Neutral Citation Number: [2010] EWHC 2578 (Comm)

Case No: 2008 Folio 369
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 19 October 2010

Before :

MR JUSTICE CHRISTOPHER CLARKE
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Between :

	(1)	GARNAT TRADING & SHIPPING (SINGAPORE) PTE LTD

(2)	VUNG TAU SHIPBUILDING INDUSTRY JOINT-STOCK COMPANY
	Claimants/Part 20 Defendants
	
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	BAOMINH INSURANCE CORPORATION
	Defendant Part 20 Claimant	

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Michael Ashcroft (instructed by Thomas Cooper) for the Claimants
Stuart Isaacs, QC (instructed by Taylor Wessing LLP) for the Defendant

Hearing dates: 8th -12th, 15th – 17th March, 28th May
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Judgment

MR JUSTICE CHRISTOPHER CLARKE

1	In this action the claimants claim damages against Baominh Insurance Corporation (“Baominh”) in the sum of US $ 8,388,600 arising out of the total, or constructive total, loss of a floating dock (“the Dock”), carrying a floating workshop (“the Workshop”),  which sank in the course of a voyage from Vladivostok in Russia to Vung Tau in Vietnam.

The parties

2	Garnat Trading & Shipping (Singapore) Pte Ltd (“Garnat”), the first claimant, is a trading and shipping company based in Singapore. Its principal director is Mr Mykola Sashkin. Vung Tau Shipbuilding Industry Joint-Stock Company (“Vung Tau”), the second claimant, is a Vietnamese company and a subsidiary of Vietnamese Shipbuilding Industry Business Group (“Vinashin”), a company owned by the Vietnamese State. 

3	Baominh Insurance Corporation (“Baominh”) is an insurance company based in Vietnam. It specialises in, inter alia, marine insurance risks.

The Floating Dock

4	The Dock was built in 1972 in the Ukraine at Kherson, a sea port on the Dnieper on the Black Sea. Its hull, which was 139.5 m long, was constructed of reinforced concrete and sub-divided into 16 ballast tanks. On either side of the hull were side walls (or “towers”) which were constructed of steel and sub-divided into ballast tanks and void spaces. The latter functioned as buoyancy compartments. Each tower was divided into four ballast tanks and three buoyancy compartments. There were also buoyancy compartments in the hull itself. The Dock had living quarters (it could accommodate up to 17), towing and anchoring gear, and electric power from 3 generators (one an emergency generator). 

5	The Dock had 3 decks: the pontoon deck (hereafter “the main deck”), the safety deck and the top deck. For the voyage to Vladivostok a number of pontoons were installed on the main deck. One in particular was at the forward end. Further forward of that there was a steel breakwater. Four steel stanchions extended from the forward edge of the forward pontoon to the breakwater. The Workshop was loaded onto pontoons on the Dock, aft of the forward pontoon.  

6	The Dock was designed to have six pumps for ballasting and deballasting operations in order to lower or raise the Dock swiftly in the water. These had a pumping rate of 1,500 or 2,000 m3 per hour. As a result the Dock could be entirely de-ballasted (save for a minimal residue) in about 2 hours. The ballast system would allow any of the six pumps to pump out any compartment although normally each pump would work upon a group of tanks.

The insurance

7	The insurance was dated 12th June 2006. There is a dispute as to when it was actually agreed. It takes the form of a hull policy on the Dock and Workshop for a total sum of   $ 8,388,600 for a single voyage from Vladivostok to Caimep Port, Vung Tau. It is signed by Mr Nguyen Van Minh.

The acquisition of the Dock by Vung Tau

8	Vung Tau wanted to purchase a floating dock and workshop for commercial use in Vietnam. In December 2005 Mr Le Minh Hai of Vung Tau approached Mr Sashkin of Garnat, whom he knew well, for help in buying these items. Mr Sashkin knew, from a circular that he had received from brokers at the end of July 2005, that the Dock was for sale and he agreed to act, in effect, as a broker. At that stage the Russian Maritime Register of Shipping (“RMRS”) was preparing a report about the conversion work needed if the Dock was to be transported. After various investigations and assessments it was agreed that Garnat would purchase the Dock and the Workshop from their owners, who were originally Pervomaiskiy Ship Repair Yard JSC (“PSRY”), and sell them to Vung Tau.  In the end the seller was a Hong Kong company called Honest Winner Industrial Limited (“Honest Winner”), to whom PSRY sold the Dock and Workshop after negotiations for the purchase by Garnat had begun. The terms of Garnat’s purchase remained the same. Honest Winner changed the flag to that of Cambodia. Garnat was to arrange for the necessary alterations to the Dock to make it ready for the voyage from Vladivostok to Vietnam, oversee the implementation of the Towage Plan and then sell the Dock and the Workshop to Vung Tau in a seaworthy state ready for towing to Vietnam.

9	Garnat entered into a Memorandum of Agreement (“MOA”) with Honest Winner on 12th April 2006. On the same day it entered into a ship repair contract with DalRemSnab DV Ltd (“DalRemSnab”).

10	An MOA between Garnat and Vung Tau was signed on 31st May. A final version of the MOA was signed on 6th June, by which date Garnat had taken delivery from Honest Winner, and Class Certificates for both Dock and Workshop had been issued by GMB in Garnat’s name. The change of Classification Society arose because the Cambodian Registry to which the vessels were to be transferred had an exclusive arrangement with GMB. 

11	On 9th June Garnat, Vung Tau and Standard Chartered Bank (“SCB”) entered into an escrow agreement relating to the Dock and Workshop providing for payment of the price of which 20%, and later 80%, was to be released in accordance with the terms of the agreement.  On 11th June Garnat sent to Vung Tau a letter asking for the price to be remitted to SCB and specifying 14th June as the date for completion. On 14th June Garnat and Vung Tau agreed an addendum to the MOA which provided for the purchase price to be paid into a joint account at the bank, of which 20% was to be released in accordance with joint instructions in exchange for clean title to the vessel and agreed delivery documents and 80% in accordance with joint instructions upon the fulfilment of all legal procedures and physical departure of the vessel from Vladivostok. 

12	On 13th July Garnat complained to Vung Tau that it was refusing to release the balance of 80% of the price from the escrow account and threatened arbitration. On 14th July the vessel sank. On 15th July Garnat and Vung Tau agreed to proceed together to procure the bank to return 80% of the price to Vung Tau and to recover under the insurance recognising that Vung Tau had remitted 20% of the price and that the remaining insurance money was to be paid to Garnat. 

Preparation for towage

13	On 7th April 2006 Garnat engaged Daltramp Shipping Company (“Daltramp”) to supervise the preparation of the Dock and the Workshop for towage.  Daltramp employed Mr Kalmykov, a certified independent surveyor, to supervise the repair, conversion and preparation of the works. A substantial repair and preparation program took place under the supervision of two Class surveyors (from RMRS and GMB), Mr Kalmykov, and others, including (i) Captain Oleg Rada, the Master of the Dock; (ii) Captain Parshintsev, the commander of the towage expedition; and (iii) various port officials and inspectors. Appendix 1 contains a summary of what occurred.

14	The Dock was powerless. It was towed on the insured voyage by two tugs, LAZURIT and TOPAZ. Captain Parshintsev was the Captain of the latter.  The Towage Contract was agreed on 2nd May 2006 between Garnat and Pacifictramp Shipping Co. The Workshop was stowed and secured on the main deck of the Dock as cargo together with other pieces of machinery and equipment. 

23rd June 2006 - departure from Vladivostok

15	According to the claimants, on 23rd June 2006 the Dock was ballasted to a draft of 2.8m and was ready for departure. A document entitled “Statement on the right of departure No 1672” signed by the Controller of the Port State Control  (A. Kislov) and described as drawn up at 14:15 on 23rd June shows an even draft of 2.8m with ballast of 286 mt.

16	However, as recorded in a “Letter of Explanation” of 4th August 2006 from Captain Rada to Captain Parshintsev, (which he was asked by the Russian Investigation Board to write after having been given a copy of the log of the TOPAZ), in the evening and prior to departure the Deputy Harbour Master attended on board and recommended that the draft be increased to 4.4m to reduce the windage whilst the Dock was moving under tow along the narrow channel in Golden Horn Bay in Vladivostok. Captain Rada agreed; ballasted the Dock accordingly; and then reported to Captain Parshintsev, the commander of the expedition, a draft of 4.4 m prior to departure. 

17	The Dock sailed at about 22:00 on 23rd June 2006, towed initially by TOPAZ alone. 

24th June 2006

18	It is apparent from the log of the TOPAZ which refers to a 0.5. m sea throughout 24th June and to a number of photos taken in the early afternoon of 24th June that sea conditions on that day were benign.  In the morning Captain Rada, the Dock Master, was ordered by Captain Parshintev, as commander of the expedition, to reduce the draft to 2.8 m. This is recorded in the log of the TOPAZ in the following terms:

“08:40	Calculated the dock’s tonnage at the moment for the dock’s draught 4.4m – 19320 t. Ordered to dock master to pump out ballast and to get the dock’s draught as 2.8m.”

19	The claimant’s case is that the draught was so reduced. That was the evidence of Captain Rada (see also the Letter of Explanation referred to in para 16 above). The TOPAZ log reveals no later entry stating that the draft had not been reduced (or that it had). 

26th June 2006

20	A photograph taken at 12:39 on this day shows what may well be a draft of 2.8m. But assessment of draft from photographs alone is not very reliable since it involves placing a two dimensional scale on a photograph of a three dimensional object. It is, however, clear that the draft was not 4.4m.

27th June

21	The TOPAZ log for 27th June has the following entry 

“08:30 	The dock master reported that during the day of June 26 they inspected all ballast compartments on board the floating dry-dock No 7 and all tanks of floating workshop No 722 as well as of pontoons stowed on pontoon-deck. No water found, the dry-dock de-watered. Dry dock’s draught = 3.3m.

22	Baominh submits that this entry shows that the Dock was not de-ballasted to 2.8m. The Claimants say that what it shows is that the 3rd mate of the TOPAZ (Mr Dudinov) recorded only one of the different draft levels that were reported on 26th June 2006 when the ballast system on the Dock was tested.

23	Captain Rada’s Letter of Explanation of 4th August records that at about 09:00 on 26th June Captain Parshintsev told Captain Rada over the radio that head office in Vladivostok had ordered that there should be drills and inspection of the water impermeability of all the hatches and doors on the Dock, Workshop and pontoons, and a test of the ballast drainage system and training of the crew in its operation. As a result a series of activities took place which were reported to Captain Parshintsev. They were:

(a)	Complete drainage of the tanks which showed that they were all watertight and produced a draft of 2.7m; water impermeabililty of all the hatches and doors was established and the absence of leakage between tanks, pumps and all the other equipment of the ballast drainage system;

(b)	Ballasting with an intake of about 2500 tonnes to a draft for riding at anchor, which produced a draft of 3.3m;

(c)	Ballast pumping out to the moulded draft of 2.8 m in which about 260-280 tonnes of ballast water remained in the tanks.

24	A Letter of Explanation of 7th August 2006 from Mr Dudinov reads as follows:

“On the 26th of June during my morning watch it was advised from the drydock that damage control drills and testing of the system of pumping water in/out to/from ballasting tanks were started. On the 27th of June the master of the drydock advised that during the 26th June trainings on dock drainage and ballasting were held, that all the drydock's system are go whereat I made a short entry in the logbook. During the radio traffic between the commander of the expedition and the master of the drydock I heard that the drafts of 2.8 and 3.3. m under different conditions of ballasting were mentioned. In the logbook the entry of the draft of 3.3 m was made.”

Close encounter with typhoon EWINIAR

9th July

25	On 9th July the Dock had a close encounter with typhoon EWINIAR. During the night of 9th July the ship encountered wind forces of up to 22 m/sec (sea force 6) and an adverse swell of up to 6 metres. These conditions were well in excess of the Towage Plan limitations (see para 40 below) of sea force 5 and wave heights of 2.0 – 3.5 m. No significant damage was suffered. The TOPAZ log records that at 12:05 the Dock Master reported that “fastening of pontoon located in Dock’s fore part broken”.  A report of the Chief Mate of the Dock of 19th July to Captain Parshintsev gives more detail: 

“On 09.07.2006 during stormy weather a sea wave overflowed the dry-dock pontoon-deck and torn out fastening of forward pontoon in way of breakwater (four stanchions) and forward head guy lines. The pontoon shifted by approx. 5 cm in aft direction and by approx. 10 cm to port side” 

Captain Parshintsev report to Daltramp of 12th July 2006 has different figures of 15 cm to port and 10 cm aft.

10th July

26	On 10th July the conditions improved with wind speed of 20 m/s and a sea force of 5 and a swell of 2.5 - 3.0 metres.

27	The crew repaired the lashing of the pontoon. The report of 18th July of the Dock’s Chief Mate records:

“When on 10.7.2006 the stormy weather abated, in accordance with the Master’s order the crew under my guidance and with my participation mounted four guy-lines into the pontoon (steel line of 19mm thickness), welded angle bars on stanchions and breakwater, re-tightened guy lines with loads on the pontoon deck”.

Tropical storm “Bilis”

12th July

28	At 14:00 LT on 12th July the convoy reduced speed to half ahead on one engine, in order, so it was hoped, to leave the centre of tropical storm “Bilis” over 200 nautical miles distant to the south. 

13th July 

29	On 13th July Bilis changed course from WNW to NW bound and the Dock was caught by a near direct hit. The change of direction was unexpected and contrary to what was forecast. The forecast had, also, been that the storm would weaken. In fact during the course of the day the weather progressively worsened and the wind force became as high as 20 -28 m/sec with a swell of up to 6 metres. The log of the TOPAZ records a deteriorating position:

0400	Unfavorable weather. Wind from E – 12-14 m/sec/ High seas. Swell from SE of 5 m height, sometimes 6m height.

1510	Dock master reported that pontoon fastenings broken. We reduced engine’s speed to slow ahead-4 to steer the course. Dock’s crew mounting new fastenings on pontoon.

1600	Stormy weather. Wind NE – 20-25 m/sec, wind induced waves of height of about 4m, swell from SE 5-6 metres.

1830	Dry Dock No 7 reported that Dock’s crew fighting for Dock’s survivability – repairing holes in pump compartment

2115	Dock master reported that last remaining guy-line fastening the pontoon broken. Decided to evacuate the Dock’s crew in case the situation aggravated. 

2330	Dock master reported that the Dock’s ballast tanks intensively taking water, the Dock got list to port side. 

2400	A wind speed of 28 m/s and swell up to 6m.

The log of the LAZURIT records wind speeds of 12-24 m/sec, sea force 6-8.

30	According to a letter of 14th July from Pacific Tramp (the towage contractors) at 18:30 LT the tow captain gave the following report of events on 13th July. The weather conditions had become much worse and a big mass of sea water was going “up to dock staple deck”.  The steel wire ropes lashing the forward pontoon were broken and the pontoon became free moving. At 20.30 the Dock became difficult to tow. The crew did their best to discharge water from the ballast tanks by pumping.  At 23.30 the wind force (ENE) became 23-25 m/sec, with a swell of up to 6 metres. The ballast pumps became unable to discharge the large quantity of sea water coming over into the Dock. The trim to the head increased more and more. A distress message was sent.

31	The weather and sea conditions experienced during 13th/14th July were extreme with wind speeds of up to 33 m/s and seas of up to 10 m in height with sea force 10 on 14th: see the LAZURIT log. The TOPAZ log reports wind speeds of 30 m/s. In the end the force of the weather and sea broke all of the pontoon securing arrangements with the result that the pontoon was free to move around the main deck. As a result it collided with and holed various ballast tanks and buoyancy compartments and also slammed heavily upon and may well have holed the main deck (although no one saw this because the deck was permanently covered with water). 

32	Details are set out in Captain Rada’s report of 21st July 2006 to the Russian Investigation Commission. It appears that at one stage the pontoon was temporarily secured by 6 longitudinal guy lines from the “dry-dock towers to the pontoon bollards” but the lines were subsequently torn out by the force of the waves and the pontoon began to move chaotically, striking interior bulkheads of the towers, holing the forward buoyancy chamber on the port side in two places, and striking the deck itself with great force. Later it made holes in the forward starboard buoyancy chamber. 

33	It is likely that, as the official investigation of the Russian Ministry of Transport concluded, the hull structure began to break down allowing sea water to enter into ballast compartments uncontrollably. Notwithstanding the efforts of the crew to attempt to refasten the pontoon, patch holes, and pump out flooded tanks at about 03.00 the Dock had to be abandoned as more and more water came in. The crew were picked up from the water by LAZURIT, save for Captain Rada who was missing for many hours before he was picked up by a Chinese vessel.  The Dock’s logbook was lost when Captain Rada’s life raft foundered on rocks before, sometime later, he was rescued. 

Claims after the loss

34	The claimants gave Baominh notice of loss on 14th July and notice of abandonment on 15th August 2006. Baominh initially instructed DP Survey Group N.V. (“DPS”), international loss adjusters and expert surveyors, to investigate the cause of the loss. DPS instructed Marinex-ILCS Limited (“Marinex”) to carry out the investigation. They did not suggest any basis for denying liability. In December 2006 Baominh instructed Mr Andrew Case as a further expert consultant.

35	On 17th April 2007 Baominh purported to avoid the insurance for alleged material non-disclosure and breach of the implied warranty of seaworthiness.

Investigations

36	There was a formal investigation by the Ministry of Transport for the Russian Federation. It concluded that the Dock was wrecked because of the extreme wave heights encountered (of 8 m) which exceeded the permitted height of 3.5 m and resulted in constructive hull breakdown. The report did not criticise the seaworthiness of the vessel.

37	DPS/Marinex produced a report for Baominh, prepared by Mr Vladimir Omelyanenko. The report made no criticism of the seaworthiness of the Dock and expressed the view that the main cause of the sinking was the extraordinary weather conditions and the “major factor was the wave heights significantly exceeding the maximal allowable height for which the Dock could retain her strength”.

38	A report by the Far East Marine Research, Design & Technology Institute, which considered whether the procedures designed to prepare for the towage were sufficient, also made no criticism of the seaworthiness of the Dock. It expressed the view that the Dock had been subjected to external conditions much more severe than the established limits i.e. the wave height of 3.5m set out in the Assessment to which I refer in para 40 below.

The cases of the parties

The claimants

39	The claimants contend that the vessel was lost by perils of the seas in the form of an encounter with extraordinary weather conditions (wind speeds up to 33 m/s, a sea force of 10 and wave heights of up to 10m) which far exceeded the conditions which the Dock had been designed to or could reasonably be expected to endure and that Baominh’s purported defences are a contrived and unfounded attempt to avoid liability.

