reasonably; and in that vein, the owners must show, or at least raise a prima facie
case to show, that they acted reasonably. Its finding was that the owners had failed to
establish the impossibility or impracticability of exercising the lien ashore, or if it did
so, it would have been more expensive than to exercise the lien on the cargo aboard
the vessel. Therefore, the tribunal held that the owners failed to raise even a prima
facie case that they had acted reasonably and were not entitled to recover demurrage
during the period of exercising the lien on cargo on board.
25 It is abundantly clear
from the three cases cited above, that in so far as the shipowner’s exercising of the
cargo lien is concerned, acting in a reasonable manner is a necessary ingredient. All
the tribunals in the above-noted cases took into consideration what counts as
reasonable under different circumstances. In one leading case, Marks and Spencer
plc v. BNP Paribas Securities Services Trust Company (Jersey) Limited and
another,
26 it has been held that “a term should not be implied into a detailed
commercial contract merely because it appears fair or merely because one considers
that the parties would have agreed to it if it had been suggested to them. Those are
necessary but not sufficient grounds for including a term. In this case the tests of
“reasonableness” and “officious bystander” are confirmed but the test of “necessity”
is stressed by pronouncing that the court does not imply terms simply based on what
it thinks ought to be the contractual relationship between the parties.
27 The court is
concerned with the presumed intention of the parties because it can ascertain their
subjective intention only through the objective evidence available before it.
28 Thus,
unless there is sufficient objective evidence to show that an implied term is necessary
in the interests of fairness and business efficacy, the court will generally be disinclined to imply a term into the contract. It is thus submitted, that all in all, apart from
reasonableness and fairness, the test of business necessity is of practical importance
to reach an objective result.
4 Application of Good Faith Doctrine to Cargo Liens
4.1 Preliminary Observations
In the context of a shipowner exercising his right of a cargo lien under a charterparty,
a question arises as to whether apart from acting reasonably, he must also act in good
faith. A related issue is whether they are two elements of the same requirement and
therefore inextricably connected; in other words, must the shipowner act in good
faith to demonstrate that his actions are reasonable. The third prong of the issue is
25 London arbitration No. 5/92, in Lloyd’s Maritime Law Newsletter (LMLN 321, page 4), A
summary award can be found in Steamship Mutual (1999).
26 [2015] UKSC 72.
27 Ibid.
28 Ibid. at para. 66.
Shipowner’s Implied Obligations in a Charterparty Relating to. . .
319
case to show, that they acted reasonably. Its finding was that the owners had failed to
establish the impossibility or impracticability of exercising the lien ashore, or if it did
so, it would have been more expensive than to exercise the lien on the cargo aboard
the vessel. Therefore, the tribunal held that the owners failed to raise even a prima
facie case that they had acted reasonably and were not entitled to recover demurrage
during the period of exercising the lien on cargo on board.
25 It is abundantly clear
from the three cases cited above, that in so far as the shipowner’s exercising of the
cargo lien is concerned, acting in a reasonable manner is a necessary ingredient. All
the tribunals in the above-noted cases took into consideration what counts as
reasonable under different circumstances. In one leading case, Marks and Spencer
plc v. BNP Paribas Securities Services Trust Company (Jersey) Limited and
another,
26 it has been held that “a term should not be implied into a detailed
commercial contract merely because it appears fair or merely because one considers
that the parties would have agreed to it if it had been suggested to them. Those are
necessary but not sufficient grounds for including a term. In this case the tests of
“reasonableness” and “officious bystander” are confirmed but the test of “necessity”
is stressed by pronouncing that the court does not imply terms simply based on what
it thinks ought to be the contractual relationship between the parties.
27 The court is
concerned with the presumed intention of the parties because it can ascertain their
subjective intention only through the objective evidence available before it.
28 Thus,
unless there is sufficient objective evidence to show that an implied term is necessary
in the interests of fairness and business efficacy, the court will generally be disinclined to imply a term into the contract. It is thus submitted, that all in all, apart from
reasonableness and fairness, the test of business necessity is of practical importance
to reach an objective result.
4 Application of Good Faith Doctrine to Cargo Liens
4.1 Preliminary Observations
In the context of a shipowner exercising his right of a cargo lien under a charterparty,
a question arises as to whether apart from acting reasonably, he must also act in good
faith. A related issue is whether they are two elements of the same requirement and
therefore inextricably connected; in other words, must the shipowner act in good
faith to demonstrate that his actions are reasonable. The third prong of the issue is
25 London arbitration No. 5/92, in Lloyd’s Maritime Law Newsletter (LMLN 321, page 4), A
summary award can be found in Steamship Mutual (1999).
26 [2015] UKSC 72.
27 Ibid.
28 Ibid. at para. 66.
Shipowner’s Implied Obligations in a Charterparty Relating to. . .
319