• COMMERCIAL

Sea Tractor & Others v Tramp [2007] EWHC 31 (Admlty) 18 January 2007

The Claimants are the owners of the tug SEA TRACTOR, her Master, Officers and Crew. The Defendants are the owners of the vessel TRAMP. The Claimants seek to recover salvage remuneration in respect of services rendered on 21 March 2006. The Defendants contend that the services were merely towage services to be remunerated in accordance with the Claimants' usual tariff in the sum of £625. SEA TRACTOR is a small motor workboat/tug of 340 hp. She was built in 1980. She is some 15 metres in length with a maximum draft of about 1.5 metres. She is equipped with twin propellers. She was of ideal size and power for towage operations on the River Swale where she is based. Her replacement cost was in the region of £150,000. TRAMP is a small coaster of 1,181 tons gross with a single hold. She was built in 1978. She is some 68 metres in length and 11.6 metres in beam. At the relevant time she was in ballast and drawing about 1.8 metres forward and 2.7 metres aft. She is equipped with diesel engines of 1800 hp driving a single propeller. Her value was not agreed. It is not necessary to say more than that she was probably worth in the region of £400,000. The services took place in the River Swale. This river runs between the Isle of Sheppey and mainland Kent, the Isle itself lying between the estuaries of the River Thames and the River Medway. The scene of the services was in the vicinity of Washer Wharf, Queenborough.

It was held that the vessel was in an unhappy predicament and was clearly in need of tug services on salvage terms. In many respects the services were as short and straight forward as could be involved in a salvage claim. The tug came out at about 15 minutes from her mooring some 1/3 of a mile to the east. The tow was accomplished in a few minutes. there was no material risk of damage to the tug given the competent command of her master. It is also clear that there was alternative assistance in the form of the tugs of ADSTEAM, but it would also have to be paid for on salvage terms. In brief this was a relative straightforward service to a vessel in modest danger from which she could not extract herself safely. The services were rendered by a small tug which had responded promptly but which has no claim to professional status. A fair but encouraging award would be in the sum of £12,500.

• CONTRACT

Thames Water Utilities Ltd & Anor v Heathrow Airport Ltd [2009] EWHC 407 (Comm) 06 March 2009

This case raises a short but commercially significant question on the construction of an agreement dated 16 February 1993. The provision in issue concerns the calculation of the amounts payable in respect of the sale of the land on which Terminal 5 at Heathrow Airport was built. The claimants (who were the sellers of the land) "Thames Water", and the defendants (who were the buyers) "Heathrow".

The parties have already reached extensive agreement, but have not been able to reach agreement about everything. They have cooperated in bringing the matter to Court under CPR Part 8 with the minimum of delay. It is hoped that the Court's ruling will enable them to take matters forward. Part of the consideration payable on the sale includes the additional costs involved in operating the new works which were required to replace those which Thames Water had previously operated on the site. The provision which is the subject of this action requires the chief executives of the respective parties to try to reach agreement as to the basis of calculation of these additional costs. If they are unable to do so, the matter is to be referred to an independent expert for determination. The parties are in dispute as to the scope of the expert's role. In broad terms, the issue is whether as Thames Water submits the expert has to make a one-off determination, or whether as Heathrow submits a one-off determination can nevertheless make provision for periodic adjustment in the light of such developments as changes in legislation.

It was held that Thames Water's construction of the contract is the correct one. As Mr McCaughran QC submitted, once the bases are determined by the independent expert, the parties can agree the resultant costs, with reference to a chartered accountant under clause 10.4 in the event of dispute. It is ultimately a matter for the expert to decide on the right approach. Whatever approach is adopted, there will in any event be a final, once and for all, determination. I would add that I consider this to be a commercially reasonable outcome, minimising the possibility of continuing disputes between the parties over the course of the thirty year life span of this contract.