BP Exploration Operating Co Ltd v Chevron Transport (Scotland) (The “Chevron North America”) - House of Lords (Lord Slynn of Hadley, Lord Hope of Craighead, Lord Clyde, Lord Hobhouse of Woodborough and Lord Millett) - 18 October 2001

Section 74 of Harbours, Docks and Piers Clauses Act 1847 providing that “owner” of vessels should be answerable for any damage done by the vessel to harbour works - Whether the word “owner” includes demise charterer - Whether claims barred by limitation

On 28 February 1990 the vessel Chevron North America berthed at the Sullum Voe terminal in Shetland for the purpose of loading crude oil from the terminal. The terminal was owned and operated by BP Exploration Operating Co Ltd (“BP”). On the following day the wind strength increased, and the four loading arms on the jetty to which the vessel was attached were damaged when the vessel’s mooring winches rendered and she moved off the berth. On 21 February 1995 BP brought proceedings against Chevron Shipping Co (“Shipping”), a California corporation, alleging that Shipping were the owners, managers and operators of the vessel. Although Shipping initially admitted those averments, they withdrew them on 12 June 1995, and said that the vessel was owned by Chevron Tankers (Bermuda) Ltd (“Tankers”),a Bermuda corporation. On 16 June 1995 BP brought proceedings against Tankers. Tankers admitted that they were the registered owners of the vessel, but averred that she was the subject of a bareboat charterparty with Chevron Transport Corporation (“Transport”), a Liberian corporation. On 28 September 1995 BP brought proceedings against Transport. In all three actions BP alleged that the accident was caused by the defendants’ breach of their contract with BP as the operators of the terminal, and that the accident was caused by the negligence of the defendants, and that of the master for whose actions they were respsonsible. BP said that it had title to sue both for breach of contract and on the ground of negligence in its capacity as the operator of the terminal, and that all the other participants in the terminal had assigned their rights to BP in respect of the loss and damage. BP also said that the jetty was constructed on land owned by the Crown Estates Commissioners and leased to Shetland Islands Council by whom their respective rights of action to sue for the loss and damage had been assigned to BP. BP also said that the loading arms formed part of the property of Shetlands Islands Council as the harbour authority, that the defendants were liable under section 74 of the Harbours, Docks, and Piers Clauses Act 1847, and that the harbour authority’s right to payment under that provision had also been assigned to BP.