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Mechanical Breakdown
Last updated: 08-Jul-2015

Per Goff J in The Thanassis A (1982, unreported):

So far as the damage to the jetty is concerned, I do not see how that can properly be described as breakdown of machinery or equipment. Plainly the jetty is not machinery; plainly it is not equipment. Furthermore, complete destruction of part of the facility would appear to involve something more than a breakdown.

… There was then canvassed in argument the colloquial use of the word "breakdown" in relation to such things as motorcars, which seemed to indicate that in that context at least the word "breakdown" indicates some inherent defect of the machinery of the car itself which results in the car breaking down, whereas if the car was damaged in collision with another car one would not normally say that the car broke down.

… In my judgment, although I am not dealing with the same clause and I must construe this particular clause in its context, here too the cause of the breakdown is immaterial. It could be some external agent, or it could be some internal defect in the machinery or equipment, but if the machinery or equipment does not function, and possibly also if it malfunctions, then there is a breakdown of the machinery or equipment.

Per Clarke LJ in The Afrapearl [2004] 2 Lloyd’s Rep. 305 at para 21:

21. It does seem to me that a distinction should be drawn between a breakdown and its cause. To my mind Robert Goff J was right to draw that distinction. As I see it a breakdown of equipment such as the discharge pipe occurs when it no longer functions as a pipe. The cause of the breakdown may be a hole in the pipe or, as here, a gap in way of the flange which prevents the pipe operating as a discharge pipe. The hole may of course be caused in a number of different ways and for a number of different reasons. One of those reasons will commonly be the fault of someone concerned with the operation of the equipment, here the pipe.

Per Eder J in ED & F Man Sugar Ltd v Unicargo Transportgesellschaft GmbH [2012] EWHC 2879 (Comm) at paras 18, 20, 24:

… the starting point must be the finding of the Tribunal as stated in paragraph 13 of the Award viz that the fire had destroyed the conveyor-belt system linking the terminal to the warehouse. Despite Mr Young QC’s arguments, it seems to me that, as a matter of ordinary language and common sense, the destruction of an item (or even its partial destruction) is not within the scope of the term "breakdown", still less within the term "mechanical breakdown". This can be tested by reference to two everyday examples which were referred to by Mr Phillips. If a vehicle were consumed by fire and written off, its owner would invite a raised eyebrow if he were to suggest that his car had merely suffered a breakdown. Likewise, if a heating engineer were to be summoned to repair a domestic boiler described as having broken down, he would be surprised to discover that it had in fact caught fire and burned to destruction. As submitted by Mr Phillips, it seems to me that these examples illustrate the difficulty as a matter of ordinary language in way of Charterers’ argument.

20. … as a matter of ordinary language and common sense, the destruction of an item (or even its partial destruction) is not within the scope of the term "breakdown" still less within the term "mechanical breakdown".

24.… it seems to me that this difference is significant. The inclusion of the word "mechanical" serves to restrict the scope of the "breakdown" which must be established for the purposes of the exception. In this regard, it is clear that what is required is a breakdown of a mechanical nature. Thus, unlike in The Afrapearl [2004] 1 W.L.R. 311 and The Thanassis A, the nature of the breakdown is relevant. In other words, it is not enough that the mechanical loading plant in question simply no longer functions, or malfunctions (irrespective of the cause of the malfunction). The nature of the malfunction must be mechanical in the sense that it is the mechanism of the mechanical loading plant which ceases to function, or malfunctions, and causes the prevention of or delay to loading (and the consequent loss of time). This connotes an inherent mechanical problem, as distinct from a wider or external cause.


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