Baominh

Non-disclosure

40	Baominh contends that the claimants should have disclosed, but failed to disclose, the conclusion of a document entitled (in translation) “Floating Dry Dock of Project 1760 (FD-7) 1760-901-307 Assessment of Strength, Stability and Unsinkability during Towage” (“the Assessment”). This document forms part of a much larger set of documents called the Towage Plan, which, as that name implies, were prepared for the purpose of ensuring the safe towage of the Dock to Vietnam.  

41	The Assessment contains very detailed calculations as to the stability and floodability of the Dock. These calculations were based on initial data which included a midships draft during Dock towage of 2.79m. In paragraph 4 there was an “Assessment of Maximum Wave Disturbance at Conditions Ensuring Strength” which stated that:

“The design maximum wave is determined according to the formula (which is then set out) [as] 5.58m

The design maximum wave height during towage hd = 5.58m, which corresponds to scale 6 wave height of 3% probability.

According to experience in towing constructions similar in type, the design maximum wave height hd is 2.0…3,5m which corresponds to scale 5 wave height of 3% probability” 

42	The Assessment concluded:

“6.1. In conformity with design documentation, [the Dock] is permitted for tugging by sea at a wave height of h3%= 7m… 

6.1.3.In accordance with data in the present document, with consideration for the design ultimate bending moment, the maximum scale for waves is 6 at a wave height of h3% = 5.77m

Considering the practice of towing such Docks, the designer considers it possible to allow [the Dock] for ocean tugging, limiting the maximum permissible wave scale to 5 at a wave height h3% = 2.0… 3.5m. To minimise the bending moment at midship on calm water, in conformity with the requirements of the Rules of the Shipping Register 2005 ….and the Dock trim, liquid ballast must be taken into ballast sections No 2 and No 19 in the amount of 286 tonnes and 363 tonnes respectively.

For standing at anchor, to minimise the swaying surface the Dock’s draught must be increased to an amount of d=3.20m. This is achieved by additional use of liquid ballast in ballast sections No 2 and No 19 in the amount of 2*545-1090 tons and by using liquid ballast in ballast sections No4 of the port side and No 8 of the starboard side in the amount of 631 tonnes and No 13 of the port side and No 17 of the starboard side in the amount of 805 tons… 

6.2.2 In conformity with design documentation the seaworthiness of the Dock in sea waves in condition of lack of slamming is ensured in the range dtow= 2.4 …3.75m. The present tugging is carried out with a draught of dtow=2.79m which ensures fulfilment of the necessary requirements”

In short the assessment specified that sea towage was permissible only in conditions up to sea force 5 and with a maximum permissible wave height of 3.5m. It is this information which it is said ought to have been disclosed.  

43	The claimants contend as follows:

a)	the Assessment and the technical information contained in it were provided to Baominh;

b)	there was in any event a fair presentation of the risk since it was presented on the basis that the technical detail of the Towage Plan was to be inspected and approved by the Classification Society and Baominh was content to proceed on that basis;

c)	there was in any event no obligation to disclose the Assessment or the technical information contained in it because a reasonable underwriter of floating docks would know that the towage of a floating dock will be subject to some limitations regarding wave height and the particular limitations applicable in the present case were not unusual;

d)	Baominh waived disclosure – a reasonable insurer would have taken steps to obtain the information if he was interested in it;

e)	there was no obligation to disclose the technical information because it was superfluous to disclose it by reason of an express towage plan warranty that was included in the proposal for the insurance until the very last moment when it was unilaterally removed because Baominh’s underwriter was satisfied that GMB had inspected and approved the technical content of the Towage Plan. 

f)	Any non disclosure did not induce. Non-disclosure of the technical information was not a substantial cause of the decision to write the risk on the terms in which it was written – Baominh’s underwriter had no real interest in the underlying technical information.

Unseaworthiness

44	Baominh contends that the Dock was unseaworthy at the time that it sailed from Vladivostok on 23rd June 2006 by reason of (i) its draft at the time of sailing; (ii) the manner in which the pontoon was secured on the main deck of the Dock; (iii) the condition of the ballast/fire systems, the manhole covers and the watertight subdivisions between the ballast tanks. 

45	The claimants deny that the Dock was in any way unseaworthy. Both it and the Workshop had undergone an extensive program of works to fit them for the voyage. This had included comprehensive inspections by experienced surveyors, the tug and Dock captains, Class surveyors, Port State inspectors and others. The initial draft of 4.4m, which had the approval of Captain Rada, Captain Parshintsev, and the Deputy Harbour Master, did not make the vessel unseaworthy. Its adoption was a prudent measure taken to reduce windage and hence improve handling whilst the vessel was in the sheltered and flat calm waters of Golden Horn Bay, where vessels are exposed to gusting winds as a result of the topography in and around Vladivostok. The draft was readily reducible to 2.8m. The pontoon securing arrangements were more than adequate to survive sea conditions considerably worse than the 2.0 – 3.5m wave height mentioned in the Assessment without allowing the pontoon to come loose in such a way as to pose a risk of damage to the Dock. There were no defects of substance and certainly none that could not be remedied on voyage. The Dock only succumbed because of the unexpected and extraordinary conditions experienced on 13th/14th July when the Dock was hit, nearly directly, by severe tropical storm BILIS which changed track unpredictably and developed abnormally.  

The witnesses

46	The claimants adduced the evidence of the following factual witnesses:

(i)	Alexander Kalmykov; Superintendent of Daltramp of Vladivostok which supervised the repair and conversion work of the Dock and Workshop on behalf of Garnat;

(ii)	Captain Rada, the Captain of the Dock;

(iii)	Le Minh Hai, a director of Vung Tau;

(iv)	Mykola Sashkin, a director of Garnat;

(v)	Captain Parshintsev, Captain of the TOPAZ and commander of the towage expedition.

The first two of these witnesses gave evidence by video-link from Vladivostok. Mr Hai gave evidence by video-link from Vietnam. Mr Sashkin gave evidence in person. Mr Parshintsev’s evidence (such as it was) was adduced in writing.

47	Baominh adduced the evidence of the following factual witnesses:

(i)	Nguyen Van Minh: General Manager of  Baominh’s Marine Insurance division;

(ii)	Ho Hai Dang – Baominh’s marine insurance specialist, responsible for the insurance;

(iii)	Vladimir Omelyanenko, joint founder of Marinex, the company used by DPS to investigate the sinking of the Dock;

(iv)	Byron  Lloyd-Jones, a technical consultant at a computer forensics company instructed by Taylor Wessing LLP, Baominh’s solicitors;

(v)	Mr James Crabtree, a solicitor at Taylor Wessing;

(vi)	E.S.Tikhov, engaged by Marinex, who interviewed crew members of the Lazurit;

(vii)	Richard Kuek Chong Yeow, a solicitor at Gurbani & Co.

Only the first two gave evidence in person. 

Expert evidence

48	Expert underwriting evidence was given by Mr Peter Christmas for the claimants and Mr Murray Scott for Baominh; and expert seaworthiness evidence by Mr Colin Barker for the claimants and Mr Andrew Case for Baominh.

The placing of the insurance

49	Mr Hai of Vung Tau recommended to Mr Sashkin that Garnat should insure with Baominh. In the month before the insurance was placed there were several meetings between representatives of Garnat and Baominh. Some of the meetings are disputed either as to whether they took place at all, or as to who attended, or as to what was presented to Baominh. It is therefore necessary for me to determine what is likely to be the position in the light of the evidence and the inherent probabilities. 

Observations on the evidence and the witnesses

50	Before setting out my findings, which appear in the paragraphs that follow, it is necessary to say something about the evidence and the witnesses. Baominh’s chief witness was Mr Dang. He had no written records of any meetings or discussions and was disinclined to make any. His practice, as expressed in his evidence to me was only to take a copy of a document which was shown to him by a customer if the customer asked him to do so, and not to make any written note of documents he was shown. He was very inexperienced and had never before assessed a risk concerning the towage of a floating dock. He was somewhat indifferent to technical documentation relating to the towage plan: see paras 76 and 78. This may explain his lack of recollection about it. He made a number of mistakes in relation to the documentation (see paras 89 and 94 below). He did not have a good recollection of the sequence of events.

51	Mr Minh, Mr Dang’s superior, had a very limited role in the fixing of the insurance.  He, too, had no written records of meetings or discussions. His recollection of events was also poor. 

52	By contrast Mr Sashkin’s recollection was detailed, credible and consistent with the available documents. I regarded him as a reliable witness. The same goes for Mr Hai, who corroborated some of what Mr Sashkin said. 

53	Baominh’s primary position was that the claimants had dishonestly attempted to maintain cover by seeking after the event to conceal their original failure to make disclosure and to demonstrate the alleged seaworthiness of the vessel. This involved, on their case, dishonestly inventing the occurrence of several meetings e.g. those of  18th and 19th May, 1st and 5th June, and fabricating at least one fax (10th June) and one e-mail (12th June). This would have been an elaborate and highly dishonest conspiracy. I do not accept that this is what has happened. 

54	The towage of a floating dock from one country to another across an ocean is something of a specialist risk. Neither Mr Minh nor Mr Dang had any experience of addressing such a risk, nor were they familiar with the technical aspects of towing a floating dock in the open sea or in much of a position to understand the detailed technical aspects of the towage plan. In those circumstances Baominh’s approach to the assessment of such a risk was that they were prepared to grant insurance provided that GMB approved the towage plan. It was that which, for them, was the critical factor. 

16th May 2006	1st Meeting at Baominh’s office		Sashkin and Minh

55	On 16th May Mr Sashkin met Mr Minh, the general manger of Baominh’s marine insurance department at Baominh’s offices in Ho Chi Minh City. Mr Sashkin explained his insurance needs. Mr Minh asked if he had any documents which would provide Baominh with information about the technical condition of the Dock and the Workshop and their present ownership. Mr Sashkin gave him a spare copy of the Towage Contract of 2nd May 2006 and a draft MOA dated 19th May 2006. Mr Minh either retained those copies or took copies of both those documents, and said that Baominh could provide a quotation very soon.

18th May	2ndMeeting at Baominh’s office		Sashkin, Minh & Dang

56	Mr Sashkin, not having received a quotation, telephoned Mr Minh and arranged to meet him. He met him that day with Mr Dang. Mr Sashkin handed to Mr Dang copies of the following RMRS documents for the Dock (a) a Class Certificate valid until 29th November 2006; (b) a Seaworthiness Certificate dated 29th November 2001, valid until 28th November 2006; (c) the last Survey Report for the Dock dated 9th February 2004; (d) a Certificate of Ownership dated 19th November 2002. He also handed over (e) an RMRS Class Certificate and Certificate of Ownership for the Workshop; and (f) a spare copy of a general description of the Dock and Workshop in English.

57	Mr Sashkin asked Mr Minh and Mr Dang what more information Baominh needed before they could provide him with a quotation. They asked about the Towage Plan which was mentioned in the Towing Contract and the draft MOA (referred to as “the Developed Project”). Mr Sashkin explained that this was a rebuilding project designed to make the ship seaworthy for the voyage to Vietnam and that all the Towage Plan documents should be with Vung Tau in Ho Chi Minh City and available at Baominh’s request. He explained that Vung Tau had obtained all the Towage Plan documents during their inspection of the Dock and Workshop in Vladivostok in May 2006; and that Garnat’s set of the Towage Plan documents was being used by their surveyor in Vladivostok to control the progress of the rebuilding works. He only had some of the main pages and the title page of some documents of the Plan (which he had had to produce to Vinashin and Vung Tau before their inspection in Vladivostok) which he could provide the next day. 

58	Mr Sashkin was asked to describe the documents in the Plan. He explained that the vast majority were plans, drawings and technical calculations for the rebuilding and consisted of about 500 pages of various sizes. Some of the documents described the terms and conditions for towing the Dock to Vietnam.

59	Mr Sashkin asked Mr Minh to draw up a protocol of the meetings of 16thand 18th May to record the transfer of the documents and agreed decisions. As an alternative he suggested handing over documents against a receipt by Baominh. Mr Minh said that these formalities were not acceptable and that it would be better if after every meeting Baominh issued a new quotation which would be accompanied by confirmation of agreed decisions and documents received. Mr Sashkin agreed. In the event this procedure was not followed. The meeting closed with Mr Minh and Mr Dang saying that they would provide Mr Sashkin with a quotation after lunch. Mr Minh explained that further communications would be with Mr Dang who would be primarily responsible for the insurance. 

60	This description of the meeting derives from Mr Sashkin’s evidence which I accept is likely to be correct and consistent with the inherent probabilities. Mr Dang had no recollection of this meeting (“I could not remember exactly about this time”). Mr Minh recalled no detailed discussion after 16th May.

The first quotation

61	By an e-mail of 14.47 on the same day Mr Dang, on behalf of Mr Minh, sent a quotation with a premium of 0.38% for the voyage. Included in the quotation were two warranties:

“-	Warranted Dock classed with and remain in the register of Russian Maritime Register of shipping classification society and all rules and requirements of the classification society complied with.

-	Warranted the towage plan must be inspected and approved by a Classification Society of IACS (International Association of Classification Society).”

The quotation referred to the Dock as being classified with RMRS and her nationality as Russian. The fact that Mr Dang included these warranties, and in particular the second supports the conclusion that a meeting with him took place on 18th as described in paras 56-60 above. I do not accept that the fact that the e-mail does not refer to the meeting shows that no such meeting occurred.

62	In the evening Mr Sashkin telephoned Mr Dang to say that the quotation did not correspond with the Towcon contract and the draft MOA between Garnat and Vung Tau dated 19thMay. A meeting was arranged for the next day.   

19th May 2006	3rd Meeting at Baominh		Sashkin, Minh & Dang

63	Mr Sashkin met Mr Minh and Mr Dang again before lunch. He thanked them for the quotation; told them that the flag would be changed to Cambodian and that after 30th May the Classification Society would no longer be RMRS but GMB, and asked them to amend their quotation accordingly. He referred them to the relevant boxes in the Towcon contract. He also showed them the MOA of 12th April 2006 between Honest Winner and Garnat to demonstrate these points. He did not permit Baominh to keep a copy of these documents. 

64	According to Mr Sashkin he handed over the following documents from the Towage Plan, which are in Russian:

(i)	The title page of the list of design documents for delivery of the Dock to Vietnam (1760-900-301) stamped as approved by GMB on 27th April 2006;

(ii)	The title page of the Assessment (1760-901-307) stamped as approved by GMB on 27th April;

(iii)	The last page of the Assessment which contains the Conclusion (paragraphs 6.1. – 6.3.)

(iv)	The title page of the Explanatory Note of the Towage Plan (1760-901-301) stamped by GMB; together with the seventh page (paras 3.2 – 3.6)

(v)	The title page of the Instructions to the Master of the Tug (1760-070-302)

(vi)	The title page of the Instructions for the Dock Master (1760-070-301) approved by GMB on 27th April. 

This set of documents had been e-mailed to Mr Sashkin on 4th May 2006 from Mr Lata in Vladivostok.

65	Mr Sashkin explained the content of these documents and offered to translate them from Russian to English. Mr Dang indicated that Baominh would ask him later if they needed to do so or would translate the documents themselves.

66	Mr Sashkin, who explained that after 30th May Garnat would be the owner of the Dock and Workshop and would be in a better position to provide full documentation, also presented four other documents:

(i)	The conclusion of Mr Pivovarov, the chief designer of Design Bureau Daljzavod (a large Russian ship yard with a design bureau) and manager of the Towage Plan, dated 26th April 2006, about the technical condition of the Dock, in Russian;

(ii)	Mr Pivarov’s conclusion about the technical condition of the Workshop of the same date;

(iii)	A 100 page document – M -11666713168-12.05 - consisting mainly of measurements and technical calculations by PSRY;

(iv)	The repair contract between Garnat and DalRemSnab of 12th April 2006.

67	Mr Sashkin handed over copies of (i) and (ii). Mr Dang looked through (iii) and took a copy of the title page. 

68	Mr Dang’s evidence was that there was no such meeting or that he had no recollection of this meeting. Mr Minh’s evidence was that he did not meet with Mr Sashkin and was not aware of Mr Dang doing so. I am satisfied that Mr Sashkin’s account is accurate. The meeting was needed in order to explain why Garnat wanted a revised quotation. It would be entirely natural for Mr Sashkin to have produced the documents which he says that he produced, not least because those specified in paragraph 64 had been sent to him as a batch. 

The second quotation

69	By an e-mail sent at 17:10 on 19th May Mr Dang gave a quote which referred to the nationality of the Dock and Workshop as Cambodian and the Class as GMB. The premium rate was now 0.40%. The warranties were amended to read:

“-	Warranted Dock classed with and remains in the register of Global Marine Bureau Inc. and all rules and requirements of the classification society complied with.

-	Warranted the towage plan must be inspected and approved by Global Marine Bureau Inc. or equivalence”

30thMay

70	Garnat concluded a crewing contract with Falcon Shipping. 

31st May	Signing of an MOA	

71	In the morning of 31st May Mr Sashkin met Mr Hai in order to sign the MOA between Garnat and Vung Tau. He and Mr Sashkin agreed that there should be a joint meeting between Garnat, Vung Tau and Baominh later in the afternoon in order (i) to hand over a copy of the signed MOA and  draw attention to the time and terms of delivery of the vessel which was to take place by 10th June; (ii) to introduce Vung Tau to Baominh; (iii) to hand over the signed crewing contract and ask Baominh to arrange insurance for the crew; and (iv) to inform Baominh that the repair and conversion works were complete, that the new documents for Honest Winner were already issued and that GMB had started its final survey in order to issue all ship’s certificates to Garnat as the new owner. 

4thMeeting at Baominh					Sashkin, Hai, Mai & Dang

72	Ms Le Thi Phuong Mai (“Ms Mai”), who was director of Vung Tau’s representative office in Ho Chi Minh City, called Mr Dang to arrange the meeting which took place at 2.30 in Mr Dang's office. It was attended by Mr Sashkin of Garnat, Mr Hai and Ms Mai of Vung Tau, and Mr Dang of Baominh. Ms Mai was asked by Mr Hai to attend the meeting in order to explain the Towage Plan in Vietnamese. 

73	Ms Mai introduced Mr Dang to Mr Hai. Reference was made to the signature of the MOA and the results of Vung Tau’s inspection in May and that Vung Tau had agreed to be joint assured because Vung Tau was buying the Dock during the course of the voyage. Mr Dang looked at the MOA of 31st May, which Mr Sashkin showed him, and the crewing contract of 30th May. He said that Baominh would wait to receive the documents being issued by GMB as a result of their survey and after that would issue the insurance contract. 

