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

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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Glencore International AG v. MSC Mediterranean Shipping Co SA – EWCA Civ 365, 24 May 2017

ERS – BILL OF LADING – CARGO DISCHARGE TO WRONG RECEIVER After 69 uneventful deliveries, the 70th delivery was misappropriated when delivering against an electronic release system (ERS) rather than in exchange for a B/L or Delivery Order. fter 69 deliveries, discharge of the 70th shipment saw 2 of 3 containers misappropriated.  Glencore claimed damages against MSC for breach of contract, bailment and conversion when MSC delivered the cargo without requiring the B/L or a Delivery Order in exchange for it.  The B/L provided, “If this is a negotiable (To Order/of) Bill of Lading, one original Bill of Lading, duly...
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London Arbitration 21/17

SHELLTIME 4 - EARLY REDELIVERY - RENUNCIATORY / REPUDIATORY BREACH - DAMAGES Charterer’s daily hire payments were delayed or missed.  Then, when Charterer told Owner via email that it would like to cancel the Charter Party, Owner accepted Charterer’s alleged repudiatory breach and claimed for damages.  Charterer disputed damages were due.
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London Arbitration 16/17

TIME CHARTER – OFF-HIRE FOR CLEANING OF HOLDS AFTER DISCHARGE – PROLONGED PORT STAY – SPEED AND CONSUMPTION When charterer’s cargo got wet and was compacted during discharge, extensive cleaning of the holds was required.  During the cleaning, 2 cleaning machines were damaged.  Charterer disputed the time spent cleaning and the cost to repair the damaged machines.  Further, charterer claimed underperformance which owner disputed on the basis that it resulted from the extensive stay in warm waters whilst cleaning. he following arbitral proceedings arose from the carriage of sulphur out of Ust-Luga, Russia under an amended NYPE form charter party...
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London Arbitration 18/17

STEMMOR 83 - VOYAGE CHARTER - ACCORD AND SATISFACTION - DETENTION - CUSTOMARY ANCHORAGE - NOR VALIDITY - MARKET RATE VS DEMURRAGE RATE - BUNKER COSTS When charterer directed the vessel to cease loading, as she had originally been directed not to start loading until directed by charterer, additional expenses were incurred by owner which owner claimed from charterer.  Then, at the disport the vessel was directed to wait outside the port and not tender NOR till directed.  Owner subsequently claimed this delay as damages rather than as demurrage and at a rate higher than the demurrage rate.
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Vitol SA v Beta Renewable Group SA – QBD (Comm Ct), 7 July 2017

SALES CONTRACT - RENUNCIATORY BREACH - FAILURE TO NOMINATE VESSEL - OBLIGATION TO DELIVER When FOB seller indicated an inability to provide cargo, buyer did not nominate a vessel and later, formally accepted seller’s breach.  Seller claimed the non-nomination was an oversight which alleviated it from having to provide the cargo.  Damages claimed by Buyer were basis losses calculated by reference to hedging or alternatively, market value.
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Dainford Navigation Inc v PDVSA Petroleo SA (The “Moscow Stars”) – QBD (Comm Ct), 2 August 2017

TIME CHARTER - FAILURE TO PAY HIRE - ORDER FOR SALE OF CARGO When the vessel was sat by charterer for an extensive period of time with late or non-payment of hire, the Court was tasked with determining whether they had the power to implement an order for the sale of charterer’s cargo and whether they should.
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Thorco Shipping A/S v. Effie Business Corporation S.A. (The “Thorco China”) – SMA 4316, 15 December 2015

NORGRAIN 1973 - FIRE - NORGRAIN EXCEPTIONS CLAUSE - IMPRACTICALITY - REPUDIATED / CANCELLED CHARTER PARTY Due to a cargo elevator, allegedly needed in order for a vessel to discharge bulk cargo, being unavailable due to fire, Charterer cancelled the charter party due to commercial impracticality and a clause in the C/P.
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London Arbitration 20/17

TIME CHARTER - NYPE - DURATION - OPTION TO EXTEND Basis verbiage in a pro forma recap, charterer argued for a 15 days extension of the time charter.  Owner disagreed that an extension was due, pointing to the ultimate recap which did not reference the extension.
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Wagenborg Shipping v. Rain CII Carbon (The “Azoresborg”) – SMA 4314, 17 May 2017

AMWELSH - CANCELLED / REPUDIATED CHARTER PARTY - MITIGATED LOSSES - BALLAST VOYAGE - SUBSTITUTE EMPLOYMENT - POSITIONING VOYAGE Upon cancelling the charter party during loading Charterer instructed Owner to mitigate losses by seeking other cargos. Owner repositioned the original vessel and had a sister ship sail a ballast voyage to the delivery location of the follow on time charter of the original ship.  Owner claimed for lost income and bunker costs due to repositioning.
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