage and salvage brokers. He preferred that tug to the 20,000 bhp salvage tug DE DA, a Chinese tug managed by Svitzer Ocean Salvage. His evidence was that, although DE DA was already at sea and about 860 miles from CAPE BONNY and KOYO MARU was in port about 1050 miles from CAPE BONNY, the path of tropical storm MA ON meant that DE DA would have to deviate around it which meant uncertainty in her ETA whereas KOYO MARU had a clear run to the casualty. Thus KOYO MARU was likely to arrive before DE DA. The decision to hire KOYO MARU was taken in the afternoon of 15 July 2011 with the full support of the casualty’s insurers.

[165]A third tug was also a possibility, SALVAGE CHALLENGER, of 12,000 bhp. She was undergoing repairs and had to steam a greater distance to reach the casualty.

[166]The Defendants accept that the hire of a tug was necessary but says that the decision to hire KOYO MARU rather than a cheaper alternative option was unreasonable. KOYO MARU was the most expensive at US$56,656 (or possibly US$57,656) per day, DE DA was a little cheaper at US$55,000 per day and SALVAGE CHALLENGER was the cheapest at US$40,000 per day. It was submitted that there was no material difference in capacity or ability to perform the required service between the three tugs, that the vessel was not in any substantial danger and that in the circumstances whether a tug could reach the casualty in 3 days, 4 days or 5 days was not crucial. It was said that by choosing the most expensive tug the Owners failed to exercise reasonable, prudent and sound judgment. SALVAGE CHALLENGER ought to have been hired, alternatively DE DA.

[167]Reliance was placed by both parties upon the contemporaneous exchanges. Two points may be made about them. First, the court was given no assistance in ascertaining the sequence in which the various emails were sent. The times of the emails did not appear to be in a consistent format. Second, reference to the emails suggest that Mr. Koerber’s recollection of the precise reasons for his choice of KOYO MARU was not accurate or, at any rate, not complete.

[168]The contemporaneous exchanges to which I was referred evidence the following exchanges (though their precise sequence is not clear). On 15 July 2011 Mr. Koerber spoke by telephone to Samuel Stewart and then confirmed his request for a tow by email. Mr. Koerber informed Samuel Stewart that he needed a commercial tow, probably to Tokyo Bay. “She is presently stopped at position 26 47.4N 148.53.1E. The main engine is disabled, hence an ocean-going tug with sufficient bollard pull (would assume at least 100 ton) is required.”

[169]Samuel Stewart emailed offers from Nippon Salvage and from Svitzer. The offers indicates that KOYO MARU was some 650-700 nautical miles away but would have to avoid MA ON, contrary to Mr. Koerber’s recollection. DE DA was said to be some 840-850 nautical miles away. Samuel Stewart also passed on an offer from Asian Marine, the owners of SALVAGE CHALLENGER. Samuel Stewart advised that she would have to proceed from Kaohsiung, Taiwan, and would take about 4 days to reach the casualty. Mr. Koerber sought further information about DE DA’s offer and said that SALVAGE CHALLENGER would not be considered. Samuel Stewart answered the query about DE DA’s offer and informed Mr. Koerber that DE DA was unable to proceed to the casualty by a direct route because of the typhoon. Thus both tugs would have to divert to avoid the typhoon. The master of KOYO MARU was reported to have advised that he would be at the casualty within 3.5 days weather permitting but without guarantee.

[170]Mr. Koerber informed Samuel Stewart as follows:

“Our favourite is still the Japanese tug. Though more expensive, cost can be compensated by the shorter distance. ”

[171]It seems likely that the reference to the “shorter distance” was to KOYO MARU being 650-700 nautical miles away, compared with DE DA being 840-850 nautical miles away.

[172]Samuel Stewart made their own observations about distances. “We calculate that the KOYO MARU (proceeding from Moji) has a distance of over 1050 nmiles to the position whereas DE DA has only 860 miles. Also, the De DA is already at sea so can commence routing directly to the vessel whereas the KOYO MARU requires 2-3 hours for clearance purposes.”