74	During the meeting Mr Minh came to the office and exchanged his business card with Mr Hai and Ms Mai. After a few minutes he left in order to attend a training course in Vung Tau City. 

75	Mr Sashkin drew Mr Dang’s attention to clauses 5, 8 and 18 of the MOA of 31st May which showed that the vessel was to be delivered to Vung Tau not later than 10th June. He told him that Garnat had booked tickets for the crew to fly to Vladivostok on 6th and 8th June and asked about insurance. Mr Dang promised an offer on insurance for the crew before 5thJune.

76	Ms Mai, who is fluent in Russian, put the Towage Plan on the table and opened some of the pages. She and Mr Dang spoke (in Vietnamese) for somewhere between 8 and 15 minutes. She showed him the key documents including the Assessment, the Explanatory Note and the Instructions to Dock Master and Tow Master; and briefly explained them by reading from them. According to the evidence of Mr Sashkin and Mr Hai Mr Dang said that these were very technical documents which were not of interest to him and were not necessary for the issue of the insurance. He asked whether Garnat could supply him with official documents such as the plan of the towage which indicated the route, the distance and the duration of the towage, details of the tow and the tugboats, and the terms and conditions of the towage and the requirements and obligations of the towing company. 

77	Mr Sashkin understood from this inquiry that Mr Dang had not studied the Towage Contract of 2nd May, which gave much of this information; and he reminded him that he had been handed a copy of that document on 16th May. It describes the contemplated route, the distance of the route, the duration of the towage, details of the tow and of the tugboats. 

78	Mr Sashkin drew attention to clause 11 (“General condition of tow: Satisfactory (in accordance with GMB surveyor report”) and explained that the final official document which would be issued by GMB would be its Survey Report which would confirm the fulfilment of the main requirements of the Towage Plan, the completion of the repair works and the fact that the vessel was ready for towing. He reminded Mr Dang of the Assessment, the Explanatory Note, the Instructions and other technical details of the tow which were included in the Towage Plan and which he had referred to by way of introduction at the meeting on 19th May. He suggested that Mr Dang make copies of some of the documents from the Towage Plan and again suggested providing him with a translation. Mr Dang said that this documentation was not necessary or relevant for insurance purposes.

79	It is not  clear (a) what exactly were the contents of the copy of the Towage Plan in Vung Tau’s possession at this stage; and (b) whether the file which Ms Mai had constituted Vung Tau’s entire copy of the Towage Plan or extracts from it. As to (a) different descriptions of the total contents of the Towage Plan have been given by the claimants’ solicitors at different times. As to (b) Mr Sashkin’s evidence referred at different stages to Ms Mai having a selection of documents and to her putting on the table a file with “the whole of the towage plan”. The likelihood is that it was a substantial proportion, but probably not the whole of the file, being, as was said, about 500 pages long and weighing about 5-6 kilos. The documents were loose in a file, which was not a lever arch file.  

80	At the end of the meeting, which lasted about 30-40 minutes, Ms Mai took the Towage Plan away. Mr Sashkin gave Mr Dang copies of (a) the signed MOA of 31st May; (b) the crewing contract of 30th May; and (c) the RMRS Tonnage Certificate of 30th May.

81	The above account is, again, derived from Mr Sashkin’s evidence which was corroborated by that of Mr Hai, who was familiar with the detail of the Towage Plan. Mr Dang had no recollection of this meeting although he did recall a meeting at some time between 30th May and 2ndJune but could not remember if Ms Mai was present. He did not accept that he was shown any of the documents to which I referred in para 76 except the Crewing Contract and a Crew List (which, at dinner with Mr Minh on 2nd June, he told him he had received).

82	Baominh contends that the sole purpose of the meeting was to discuss the provision of crew insurance. They contend that the claimants have given a fictitious account in an endeavour to establish that Baominh was shown the very documents which it denies receiving before the insurance was written. 

83	I am satisfied that the evidence of Messrs Sashkin and Hai is likely to be substantially accurate. I was invited to draw an adverse inference from the fact that no evidence had been tendered from Ms Mai, who has retired from Vung Tau and lives in Australia. The fact that evidence was not adduced from her means that the evidence is not as full as it could have been but I am not persuaded that I should infer from the fact that no attempt appears to have been made to contact her in Australia and to adduce evidence from her, that the account given of the meeting by others is largely invention. 

84	It was submitted that the round table at which the meeting took place in Baominh’s open plan offices which was said to be only 1.2 m in diameter and could not have accommodated the plan. The Towage Plan is a set of documents that has grown as matters progressed such that, in its present form it occupies seven lever arch files but these include English translations of Russian documents. I accept that the version which was produced at this meeting was a copy of the plan which comprised one large loose file of documents which could be worked through on the table referred to, even if it only had that diameter. 

1st June	5thMeeting at Baominh 					Sashkin & Dang

85	Mr Sashkin met Mr Dang in his office in the evening in order to hand over to him a copy of the new MOA signed with Vung Tau that day. The meeting lasted about 8 – 10 minutes. Mr Sashkin explained that Vung Tau wished to change minor terms of payment  from the previous version of the MOA signed the day before, as required by Vinashin’s head office in Hanoi. Mr Sashkin reminded Mr Dang about the insurance for the crew and asked him to confirm receipt of documents after every meeting as agreed to which Mr Dang said “Sorry, I will do”.  Mr Dang denies that this meeting took place.  I am satisfied it did. I can see no reason why Mr Sashkin should have invented it.

5th June 	Monday	6th Meeting at Baominh 	Sashkin, Hai & Dang

86	In an e-mail sent at 9:13 Mr Dang sent Mr Sashkin and Mr Hai a draft crew insurance contract and certificate. 

87	At about 10:00 a meeting took place between Mr Sashkin, Mr Hai and Mr Dang for the purpose of negotiating the terms of the crew insurance contract and also to introduce a new draft MOA which was to be signed on 6th June, incorporating further requirements of Vinashin. 

88	At this meeting Mr Sashkin handed over to Mr Dang Provisional Certificates of Registry from the Cambodian Registry for the Dock and the Workshop, which he had received from GMB the previous day. Baominh contends that this meeting never took place but I accept that it did.

89	At 17:22 Mr Dang e-mailed a draft policy naming Garnat and Vung Tau as insured which had some very odd terms. It referred to the “Shiptype” as a Bulk Carrier, with Vladivostok as its port of registry and a sum insured of $ 25,650,000. This was plainly a mistake.

6th June	Tuesday

90	Mr Sashkin visited Hanoi and negotiated and signed the MOA of that date. On the same day GMB issued Class Certificates in Garnat’s name for the Dock and the Workshop and an Interim Seaworthiness Certificate for the Dock. 

7th June	Wednesday	7th Meeting at Baominh		Sashkin & Dang

91	A meeting took place at Baominh’s offices at about 17:00 between Mr Sashkin, who had just returned from Hanoi, and Mr Dang at which Mr Sashkin handed over :

(a)	The completed application forms for the insurance of the Dock and the Workshop;

(b)	A copy of the MOA of 6thJune;

(c)	The GMB Provisional Class Certificates for Dock and Workshop;

(d)	The Interim Seaworthiness Certificate for the Dock, dated 6th June 2006; 

(e)	The Interim International Tonnage Certificate for the Dock from GMB, received that morning;

(f)	A copy of the Minimum Safe Manning Certificate issued by the Cambodian Registry and received by e-mail on 5th June 2006.

92	Mr Sashkin asked Mr Dang to correct the draft policy which he had previously sent (see para 89). Mr Dang expressed surprise at the incorrect draft of 5th June (which his computer produced in the same form when he printed it out but with the date of 7th June). 

93	It is common ground that this meeting took place and that documents (a), (b) and (e) set out in para 91 above were handed over. Baominh contends that the MOA which was handed over was that of 31st May. I prefer the evidence of Mr Sashkin. The likelihood is that he handed over all the up to date documents. 

9th June 	Friday 

94	A series of communications took place during the course of the day.  I set out the material ones by reference to their timing:

Time

9:31	Mr Dang e-mails Mr Sashkin a draft policy with Garnat and Vung Tau as insured, and a sum insured of $ 8,388,600 together with a debit note.
Both warranties had been removed. This was a mistake. The sum insured is expressed as “110% CIF Vungtau”. Vinashin had required cover for 110% of the contractual value of the Dock and Workshop. 

10:51	Mr Dang e-mails a new version of the policy (“Please find herewith the revised policy with the warranty as per our quotation”) which now contained a warranty that the Towage Plan must be inspected by an IACS Classification Society; but no warranty as to Class. That warranty had been removed because Mr Sashkin had provided GMB’s Class documentation on 7th June.

11:13	Mr Dang e-mails a further version of the policy where the sum insured is only specified as a monetary amount and the description of the subject matter is reduced.

11:17	Mr Sashkin said that he would supply all Towing Certificates “today or on Monday”.

11:24	Mr Sashkin e-mails Dang asking him to correct the warranty clause so as to change the name of the Classification Society (as the inspector of the towage plan) to Global Marine Bureau Inc.

11:47	Mr Dang replies “Thanks for your advise (sic): please review it”. This should have attached a policy but did not.

11:49	Mr Dang e-mails a policy and debit note. The warranty was now that the Towage Plan must be inspected and approved by GMB.

12:37	Mr Sashkin corrects the draft with the right name of the vessels, their official number and value		

13:34	Ms Hai e-mails her comments on the draft, which are not material for present purposes.

95	That evening Mr Sashkin, when he returned home, drafted a protocol of negotiations between Garnat and Vung Tau to be dated 10th June which recorded that both sides had agreed terms and conditions of the insurance policy with Baominh on 9th June and that Baominh had promised to issue a policy on Monday 12th June after receiving a certificate from GMB stating that the Dock and Workshop were ready for tugging. He also drafted a fax to Baominh with a copy to Vung Tau enclosing various documents – see para 97 below.

96	Mr Sashkin received by e–mail from GMB their (a) Interim Seaworthiness Certificate for the Workshop; (b) Seaworthiness Survey Report on the Dock; and (c) Statements of Compliance for Towing in respect of both tugs.

10th June	Saturday

The disputed fax

97	According to his evidence, just after midnight Mr Sashkin sent to Baominh a fax which consisted of a covering letter enclosing:

(a)	the Seaworthiness Survey Report on the Dock, which itself refers to the documents in (b) and (c) below;

(b)	the Instructions to the Tugboat Captain; 

(c)	the Instructions to the Dock Master, which refer to the Assessment;

(d)	the Statements of Compliance for Towing in respect of both tugs being the certificates the subject of the e-mail of 11.17 on 9thJune;

(e)	the Interim Seaworthiness Certificates for the Dock and the Workshop, received on 6th and 10th June respectively; and

(f)	the Interim Tonnage Certificate, received on 7th June.

98	The faxed letter, which was addressed to Baominh with a copy to Mr Hai of Vung Tau and headed “Seaworthiness Survey Report No GMBRU005 dated 10th June 2006 and other official documents of floating Dock and Workshop required for insurance”, recorded (i) that the Seaworthiness Survey Report  had been issued that day; (ii) that the Instructions  were part of the Towage Plan and that Vietnamese translations could be received from Vung Tau who had collected these documents when they visited Vladivostok in May; and (iii) that the Statements of Compliance for Towing and the Interim Seaworthiness Certificates had been issued that day. It also recorded that several other documents had been provided earlier. The letter requested that Baominh issue the policy.

99	According to Mr Sashkin the fax with its attachments was sent from his fax number to the fax number – 8210444 – of Baominh’s underwriting division. A copy of the fax was also sent to Vung Tau with all the attachments save (b) and (c) i.e. the Instructions which Mr Sashkin knew that Vung Tau had. 

Was the fax of 10th June sent to Baominh or received by it?

100	There is a dispute as to whether the fax to Baominh of 10th June was ever sent or, if sent, received. Baominh alleges that the fax to Baominh is a fabricated document which was never sent and never received. It draws attention to a number of matters in support of its contention:

(a)	The fax in the form which it was supposedly sent (i.e. as it appears at Tab 17 of the Core Bundle) was not produced to Baominh’s solicitors until 5th February 2010 when it was produced as a series of insert pages for inclusion in the trial bundles. What had been disclosed previously was the version received by Vung Tau.

(b)	The version of the Interim International Tonnage Certificate sent to Vung Tau has a header showing that the document came in by fax from Russia (IDD +7) to Garnat. That header is absent from the equivalent document said to have been sent to Baominh.

(c)	Other faxes from Mr Sashkin were sent to Baominh's main fax number – 8294185. Mr Sashkin’s first witness statement was provided a week after Taylor Wessing had informed the claimants solicitors that there was no record of incoming faxes made at the underwriting division’s fax number. There is no evidence that Mr Sashkin knew that 8210444 was the underwriting division’s fax number.

101	In my judgment the likelihood is that the fax was sent to Baominh. I have reached that conclusion for the following reasons. 

102	Firstly, that was the evidence of Mr Sashkin and I regarded him as a witness of truth. It was not suggested to him that he did not know the underwriting division’s fax number at the time (it appears on Baominh business cards) or that he took the opportunity of learning that no record was kept of incoming faxes to that number to claim that it was that number which he used. In view of the need to get the insurance fixed in order to sign the final MOA I do not find it particularly surprising that he should have faxed the underwriting division over the weekend. 

103	Secondly, Vung Tau has produced what appears to be, and what I find is, their copy of the fax to them. The stamp at the top shows it to have been despatched from Mr Sashkin’s fax and received between 12:39 and 12:51 a.m. on 10th June. It does not seem to me at all likely that a fax was sent to the party to whom it was expressed to be copied but not to the primary addressee. 

104	Thirdly, the contents of the fax and the fact that it was sent are consistent with the pattern of negotiations and supply of documents that preceded 10th June. Garnat had shown themselves fastidious in supplying documentation as and when it became available. The fax of 10th June was a fax which Garnat can readily be expected to have sent.

105	Fourthly, the contrivance involved in creating and deploying the purported fax, if it was never sent, makes it implausible that it is a forgery. 

106	Fifthly, I take account of the points set out in para 100 but I do not accept that they should lead to any contrary inference. As to the first, both versions should have been disclosed originally since they are different documents, the one having a time stamp and the other not, and the attachments are different (the Instructions being included in the fax to Baominh) and the existence of both was, as the subsequent controversy has shown, relevant to whether the fax was sent to Baominh. Further it is not clear exactly when the version said to have been faxed to Baominh came into the possession of the claimants’ solicitors. But I do not regard that failure as justifying the conclusion that the fax was never sent to Baominh.

107	As to the second, the difference between the two versions indicates that a different copy of the Interim International Tonnage Certificate was attached to the two faxes. Mr Sashkin suggested that he received many documents by both fax and e-mail and that he would send them by fax and e-mail to Baominh and Vung Tau. It seems likely that he received the Tonnage Certificate by both means, although no document has been disclosed showing receipt by e-mail. There is no evidence that the documents in question were e-mailed to Baominh. And one would, prima facie, expect the same documentation to be faxed to Baominh and Vung Tau or, at the least, that there would not be only a single page which was different.  I am not however persuaded that this oddity should cause me to conclude that nothing was faxed to Baominh at all.

108	In short, I do not regard either of the two points as casting such doubt on what happened as to preclude or invalidate the finding that I have made.

109	Sixthly, I note that the fax did not purport to include the Assessment. If, as alleged, it was created for the dishonest purpose of bolstering a false defence, it is somewhat surprising that it did not attach that document as well. 

110	Whether the fax was received is more problematic. Both Mr Minh and Mr Dang say that they were not provided with a copy of the fax. I deal with this question below. 

11th June		-    Sunday

111	On 11th June Mr Sashkin e-mailed Mr Dang to ask him to correct the draft policy again in accordance with a version attached which incorporated some minor changes and changed the date from 9th to 12th June, and to issue an original on 12th June. He also stated that two Statements of Compliance for Towing “have been sent to you by fax now” and that he would meet him tomorrow morning to hand over good copies of those statements and “agree other questions of our common matter”. This e-mail tends to confirm the despatch of the fax of 10th June (with which two Statements of Compliance were enclosed).

12th June	Monday   8th Meeting at Baominh		Sashkin, Dang & Hai

112	Mr Sashkin’s account is that he stopped by the offices of Baominh at 08.50 or 09.00 where he met Mr Dang and Mr Hai of Vung Tau. Mr Sashkin brought with him a full file of documents which he had prepared for the ship’s delivery in Hanoi including the fax of the 10th June and all its attachments. (Mr Hai confirms that on 10th June he had had a meeting with Mr Sashkin in Vung Tau’s office at which 3 sets of all the documents collected by Garnat by this date for the Dock and Workshop were prepared for Garnat, Vung Tau and the head office of Vinashin).

113	Mr Dang told Mr Sashkin that he had received some documents by fax and e-mail during his rest days but they were not so good copies. He took Mr Sashkin's file and made copies of some of the documents from it on the larger photocopying machine at Baominh's office. Mr Sashkin was unclear as to what precisely those documents were, 

114	When Mr Dang returned he asked Mr Hai if he could provide him with a Vietnamese translation of the two aspects of the Towage Plan which were named in the Seaworthiness Survey report namely the two sets of Instructions. This evidence was confirmed by Mr Hai. Vung Tau had prepared Vietnamese translations of the Instructions because they were expecting that the crew would be Vietnamese. Mr Hai called Ms Mai and asked her to e-mail those documents to Baominh. 

115	Mr Dang also asked why the Instructions for the Captain of the Tugboat were not approved by GMB. Mr Sashkin promised to check this. He referred Mr Dang to the version of the policy which had been agreed between Garnat and Vinashin on 9th June. Mr Sashkin handed over a copy of the draft of the policy as agreed on 9th June, which he had printed, and asked Mr Dang to issue an original policy as soon as possible. He was told that the original could be collected after lunch. 

116	Mr Dang’s evidence was that on 12th June he received only a copy of a fax from Garnat attaching copies of the two Statements of Compliance for Towing (sent to his desk by Mr Minh). At a meeting later on that day with Mr Sashkin he was given copies of the latter, two Statements and the two Interim Seaworthiness Certificates.

Garnat’s e-mail of 11:27

117	At 11:27 on 12th June Ms Mai sent an e-mail in Mr Hai’s name to Baominh with translations of the two Instructions “as you requested in our meeting at Baominh's office”. Mr Hai’s evidence was that this e-mail was found (by others) in Ms Mai’s “Sent” box and was still there in August 2009. It had been given to Thomas Copper in July 2007. Baominh’s case is that this e-mail was fabricated, never sent and never received. 

