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

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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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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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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