[173]It seems likely that this email, whilst it factored in the need for KOYO MARU to avoid MA ON (because the distance to be covered was 1050 rather than 650/700 miles) did not factor in the need for DE DA to avoid MA ON (because the distance to be covered was said to be 860 miles). This email must have been sent before Samuel Stewart learnt that DE DA would have to run “much more” than 860 miles.

[174]There was a discussion about whether KOYO MARU could assist in bringing the casualty alongside. Samuel Stewart advised that both tugs would be very limited in the assistance they could provide in bringing the casualty alongside.

[175]Mr. Koerber then confirmed, still on 15 July, his decision that KOYA MARU was to perform the tow.

[176]In considering the reasonableness of Mr. Koerber’s decision to engage KOYO MARU it is necessary to bear in mind the circumstances in which the decision was taken. CAPE BONNY, a laden tanker, was adrift at sea having suffered a main engine breakdown. Whilst there was no danger of her grounding she was immobilised at sea at a time when typhoon MA-ON was causing concern. At the time of her main engine breakdown she was in fact taking action to avoid the typhoon. The master stated in his witness statement that the casualty was 500 miles north, north-east of the typhoon’s centre but “there was always the danger of it re-curving and becoming a serious threat”. This might have been unlikely in circumstances where the typhoon was forecast to track westerly and then turn northwards but at the time it would have been difficult to discount the risk. Although Mr. Koerber accepted that the vessel was not “in distress” he was, in my judgment, entirely right to say that his “top priority” was to follow “the international standard safety of life on board of the ship, of the environment and of the cargo….And not to make a decision to get help to the ship as soon as possible would probably be not a good decision.” Experience of maritime casualties shows that when a casualty occurs at sea there should, in principle, be a minimum of delay when engaging appropriate assistance. Although CAPE BONNY was immobilised at sea and not in danger of drifting aground there was a tropical storm in the area and in such circumstances I am unable to accept the submission that whether a tug could reach the casualty in 3 days or 4 days or 5 days was not crucial. The fact that on 17 July 2011 (two days after KOYO MARU was hired) Mr. Matis concluded that the casualty would avoid the typhoon so that the vessel’s safety was not compromised is not to the point. I am also unable to accept Mr. Smith’s submission that when the decision to engage KOYO MARU on 15 July 2011 was taken “there was no real urgency or impending peril requiring the Claimant to make a snap decision.” It was prudent and in accordance with the principle of safeguarding life, the environment and property that towage assistance was secured without delay. It was therefore essential to have regard to the time at which the available tugs could reach the casualty.

[177]There is a passage in Lowndes and Rudolf at paras. A-24 and 25 that suggests that mere immobilisation may not amount to a sufficient peril or danger in the law of general average (which is contrasted with the law of salvage where immobilisation is a recognised danger). But there is another passage in Lowndes and Rudolf at para. A-42 which states that immobilisation caused by a main engine breakdown is a sufficient peril or danger in the law of general average “even if the accident occurs in fine weather. The cost of towage and/or salvage into a port of refuge will then unquestionably be treated as general average.” In my judgment the latter statement is correct. Immobilisation is a peril or danger because without assistance neither ship nor cargo can be used. They are worthless unless and until assistance is procured to bring them to a port of refuge where the vessel can be repaired and continue her voyage. In any event, (even if there is a difference between the meaning of peril or danger in the law of salvage and the law of general average, which I very much doubt), in the present case, where there was a risk of a disabled vessel in the Pacific ocean meeting bad weather caused by a typhoon, there must plainly be a sufficient danger or peril for the purpose of general average.

[178]On these grounds I accept that Mr. Koerber’s decision not to consider SALVAGE CHALLENGER was reasonable, notwithstanding that she was the cheapest tug on offer.