118	I am satisfied that the e-mail and accompanying Vietnamese translations are genuine. They are confirmation of what had occurred at the meeting that day. In the light of my finding that a translation of the Instructions had been asked for at the meeting, the e-mail is one which could be expected to have been sent. The expert evidence of Mr Lloyd Jones as to his inability in 2009 to find the e-mails on Mr Minh’s and Mr Dang's hard drives does not establish to my satisfaction that they were never received. Although Mr Dang was very sure in evidence that he did not delete any of the e-mails received from the claimants I am not so sure. Moreover Mr Dang himself volunteered that the changeover of Baominh's e-mail software from Outlook to Lotus Notes may have accounted for the absence of the e-mail from its computer system. I accept, as he did, that he is no expert in computers but I decline, in the light of all the evidence, to accept that there is no possibility of the e-mail having been deleted, or even lost in the system. 

119	In August 2009 Taylor Wessing, Baominh’s solicitors, made a request to Thomas Cooper, the claimants’ solicitors, that a copy of the e-mail said to have been sent to Baominh by Vung Tau be provided in a zip file for examination. That was not provided although it was provided on 16th March 2010 after Baominh had been given permission – on 8th March 2010 -  to run a positive case (as opposed to a non admission) that this e-mail had never been sent and, also, after the conclusion of the claimants’ factual evidence. I was told that the copy produced by this process shows a time of 5.28 a.m., which may be London time (if so, the reason is unclear). Baominh did not seek to investigate the matter further.  

120	At 11.29 Mr Dang e-mailed a revised draft which had very few changes but set things out slightly differently. It still contained the warranty that the towage plan must be inspected and approved by GMB. 

10th Meeting at Baominh					Sashkin, Hai and Dang

121	At about 14.00 Mr Sashkin met Mr Dang and Mr Hai in his office in Baominh. Mr Sashkin confirmed to Mr Dang that he had received the last version of the policy that Mr Dang had e-mailed. Mr Dang said that the original was ready to be signed but that at that moment all managers and directors who were authorised to sign were absent from the office and he could not sign yet. Mr Sashkin asked him to sign the policy as soon as possible.

The “Diving Report”

122	In Baominh’s documents there is included a document with the figures 1760-070-302 at the bottom, words in Russian at the top, and the words “Diving  Report” in Vietnamese on the top right hand corner of the first page in manuscript. This is the last page of the Instructions to the Tug Boat Master. The following pages in Russian have the figures 1760-070-301 at the bottom and are the Instructions (in Russian) to the Dock Master but without the page (no 6 in the original) containing paras 3.6 – 3.9.  These documents were filed by Mr Dang as a diving report, which is what, so he said, Mr Sashkin described them as. Mr Dang could not recall when he received this document but suggested that Mr Sashkin may have provided it to him on 14th July, on the occasion when he came to report the loss.

123	I regard this as unlikely both because there is no apparent reason for Mr Sashkin providing this document on that date (Mr Dang could suggest none) and because Mr Sashkin, who speaks fluent Russian, is unlikely to have misdescribed these documents or to have provided only part of the Instructions. In truth the basis of Mr Dang’s suggestion rested on the fact that the pen which he used to write “Diving rep” appeared to be the same as that which he had used to write on another document that he received from Mr Sashkin on 14th July.  

124	The likelihood is that Mr Dang received this copy of these Instructions either as an attachment to the fax of 10th June or at the meeting on 12th June, probably the former. I note that the “Diving Report” version of the document appears to have the same manuscript numbers in the bottom right hand corner of the pages of the documents (ignoring subsequent disclosure or trial bundle numbering) and what appears to be the same manuscript correction to para 2.4 of the Instructions to the Dock Master as appear in the version attached to the disputed fax to Baominh of 10th June.

125	At 15.00 Mr Sashkin called Mr Dang and asked if he could collect the original policy. He was told that Mr Dang could not sign because no managers were actually in the office but he would inform him the next morning exactly when the policy would be ready. At 15.45 Mr Sashkin e-mailed Mr Dang attaching a copy of Garnat’s instruction to the bank in Singapore to pay the insurance premium. Mr Dang responded at 17.09 thanking him for “your prompt actions. We will check with our accounting and will revert to you accordingly”. 

Mr Dang meets Mr Minh

126	At some time on 12thJune Mr Dang met Mr Minh and showed him the Statements of Compliance for Towing and Interim Seaworthiness Certificates. They agreed that the towage plan warranty was not needed.  The Statements of Compliance certified that the tugs had been inspected and that inspection had “showed that all towing arrangements were in good and efficient condition” for the tow. The Interim Seaworthiness Certificate for the Dock certified that the hull, machinery and equipment were in good and efficient condition and that the certificate was issued for a single voyage on tow. The Interim Seaworthiness Certificate for the Workshop certified that it was in like condition and ready for towing in all respects. The Seaworthiness Survey Report certified that the Dock was ready for towing in all respects. Baominh was satisfied that GMB had approved the towage plan (as it had).

	13th June 	Tuesday	11th Meeting at Baominh 			Sashkin & Dang

The policy is issued

127	Mr Dang rang Mr Sashkin to say that the policy would be signed after lunch. Mr Sashkin told him that he had received from Vladivostok 5 cover pages of the Towage Plan approved by GMB including the cover page of the Instructions to the Captain of the tugboat. Mr Sashkin handed these over to Mr Dang when at 15.00 he collected the policy, now executed by Mr Minh, from Baominh's office with the warranty removed. Garnat did not know before the final version of the policy was issued to them that the warranty was to be deleted. 

128	The policy as issued also provided:

“Towage plan:	as per Certificate No. T-833438 and T-892546 issued by Global Marine Bureau Inc”

These are the certificate numbers of the Statements of Compliance for Towing.

129	Mr Minh and Mr Dang dispute the suggestion that the policy was not signed until 13th June and deny that there was any meeting on that day. I do not believe that they are right on this.

Was the 10th June fax received by Baominh?

130	I now return to the question of whether Baominh received the 10th June fax.  Mr Minh suggested in his oral evidence that the fax machine in the underwriting department may have been turned off over the weekend to save electricity. But there is no reliable evidence that that was so. Nor was there any evidence from the persons responsible for checking what faxes had been received over the weekend (Mr Minh said there were two such staff who worked in rotation whose job it was to check the faxes that came in overnight and especially over the weekend) that he or she checked on Monday 12th and found no fax from Garnat.  The local telephone records are not such as to establish matters one way or the other. 

131	The likelihood is that the fax was transmitted and received. I say that for a number of reasons. First, there is no record or evidence of transmission failure. It is true that faxes which appear to have been sent can fail to arrive. But in ordinary course they do arrive. Secondly, Mr Sashkin’s 11th June e-mail refers to two Statements of Compliance having been faxed. Thirdly, I accept Mr Sashkin’s evidence that Mr Dang told him on Monday 12th that he had received some documents by fax and e-mail during his rest days but they were not good copies. This is likely to refer to the fax of 10th and the e-mail of 11th June.  

132	Baominh contends that they first received or were shown copies of the Assessment, the Explanatory Note and the Instructions after the insurance was issued. It is apparent from the findings which I have made that I do not accept that to be so.

Legal Principles in respect of disclosure

133	There was no real dispute as to the applicable legal principles.

Non disclosure 

134	The starting point is s.18 of the Marine Insurance Act 1906 (“the MIA”), which provides:

“18. — Disclosure by assured.

(1) 	Subject to the provisions of this section, the assured must disclose to the insurer, before the contract is concluded, every material circumstance which is known to the assured, and the assured is deemed to know every circumstance which, in the ordinary course of business, ought to be known by him. If the assured fails to make such disclosure, the insurer may avoid the contract.

(2)	Every circumstance is material which would influence the judgment of a prudent insurer in fixing the premium, or determining whether he will take the risk.

(3)	In the absence of inquiry the following circumstances need not be disclosed, namely:—

(a)	Any circumstance which diminishes the risk;

(b)	Any circumstance which is known or presumed to be known to the insurer. The insurer is presumed to know matters of common notoriety or knowledge, and matters which an insurer in the ordinary course of his business, as such, ought to know;

(c)	Any circumstance as to which information is waived by the insurer;

(d)	Any circumstance which it is superfluous to disclose by reason of any express or implied warranty.

(4)	Whether any particular circumstance, which is not disclosed, be material or not is, in each case, a question of fact.

(5)	The term “circumstance” includes any communication made to, or information received by, the assured.”

135	Mr Ashcroft distilled a series of propositions which I am content to adopt as accurate general statements of the law. They were as follows:

(a)	Non-disclosure is the failure to communicate a material fact within the knowledge of the assured which the insurer has not the means of knowing or is not presumed to know.
(b)	The burden of proof in relation to any allegation that a fact or matter has not been disclosed is upon the insurer.  
(c)	In general terms, a fact or matter is material if it would have been taken into account by a hypothetical prudent insurer when assessing the risk.
(d)	But, a minute disclosure of every material circumstance is not required.   The assured complies with the duty if he discloses sufficient to call the attention of the underwriter to the relevant facts and matters in such a way that, if the latter desires further information, he can ask for it. A fair and accurate presentation of a summary of the material facts is sufficient if it would enable a prudent insurer to form a proper judgment, either on the presentation alone, or by asking questions if he was sufficiently put upon enquiry and wanted to know further details, whether to accept the proposal, and, if so, on what terms.
(e)	Underwriters should listen carefully to what they are being told; they cannot complain if they do not grasp the detail or the implications of it.
(f)	 In accordance with s.18(3)(b) of the MIA, in the absence of inquiry, there is no need to disclose a fact or matter that the insurer already knows, or is presumed to know; there is therefore no duty to disclose matters of common notoriety or matters that the insurers should, in the ordinary course of business, know. In the context, the test is objective. One asks what a reasonable insurer, writing the particular type or class of business concerned, would, or should, know. A reasonable underwriter is presumed to know matters which he should have known from the facts in his possession or matters which he had means of learning from the sources available to him. A reasonable underwriter is presumed to know the ordinary incidents or attributes of any peculiar or specialist risk he undertakes: every underwriter is presumed to be acquainted with the practice of the trade he insures; if he does not know, then he ought to inform himself. Because of these aspects, and absent inquiry by the insurer, only unusual elements affecting the risk have to be disclosed by the proposer.
(g)	As regards s.18 (3) (c) of the MIA, waiver in insurance law bears a wider meaning than it does in other areas of the law. There is no need for an intentional act with full knowledge of the facts. If the facts and matters disclosed give a fair presentation of the risk, the underwriter must ask if he wishes to have more information; further, even if the initial presentation was unfair, waiver might arise if the information disclosed was such as to prompt a reasonably careful insurer to make further inquiries. In short, if the insurers receive information, which taken on its own, or in conjunction with other information known to them or presumed to be known to them, would naturally prompt a reasonably careful insurer to make further inquiries, then, if they omit to do so, they waive disclosure of the material facts and matters which such an inquiry would have revealed. A particular case in which insurers may be put upon inquiry is one where the character of the ship to be insured puts them on notice that specific preparations are or may be required before it puts to sea. Finally, an assured is entitled to assume that the insurers are waiving disclosure of matters concerning which they appear to be indifferent or disinterested.
(h)	As regards s.18 (3)(d) of the MIA, absent inquiry, there is no duty to disclose facts and matters that are superfluous to disclose by reason of an express or implied warranty that will cover the same ground. The assured is entitled to proceed on the basis that the insurer does not require disclosure of facts and matters that fall within the scope of the warranty to be included in the insurance.   
(i)	  Even where there is non-disclosure of a material fact, if this does not in fact influence the judgment of the actual underwriter, avoidance is not justified. So, for instance, in Flinn v. Headlam 1829 9 & Cr 693, the insurers were not entitled to avoid where they in fact relied upon a certificate that the ship was seaworthy, rather than upon the assured’s representation that only a small quantity of rock-salt had been, or would be, loaded. To justify avoidance, the non-disclosure must be a real and substantial cause affecting the decision of the insurer to enter into the contract, or to do so on the terms agreed, the insurer bearing the onus of proving inducement on the balance of probabilities.  No presumption of fact applies where the underwriter is called to give evidence.  
Application of the principles
136	The claimants accept, as the expert evidence and common sense indicates, that the information contained in the Assessment specifying a maximum permissible wave scale of 5, with a wave height up to 3.5m was material to the risk and should, in principle, have been disclosed.

137	Whether or not there was non-disclosure must be determined in the light of my factual findings.

138	In the light of those findings I am not satisfied that the risk was unfairly presented to Baominh or that there has been non-disclosure. On the contrary it seems to me that that there was disclosure of the information which Baominh complains was not told to them. Whether Baominh paid any attention to it is a different question.

139	That which was disclosed to Baominh included the following:

(a)	The existence of the Towage Plan.

This was apparent from the Towage Contract and draft MOA provided on 16th May 2006. It was discussed and its nature explained at the meeting of 18th May. It was the subject of a warranty in all of Baominh’s drafts of the policy (save for its temporary accidental omission for 80 minutes on 9th June) until it was removed at the last moment on the basis that the Plan had been approved. 

(b)	The title pages of the list of design documents, of the Assessment, the Explanatory Note, and of both sets of Instructions, together with the last page of the Assessment and the seventh page of the Explanatory Note, all of which were handed over by Mr Sashkin on 19th May.

The last page of the Assessment contained its conclusion and the specific details about wave height limitations. The seventh page of the Explanatory Note also contained these details.

(c)	Ms Mai’s presentation of Vung Tau’s version of the Towage Plan at the meeting of 31st May referring to the Assessment, the Explanatory Note, and the Instruction, and explaining what they were in Vietnamese. Mr Sashkin and Mr Hai offered to provide any translation required.

(d)	The documents enclosed with the fax of 10th June which included the Instructions. Mr Dang took copies of those instructions on 12th June and asked for a Vietnamese translation which Mr Hai said he would provide and which he did provide on 12th June in an e-mail of that date. 

The Instructions to the Tugboat Master, which are only 2 or 2 ½ pages long set out (see para 3.2) the wave height limitation. The Instructions to the Dock Master referred (see para 3.4) to the Assessment under the description “Calculation of strength and stability during towage”.

140	The disclosure made constituted, in my judgment, a fair presentation of the risk, and included the wave height limit, upon the alleged non-disclosure of which Baominh relies. 

141	In the light of those findings of actual disclosure, I do not propose to deal at any length with the submissions made to me that there was no duty to disclose the wave limitation provisions contained in the Assessment, Instructions and Exploratory Note to the Towage Plan, and as to waiver on Baominh’s part, because these considerations become primarily relevant only upon the assumption of a set of factual findings which differs from those which I have made; and there is a degree of artificiality in addressing them otherwise than by reference to that different set.

142	It is apparent that Baominh was made aware that there was a detailed towage plan: which they required to be approved by GMB, and that that plan contained information relevant to the towage. Mr Dang’s evidence was that, quite apart from what he was told by the claimants, he knew from his experience and that of Mr Minh that there would be a towage plan (but not the details). Mr Minh’s evidence was that his general understanding was that there would be a towage plan which would be very detailed technically and very complicated setting out standards and characteristics that must be followed but that, at the time, not having any specific experience regarding the towage of a floating Dock across the sea, he could not “estimate what a towage plan should be”. He was, however, aware at the time that the towage plan was “a very important document that can provide me with the utmost importance information that will guide me through underwriting the policy or not”.  

143	A reasonable underwriter, in the business of insuring the ocean towage of a floating dock, would (regardless of whether he had seen the Assessment) realise that there would be some general limitations, which a towage plan would be likely to contain, upon the circumstances in which such a vessel could be towed across the ocean, and that such limitations would include a limitation as to wave height. That was the tenor of the evidence of Mr Scott, Baominh’s expert, who also accepted that if an underwriter forms the view that there is a document which is likely to be material, he is put on inquiry as to the contents of that document (whether it has been produced to him by the insured or not). An underwriter would not, however, know what the limitation was for any given dock. Every floating dock is different; there are no usual conditions. But it is not, and cannot, be said that the limitations in the present case were extraordinary or markedly unusual so that they fell outwith the sort of condition that could be expected to be there.

144	It is apparent to me from the evidence that Baominh was prepared to insure the Dock without themselves scrutinising the Towage Plan, provided that a Class Society, being (in the event) GMB, approved it, and that it was prepared to do so because neither Mr Dang nor Mr Minh was familiar with the technical aspects of ocean towage of floating docks. Mr Dang agreed that he was “entirely content to rely upon an IACS classification society to inspect and approve the towage plan, including any technical standards or limitations contained in it”, although, as he added, he was not the underwriter. 

145	Mr Minh’s evidence contained the following passage:

“Q. Mr Minh, the reason that you were prepared to proceed on this basis was because you were relying upon an independent classification society to inspect and approve the towage plan on your behalf?

A. My Lord, there’s something very understandable, that in our business we have to seek the expert advice when we need it.  And in this case, I think all of you can agree that the IACS…is one of the highest classifications societies in the world, which is including the most famous expert and the highest standard for sea classification. So if the towage plan had been ratified and approved by them, then we see no reason why we should not accept.

Q	Exactly,

THE WITNESS: No, No

A To be more correct, we want to use the expert views from the experts of the IACS to help us find out what is the true proposal that we can go forward. And after that, we can discuss on that proposal in further stages.

So I mean, by asking them to grant the inspection and approval from IACS, for their towage plan, we want to make sure that the towage plan had been designed to a high standard and is acceptable”. ”  

146	In my view Mr Minh’s first answer more accurately reflected Baominh’s position which was that it would insure the Dock if, but not unless, GMB approved the plan, which they were not concerned themselves to scrutinise. So it was that, so soon as the plan was approved, the warranty was removed from the draft and the insurance was written. Baominh did not use GMB to find out what the true proposal was or enter into further discussion on, or consideration of, the proposal. 

147	That that is so derives support from the following:

(a)	Baominh’s first quotation of 18th May 2006, which ended “We hope that this quotation will meet your requirement and looking forward to receiving from (sic) your agreement”, contemplated that, if the quotation was acceptable to the claimants, the insurance would be written without more on the terms set out, which included the warranty. Mr Minh suggested that those words were nothing more than a “well-wishing sentence”; that the quotation was no more than a notice of premium rate; and that further documents would be required; but that is not what the words of the quotation signify;

(b)	Mr Dang’s e-mail of 9.31 on 9th June, which was written with Mr Minh’s authority and reads “Please check this draft policy and debit note of the said floating Dock as our agreement and confirm by return. Then the original Insurance Policy will be issued accordingly”, shows that Baominh was prepared to insure without seeing the Towage Plan; 

(c)	Baominh did issue the policy without requiring to see any more of the Towage Plan than they in fact saw before insuring; 

(d)	The towage plan warranty was in the final draft and was then deleted without either Mr Dang or Mr Minh informing the claimants that they were doing so. 

