Lloyd's Maritime and Commercial Law Quarterly
THE INTERPRETATION OF NSF 83, CL. 11
The Niobe
In The Niobe
1 a question arose as to the scope of the obligation of the sellers of a ship to notify the classification society of matters which would affect the vessel’s class under cl. 11 of the Norwegian Saleform 1983 Revision (“NSF 83”).2 The system of classification depends on surveys and self-reporting by the owners of vessels.3 An imminent sale might prove a powerful disincentive for an unscrupulous seller when it came to reporting relevant matters. In The Niobe it was common ground between the parties that cl. 11 had been amended in the light of the earlier decision of the Court of Appeal in The Buena Trader.4 There the court declined to imply into the 1966 version of the same standard form an obligation on the sellers to notify the classification society of any facts of which they knew before delivery which might affect the class of the vessel. As a result, NSF 83, cl. 11 included the following new sentence:
The Sellers shall notify the Classification Society of any matters coming to their knowledge prior to delivery which upon being reported to the Classification Society would lead to the withdrawal of the vessel’s class or to the imposition of a recommendation relating to her class.
The obligation clearly relates to matters arising prior to delivery, but does it extend to matters of which the sellers are already aware before the contract?
In The Niobe the sellers sold to the buyers the eponymous vessel by a memorandum of agreement based on NSF 83 dated 14 May 1987. A dispute arose concerning the condition upon delivery of the engine room automation system. The equipment had been surveyed and passed by the classification society in early 1986. There had been an inspection of the vessel by the buyers on 9 and 10 May 1987. As a result NSF 83, cl. 4 (which provides for a post-contractual inspection) was deleted and replaced by typed cl. 16, which recorded that the buyers had inspected and accepted the vessel and her class records. A further typed clause, cl. 19, required the vessel to have a class certificate valid for at least six months from the date of delivery. Accordingly the vessel was put through a class survey just before delivery on 18 and 19 May 1986. The vessel was delivered on 26 May 1987.
The dispute was referred to arbitration. The buyers’ claim in respect of the engine room system was based on a breach of cl. 11. They argued that the relevant date from which the knowledge of the sellers was material was the date of the last survey before contract. This was based on the obiter opinion of Lloyd, L.J. (with May, L.J., concurring) in The World Horizon,5 where he said:
I have always understood that wording similar to what is now incorporated in the printed version was intended to cover new matters, that is to say, new occurrences or matters coming newly to the
1. Niobe Maritime Corp. v. Tradax Ocean Transportation S.A. (The Niobe)
[1994] 1 Lloyd’s Rep. 487 (C.A.: Sir Thomas Bingham, M.R., Beldam and Saville, L.JJ.); [1993] 2 Lloyd’s Rep. 52 (Commercial Court: Gatehouse, J.). The buyers have petitioned for leave to appeal to the House of Lords.
2. See Goldrein (ed.) Ship Sale and Purchase, 2nd edn (Lloyd’s of London Press, 1993), 132–138. NSF 87, cl. 11 is identical. A new revision is expected soon.
3. See Cane [1994] LMCLQ 363.
4. Compania de Navegacion Pohing S.A v. Sea Tanker Shipping (PTE) Ltd. (The Buena Trader)
[1978] 2 Lloyd’s Rep. 325.
5. Taramar Shipping Corp. v. Young Navigation Corp. (The World Horizon)
[1993] 2 Lloyd’s Rep. 56, 57.
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