[179]As between KOYO MARU and DE DA the contemporaneous correspondence does not make clear precisely when each was predicted to be able to reach the casualty. It would appear that each had to take care to avoid meeting the tropical storm MA ON. It would appear that the distance of 1050 nautical miles mentioned by Samuel Stewart for the distance to be travelled by KOYO MARU made allowance for the deviation to avoid MA ON because KOYO MARU was only some 650-700 nautical miles away. At 14.5 knots (the speed mentioned by her master) she would take about 3 days to reach the casualty, although the master himself estimated 3.5 days. The contemporaneous evidence does not indicate the distance to be covered by DE DA whilst avoiding MA ON. All that is said is that she had to run “much more” than 850-860 miles to avoid MA ON. It seems more likely than not, having regard to the chart appended to Mr. Smith’s opening submissions, that if KOYO MARU’s run was increased from 650-700 miles to 1050 miles to avoid MA ON, then DE DA’s run would have been increased from 850/860 miles to well over 1050 miles. Thus it seems more likely than not that DE DA’s estimated time of arrival at the casualty would have been later than that of KOYO MARU notwithstanding that she may have been able to proceed at a faster speed. (The maximum speed of KOYO MARU was 18.15 knots whereas the maximum speed of DE DA was 20.50 knots according to their particulars. The speeds at which they could safely proceed may well have been rather less. The master of KOYO MARU considered that he would proceed at 14.5 knots.)

[180]Mr. Koerber’s recollection in his witness statement as to the precise reasons why KOYO MARU was likely to reach the casualty before DE DA is either inaccurate or incomplete. Nevertheless, his conclusion that KOYO MARU was likely to arrive before DE DA is likely to have been correct. In my judgment that was a reasonable, prudent and sound reason for deciding to engage KOYO MARU.

[181]In his oral evidence Mr. Koerber said that he also had in mind that KOYO MARU, being a Japanese tug, was more likely to be able to be allowed to bring the casualty into Japanese waters. There is no support for this in the contemporaneous documents though the suggestion does not surprise me. Ports are notoriously reluctant to allow disabled laden vessels into port limits and in that context a Japanese port might well be more favourably disposed to a Japanese tug. But in circumstances where the point is not made either contemporaneously or in his witness statement and where, in the event, the Japanese authorities did not allow the casualty to enter port I do not consider that I can accept that this was a further reason.

[182]In the result I am satisfied that the decision to engage KOYO MARU was reasonable. It is more likely than not that she was able to arrive at the casualty before DE DA. It is said that it was unreasonable for Mr. Koerber not to have sought to negotiate a better price. But in circumstances where offers had been sourced by Samuel Stewart and where the priority was to engage assistance without delay, the casualty being immobilised at sea having suffered a main engine breakdown when seeking to outrun a tropical storm, I do not consider that it would have been prudent to delay the engagement of assistance by haggling over the price.

The diversion to Korea and the transhipment of the cargo

[183]By the time KOYO MARU took the casualty in tow on 18 July the port authorities in Japan had refused permission for the laden casualty either to berth or even to enter Tokyo Bay. Accordingly, tug and tow proceeded to the Chinese ports of discharge, Tianjin and Dalian, with the intention of discharging there. There were discussions with the charterers as to the safest and quickest means by which the cargo could be delivered to the receivers. On 20 July 2011 Penavico Tianjin were appointed agents to liaise directly with the receivers’ agents.

[184]On 26 July 2011 the Chinese receivers were reported as having “expressed grave reservations about the vessel proceeding to China and have stated that there is a possibility the vessel will not be allowed into Chinese waters”

[185]Consideration was then also given to an STS operation off Yosu in Korea. But Penavico advised that although “local MSA did not agree m/v Cape Bonny to berth at Tianjin port ……..they said they can consider let her berth Tianjin Shihhua Terminal berth no.S30………this terminal is near Channel, anchorage and almost locate in sea, where is safer than berthing inside of port………pls push consignee AND charter agent to negotiate with Tianjin Shihhua Terminal if they can use line and tanker there…...”

[186]Mr. Koerber regarded this as good news. But later that day it was reported that the MSA had decided not to permit the casualty to enter Tianjin. It was expected that Dalian’s position would be the same. In those circumstances the possibility of hiring CAPE BATA for an STS operation off Yosu was investigated.

[187]On 27 July Penavico reported that it was the “consignee and charter agent” who could not accept “the alternative pier S30 after they checked and negotiated with the terminal side today”. Penavico said that the Tianjin calling had to be cancelled.