148	I do not accept the suggestion made by Mr Minh for the first time in his oral evidence that when he signed the insurance he still wished to see the plan but was persuaded to issue the policy without it because he was under pressure of time from his clients. Garnat was, indeed, keen to get the policy issued in order to complete the purchase of the vessel on 13th or 14th June. But no documentary evidence supports the suggestion that the policy was issued reluctantly or against Baominh’s inclination; nor is there any such evidence of Baominh making any requests for the plan after 12th/13th June. Mr Dang’s evidence was that he would make a note on any quotation which he sent to clients if Baominh was waiting for further documentation before finalising their risk assessment. There is no such notation on any quotation. 

149	Nor do I accept that Baominh was making repeated requests before (or after) the issue of the policy for a copy of the Towage Plan which were not answered. Again no documentary evidence supports this. I note that Mr Dang’s evidence was that when he prepared the draft quotation of 18th May for Mr Minh he had not been asked by Mr Minh to get any further information and that, when he discussed the draft with Mr Minh, Mr Minh did not suggest that he needed more documents.

150	Mr Minh suggested that if, after issuing the policy, he saw the Towage Plan and saw in it something which he did not like, he would “withdraw and cancel” the policy. That would have been unlawful and commercially unacceptable unless a case of non-disclosure was made out. It seems to me inherently unlikely that Baominh was prepared to issue a policy without seeing the Towage Plan upon the footing that, if and when they did see it and did not like it, they could avoid it.

Waiver

151	If, contrary to my finding, the claimants did not in fact disclose the particular wave height restrictions that applied, it seems to me that Baominh waived the provision of such information. The fact that the Towage Plan would in all probability contain such a restriction is something of which Baominh may be presumed to have had knowledge. Baominh was, in my judgment, put on inquiry as to the contents of the plan, at any rate so far as any wave height restriction was concerned. It failed to make any inquiry as to what such restriction might be when a reasonably careful insurer would have asked, if it was a matter which concerned him. 

Superfluity

152	Further it seems to me that disclosure of the details of the Towage Plan was superfluous in the light of the towage plan warranty that was in every draft of the policy (save for its temporary accidental omission on 9th June) until the very last moment. If the draft warranty had remained in the policy as issued, section 18 (3) (d) of the MIA would have been applicable. The circumstances would have been closely analogous to those in Kirkaldy & Sons Ltd v Walker [1999] CLC 722 where a policy covering port risks in respect of a dry dock (which was towed from Sweden to Portland where it sank at its moorings) required a towage approval survey and a condition survey to be performed by a named surveyor and all recommendations to be complied with prior to sailing. Longmore, J, as he then was, decided, obiter, that this made it unnecessary to disclose that the dry dock leaked since the underwriters:

“were obviously not relying on what the insured did or did not disclose to them in this respect because they required both a towage approval survey and condition survey ….the warranty of the condition survey rendered it superfluous to disclose matters which would be found and, if necessary dealt with by way of recommendation”.

So here, a warranty that the Towage Plan was to be inspected and approved by GMB would have rendered it superfluous to disclose matters which would be found on such an inspection and, if necessary, dealt with by a recommendation as to whether towage was appropriate.

153	But, as Baominh points out, the draft warranty was not included in the insurance issued for the simple reason that it had been fulfilled. That has the effect, in my judgment, that section 18 (3) (d) is not applicable. The section does not apply to draft warranties which are not incorporated in the policy.

154	Mr Ashcroft for the claimants submitted that it could not be correct that a duty of disclosure sprang up in the short period of time between the deletion of the warranty  and the issuance of the policy. (The period is, for practical purposes, non-existent since the policy was presented with the warranty removed upon its issue). As to that, it could be said that all that the draft warranty does is to provide the prospect that, if incorporated into the policy, it will render disclosure superfluous, and that the duty of disclosure remains constant rather than popping up at the last moment. 

155	To my mind, the better way to look at the matter is that the draft warranty rendered disclosure superfluous because it indicated that Baominh was not relying on the insured to make disclosure to it of the content of the Towage Plan. The disclosure of such information remained superfluous even though the draft warranty was deleted because the reason why it was deleted was that Baominh was satisfied that GMB’s approval of the Towage Plan had been given. An underwriter who, in effect, indicates that he does not require information from the insured about a towage plan because he wants the information vetted to the satisfaction of someone else, is not, when such satisfaction is expressed, then entitled to turn round and say that the insured now owes him a duty to provide the information. It is information as to which he has waived disclosure. 

Inducement

156	There remains the question whether, if there was, Baominh has established that it induced the contract in the sense that, if disclosure had taken place, it would not have entered into the insurance or would not have done so on the terms that it did. I have not been persuaded that this is so. In my judgement the likelihood is that, if (as they did) GMB approved the towage plan, then Baominh would have insured on the terms on which it in fact insured.  At the lowest I do not regard it as established that it would not. 

157	I reach that conclusion in the light of my other factual findings. Neither Mr Dang nor Mr Minh had the technical experience which they regarded as appropriate to assess the suitability of the towage plan for the voyage envisaged. They were prepared to insure if GMB approved the plan and not otherwise. When GMB approved the plan they did not seek any further information, nor enter into any further negotiation or discussion or consideration. I am not persuaded that the provision to Baominh of the wave height limitation (if they had not already seen it) would have caused them to take a different view. 

158	In the course of his final submission Mr Isaacs placed some reliance on the importance which Mr Minh attached to the towage route. I do not regard it as open to Baominh on the pleadings to complain (if that is what they seek to do) about non-disclosure of the route. In any event it is apparent from the Towcon contract, with which Baominh was supplied, what the route was to be. 

159	In my judgment the defence of non-disclosure fails.

Unseaworthiness

Legal Principles		Seaworthiness

160	There was no substantial dispute as to the following applicable legal principles:

1.	Pursuant to s.39(1) of the Marine Insurance Act (“the MIA”), there was an implied warranty that at the commencement of the voyage the Dock would be seaworthy for the purpose of the contemplated voyage;
2.	Section 39 (3) provides:
“Where the policy relates to a voyage which is performed in different stages, during which the ship requires different kinds of or further preparation or equipment, there is an implied warranty that at the commencement of each stage the ship is seaworthy in respect of such preparation or equipment for the purposes of that stage”.
3.	Pursuant to s 39 (4) of the Act, a ship is deemed to be seaworthy if she is reasonably fit in all respects to encounter the ordinary perils of the seas of the adventure insured.
4.	Thus, a ship will be deemed seaworthy if she is in a reasonably fit state as to repairs, equipment, crew and all other respects to encounter the ordinary perils of the voyage insured at the time of sailing on it.
5.	The inclusion of classification clauses in insurance policies is generally seen as a move towards ensuring improved standards of seaworthiness. Thus, it should follow that the fact that a vessel was in Class at the time of sailing on the voyage is of significant weight (albeit, of course, not determinative) when considering whether she was seaworthy, particularly where the vessel has been surveyed and approved by Class shortly before sailing.   
6.	By reason of the ‘doctrine of stages’ it is sufficient if the ship is seaworthy for some definite, well recognised and separate stage of the voyage, even though some work, or change, to the vessel, her equipment, supplies or crew is required before she is fit for a second or later stage of the voyage.  Different parts of a sea voyage can be separated into distinct stages. Indeed, in many cases the circumstances of the voyage are such that it will be necessary to introduce an intermediate stage before the commencement of the open sea voyage.
7.	Seaworthiness is “relative to the nature of the ship”.   The ship should be “in a condition to encounter whatever perils of the sea a ship of that kind and laden in that way may be fairly expected to encounter”. When it is known that a particular ship is not capable of being made as fit to encounter the perils of a voyage as an ordinary vessel, the most that the warranty of seaworthiness requires is that the particular ship, given its limitations, is made as fit for the voyage as practicable. Thus, seaworthiness is to be judged flexibly and by reference to the adventure insured; and the assured does not warrant the prudence of the adventure, which is for the insurers to judge when deciding whether to accept the risk and the level of premium. 
8.	One, often applied, test of seaworthiness is to ask whether a reasonably prudent owner would have required that a particular defect, if he had known of it, must be made good before sending the ship to sea. In that context, a reasonably prudent owner should take into account the probable circumstances of the voyage and the weather and sea conditions likely to be encountered on it.
9.	Bad stowage can render a vessel unseaworthy, but only where it renders the vessel unfit for the insured adventure.
10.	Temporary matters, which can be quickly remedied, do not render a vessel unseaworthy. Thus, a defect which can be easily remedied at sea does not render the ship unseaworthy.
11.	The burden is upon the insurers to prove unseaworthiness. There is no presumption of fact that a ship is unseaworthy where she founders in a violent storm.   
161	The allegations of seaworthiness, as summarised by Baominh, are as follows:

(1)	The pontoon stowed at the forward end of the Dock was inadequately secured;

(2)	The Dock’s fire and ballast pumping systems were in a poor state of repair and could only operate at a significantly reduced capacity;

(3)	The watertight subdivision between the ballast tanks was compromised. In particular, the connecting elements in the port side ballast tanks and starboard side towers were corroded and valves intended to isolate the various compartments from each other were leaking;

(4)	The manhole covers on the Dock’s deck and the deck itself were leaking in several places;

(5)	Instead of departing Vladivostok with an even keel draft of 2.79m as stipulated in paragraph 6.2.2 of the Assessment, the Dock’s even keel draft on departure was 4.4m and (if relevant) was never reduced to 2.79m. As a result of the reduced freeboard, shipping seas on deck were a problem throughout the tow and neither the bow breakwater nor the securing arrangements were sufficient to prevent waves from making the pontoon buoyant, thereby breaking the cargo sea fastenings.

	The factual evidence

162	The claimants relied on the factual evidence of Mr Kalmykov and Captain Rada, and a written statement of Captain Parshintsev of a limited nature, together with the documentary evidence including what were or purported to be contemporaneous explanatory notes and records of interviews. 

163	Baominh observe that there are some 15 witnesses who are referred to in the statements of Mr Kalmykov and Captain Rada who were not called, and invites the Court to draw the inference that their evidence would not have been helpful to the claimants. Those witnesses were:

(1) 	Andrey Murav’ev, the Chief Engineer of the Dock, who inspected the ballast system and conducted tests, and inspected the watertight subdivisions; 

(2) 	Mr Pivovarov, the Chief Designer of Design Bureau Daljzavod, who oversaw the development of the towage plan; 

(3) 	Mr Naguevsky, the chief inspector of GMB, who supervised the repair works on the Dock and compliance with the towage place; 

(4) 	Ms Lyudmila Kljueva, an engineering expert involved in discussion regarding the details of the repair and conversion works;

(5) 	Mr Pustovoy, the General Director of Daltramp, Mr Kalmykov’s superior;

(6) 	the Deputy Harbour Master who is said to have recommended that the Dock’s draft be increased to 4.4m within Golden Horn Bay;

(7) 	Mr Kislov, the senior government controller of PSC Vladivostok, who was a member of the Commission which checked the technical condition and readiness for towage of the Dock “in accordance with the rules and regulations in force for marine transport in Russia and as per the requirements of the approved Towage Plan”, and who together with Captain Rada and Captain Parshintsev declared the Dock ready for towage;

(8)	Inspectors of the Port Authority who are said to have carried out checks on the technical condition of the Dock between 10th and 23rdJune;

(9) 	the Dock’s electrical officer, who tested various items in relation to the pumping system;

(10)	the Chief Mate who is said to have confirmed that the ballast tanks were completely empty along with Mr Murav’ev;

(11) 	the previous Dock Master and crew with whom Captain Rada is said to have had discussions while undertaking his initial inspection of the Dock;

(12)	Other crew members who examined equipment and machinery on the transfer of the Dock from the crew of the shipyard;

(13)	the master of the Department of Technical Control of the Shipyard; 

(14)	representatives of RMRS;

 (15)	representatives of Vinashin who checked the equipment and technical condition of the Dock.

Baominh also relies on the absence of adequate documentation evidencing the inspections said to have been carried out. 

164	I decline to draw the inference that these witnesses, if called, would have given evidence unhelpful to the claimants, particularly in cases where documentary evidence which is either signed by them or is the fruit of their labours is helpful; or that they were not called on that account. I have no means of knowing with what ease (or the lack of it) these witnesses could have been called or their evidence adduced in documentary form, and in some cases e.g. witnesses (4), (5), (8), (9), (11), (12) and (13) I have doubts about the utility of doing so. 

165	Captain Parshintsev as the commander of the expedition and Master of the TOPAZ played an important role in the events with which this case was concerned. The claimants adduced from him a short witness statement dated 15th January 2010. It does no more than purport to prove the authenticity of the Explanatory Note of 18th August 2006 to which I refer in paragraph 223 below. The statement was filed in response to a notice to prove served by Baominh on 21st December 2009.  It transpired during the course of the trial that on 5th March, 2010 when he spoke to him, Mr Sashkin learnt that Captain Parshintsev was on board the tug “IAGOS PELAGOS” in the Bay of Biscay, towing a Ministry of Defence missile barge bound for either Falmouth or Bristol. In the event he was not called

Preparation for the tow.

166	The claimants submit that the suggestion that the Dock was unseaworthy is implausible. They refer, first, to the extensive preparations for the tow which took place as from March 2006. In particular they rely on the following:

i.	RMRS conducted a survey of the Dock in February 2006, including the hull, arrangements, equipment, outfit and machinery, and made various repair recommendations;

ii.	Garnat appointed Daltramp to supervise all conversion and repair works. Mr Kalmykov’s evidence was that he properly supervised all of the works on behalf of Garnat, and this is borne out by the documents, which show a definite thoroughness of approach.

iii.	The Protocol dated 3rd April 2006 between Garnat, DalRemSnab (the repair contractor), RMRS and GMB shows the comprehensive approach that was taken towards making the Dock ready for the voyage. It was agreed that the repair contract would be worked out in accordance with the requirements of the Towage Plan in accordance with the rules of RMRS.   All repair works were to be done under the supervision of Class (RMRS in relation to the repair works started but not yet completed by PSRY; GMB in relation to the preparation of the Dock and Workshop for towing. The recommendations of RMRS and GMB that had to be satisfied during the preparation of the Dock included checks/repairs/tests in relation to the ballast system (item 10) and the repair/examination of all hatches (item 11).

iv.	A work scope for the repairs to the structure of the Dock was signed by RMRS on 10th April 2006. The requirements included examination of ballast tanks by “pouring water into the tanks up to safety deck after completion of repair works” (item 5.1).

v.	The repair contract was agreed with DalRemSnab on 12th April. It included a detailed repair specification.  Repairs were to be supervised by the GMB surveyor (clause 4.2). Enclosure 2 to the contract records the substantial work in fact done, at a total cost of US$880,762. Items 1.12, 1.13, 1.14, 1.17, 2.8 and 2.9 relate to the ballast tanks, hull structures, lashing of pontoons, and repairs to ballast and fire pumps.   

vi.	All manhole covers and hatches were tested and accepted by Mr Kalmykov and RMRS in the period through to May 2006, before any cargo was placed on board which might restrict access.

vii.	The Dock was inspected by a delegation from Vung Tau, including a specialist in relation to floating Docks, during 11-13th May 2006 with subsequent reports noting the good condition of the Dock and Workshop.

viii.	On 24th May 2006 RMRS completed their annual survey and endorsed the Class and Seaworthiness Certificates without any recommendations.   According to Mr Kalmykov, the RMRS recommendations for necessary repair works were followed to the letter, and RMRS surveyed the works and “the Inspector confirmed …that all the requirements of the register were fulfilled”.

ix.	On 30th May 2006 Daltramp, the Shipyard and GMB signed a document confirming that all repairs to be done by the shipyard and its sub-contractor had been performed in accordance with the requirements of RMRS.

x.	From 30th May to 10th June 2006 the Dock and Workshop underwent further inspections as part of the process of reclassification from RMRS to GMB. GMB issued Provisional Class Certificates on 6 June 2006, Interim Seaworthiness Certificates on 6th and 10th June 2006 and a Seaworthiness Survey Report dated 10th June 2006. 

xi.	Although GMB may to some extent have had limited access to certain parts of the Dock as from 30th  May 2006, there is no reason to think that they did not check and satisfy themselves in relation to all those parts of the Dock, its machinery and equipment that they could access and inspect.   Those limited parts that could not be accessed had already been checked and approved by RMRS and Kalmykov.

xii.	On 10th June 2006, GMB issued Statements of Compliance confirming that all towing arrangements were in “good and efficient condition to tow from Vladivostok to Vung Tau”. 

xiii.	Thereafter, on Mr Kalmykov’s evidence, port authority inspectors checked the technical condition of the Dock, its equipment and machinery and the claimants inspected the Dock: see the minutes of inspection of 19th June 2006.

xiv.	The Dock was also subject to checks by her crew, including Captain Rada and the chief engineer. There is no reason to think that these were not reasonable and adequate checks.

xv.	On 23rd June 2006, there was a final inspection and approval of the Dock as ready for towage by, amongst others, a senior government controller of Port State Control, Captain Rada and Captain Parshintsev.

167	In relation to item xiv above Baominh points out that, on his evidence, Captain Rada only learned of the Dock Master’s job in early June 2006 after which he visited the Dock every day, but only started what he described as a “very deep investigation” of all the Dock’s systems and mechanisms when he had signed an employment contract on 16th June 2006, after which he moved to live on the Dock. They also point out that Captain Rada could not have relied on the advice of Chief Engineer Murav’ev, as he said he did, until late because Mr Murav’ev, according to the record of his interview on 21stJune 2006 went on the Dock for the first time on 15th June and only accepted the job as Chief Engineer and started working on the Dock on 21st June. Captain Rada thought the Chief Engineer was wrong on this and put the latter’s confusion down to the trauma of the shipwreck. In that, I think, he was mistaken.

168	The claimants submit that there is no evidence to suggest, nor reason to suppose, that the preparations referred to in para 166 above were not correctly performed and that it would be surprising if the defects now alleged existed after two successful Class surveys and an inspection by Port State Control. It is inherently unlikely that any significant defects remained. It is significant that neither Mr Omelyanenko of DPS, nor the Russian Ministry of Transport’s Investigation Commission, nor the Expert Evaluation issued by the Far Eastern Marine Research Institute expressed or supported the view that the Dock was unseaworthy. 

