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06 March 2013
On November 16 2012 the Court of Genoa issued a first instance decision regarding interpretation of both contracts for the supply of food to ship crew members and of the applicable rules in the related collective bargaining agreement.
Between 2005 and 2008 an Italian shipowner entered into various contracts for the supply of food and beverages for the crew of its ships. The terms and conditions contained in the contracts were almost identical and provided that the contractor would supply food and beverages at a fixed price for each meal consumed onboard (breakfast, lunch and dinner). Some items were expressly excluded from the fixed price. The quantity and quality of the foods were to be determined in accordance with the qualitative and quantitative prescriptions contained in the applicable collective bargaining agreement. The contracts had a fixed term of one year, but were automatically renewed each year.
In 2009 the shipowner terminated the contracts upon expiry of the contract year. Within a few months of the termination of the contracts, the supplier issued invoices (one for each ship) claiming compensation for alleged extra food consumption onboard. The supplier contended that the quantity of food consumed exceeded the parameters set out in the collective bargaining agreement and therefore had to be regarded as extra food.
The shipowner contested the claim brought by the supplier, arguing that the quantity parameters in the collective bargaining agreement were not to be interpreted strictly, but rather were only a general indication of the quantity of food to be consumed by each crew member. Therefore, the shipowner commenced proceedings to obtain a declaration that the sums claimed in the invoices were not due. Furthermore, the shipowner brought a counterclaim for damages to the reputation of the company arising from the supplier's late supply of food and for late payment of sub-suppliers, several of which had threatened to have the ships arrested on various occasions.
The judge decided in favour of the shipowner. He stated that the reference made in the supply contracts to the collective bargaining agreement did not imply that the quantity of food to be supplied by the contractor had to be the exact quantity mentioned in the collective bargaining agreement. He held that the quantities of food referred to in the collective bargaining agreement were not precisely determined and therefore could not be seen as strict parameters for the quantity of food to be supplied on the ship; they were to be regarded only as guidance for the supplier to determine the quantity and quality of food to be supplied.
To support this interpretation of the contracts, the judge also relied on the following behaviour of the parties:
The judge also granted the shipowner's claim for loss and damages due to the fact that the contractor, by not paying some of the food sub-suppliers in a timely manner, had put the ships at risk of being arrested; consequently, the shipowner's reputation was affected as the various sub-suppliers could have circulated the news about the delayed payment. The judge took into account the delays and shortages in the supply of food on some of the ships, as such negative episodes might have circulated among the crew members. The judge assessed such damage in equity.
This is an interesting decision as it is the first time that an Italian court has taken a view on the construction of a food supply contract for a ship and considered the provisions of a collective bargaining agreement dealing with the quantity and quality of food to be supplied to crew members. In construing the wording of this particular food supply contract, the judge took the view that the quality and quantity provisions in the collective bargaining agreement could not be regarded as precise and definite parameters, but rather set only a proper standard for the quality and quantity of food to be supplied.
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