[188]On the same day the master reported his understanding that the China Port Authorities did not allow the vessel to enter port and it is also to be noted that on 28 July the receivers said that it was “the Chinese port authority that rejected the vessel”. They expressed their willingness to cooperate and noted that they were “obligated to take delivery of the cargo from carrier at discharge port”. It is not clear from this message that the receivers were willing to accept delivery at berth S30. They may simply have been referring to the fact that they were willing to accept delivery at the more usual berth further within the port and that the port authorities had refused permission for the casualty to go to that berth. There was no evidence from the cargo interests, even though the Defendants had guaranteed cargo’s liability in general average.

[189]Arrangements were then made for the tug and tow to divert to Yosu where local agents were appointed. Tug and tow were expected to arrive on 29 July but, to avoid approaching congested waters in rough weather generated by the tropical storm, the tug slowed the speed of the tow and later turned south towards the open sea.

[190]Tug and tow arrived off Yosu on 1 August and dropped anchor. According to the Average Adjustment four harbour tugs towed the vessel to the outer anchorage. An STS operation took place between 2 and 3 August using another CSM managed vessel CAPE BATA. After that had been completed the local authorities were reluctant to permit the disabled vessel to enter the port and KOYO MARU remained alongside. According to the Average Adjustment KOYO MARU was retained after completion of the STS because there was as yet no permission for the casualty to enter the port. That appears to me to be more likely than not. The port authorities in fact required the vessel to put to sea in view of the approach of another typhoon MUIFA unless certain strict conditions were complied with. There was little time to comply with those conditions and so tug and tow proceeded out to sea. It was only after the intervention of the local Pilotage Association that the port authorities agreed that the vessel could be safely brought into port for repairs. KOYO MARU brought the casualty back to the outer anchorage on 9 August when she was dismissed. Later, still on 9 August, the casualty was assisted into berth by four local tugs. It was not until 12 August that the local authorities permitted the necessary repairs to be carried out a layby berth.

[191]The Defendants have submitted that the decision to divert to Korea was unreasonable. It is said that the port authorities in Tianjin gave permission for the vessel to enter the port and that, if the receivers were not willing to receive the cargo,the Owners ought to have delivered the vessel to the usual waiting place at Tianjin or Dalian, issued a notice of readiness and called on the receivers to take delivery. Further, it was said that the decision to go to Korea was taken without making appropriate enquiries. It was not known whether she could enter port. Finally, it was said that the overall costs of the decision to go to Korea and conduct an STS operation had not been considered. It was said that the real motivation for the decision was a desire to ensure that a sister vessel earned freight at the insurer’s expense.

[192]The contemporaneous emails do not speak with one voice as to who objected to the casualty entering Tianjin but my assessment of the position is as follows. The best, in the sense of the most detailed information, appears to come from Penavico. The port authorities originally refused to permit the casualty to enter but later allowed berthing at berth S30, a berth within the port but nearer to the sea. Whether that would be feasible depended upon whether the receivers would accept delivery there. In the event they were not content with berth S30. I do not regard the receivers’ message of 28 July as contradicting that evidence. It probably means no more than that the port authorities had refused to permit the casualty to enter the port (as they in fact had originally) and that the receivers had been willing to accept delivery in Tianjin (as presumably was the case originally). But it is silent as to whether the receivers would accept delivery at the alternative berth S30.

[193]The question raised by the Defendants is whether in those circumstances the Owners ought to have proceeded under towage to Tianjin and waited for the receivers to take delivery. This was a possible option but it would mean the Owners risking having to wait for an indeterminate period off Tianjin for the receivers to relent and take delivery. In circumstances where the Owners have responsibility for a laden disabled vessel under tow I do not consider it reasonable to expect Owners to have taken such a risk. The reasons for the receivers’ unwillingness to take delivery at berth S30 were not (and are not) known. This court and its sister court, the Admiralty Court, from time to time hear applications by shipowners (whose vessels are neither disabled nor under tow) for orders compelling receivers to take delivery of their cargo or for permission to sell the cargo. Such applications are usually made after the vessel has been waiting a very long time at considerable expense. Whilst the shipowners may have the law of contract on their side they have, by insisting on those rights, incurred considerable expense and wasted much time. In circumstances where the vessel is disabled and under tow the suggestion made by the Defendants appears to me to lack realism.