169	Baominh submits that this catalogue of events does not establish that there were extensive and satisfactory preparations for the tow. The Class surveys, the acceptance document of 30th May 2006 and the Class certificates do not, it submits, relate to the Dock’s seaworthiness for the towed voyage. Some of the material referred to is of a general nature e.g. Mr Kalmykov’s lists of remarks, the protocol of 3rd April, and the report of Vung Tau’s inspection. The production of a work scope for repairs does not show that they were carried out. There is no documentation dealing with the inspections by port authorities. The reality, it submits, is that the requisite repair work to make the ship seaworthy was either not carried out or was carried out inadequately. 

170	Whilst there is some force in these points, the general picture evidenced by the material referred to is that all the relevant personnel were, within the sphere of their respective responsibilities, endeavouring to secure that the Dock was fully classed and fit for the contemplated towage. The fact that some of the matters described related to Class requirements does not mean that they were irrelevant to towage. A vessel whose ballast system is in part inoperative or whose tanks were not watertight would not comply with Class requirements. In my view it is legitimate to infer from the material referred to, the absence of sufficient evidence to the contrary, the final approvals given on 10th and 23rd June 2006 to the effect that the Dock was fit for towage, and the evidence of Mr Kalmykov that the work needed was properly carried out and that no significant defects remained.  I do not accept, as was submitted, that the GMB Statements of Compliance of 10th June relate only to the tugs. They state that “the above and below vessels” were “in good and efficient condition to tow”. The “below vessel” is the Dock.

The expert evidence

171	Mr Barker and Mr Case submitted several lengthy reports. Mr Barker’s views appeared to me reasonable and supported where necessary by appropriate analysis. Some of what Mr Case said appeared to me to lack detachment and to assume facts which were far from established: e.g. his first report which proceeded on the basis that the draft was never reduced to 2.8 m as opposed to the 3.3 m referred to in the TOPAZ log book entry, when the evidence of Mr Dudinov who made the entry and Captain Rada, who ordered the reduction, was to a different effect. He appeared to be prepared to rely upon contemporaneous reports by crew members when consistent with the case he was making but to dismiss them when they were not: see e.g. paras 2.11 and 7.3 of his fourth report compared with his dismissal as incredible of the three explanatory notes relating to the Topaz log entry that refers to the Dock having a 3.3m draft. He expressed views on the inferences which could be drawn from the fact that only 3 ballast pumps were used on 13th/14th July which is not in fact a technical issue, as he accepted. The view expressed in his second report that failure of the pontoon securing arrangements was inevitable in all but flat calm conditions seemed to me difficult to sustain in the light of the way in which the Dock withstood typhoon Ewiniar .

Pontoon securing arrangements

172	Mr Case made clear that he did not suggest that the failure of the lashings on 13th July during the extreme weather conditions which then prevailed, as a result of which the pontoon eventually became free in the late afternoon, was itself evidence of unseaworthiness. His view that the vessel was unseaworthy related to the departure condition of the vessel and was based on the fact, as he described it, that the securing arrangements failed in conditions less severe than those for which they were supposedly designed.

173	In order to determine the question of unseaworthiness it is necessary to consider (a) what the securing arrangements were; and (b) whatever they were, whether they were sufficient in sea conditions of up to h3%  = 2.0 – 3.5 m.

174	A considerable amount of evidence was adduced as to the former. The claimants contend that the arrangements were as follows:

(a) 	4 steel stanchions attaching the forward part of the pontoon to the breakwater at the fore end (referred to as the “manger board”);

(a)		10 steel ropes, 5 on either side of the pontoon, which fastened 
	the pontoon to the side of the Dock.

Baominh contends that there were only six lashings securing the pontoon from the time that the Dock left Vladivostok until she encountered typhoon Ewiniar on 9th July and that the diameter of the lashings was 19 mm. 

175	A drawing dated 17th May 2006 (“Scheme of equipment fastening at the shipway deck 1760-926-311CB”) indicates 3 wires per side, the foremost wire being fastened to a spot a little way aft of the corner of the pontoon. The list of equipment of the same date (“Allocation and lashing of equipment on the ship-way deck in the area 4 ….. 26 frames”) gives a specification for the lashings of a 29 mm diameter wire with a typical break load of about 51 tonnes. The turnbuckle and the connecting eyebolt have a permissible working load of 8 tonnes.

176	Mr Kalmykov’s oral evidence was that 4 additional rope lashings were added prior to the departure of the Dock at the 4 corners of the pontoon. They were added because he persuaded the designer to add them. He did so because his view was that the original design (based on a maximum wave height of 3.5m) might not be sufficient if wave heights exceeded 3.5m.  The lashings which he asked for were fitted. Both he and the GMB Inspector checked them, the latter having required the additional lashings to be shown to him. 

177	That evidence is corroborated by a revised “Specification of the materials for the fore pontoon strengthening on the ship-way Dock of Floating Dock in the area of 4 ….16.5 frames” dated 7th June 2006.  That document shows that the steel ropes were 29 mm in diameter and the turnbuckle break load had been uplifted to 12.5 tonnes. 

178	Baominh challenged the authenticity of this document but I am satisfied that it is genuine in the light of:

(a)	the unlikelihood of it having been invented; particularly in the light of its detailed content and the documents in (c), (d) and (e) below whose authenticity was not disputed;

(b)   	Mr Kalmykov’s evidence;

(c)	a letter sent by Mr Chepchugov (a director of the ship repair Company Vladivostok Sea Port Pervomaiskiy) to Mr A. Naguevskiy, GMB’s Chief Inspector, dated 7 June 2006 which forwarded for consideration and approval documentation:

“of the additional rope or cable fastening .. of the bow pontoon (additional to the Project of delivery of floating Dock No 7 approved by you) which is developed by designers by  …[Dal’zavod] in accordance with the requirements of representatives of buyer and towing company”. 

The letter referred expressly to an additional 4 lashings which were intended to provide a margin of safety and fulfil the requirements of the buyer and the towage company. The GMB Surveyor stamped the words “Approved” on the letter.

(d)	Captain Parshintsev’s list of remarks to Mr Pustovoy, general director of Daltramp, dated 6 June 2006, in which he requested “additional lashing of the bow pontoon”; he also refers to his requirement for additional lashing in his report of 24th August 2006 (“my requirement to provide additional lashing of pontoon compared to Towage Project was fulfilled”). 

(e)	In January 2010 Mr Shubin, the towage plan designer, recalculated the lashing strength of the bow platoon upon the basis of 10 steel lashings, 2 in or at each of the four corners and 1 at the middle of the side. The calculation is described as “a testing of the existent fasteners of the transitional fore pontoon on the ship-way deck [of the Dock] which were mounted in May and June 2006 before departure for towage..” It is difficult to see why he should have done so on a factually erroneous premise. The document refers in para 1.3.1 to some of the items in the 7th June 2006 specification.

179	Set against that is the fact that in his original written statement Captain Rada said that on departure the forward pontoon was “secured by means of a series of 6 19mm steel wire cables” and that after the Dock passed through Ewiniar, “we added four additional steel cables to the bow break of the vessel to further increase the lashing of the pontoon”.  When he came to give his oral evidence he said that, when he was giving evidence (sc. his written statement) he could not remember how many steel cables were brought on board but he was sure that there were more than 6 of them. He said that there were no less than 10. 

180	The claimants relied on the  photograph which appears at F1/118 (with a better copy attached to Mr Case’s report at  E 9/363) which shows a lashing wire at the extreme forward corner of the pontoon on the starboard side, which is not a position shown for any lashing on the original drawing. Against that the claimants point out that it does not show any other lashing at the corner. None of the photographs which Captain Rada said he considered before his oral evidence show that there were more than six lashings either.  Further that which Captain Rada suggested at one stage in his evidence was a lashing extending forward from the fore part of the pontoon (which appears on F1/118 and F1/93 & 96) is in fact some form of wire going through a pulley.

181	In my judgment the likelihood is that the Dock sailed with 10, and not the originally intended 6, lashings to the pontoon of 29 mm - as the contemporaneous documentary evidence to which I have referred and the evidence of Mr Kalmykov indicates.  There are only a limited number of possibilities. The first is that the Dock sailed with only 6 lashings to the pontoon; the revised specification providing for 10 lashings is an elaborate falsehood; both Mr Kalmykov and Captain Rada are not telling the truth; and Mr Shubin has also participated in the deception or, which seems implausible, he never saw the lashing arrangements on departure and was, later, deliberately misinformed as to what they were. The second is that a revised specification was drawn up but never implemented, in which case the revised specification is not, itself, a falsity but the position is otherwise the same. The third is that the revised specification was drawn up at the date it bears, and was implemented, and Mr Shubin was then asked to make calculations which he did by reference to what had been the actual position. On this hypothesis the lashings were attached in a manner different to that shown in the diagram in Mr Shubin’s paper and different to that shown in the original drawing; and, save as to one, are not visible in the photographs which we have. That seems to me the most likely explanation. I accept Mr Kalmykov’s evidence. There is no plausible reason why he should have made it up and none was suggested to him.

The sufficiency of the securing arrangements. 

182	Prior to 30th June the weather conditions were favourable with seas generally in the 0.5 to 1.0 m range. From 30th June the conditions began to deteriorate with reported wave heights in the 2-2.5 range on 1st July with rough seas and Beaufort Force 5 winds. Conditions improved slightly on 3rdJuly. On 4th July stormy conditions with rough seas of up to about 3.0 m were noted with further deterioration on 5th July and seas of up to 3.5m reported. At 12:00 on that day both tugs were ordered to switch to one main engine so as to allow typhoon “EWINIAR” to pass. Throughout the period 30th June to 5th July 2006 the securing arrangements survived without reported incidents or any apparent problem.

183	On 6th July the sea conditions improved to 1 – 1.5m wave height. At 08.30 the Dock Master reported that “additionally fastened/enforced the property stowed on the dock pontoon-deck, no any remarks arose”. This does not appear to relate to the pontoon itself; and it is unclear whether “the property” referred to had shifted, whether that was as a result of the rough weather, and what exactly was done.  On 7th July the conditions were much the same. Late on 8th July the weather again deteriorated.

184	During the morning of 9th July seas of up to 3 m were noted. At 12:05 on that date the Dock Master reported that “fastening of pontoon located in Dock’s fore part broken”: see the TOPAZ log. That was, in my view, a reference to the four stanchions: see para 187-8 below. The convoy altered course to reduce the effect of shipping seas on the Dock.  The sea surface wave height was reported as up to 6 m later in the day. In his explanatory note of 17th August 2006 Captain Rada said that “actually this day the height of waves from 1200 a.m. till 2000 pm increased from 3.5 up to 5.0 – 6.0 metres and force of wind reached 22-25 knots. The storm has started to cease only in the morning on July 10th”

185	On 10th July the conditions improved and repairs and improvements were effected to the fastenings. I consider below what that amounted to. 

186	It is not clear precisely what securing arrangements other than the 4 steel stanchions attached to the breakwater parted on 9th July. 

187	In Captain Rada’s evidence to the Russian authorities on 31st July 2006 he refers to sea waves on 9th July tearing out the “pontoon fastening lines fixed on the dock’s manger board” and that:

“the pontoon shifted to port side by 5 cm and in direction of stern by 5-7 cm, but that time the pontoon was fixed by side guy lines. We reported about that to our flagship and they, in their turn, reported to towage headquarters. On July 10 we received recommendations from our headquarters to rig additional guy-lines, By that time we had already rigged 4 additional guy-lines, they were fastened to hawses and deck eyebolts in order to reduce the angel and press the pontoon on the deck. That time our welder repaired fastening line fixed to manger board….”

188	At trial the interpreter, who was plainly competent, translated the first phrase as “the lashing of the pontoon attached to the breakwater was torn off” and explained that the Russian word he had translated as “lashing” signified something that was attached to the breakwater and was holding it in place but did not specify the type of attachment. This seems to me likely to refer to the stanchions (Mr Sashkin had interpolated the translation “braces” before the interpreter’s translation), which were then refixed with angle bars.

189	The Chief Mate of the Dock’s report of 19th July reads:

“On 9.07.06 during stormy weather a sea wave overflowed the dry- dock pontoon –deck and torn out fastening of forward platoon in way of breakwater (four stanchions) and forward head guy lines. The pontoon shifted by approx. 5 cm in aft direction and by approx. 10 cm to port side. When on 10.7.06 the stormy weather abated, in accordance with the Master’s order the crew under my guidance and with my participation mounted four guy-lines onto the pontoon (steel line of 19mm thickness), welded angle bars on stanchions, and re-tightened the remaining guy lines with loads on the pontoon deck”.

190	The interpreter translated this as :

“On 9th July 2006, during the storm, the wave which hit the ship-way dock tore off the reinforcement of the bow pontoon which attached it to the breakwater (four braces). The bow or forward longitudinal rope lashings were torn off”. 

The Russian word he translated as “reinforcement” is the same word he had translated as “lashing” (see para 188 above).

191	The record of interview of the boatswain, Mr Melekhov Ivanovich, dated 27th July 2006 contains the following:

“Q  	In other words, did you consider fastening as insufficient?

A	No, I don’t think so. We decided to be overcautious. However, when we were passing the first typhoon, 2 side and 2 bow steel guy-lines were broken. And after that we rigged another 4 guy-lines (2 from the stern and 2 from the bow)”.

192	A report from Captain Parshintsev of 24th July 2006 reads):

“On 9 July our tow passed via typhoon “EWENIAR” …As a result of the action of north-eastern wind and roughness about 3.5 m where broken some cross-arms of pontoon lashing on the dock. The crew of the dock No 7 restored lashing and installed 4 additional steel rope guy on the bow part of the pontoon”

In his witness statement Captain Rada refers to adding “four additional steel cables to the bow break of the vessel”.

193	The picture derived from that testimony is that on 9th July the four stanchions parted; the pontoon shifted to a small extent but it was restrained by side lashings (guy-lines). Some lashings gave way, variously described as “forward head guy lines” (number unspecified), “bow or forward longitudinal rope lashings” and “2 side and 2 bow steel guy-lines” and “some cross-arms of pontoon lashing”. Then another four guy-lines were rigged. This evidence is both unclear and inconclusive as to (i) how many lashings/guy-lines there were in total in the first place; (ii) how many broke (although the boatswain says four); and (iii) whether the 4 new guy-lines were rigged 2 from the stern and 2 from the bow part of the pontoon or 4 from the bow. The reference to “bow or forward longitudinal guy-lines” may be (but is not necessarily) a description of lashings at the side securing the pontoon (as appears in the original drawing). If that is what is referred to, and if 4 broke (as the boatswain’s report suggest) and the remaining lashings held the pontoon secure and almost in the same place, that suggests that there were more than six in total originally.

194	The claimants pray in aid the events of 9th and 10th July as tending to show the adequacy of the securing arrangements, whether there were 6 lashings or 10. It is not, they submit, safe to assume that when the securing arrangements parted on 9th July the wave heights had not exceeded 3.5m. The logbook records the wave heights every 4 hours. That is, as Mr Case agreed, probably an average over a four hour period. But sea conditions are constantly changing. The figure recorded every four hours (e.g. 3.0 m at 12.00) is not necessarily the maximum wave height experienced during the period (or at 12:05 on 9th July).  The comparable figure for 16.00 is 3.5 – 4.5.

195	It is also necessary, the claimants submit, to look at the totality of events on 9th and 10th July. During that time the Dock encountered typhoon EWINIAR with wave heights of up to 6m, i.e. substantially above the design limits. Even then sufficient of the securing arrangements held to prevent significant or dangerous movement of the pontoon – it moved only a few centimetres.  That is a good indication that the Dock was not unseaworthy.

196	I regard this approach as well founded. The fact that the Dock survived the typhoon does not necessarily mean that it was seaworthy on departure. The fact that lashings give way to some extent in heavy weather does not necessarily mean that the Dock was unseaworthy on departure. What is the correct inference to draw will depend on (a) the conditions in which they do so; (b) the extent of their failure and its consequences, in particular whether and to what extent the cargo shifted; and (c) the ability of the vessel’s crew to repair, restore or improve the arrangements (although , as Mr Case put it, if the securing arrangements  at the commencement of the voyage were inadequate, the existence of a competent crew and an inventory of spare parts would not make the vessel seaworthy). 

197	In the present case I do not regard it as established that the lashings gave way with wave heights below 3.5m. Seas of up to 3.5m had been reported on 5th July and may well have been reached again when or before the stanchions gave way on 9th July. Further, the extent to which the cargo shifted, even with wave heights well above 3.5 m, before 10th July was minimal and the crew were able to make repairs on 10th July. In those circumstances I am not persuaded that the Dock was unseaworthy on sailing on account of the insecurity of the lashings, which, until even worse weather conditions, fulfilled their function of securing the pontoon and not allowing it to come loose in such a way as to be a source of danger. 

198	I am fortified in reaching that conclusion by the fact that Mr Case’s contrary view differs from what was, or must have been, the views of several other experts: Mr Kalmykov, Dalzavod, GMB and Mr Barker together with Marinex (although the latter made little analysis of the securing arrangements), the Far East Marine Research, Design & Technology Institute and the Russian Investigation Commission. There is no magic in numbers (and I bear in mind that only Mr Case and Mr Barker have given expert evidence on seaworthiness in this trial) but it would be surprising if all the first three had allowed the Dock to sail with inadequate securing arrangements for the circumstances in which she was designed to operate.

199	Mr Barker supported his view by reference to standard Noble Denton transportation barge criteria, applicable whatever the weather conditions (i.e. not restricted to a wave height of up to 3.5m). The calculation assumes that the Dock rolls to an angle of 20 degrees in a 10 second period around a roll centre at the waterline (which is more than the original project criteria). Pitch is assumed to be twelve and a half degrees in ten seconds around amidships. His calculations showed that, when adopting these conservative transport criteria, intended for transport barges operating without any 2 -3.5 m wave height restrictions, the securing arrangements of the barge were not overloaded whether there were 6 or 10 lashings. Those calculations were carried out on the assumption that the permissible load of the turnbuckle (the weakest link whether the lashings were 29 or 19 mm) was 8 tonnes, whereas it appears to have been 12.5 (see para 177 above).

200	Baominh submitted that these calculations were carried out on the most favourable basis for the claimants and without (as is so) consideration of the inevitable wave impact and buoyancy forces; but put forward no calculations of its own (nor any more specific critique of Mr Barker’s calculations). Whilst I do not regard Mr Barker’s calculations as conclusive (because, as he said, the Noble Denton criteria are “very broad” and “an engineering calculation is an engineering calculation and not real life”) they seem to me to provide some support for his conclusion.

