Jan, 2018. Maritime Digest of Arbitration Awards and Court Rulings

London Arbitration 2/18

SALE OF GOODS (CFR) - DEMURRAGE - TIMELY PAYMENT OF FREIGHT - OBLIGATIONS UNDER SALES CONTRACT VS UNDER CHARTERPARTY - OWNERS REFUSING TO RELEASE BILLS OF LADING UNTIL FREIGHT PAYMENT The CFR Sellers brought arbitration against their Buyers in order to indemnify themselves for demurrage caused by the Buyers delaying payment of the Owner’s freight.  Sellers argued that it was the Buyer’s responsibility to pay freight promptly under the contract. The Buyers countered that the obligation to pay freight accrued under the Seller’s charterparty, and therefore it was the Seller’s responsibility.  
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London Arbitration 3/18

VOYAGE CHARTER - DEMURRAGE – TIME BAR – VALID NOTICE OF READINESS – FAILURE TO PROVIDE CARGO Charterer cancelled a voyage charter party after failing to provide cargo. Owner claimed demurrage and damages from the alleged repudiatory breach.  Charterer countered that the claim was time barred, the Vessel’s NOR was invalid, and the damages if awarded, should be basis the C/P’s lowest freight option.
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London Arbitration 25/17

TIME CHARTER - VESSEL’S CONDITION UPON REDELIVERY - BREACH OF CHARTER When Charterer sat the Vessel at an equatorial port for 35 days, the Owner claimed underperformance damages incurred under a subsequent fixture and the cost to clean the hull.
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London Arbitration 23/17

DEMURRAGE - OIL SPILL - FORCE MAJEURE - PROCEED THERETO - REACHABLE ON ARRIVAL - ARREST OR RESTRAINT OF PRINCES - BPVOY3 Before the vessel’s arrival at port, a vessel at the vessel’s intended berth had an oil spill which delayed the vessel once she arrived at the port.  Charterer argued to split the delay 50/50 wherein owner stated that BPVOY3’s “proceed thereto” was to be read as “reachable on arrival”, the spill was not an exception, and the prior vessel’s arrest was not an “arrest or restraint of princes, rulers or people”.
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MT “Cape Bonny” Tankschiffahrts GmbH & Co KG v Ping An Property and Casualty Insurance Co of China Ltd – QBD (Comm Ct) (Teare J) [2017] EWHC 3036, 4 December 2017

ENGINE BREAKDOWN - TYPHOON - SEAWORTHINESS - GENERAL AVERAGE - REASONABLE EXPENDITURES After suffering an engine breakdown, the shipowner employed a tug to avoid a typhoon and to bring the vessel to port.   The owner then brought claim against the insurance company for general average contribution. The defendant argued that the vessel was unseaworthy at the beginning of the voyage and that the casualty was caused by actionable fault of the Owner and thus no contribution was due. Further, the defendant argued that owner’s expenditure as claimed under general average was unreasonable.
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London Arbitration 1/18

NYPE - NON PAYMENT OF HIRE - PREMATURE WITHDRAWAL BY OWNER - REPUDIATORY BREACH - BALANCE OF HIRE - ADDITIONAL HIRE After charterer missed making hire payments, the owner informed charterer of its “rights” under the C/P.  When no payments were made by the 3rd day after its notice, owner withdrew the vessel. Charterer pointed to a clause in the C/P requiring owner give “3 clear banking days notice” prior to withdrawal.  Charterer claimed the balance of hire and owner claimed additional hire.
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London Arbitration 27/17

CARGO SHORTAGE - OWNER PROACTIVELY SETTLED WITH CHARTERER’S RECEIVER - CHARTERER INDEMNIFY OWNER - NON REVERSIBLE - DEMURRAGE After discharging, the receiver claimed a cargo shortage and detained the vessel.  The shipowner settled the receiver’s claim in order to allow the vessel to depart the disport and in turn claimed reimbursement from the charterer.  Owner also claimed demurrage incurred at the disport despite laytime being saved at load given that the laytime was non-reversible.  
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Gard Marine & Energy Ltd and Another v China National Chartering Co Ltd and Another (The “Ocean Victory”) – UKSC 35 – 10 May 2017

TIME CHARTER - SAFE PORT - CLAIM AGAINST DEMISE CHARTERERS - LIMITED LIABILITY When a ship sank upon departing a port in a storm, the court was tasked with answering 3 questions.  1) Was there a breach of the safe port warranty? 2) If so, did provisions for joint insurance preclude owner from the right to recover losses covered by hull insurers?  3) If there was a breach, are losses by a sub-charterer limited to the losses incurred by it’s owner to head owner’s insurance company.
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Fulton Shipping Inc of Panama v Globalia business Travel SAU (The “New Flamenco”) – Supreme Court

TIME CHARTER  – ANTICIPATORY BREACH – DAMAGES – VESSEL REDELIVERED EARLY – VALUE OF VESSEL SOLD AT REPUDIATION GREATER THAN VALUE OF VESSEL AT CONTRACTUAL DATE OF REDELIVERY Under a time charter, Charterer redelivered the Vessel to the Owner two years early. In doing so, Owner considered Charterer in anticipatory repudiatory breach of the contract and filed for damages. Charterer, however, pointed out that the early redelivery allowed Owner to sell the Vessel at a much higher price before the market collapsed. They argued that this windfall should be factored into the Owner’s damages claim. This is an appeal of...
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