MarIus

2.2.1 Introduction

Owing to the historically dominant position of London as a centre for maritime arbitration with English as governing law, time charters on international standard forms are not only drafted in the English language, but within an English legal tradition and typically with English choice of law-clauses. Even American forms such as NYPE will typically provide for English law as an option on an equal footing with US maritime law. Consequently, it becomes a methodical point of interest to assess the relevance of English sources of law when the parties elect to have their dispute governed by Norwegian law. A point of departure is that use of international standard forms represents no formal derogation from Norwegian law when it follows from the parties’ choice of law that Norwegian law applies. The propriety of leaning on foreign law must therefore first be justified internally.^{(1) Haaskjold (2013), p. 421. Selvig (1986), p. 4.}

2.2.2 Some general remarks

English and Norwegian construction of contract do not always follow the same principles. For example, Norwegian law does not operate with a clear functional distinction between interpretation and implication,^{(2) Tørum (2019), p. 104 (3-205 and 3-206).} whereas English law provides stringent criteria for the implication of terms.^{(3) Tørum (2019), p. 111 (3-222).} In a similar vein, Norwegian law of contract contains more background material to provide for gap-filling or ‘implication of terms in law’.

Accordingly, charter disputes may occasionally turn on how tensions between the two legal systems are resolved. The decision in ND 1952 p. 442 Hakefjord provides an example.^{(4) See also ND 1950 p. 398.} The vessel was found to be off-hire on subjective grounds pursuant to Norwegian background law going beyond and notwithstanding the exhaustive off-hire regulation found in the charter itself. An example of the English view prevailing is provided by ND 1983 p. 309 Arica. It too concerning off-hire, the issue was whether to calculate time lost on a gross basis adhering strictly to the wording as one would under English law, or to imply a limiting net principle as one would under Norwegian law pursuant to rt. 1915 p. 881 and then MC 1893 § 144 (2). Norwegian law recognizes agreed standard documents as a form of ‘private legislation’. Accordingly, account is taken of what one may through permissible means i.e., preparatory works, history and other context, discern to be the drafters’ intended design.^{(5) Falkanger et al (2017), p. 35. Haaskjold (2013), p. 418. Rt. 1991 p. 719. Arica: “formularkonsipistenes aktuelle eller formodede mening”, cf. ND 1983 p. 309 on p. 322.} The charter in question was drafted with a view to English law, and the arbitrators found that the drafters made a clear and conscious choice to integrate the rule contained within the prior English precedent of The Westphalia (House of Lords, 1891). Unlike in Hakefjord, the issue was thus not formally solved on background law:^{(6)The Westphalia was relevant as interpretive data per Haaskjold’s (2013) terminology, cf. p. 424.}

Godtar man at et standardformular efter norsk rett må tolkes i overensstemmelse med konsipistenes klare forutsetninger, gir en fortolkning av off hire klausulen løsningen, uten at det er nødvendig å trekke inn bakgrunnsretten, det være seg engelsk eller norsk rett.^{(7) ND 1983 p. 309 on p. 323. Translated to english: “If one accepts that a standard form pursuant to Norwegian law must be construed in acccordance with the drafters’ clear preconditions, an interpretation of the off-hire clause provides the solution, without it being necessary to rely on background law, be it English or Norwegian.”}

When Arica referred to the drafters’ clear preconditions, the decision invoked an interpretive result and not the interpretive method. Accordingly, Arica did not resolve that one more generally ought to apply the foreseen English method of interpretation. Such a view would represent a radical break with Norwegian tradition. Selvig rejects that reference to the drafters’ preconditions can lead to general incorporation of English principles of interpretation.^{(8) Selvig (1986), p. 24.} The parties may of course agree on the English method as the interpretive rule, but this point of view will have limited reach when the parties have elected for Norwegian law to govern the dispute and the charter is otherwise silent on interpretive rules. This is not to say that the interpretive style is blind to the contract’s origin. Given the exhaustive and detailed English style, one may by way of ordinary criteria and common sense find cause to apply a more objectivized and system-oriented style of interpretation.^{(9) As observed by Haaskjold (2013) on p. 423 with respect to modern arbitrational practice.}

So far, the conclusion is that English law enters the picture primarily via its case law as seen in Arica. There, the question presented itself neatly. The Westphalia was antecedent to the drafting; it was unequivocal, and the disputed clause was nearly identical to the one in The Westphalia.^{(10) ND 1983 p. 309 Arica on p. 322.} More difficult questions arise when the line of authorities is posterior to the drafting, as in the case at hand with The Liepaya and The Great Creation. The justification can no longer be tied to the drafters’ specific idea.