[194]In circumstances where the Owners had failed to find a Japanese port of refuge willing to allow a laden disabled vessel to enter port and where the receivers had refused to accept delivery from a disabled vessel at the intended Chinese ports of discharge the Owners decided upon an STS operation off a Korean port. I accept that there is no evidence that either the costs of repairing the vessel whilst laden in a Korean port (assuming that were permitted) or the costs of storing the cargo ashore in a Korean port were investigated. But the reluctance of ports of refuge to allow a disabled and laden vessel to enter for repairs had been demonstrated by the Japanese port authorities. Since the receivers were unwilling to allow the vessel to berth at berth S30 in Tianjin (in “the channel, almost located in the sea”) at which the Chinese port authorities had, it appears reluctantly, accepted that the vessel could discharge it is not surprising that the Owners turned to an STS operation. Such operations are expensive but so would be the operation of discharging the cargo ashore, storing it ashore and then reloading it on another vessel to carry it to the Chinese port of discharge. It may also have resulted in further delay. (It is to be noted that the adjusters allowed the on-freight for carrying the cargo to Tianjin as general average on the basis that it was a substituted expense in the terms of Rule F “against higher cargo storage during repairs and reloading costs that were saved and would have been allowable as general average in terms of Rule X(c).”) The circumstances of this case, namely, where the Owners had attempted to get the vessel into a Japanese port of refuge and had failed and had attempted to get the receivers to accept delivery in the Chinese port of discharge and had failed, are evidence that an STS operation off a Korean port was a reasonable course of action to adopt. There is therefore an evidential burden on the Defendant to adduce some evidence that the Korean port would have been willing to accept the entry of a disabled and laden vessel for repair and/or discharge ashore and that the costs of the suggested alternative operation would have been significantly less than the costs of the STS operation. There is no such evidence. I have therefore concluded that the actions of the Owners in deciding upon an STS operation were reasonable. Whilst the STS operation involved another “pool” vessel I am unable to accept the suggestion that the motivation underlying the STS operation was a desire to ensure that a sister vessel earned freight at the insurer’s expense. The motivation underlying the STS operation was the urgent need to resolve the problem of dealing with a disabled laden vessel in circumstances where the Japanese ports of refuge had refused entry and where the receivers were unwilling to accept delivery at the Chinese discharge port from the disabled vessel.

The hire of KOYO MARU after 1 August 2011

[195]The Defendants’ case is that it was unreasonable to retain the tug after 1 August 2011. This submission is unrealistic. Tug and tow had arrived off Yosu and thereafter, between 2 and 3 August, the STS operation took place. Although it would appear from the Average Adjustment that the casualty may have been held during the STS by the harbour tugs which had taken her to the outer anchorage it was reasonable to retain KOYO MARU until it was known whether permission to enter port would be given. Thereafter there was no immediate permission for the vessel to enter port and in the meantime the port authorities required the casualty to be taken out to sea in view of the approach of another typhoon. KOYO MARU was required for that purpose, it being unlikely that harbour tugs would have been capable of towing her out to sea or permitted to do so. When tug and tow returned on 9 August and permission had been granted for the casualty to enter the port KOYO MARU was dismissed and harbour tugs took her in. I have no doubt that it was reasonable to retain KOYO MARU until she was in fact dismissed.

Conclusion on quantum

[196]It follows that the expenditure incurred by the Owners was reasonable and that no deduction falls to be made in respect of the contribution in general average payable by cargo. However, since the expenditure was caused by the fault of the Owners no such contribution is in fact payable.

[197]It is therefore unnecessary, on two counts, to consider the submissions made by the Defendants as to the revised contribution payable by cargo in the event that(a) there was no actionable fault and

(b) part of the expenditure was unreasonably incurred. I shall therefore not lengthen this judgment yet further by considering those submissions.

Cited in 1 later judgment

Navalmar UK Ltd v Ergo Versicherung AG & Anor (BSLE SUNRISE) 2019