Port of Sheerness Limited vs Swire Shipping PTE Limited – High Court – [2025] EWHC 7 (Admlty) – Case Summary

Introduction

The High Court delivered its judgment on a significant case involving the Port of Sheerness and Swire Shipping PTE Limited, concerning the interpretation and application of period toll charges. The case arose from the prolonged discharge of cargo from the MV 'KIATING', a Singapore-registered bulk carrier, at the Port of Sheerness. The central issue was whether the Port was entitled to levy a period toll charge due to delays in cargo discharge attributed to poor stowage.

Background

The MV 'KIATING' was sub-chartered to Swire Shipping and loaded with plywood and hardwood in China and Malaysia, intended for discharge at the Port of Tilbury. However, due to storage limitations, the hardwood was discharged at the Port of Sheerness. Upon arrival, the discharge process encountered significant delays due to cargo shifting and inadequate stowage, leading to health and safety concerns and the suspension of operations.

The Dispute

The Port of Sheerness sought to impose a period toll on Swire Shipping, arguing that the vessel remained at the docks longer than necessary for cargo discharge. Swire Shipping contested this charge, asserting that the toll only applied to vessels overstaying after discharge completion. The case hinged on the interpretation of the contractual terms governing the period toll.

Contractual Framework

The Port's contractual terms included provisions for additional charges in circumstances such as poor stowage and delays outside the Port's control. However, Swire Shipping argued that these terms did not explicitly cover the imposition of a period toll in the present circumstances. The Port's quote and terms and conditions were central to the court's analysis.

Court's Analysis

The court examined the contractual language and the historical context of the period toll's introduction. It found that the period toll was primarily intended to protect the Port from 'berth-blocking' scenarios, where vessels occupy berths longer than necessary. The court concluded that the toll was not applicable in this case, as the delays were due to operational challenges rather than overstaying post-discharge.

Judgment

The court ruled in favour of Swire Shipping, determining that the period toll was not applicable under the contractual terms. It emphasised that the Port's interpretation would lead to uncertainty and potential misuse, as it lacked a clear mechanism for determining when the toll should commence. The court also noted that the Port's subsequent amendment of its terms to clarify the toll's application supported Swire's interpretation.

Implications

This ruling has significant implications for port operators and shipping companies, highlighting the importance of clear contractual terms regarding additional charges. The case underscores the need for ports to explicitly define the conditions under which period tolls and similar charges apply.

Conclusion

The High Court's decision in this case provides clarity on the application of period tolls in maritime contracts, reinforcing the principle that charges must be clearly defined and justified within the contractual framework. The judgment serves as a reminder for parties to ensure that contractual terms are comprehensive and unambiguous to avoid similar disputes in the future.