As a general matter, posterior case law on standard forms clarify the meaning of its terms – it becomes part of the charter law relied upon by the parties.^{(11) Haaskjold (2013), p. 417. The standard form’s ‘trykknappseffekter’ per Krüger (1989), p. 519.} But the extent to which one ought to adopt English case law has to be regarded as uncertain.^{(12) Haaskjold (2013), p. 423. Krüger (1989) on pp. 886–887} Krüger goes far in advocating for incorporation, whereas Solvang along with Selvig advise a degree of caution.^{(13) Krüger (1989), pp. 886–887. Solvang (2007), p.151. Selvig (1986), pp. 24–25. Krüger contends that it is unfortunate if an English law standard form is subject to differential interpretation depending merely on the happenstance of where a dispute arises. But the issue of governing law will typically not turn on passive forum selection rules. Since the charter’s default law is English, for Norwegian law to govern usually entails an active choice.} The difficulty of a partial approach is its vulnerability to internal inconsistencies.^{(14) Selvig (1986), p. 24.}Hakefjord and Arica seen together provide an example, where the grounds for off-hire are drawn pursuant to the expansive Norwegian view, while the duration of off-hire is drawn pursuant to the expansive English view, thereby skewing the risk allocation between the parties. But the answer cannot be unlimited incorporation either, as this would be alien to the system and undermine the parties’ choice of law. No more can the answer be to ignore the form’s English law background and international use. It is unlikely that one can avoid difficult line drawing altogether. English cases may both be relevant and carry weight but cannot be relied upon blindly. Below we will attempt to draw the line as it relates to the subject matter and case law relevant for this thesis, but not more broadly or precisely than necessary for the analysis herein.

2.2.3 The thesis’ use of foreign case law

It seems a requirement that the English cases are sufficiently clear and consistent for Norwegian arbiters of law to precondition an outcome on them. It is not for Norwegian law to settle doubtful questions of English law. It is questionable whether there is an undisputed English rule contained within the English line of authorities. The Great Creation undermined The Liepaya and is currently precedence, but the issue has not been subject to Court of Appeals-review. Moreover, The Great Creation’s ratio invokes principles for drawing non-breach scenarios, rather than a particular charter construction. The argument on which the outcome relies therefore sorts under the law on remedies. Absent specific agreement, Norwegian law governs the parties’ remedies irrespective of the contract’s origin.^{(15) Selvig (1986), p. 26.}The Great Creation will therefore not be considered authoritative in a Norwegian law perspective.^{(16) Whether its argument nonetheless is persuasive under Norwegian law will be discussed in ch. 4.3.}

When the thesis later on discusses the binding effect of notice, similar reservations apply to giving effect to English decisions insofar as they turn on English doctrines on formation of legal dispositions. Due to the requirement of consideration, English law will not consider a redelivery notice a contractual promise but may ascribe to it the effect of promissory estoppel on the criteria of that doctrine. For this and other reasons, the relevant English authority The Zenovia is not considered instructive.^{(17) See ch. 5.2.2.}

Harmony between different jurisdictions and other equitable concerns offer a more flexible justification for paying attention to international legal opinions. Kurt Grönfors proposes to give effect to this concern by employing a retrospective international adjustment of the domestic interpretive result.^{(18) Grönfors (1989), p. 52.} In context of this thesis, it justifies having an eye towards common points of construction among international authorities. In that regard, English court cases carry more weight than American arbitrations.^{(19) There are concerns with giving weight to American arbitrations, see Solvang (2009), p. 120. The available decisions are many, but often divergent and lack instruction from above as parties are effectively barred from appealing.} Occasionally, the idea of harmony is stronger than its reality. As Solvang points out, there are also differences between American and English maritime law.^{(20) Solvang (2009), pp. 96–101.} Bearing that in mind, one ought perhaps not worry too much about certain distinct Norwegian/Scandinavian rules in the charter law. There may as well be equity in giving parties a meaningful choice of law.

Looking beyond doctrine, foreign cases provide illustration material and lines of reasoning that are useful food for thought and analysis. This becomes especially valuable when the Norwegian case material is as sparse as it is. To that end, the thesis relies substantially on foreign case material. This international outlook is in line with tradition in Scandinavian maritime law.