Bunge SA v Pan Ocean Co Ltd (The “Sagar Ratan”) [2025] EWHC 193 (Admiralty)

This case, an unsuccessful appeal of London Arbitration 8/25, arose from a dispute under a time charterparty involving the vessel Sagar Ratan, concerning whether the vessel was off-hire during a delay caused by a Covid-19 outbreak among the crew. The vessel had been chartered by disponent owners to the charterers under an NYPE form for a one-time trip from the Philippines to China via Australia.

Applicable to the case are the following clauses.

Additional Clause 38:

Normal quarantine time and expenses for the Vessel’s entering port shall be for Charterers’ account, but any time of detention and expenses for quarantine due to pestilence, illness and etc. of Master, officers and crew shall be for Owners’ account.”

Additional Clause 50:

In the event of loss of time either in port or at sea, deviation from the course of the voyage or putting back whilst on voyage, by reason of … sickness or accident to the Master, officers, crew … the hire shall be suspended from the time of the Vessel’s inefficiency in port or at sea until the time when the Vessel is again efficient in the same position or equidistance position to the destination.

All directly related expenses incurred including bunkers consumed during such period of suspension shall be for Owners’ account. Under this clauses neither Owners not Charterers to be allowed to be benefited at the expense of the other party.”

Finally, clause 129 was an amended BIMCO Infectious or Contagious Diseases Clause for Time Charter Parties 2015. This clause in relevant part reads as follows:

(a) For the purposes of this Clause, the words:

‘Disease’ means a highly infectious or contagious disease that is seriously harmful to humans.

‘Affected Area’ means any port or place where there is a risk of exposure to the Vessel, crew or other persons on board to the Disease and/or to a risk of quarantine or other restrictions being imposed in connection with the Disease …

(h) If … the Vessel does proceed to or continue to or remain at an Affected Area:

(i) The Owners shall notify the Charterers of their decision but the Owners shall not be deemed to have waived any of their rights under this Charter Party.

(ii) The Owners shall endeavour to take such reasonable measures in relation to the Disease as may from time to time be recommended by the World Health Organisation [sic].

(iii) Any additional costs, expenses or liabilities whatsoever arising out of the Vessel visiting or having visited an Affected Area, including but not limited to screening, cleaning, fumigating and/or quarantining the Vessel and its crew, shall be for the Charterers’ account and the Vessel shall remain on hire throughout.”

After loading in Australia and replacing seven crew members, the vessel sailed to Bayuquan, China. Upon arrival, five crew members tested positive for Covid-19, necessitating their replacement. The vessel deviated to Ulsan, South Korea for the crew change before returning to Bayuquan. This caused a delay from 31 March to 14 April 2022. The charterers deducted hire and expenses for this period; the owners sought reimbursement and indemnity.

The tribunal held in favor of the charterers, finding that clauses 38 and 50 placed the burden of Covid-19-related delays on the owners, while Clause 129 did not shift that burden due to its narrow interpretation of what constitutes an “Affected Area.” The owners appealed, raising three legal questions: the proper interpretation of “Affected Area” under Clause 129; whether deviation to replace crew amounted to detention under Clause 38; and whether the vessel was off-hire under Clause 50 when still able to perform service.

The court upheld the tribunal’s decision on all points.

1. Clause 129 (BIMCO Clause): The court emphasized that the clause distinguishes between areas with general risk and those with specific crew-related issues. Bayuquan was not deemed an “Affected Area” because the imposed quarantine resulted from the infected status of the crew, not a general policy of quarantine applicable to all vessels. Thus, the clause did not apply. Even if Bayuquan were an Affected Area, Clause 129(h)(iii) required a causal link between the delay and the area’s status — which was lacking, as the delay was caused by positive Covid tests, not the port visit itself.
2. Clause 38 (Quarantine Clause): The court found that this clause functioned as a quarantine-specific off-hire provision. He accepted that the vessel’s inability to discharge at Bayuquan until the infected crew were replaced constituted “detention due to illness,” meeting the clause’s requirements. The vessel was physically restricted in performing the charter’s core service — this met the legal threshold for detention under previous case law.
3. Clause 50 (Deviation Clause): The court held that the vessel was off-hire under this clause due to “loss of time” resulting from crew illness, which rendered the vessel inefficient. Drawing on The Berge Sund, the court concluded that crew illness, like engine failure, was not an incident occurring “in the ordinary way” under a charterparty. As such, the deviation and resulting inefficiency triggered the off-hire provision.

The High Court dismissed the owners’ appeal, confirming that the delay was for the owners’ account under the quarantine and deviation clauses. The BIMCO clause did not apply since the delay was not due to visiting an Affected Area but to the specific health condition of the crew. This judgment underscores the importance of precise contractual language in charterparties dealing with infectious diseases, particularly around causation and operational efficiency.