Fire and ballast pumping systems

201	The Explanatory Note records that the Dock was equipped with 6 ballast pumps that are “dually interconnected by pipelines with disconnecting sluice valves that guarantee [the] ability to pump out ballast from any ballast compartments”. The system is illustrated on drawing 1760-075-168, which shows the six pumps each located within one of six valve chests, and how, by opening the necessary cross-over valves between valve chests, any one pump can evacuate any of the 20 ballast tanks. The 6 pipes are designed to be operated on 20 tanks with each pump serving 3-4 tanks simultaneously in normal operation. 

202	Baominh contends that the vessel had on board only 3 operational ballast pumps at the beginning of the voyage and that the vessel was unseaworthy on that account. The claimants say that there were 6 operational pumps and the vessel was seaworthy even if there were only 3. 

203	Mr Kalmykov’s evidence was that all 6 pumps were in good working order (after repair), as also were the emergency pumps;  and that if they had not been it would not have been possible to obtain the Class and Seaworthiness documents which were in fact obtained, nor would the Harbour Master have allowed the vessel to sail. This seems to me inherently likely to be so. The efficient working of all 6 pumps is necessary in order for the Dock to fulfil its primary function of lifting vessels in and out of the water speedily. Both RMRS and GMB should have checked the proper working of the pumps before issuing Class and Seaworthiness certificates. That would not have been a difficult exercise. There is no reason to think that both or either of them failed to do so. As Mr Case accepted, it would be astonishing if the vessel had passed Class, Seaworthiness, and Port State inspections with a fire and ballast pumping system in a defective state.

204	Captain Rada’s clear and repeated evidence was that there were 6 operational pumps on board, that they were checked on his instructions before departure; and after the encounter with the typhoon: see para 222 below. I note, also, the evidence in a record of interview of 27th July 2006 of Mr Muryaev the Chief Engineer of the Dock, that on 21st June the crew checked that all the diesel engines, six ballast pumps, and 3 fire pumps were in order and that during the voyage they inspected a number of ballast tanks to determine whether the sounding results corresponded to the actual situation. The condition of the inspected tanks was good. He also stated that the ballast pipes were in good condition and the ballast systems caused no concern. During the course of the voyage water was pumped out of the ballast tanks in insignificant quantities which had got there as part of the natural leakage of the system. 
	
205	There is no evidence relating to events prior to departure that some of the pumps were not working. 

206	When the Dock got into trouble on 13th/14th July only 3 ballast pumps, and one of the fire pumps, were used. This caused Mr Case to believe that only 3 ballast pumps were operational. Captain Rada said that there was no sense in using all six pumps because it would not have increased the rate at which the water could be pumped out of the 5 tanks (Nos 1, 2, 3, 4 and 9) into which water was flooding.  This was because the capacity of the pipeline was lower than the capacity of the pumping output of the pumps.  Mr Kalymkov’s evidence was to the same effect. 

207	It was common ground between Mr Case and Mr Barker that the pumping capacity of the Dock was restricted by the 350 mm diameter of the pipes in the system and by the layout of the pipes.

208	Mr Case accepted in his oral evidence that he was not in a position to quantify the actual restrictions on the piping system (nor was Mr Barker) or to gainsay Captain Rada’s evidence that it was not technically possible to use more than 3 pumps usefully. In those circumstances there is no sound technical basis for concluding that Captain Rada must have been wrong when he said that the application of further pumps would serve no useful purpose, much less that he did not believe that to be so. 

209	Mr Case’s view was that it would not have been futile to start additional pumps, which he thought would have increased the overall pumping rate; and that it was incongruous that no attempt was made to start an additional pump because it could not have made anything worse. As a result he inferred that the other 3 pumps did not work. 

210	Mr Barker’s evidence was that what Captain Rada had said was plausible and could not be said to be wrong. In his view the opening of a crossover valve between valve chests when other pumps were running would not increase the rate of flow down the 350mm branch pipes entering adjacent valve chests. There was a high likelihood that if two or more pumps were interconnected through the crossover line between their valve chests one pump would seek to take water from the suction of another thus “starving” the pumps and reducing their  efficiency – a process which would increase the more pumps were used. He would not have expected it to be beneficial to use more than 3 pumps in the circumstances pertaining on 13-14th July 2006, since an additional pump could not have been connected directly to the ballast tanks that were flooding.  [Day 7/31, 34, 51]. 

211	In the light of the matters to which I have referred it seems to me that the likelihood is that all six pumps were operational. I see no reason why Mr Kalmykov, who was a superintendent and marine engineer, or Captain Rada, whose son was with him and who had every incentive to use as many pumps as he thought would be useful, should have told me what they must have known to be untrue. The possibility that the two of them have done so and that RMRS, GMB and the Port Authority have all been incompetent seems to me unrealistic. The fact that 3 pumps were used does not establish that only 3 could be used. There are 3 possibilities (a) that 6 were operational and 3 were used because there was no point in using more; (b) that 6 were operational and 3 were used because Captain Rada thought there was no point in using any more; (c) that only 3 could be used. The third possibility seems to me the least likely. I also do not accept that there was anything wrong with any of the fire pumps.

212	In those circumstances it is unnecessary to determine whether the Dock would have been unseaworthy if only 3 pumps were operational.  I have, however, come to the conclusion that it would not have been.

213	The question is whether the Dock was seaworthy for the purpose of the towed voyage to Vietnam in which there would be no need for the vessel to submerge and emerge for the purpose of taking another vessel on board.   The 6 ballast pumps had a massive pumping capacity in order that they might take on and discharge ballast into or out of all 20 tanks as quickly as possible. Such ability was not needed in order to deal with emergency flooding.  That was Mr Barker’s view, which I prefer to that of Mr Case. He drew an analogy, which does not appear to me wholly inapposite, with the Noble Denton guidelines on pumping rates for flat top barges. The pumping capacity of the Dock with only 3 pumps was many multiples of those rates. The pumping capacity of only one pump on the Dock was approximately equivalent to that of a single ballast pump on Cape size bulk carriers which are normally fitted with two such pumps. 

Manhole covers and watertight subdivisions

214	Baominh’s case under this heading relies on the content of two e-mails. 

215	In the first, sent at 7:02 on July 10th 2006,Captain Parshintsev e-mailed to Daltramp a report sent “according to report of Dock-master [i.e. Captain Rada], after storm”, which included the following (in translation) among 21 reported items:

“1         All 4 stanchions of fore pontoon fastening torn

2 	Pontoon shifted from its place

4	Pontoon leaks in 7 places, cause of leakages – corrosion wear  

15	2 holes in drain pipes of main ballast repaired 

16	3 glands packed into main ballast pump 

17	We suspect overflow between main ballast systems 

18	Gate valve port side closes not fully”

I have omitted items which are not material for present purposes.  Those highlighted in black were subsequently disowned in whole or in part by Captain Parshintsev: see para 223 below. 		

216	The second, which was sent by Captain Parshintsev on 12th July 2006, was in response to an e-mail from Daltramp of 11th July asking various questions about the report of 10th July. It contained the following (in translation):

“1 	Additional fastenings of fore pontoon welded. 2 longitudinal wires additionally rigged and fastened to manger board.

2 	Pontoon shifted to port side by 15cm and to stern by 10cm with skew to port side

6.	Item 18 – ingress of sea water into ballast compartments Nos 3,4,18. Cause of ingress – weak slide valves of de-watering and ballast pumps. Perform continuous check of water level and pumping out as necessary  

7.	Stormy weather conditions, sea water on pontoon deck, leakage of seawater into ballast compartment Nos 9.10. Probably through manholes of ballast compartments located under floating Workshop

8.	In engine room: repair of holes periodically appearing in fire main, scuppers of pontoon deck, renewal of sealing glands of ME cooling pumps, compressors, gate valves and pumps of ballast system. 

9.	Concreting of dents of pontoon deck.”

Again the items in bold were subsequently disowned by Captain Parshintsev.

217	It appears to have been the view of Mr Omelyanenko of Marinex, the first expert instructed by BM, who had access to the crew, that these e-mails explained the damage suffered by the encounter with typhoon EWINIAR and the work carried out to fix that damage.  His evidence was written and, not having heard him, I am in some doubt as to whether that was his view in relation to all the matters and whether, in any event, it is right. Some of them look like items which may have been revealed in the inspection after the storm but not caused by, it e.g. 15, 16 and 18 on the 10th July list and 6 and 8 on that of 12th July. 

The joint memorandum

218	In paragraph 11 of the joint memorandum Mr Case expressed the view that the defects described in the e-mails of 10th and 12th July which are set out below presented an overall picture of a dock in a generally poor, unseaworthy condition:

11 (a)	3 glands packed into the main ballast pump: item 16 on the 10th July list;

11 (b)	Suspected overflow between main ballast systems: item 17on the 10th July list which Mr Case linked with item 6 on the July 12th list as indicating a leakage across watertight boundaries;

11 (c)	Gate valve on the port side not fully closed: item 18 on the 10th July list;

11 (d)	Weak slide valves of dewatering and ballast pumps: item 6 on the 12th July list;

11 (e)	Repairs in the engine room described at item 8 on 12th July list;

11 (f) 	Manhole covers: item 7 on 12th July.

219	In relation to some of the specific items in para 11 Mr Case’s evidence was as follows:

(i) 	Items 11 a, c, d and e could in isolation, but not together, be taken as items of routine maintenance: together they were indicative of a poor state of overall repair; there was no evidence that they had been quickly remedied;

(ii)	Item 11 a: it was not clear what was meant by “the main ballast pump” but he understood that the item could be quite a minor repair to undertake;

(iii)	Item 11 b: it was not clear to Mr Case (nor Mr Barker), nor is it clear to me, to what Captain Parshintsev was referring by the expression “overflow between main ballast systems”. Mr Case thought this could refer to leakage between the 3 buoyancy compartments, where the pumps were, through the gate valves which connected them (although this seems unlikely if it is to be taken as meaning leaking from one of the identified tanks to another given the separation between the identified tanks) or from the overboard discharge valves into the suction chests;  

(iv)	Item 11c: where this valve was (other than on the port side) is unknown;

(v) 	Item 11d: Mr Case thought this could refer to a leakage between the buoyancy compartments referred to in (iii), or to the non return valves between the pumps and the outboard discharge or to a further valve outboard of that one.

220	In the same memorandum Mr Barker expressed the view that it was not possible to attach any real significance to the reference to a leakage through manhole covers because if they were in place, then, even if they were not in good condition, any leak would not be significant because of their physical construction as a piece of steel closely bolted down onto a rubber gasket. Any leak would, as Mr Kalmykov put it be a drop in the ocean. I share that view.

221	Mr Barker further took the view, which I also share, that there was no indication in the e-mails as to the seriousness of the matters listed or, in at least one case, whether they existed (e.g. the reference to a suspected overflow in item 17 on the 10th July list) and some items appeared to be matters of routine maintenance or matters that would comprise normal checks following a storm or even as a matter of daily routine. Thus item 15 on the 10th July list gives no details of size or location of the holes; item 16 does not indicate the nature of the defect, which may be a weeping pump gland. Item 18 does not indicate the amount of leakage, which appears to be in a single valve in circumstances where the ballast compartments are all separated by between two and seven valves. Item 8 on the 12th July list gives no indication of the seriousness or otherwise of the problem. 

The August 2006 Explanatory Notes

17th August		Captain Rada

222	In  an explanatory note of 17th August to the Russian Commission of Investigation into the wreck Captain Rada reported that:

“1	…..Early in the morning on July 10th 2006 I have actually reported to the Chief of Expedition that the divergence with a typhoon EVENIAR has passed as a whole safely, and the small damages received as a result of a storm will be eliminated. The permanent monitoring of water in the tanks through sounding pipes and trial test pumping out of water from the tanks by bilge pumps during July 9-10 have shown that ingress of seawater in ballast tanks and dry compartments were not occurred. Ballast pumps during this period were not used at all.

Moreover it could not be any discussion of the flow of water in tanks 10-12 July when the weather was normal and the crew safely removes the consequences of storm on July 9 (paragraph 6 of the telex of Mr Parshintsev dated 12.07.2006). But I really had been stated to the Chief of expedition about my suspicion for small leaks through glands of the sluice valves of the ballast system or bulkhead glands, and also intentions to check up all suspicions after the storm. Duties of crew include check of a condition of all systems of the dock after a storm.

2.	Between 10-11 July dock crew had completed work on the restoration of the bow pontoon’s fastening which were damaged by waves, additional cable brace of the pontoon has been provided on the recommendation of the Chief of the expedition, other damages or defects identified after the storm were eliminated. It was removed several flaws in the fire main, scuppers were cleaned, we have started checking of the glands of sluice valves and bulkhead glands in the tanks that to remove the suspicion of possible leakage of water through  these glands. The gland’s nuts and studs were pressed out where it is need.

At the same time I declare that no any sealing glands of the ballast pumps, cooling pumps of diesel generator and compressors were not replaced, as specified in the telex of the chief of expedition Mr Parshintsev on the 12.07.2006. All pumps were in good condition, any flaws in scuppers of the ship-way deck have been not eliminating also. I have reported to the Chief of expedition by radio in the evening on July 11 about the executed works and that next day on July 12 we shall continue checking of some elements of ballast bilge system of the dock and carry out repair and maintenance works as required. 

According to the instruction of the ship-owner, provided before departure dock from Vladivostok, the crew continued the concreting of dents on the surface of ship-way deck that were made at the time of the dock’s repair in Vladivostok or during of its previous operation. ….

3	During the 12 July crew dock surveyed several tanks and sluice valves of the ballast system and the piping of ballast-bilge system, glands of the sluice valves and bulkhead valves were pressed out, flange couplings of piping were tightened. No serious damages have been detected.

We have carried out test of the ballast-bilge system once again with taking up of the ballast into the tanks and pumping it out, tank’s stripping – all equipment worked in normal mode. Any cross-flows or leaking of water in the sluice valves and bulkhead glands were not found. Results of the tests were reported to the Chief of Expedition on evening of July 13. The necessary records about all operations and actions of the crew were made in the ship; log of the dock.

4	As to reports and the information of the Chief of Expedition, basically they correspond to the taken place facts during the specified period on July 9-12 2006 but in view of my amendments and remarks made in this note.”

								Bold added
18th August	Captain Parshintsev

223	On 18th August Captain Parshintsev, who had seen Captain Rada’s note of the previous day, wrote a note of his own addressed to the Investigation Board with a copy to DV Basu i.e. the Federal State Unitary Enterprise, which was the owner of the tugs, in which he confirmed Captain Rada’s note. In it he said that when he drew up his reports on 10th and 12th July to the headquarters of the towing company he had intentionally distorted some facts for the purpose of overestimating actual volume of work performed by the Dock’s crew that could affect future “awards for the result of the operation”. He confirmed that items 1-3, 5-14, 19-21 of the e-mail of 10th July were items of damage which he had correctly identified on the basis of Captain Rada’s report. As to point 4 he said that Captain Rada had reported after the storm that they had discovered some holes in 4 places in the fore part of the hull of the pontoon which arose were the four broken stanchions which were attached to the wave breaker were welded to the pontoon’s hull. When the stanchions were restored the crew welded up all the holes using plate steel. 

224	In relation to the e-mail of 12th July he stated that points 1-5, and 9 were as Captain Rada reported but that the “damages specified by me in points 6-8 ..actually did not take place on the Dock” adding “the distorted information made by me in reports date 10th and 12th July could not affect … towing operation or safety of the Dock and her crew”.

225	Baominh disputes the authenticity of this note.  It was suggested that it had been fabricated after 30th October 2009 to explain away the defects relied on in Mr Case’s reports. 

226	Captain Parshintsev says in his statement that on 18th August he made three copies of the note. He handed one to the Investigation Board (although later in his statement he refers to handing them the original); a second to the Director of DV Basu; and he kept a third copy for himself which he delivered to Garnat in December 2009 after he had resigned from DV Basu. 

227	Reliance is placed by Baominh on the nature of the two different copies in the papers before the court. One has the stamp of Pacifictramp, the company that concluded the Towcon contract, against the words “Received from DV Basu 03 December 2009”. In manuscript at the top are a signature, the date of 22nd August 2006, and the words, apparently addressed to the Personnel Department, “Please draw up an order”. This would appear to be the copy Captain Parshintsev handed to DV Basu.  The other copy does not have that manuscript. The content appears to be the same but the alignment of the words on the page differs in some respects (e.g. the first two sentences of the third paragraph) and the signature, although appearing to be from the same hand is slightly different. That is said to be the copy obtained by Garnat direct. 

Captain Rada’s second statement

228	In his second statement Captain Rada dealt with the e-mails of 10th and 12th July. In relation to the former he confirmed that he did report items 1-3, 5-14, and 19-21 i.e. the items which, on 18th August 2006 Captain Parshintsev had himself confirmed. In relation to item 4 he said that he did report it but clarified what he meant by “cause of leakages – corrosion”. After the storm he had noticed some cracks in the bow pontoon in 4 places where the pontoon was welded to the steel stanchions, which were secured to the wave break. The cracks appeared to him to have appeared where the structure of the pontoon has been subject to some corrosion and the metal was less strong than in other parts of the pontoon. The cracks only appeared after the Dock had passed through the typhoon. Between July 10th and 12th the cracks were closed using welded steel plates. 

229	With regard to the e-mail of 12th July he confirmed that he reported items 1-5. He did not remember reporting item 6 and on reading the contents for the purposes of the statement he felt that it was quite impossible that he did. He did not recall reporting item 7 or items 8 and 9, but these latter two were routine works for which they were being paid extra. He thought that they had not done either of these immediately after the storm and that none of them related to the storm but they would have done these things as part of routine. 

Was Captain Parshintsev’s note of 18th August 2006 fabricated?

230	I regard the proposition that Captain Parshintsev note of 18th August was fabricated after 30th October 2009 to deal with Mr Case’s evidence (or at any other time) as highly implausible. It appears to me far more likely that it was produced as part of the investigation by the Russian Commission in order to address what was said in Captain Rada’s note of 17th August; that Captain Parshintsev overegged the pudding and, when challenged, backtracked. That he might have done so gains some support from Mr Sashkin’s evidence which was that the tugboat crews were paid very little (Captain Rada, for instance, was paid at least twice as much as Captain Parshintsev) and that, before departure he had told Captain Parshintsev that, if there were additional difficulties or problems as a result of which there was additional work, they would be paid extra. According to his evidence extra work by the Dock’s crew could attract extra payment for the crew because so much depended on the work of the Captain of the tugs and his crew. I find it difficult to follow why extra work for the crew of the Dock should mean extra payment for the crew of the tug[s]. But it may well have been to his advantage to overstate any actual or potential problems. The production of two non-conforming copies of the note of 18th August would be a very curious and convoluted fabrication. I do not know what the explanation is for the different form of the two copies but the difference does not lead me to suppose that both are fakes. 

231	Mr Case accepted that, if what Captain Rada said in his Explanatory Note was correct, none of the matters referred to in para 218 (a) – (e) above were serious or evidence of unseaworthiness at the commencement of the voyage, although adding the caveat that he was not sure how some of the work could have been carried out because of access restrictions. I see no reason to disbelieve Captain Rada or his August 2006 report, particularly in the light of Captain Parshintsev’s note of the next day, or to believe that it was deficient.  I do not regard what is described in that note, which seems to me likely to constitute the most accurate account available of what was found, suspected or done, as evidence of unseaworthiness at the start of the voyage but of relatively minor matters discovered after and to some extent caused by an encounter with a typhoon and swiftly seen to without difficulty.

232	The position would be the same even if the entirety of the 10th and 12th July e-mails was accurate. The content of the e-mails is obscure both as to what they mean and as to the seriousness of any defect. I do not regard them as establishing, even if taken at face value, that the Dock was unseaworthy and would not have been sent to sea by a prudent shipowner. 

233	In short it has not been established that there were at the commencement of the voyage such defects in the Dock as rendered it unseaworthy. If there had been such defects it would be very surprising if they had not been picked up by RMRS, GMB or Mr Kalmykov. None of the alleged defects were difficult to identify.

234	So far as leaking manhole covers are concerned Mr Kalmykov, whose somewhat belligerent evidence I accept, made clear on more than one occasion that during the course of the work on the Dock the covers were repaired and checked on a continuing basis for tightness, and all this was done before any cargo was placed on board the vessel. This had to be done then because it was necessary for the Dock to be submerged before any objects could be put on board.  Mr Kalmykov personally checked all the ballast tanks by descending into them before cargo was placed on board; the subdivisions of the tanks were subjected to hydrostatic and pressure tests. Captain Rada tested that there was no overflow between the tanks by opening and closing valves and sounding the tanks from the deck. If there were any significant leaks they would surely have been detected.  He was also party to a visual inspection prior to departure of such manhole covers of the ballast tanks as were accessible for visual inspection after the cargo was loaded. In addition the tanks were checked regularly for water level and no additional water was found to be coming in. 

The departure draft

235	It is common ground between the experts that it was theoretically possible to reduce the draft to 2.8m. The Statement on the Right of Departure No 1672”, signed by the Master and the Assistant Harbour Master records a draft, fore and aft of 2.8m. It describes the “time and date of drawing up departure” as 14.15 on 23rd June 2006. The departure is said to have been “adjusted” by the Controller of the Port State Control Mr Kislov, who signed the document, as did Captain Rada. There is another document signed by Mr Kislov with the same time and date containing the same information. I infer from this that there was a physical inspection in the early afternoon of 23rd June. 

236	I regard it as unlikely that the draft was wrongly recorded, or that the Dock would have secured clean Class certificates from RMRS and GMB, and been certified as seaworthy by both of them and as fit for towage by GMB, if the design draft of 2.8 m was in fact incapable of achievement. It would have been necessary for the GMB surveyor to be satisfied that that draft could be achieved, probably by seeing that it had actually been achieved. I accept the evidence of Mr Kalmykov and Captain Rada that a 2.8 m draft could be and was achieved before departure.  Photographs are, as I have said, an insecure guide but the photograph [E/3/122] taken on 26th June appears consistent with such a draft.

237	The “Statement” records that there were 286 mt of ballast on board. However, the Assessment records that it is necessary to take water ballast to tanks 2 and 19 in the quantity of 286 and 363 tonnes in order to decrease the bending moment at midships in still water, and it appears to be the position that those quantities are the quantities needed in order to secure the recommended draft of 2.79m.

238	The two statements are not compatible. In this regard there are a number of possibilities: 

(i)	a draft of 2.8 m was achieved when only 286 mt ballast was used;

(ii)	the compiler of the Statement failed to include the contents of tank 19, as did Captain Rada in his letter of explanation of 4th August;

(iii)	there was only 286 mt of ballast and the Dock did not have an even draft of 2.8m when the Statement was made up; 

(iv)	there never was a draft of 2.8m. 

239	Of these the fourth seems to me the least likely, being inconsistent with the Statement, the Explanatory Note and Captain Rada’s evidence. The third seems almost equally unlikely, being inconsistent with the explicit measurements in the Statement that the Dock had a 2.8 m draft fore and aft. 

240	As to the first possibility, Captain Rada’s letter of explanation of 4th August 2006 (see paragraph 23 above) which refers to the Dock achieving, on 26th June 2006, a moulded draft of 2.8 m when about 260-280 mt remained in the (unspecified) tanks is consistent with the reference in the Statement to 286 mt as being the ballast on board when the Dock had a draft of 2.8 m on 23rd June. But if all the calculations in the Assessment were accurately made and the 286 mt was all in tank 2 (which the Statement does not vouch) it implies that there had been an increase in weight over that contemplated by the data used in the Assessment of some 363 tonnes with the same longitudinal centre of gravity as tank 19, or a redistribution of weight having the same effect. 

241	The second possibility is open to the objection that you would expect that, if two tanks were ballasted, both quantities would be noted.

242		It is not, I think, necessary to choose between the first two possibilities. It seems to me 
more likely that the vessel carried 286 mt of ballast, but not all in tank 2, so as to reach  a draft of 2.8 m. Alternatively, the 363 tonnes was mistakenly omitted from the Statement and the figure of around 260-280 mt remembered by Captain Rada in consequence. 

243	I also accept that, as Captain Rada said, the draft was increased to 4.4 m as recommended by the Port Authority in order to reduce windage during the towage out of Vladivostok through Golden Horn Bay: see para 16 above. I can see no reason why he should have made this up particularly when the Assessment itself states that the draft of the Dock must be increased to 3.2 metres in order to decrease windage during anchorage.

244	I do not accept that the Dock was unseaworthy or unsafe because it sailed from Vladivostok with a draft of 4.4m.  I reach that view for the following reasons.  

245	The draft was increased at the suggestion of the Deputy Harbour Master and with the agreement of Captains Parshintsev and Rada so as to reduce windage and, thus, improve control over the Dock. If anything, the increase made the Dock more seaworthy for its immediate passage. When the Dock left the shore it did so in the flat calm waters of Golden Horn Bay, where the shipping of seas on deck would be either non-existent or minimal. Whilst weather conditions can change abruptly it was possible to forecast them with reasonable accuracy. There is no evidence that any difficulties were in fact encountered or should have been expected on account of the increased draft for the period that it lasted. The increase in the draft was a temporary measure. Unless there was a defect in the pumping system it would have been possible to reduce the draft from 4.4 metres to 2.8 metres very quickly. The entire ballast capacity of about 19,500 tonnes could be dewatered in about 2 hours – 286 or 286 + 363 tonnes in far less time. 

246	The draft figure of 2.79 m is contained in the Assessment. The Assessment contains calculations which were “completed to determine the possibility of its oceanic towing”: para 1.1. I agree with Mr Barker that that must have been intended to relate to the towage of the Dock through the ocean by two tugs, rather than towage by one tug through and out of the Bay. The Dock was towed out by the TOPAZ. LAZURIT was not connected until the afternoon of 24th June. 

247	I am satisfied that the draft was reduced to 2.8m on 26th June: see para 236 above. Captain Parshintsev’s order for the reduction in the draft appears in the TOPAZ logbook. It would have been entirely logical for him to have given that order in the light of what is specified in the Assessment. Captain Rada’s evidence, both contemporaneously in his letter of explanation of 4th August 2006 and in these proceedings, was that that reduction took place. There is no record (or other evidence) of any protest by those on board either tug that the draft had not been reduced as ordered. There was ample opportunity to check the draft by the side markings on the Dock when the TOPAZ was close alongside on 25/26th June. If after 24th June the draft had remained at 3.3 m I should have expected some reference either in the logs or in one of the explanatory notes filed after the loss. I accept Captain Rada’s evidence. 

248	I am not persuaded that the entry in the TOPAZ logbook for 27th June signifies that the draft was not decreased to 2.8 from 3.3m. There seems to me no reason why the draft should have been reduced to and then kept at that intermediate figure. The more likely explanation is that given in the contemporaneous explanatory notes of Captain Rada and Mr A.Y Dudinov, the 3rd mate, namely that the 3.3 m figure was one, but only one, of the drafts that were reported orally over the radio by Captain Rada during the ballast trials that were carried out on 26th June. I find it impossible to believe that evidence as to the holding of those trials, which would not be abnormal, was invented. The fact that there is no mention of them in the Instructions to the Dock Master does not mean that they did not happen. Captain Rada regarded them as normal practice. It is significant, also, that the log book entry “No water found, the dry-dock dewatered. Dry-dock’s draught 3.3m” is, in the absence of some additional weight somewhere, internally inconsistent since a de-watered dry Dock would not have a 3.3m draft. 

249	That conclusion renders it unnecessary to consider the applicability of the principle of “stages” laid down by section 39 (3) of the MIA.  It is, however, legitimate, in my judgment, to regard this voyage as having at least two stages, which were sufficiently definite, well recognised and separate. The first was from leaving berth to the commencement of ocean towage proper i.e. when the Dock was linked to two tugs and began her transit of the ocean towed by the two of them; at which time the second stage began. It does not, as it seems to me, matter that the parties to the Towcon contract did not divide the voyage into stages, or that the two tugs began their tow outside the port limits of Vladivostok, which the TOPAZ traversed at 02:45 on 24th June 2006.   It is sufficient that the voyage can properly be regarded as dividable into two definable stages that are distinct because they call for or justify distinctly different treatment of the vessel. 

250	Baominh submitted that such an approach is inconsistent with the Assessment and the Instructions. The Assessment calls for a 2.79m draft for ocean towage (which was to be performed with two tugs): see paras 1.1 and 6.1.3. That indicates that such a draft had to be achieved when the Dock was being so towed in the open sea. The Instructions to the Dock Master required the Dock to be ballasted in accordance with the Assessment before “the sea departure”: para 2.4. The latter phrase could be interpreted as relating to the commencement of the ocean voyage proper. But the same para requires the Dock’s “departure” to be performed at the day time and in good weather conditions. On the assumption, the validity of which is not apparent to me since the original wording is Russian, that “departure” means the same as “sea departure” and that both refer to the commencement of the ocean voyage proper there would be difficulties in ensuring that such departure occurred in good weather conditions. The Instructions to the Captain of the Tugboats required the Dock to be ballasted in accordance with the Assessment “before departing [Vladivostok manoeuvred by two tugboats] … at draft accepted for towage/with the draft usually applied to towage”: para 1.3, taken with paras 1.1 and 1.2. The draft in question was the 2.79 m specified in the Assessment for towage to Vietnam: para 1.6.

251	It does not seem to me that the application of the doctrine of stages is to be definitively determined by the wording of the Assessment and the Instructions. If, as turned out to be the case, seafaring prudence called for a greater draft to protect against windage during the passage of the Dock out from the berth followed by a reduced draft once ocean towage was under way, it can properly be said to be incumbent on the claimants to adopt the different drafts at the two different stages and this would be consistent at any rate with the Assessment, which is the design document for the purpose of oceanic towing, and the Instruction to the Captain of the Tugboats.

252	If, however, the doctrine of stages is inapplicable, the Dock was not unseaworthy because she left the shore with a draft of 4.4 m, provided, as was the case, she was capable of reducing her draft to 2.8 for the oceanic voyage in which she would be towed by two tugs. 

General considerations

253	The most significant allegation of unseaworthiness is that which relates to the alleged deficiency of the pontoon securing arrangements. Mr Case’s opinion was that there would have been no damage to the Dock at all if the pontoon had not broken free, even during the encounter with heavy weather conditions on 13th and 14th July 2006. That is some indication that all the matters other than the pontoon securing arrangements were not such as to render the vessel unseaworthy.

Conclusion on unseaworthiness

254	In short, for all the reasons set out above, I do not regard it as established that the Dock was unseaworthy at the commencement of the voyage for any of the reasons put forward. 

Finale

255	It is a singular feature of this case that Baominh’s defence has led them to assert, under both heads, that several of the documents produced by the claimants are fictitious or inaccurate. The Court is, of course, familiar with the fact that from time to time claims are made on insurers backed up with false documentation or on the basis of false evidence; and it endeavours to be astute to discern when that is so. In this case, however, the number of documents which, although apparently regular, are said to have been false, of alleged meetings which are said by insurers never to have taken place, of seemingly (and, as I find, actually) honest witnesses (such as Mr Kalmykov and Captain Rada, who had no reason to dissemble) who are said to be saying what they know to be untrue, and of independent authorities who failed to spot the supposed deficiencies in the vessel and, instead, classed it and certified it to be seaworthy and fit for ocean towage, strains credulity. The fact that it does so confirms me in the views which I have taken.

Conclusion

256	In those circumstances the claimants are entitled to succeed. 

APPENDIX 1

1.	In January 2006 Pervomaiskiy Ship Repair Yard JSC, the owners of the Dock, commissioned DB Dalzavod , a firm of naval architects and engineers, to prepare design plans, drawings and calculations for alterations to the Dock to make it seaworthy for towage. This produced what came to be known as the Towage Plan. The Towage Plan consisted primarily of naval architectural plans, drawings and technical calculations.  It included three documents of particular significance:
(i)	Document 1760-901-307 “Valuation (or Assessment) of Strength and Stability for the Towage of the Dock” (“the Assessment”);
(ii)	Document 1760-901-303 “Instructions to Tug Captain for the Towage of Dock”;
(iii)	Document 1760-901-301 “Instructions to Dock Master for the Towage of Dock”.
(iv)	Document 1760-901-301PZ “Explanatory Note Towage Plan of Floating Dock No 7” (“the Explanatory Note”).
2.	On 16 February 2006 the Russian Maritime Register of Shipping (“RMRS”), the Russian IACS Classification Society, conducted an annual survey of the Dock and made various repair recommendations. The Dock was classed with RMRS with a restriction on the navigational area to what appears in translation as “limit III – coastal shipyard”. 
3.	On 15 and 16 March 2006 Mr Kalmykov of Daltramp Shipping Company of Vladivostok examined the technical condition of the Dock to determine whether it could be made fit for transportation to Vietnam. 
4.	On 3 April 2006 (a) Garnat, (b) DalRemSnab DV (the company that undertook repairs to the Dock), (c) RMRS and (d) GMB concluded a “Protocol of negotiation” as to the repair of the dock and workshop in connection with their sale and preparation for towage to Vietnam.   It was agreed that Garnat would sign a repair contract with DalRemSnab DV Ltd after signing the contract with the previous owners. Certain repair works started but not yet completed by Pervomaiskiy were to be completed under control of RMRS. All repair works for the preparation of the Dock and Workshop for towing were to be done under the supervision of GMB, which was also to approve the towing design project.  Garnat also agreed to appoint its own surveyors for additional control of the repair process. Recommendations of RMRS and GMB as to repair works were set out. 
5.	On 7 April 2006 Garnat authorised Daltramp to provide the supervision of all of the repair and conversion works to the Dock. 
6.	On 10 April 2006 a work scope for repairs to the structure of the Dock was agreed between Pervomaiskiy Ship Repair Yard JSC and RMRS. 
7.	On 12 April 2006 a detailed repair contract was agreed between Garnat and DalRemSnab for repair and conversion works in relation to the Dock as per the requirements of RMRS and the Towage Plan. Clause 4.2 of the contract provided that the works were to be supervised by a GMB surveyor.  Enclosure 2, which was drawn up subsequently, sets out the work in fact performed by DalRemSnab at a total cost of US$ 880,762.
8.	Between 11-13 May 2006 a delegation from Vung Tau, led by Nguyen Van Hao, a specialist in relation to floating docks, inspected, and checked the technical condition of, the Dock and the Workshop. Mr Hao returned to Vung Tau’s offices with a copy of the Towage Plan.
9.	 In May the Dock’s ballast tanks were tested and approved by Mr Kalmykov.  
10.	On 24 May 2006 RMRS completed the Annual Survey and endorsed the Class Certificate for the Dock without recommendation; but with a restriction in relation to its navigation area as the berth at PSRY.
11.	On 30 May 2006: 
i.	GMB issued provisional Certificates of Classification of the Dock and the Workshop to Honest Winner;
ii.	Representatives of GMB (on behalf of Garnat), Daltramp, and Pervomaiskiy Ship Repair Yard JSC signed a document accepting that the repairs to the Dock had been performed in accordance with the requirements of RMRS.
iii.	On 30 May 2006 numerous interested parties and persons, including the seller, PSRY, and Daltramp, signed a Statement of Readiness for Towage, confirming that all repair and renewal works had been totally completed in accordance with the rules established in the Russian Federation and presented for survey, and that all operations for the preparation of the Dock for towage had been completed in accordance with the Towage Project approved by GMB’s surveyor.
11     On 6 June 2006:
(a)	GMB issued further provisional Certificates of Classification of the Dock and Workshop naming Garnat as the owner;   
(b)	GMB issued an Interim Seaworthiness Certificate for the Dock, confirming that it had been inspected and that the inspection had shown the hull, machinery and safety equipment to be in a “good and efficient condition”.
(c)	Mr Parshintsev, the commander of the expedition, requested the designers of the Towage Plan to provide for additional lashing connecting the stern part of the bow pontoon to the main deck.
12.	On the following day, the designers forwarded documentation to GMB relating to additional lashing of the pontoon to the main deck. 
13.	On 10 June 2006:
1.	GMB issued an Interim Seaworthiness Certificate for the Workshop.
2.	GMB also issued a Seaworthiness Survey Report relating to the Dock.   The Report declared the Dock ready for towing in all respects and in seaworthy condition for the proposed voyage, provided that sufficient care was taken to ensure that weather forecasts were received and that the masters of the Dock and of the tug vessels used judgment in relation to changes in the weather and conditions for navigation. The report said that the ship’s ballasting and draining systems, and scuppers were examined and so far as could be seen found satisfactory. 
3.	GMB also issued Statements of Compliance for Towing for LAZURIT and TOPAZ, confirming that the tugs and the Dock had been inspected and that “all towing arrangement were in good and efficient condition to tow from Vladivostok to Vung Tau”.
14.	From 10 to 23 June 2006 inspectors of the port authority checked the technical condition of the Dock, amongst other things.
15.	On 19 June 2006 representatives of Garnat and Vung Tau inspected the dock.
16.	On 23 June 2006 the tow preparations were approved by the senior government controller of Port State Control, Vladivostok (Mr Kislov), Captain Rada and Captain Parshintsev, the Master of the TOPAZ and commander of the expedition. The Dock was certified as ready for towage.