Category: Maritime Articles

Commentary on the maritime industry, demurrage discussions, and industry professional interviews.

Nautica Marine Ltd v Trafigura Trading LLC (The “Leonidas”) – English Commercial Court: Foxton J: [2020] EWHC 1986 (Comm): 28 July 2020

VOYAGE CHARTER - APPROVAL OF A VESSEL - DAMAGES FROM BREACH OF CHARTER - PRE-CONDITION OF CHARTER - PERFORMANCE CONDITION OF CONTRACT - IMPLIED OBLIGATIONS OF CHARTERER - PUTATIVE LOSS OF PROFITS – BREACH OF CHARTER Nautica (Owner) negotiated a prospective voyage charter of the tanker "Leonidas" with Trafigura (Charterer) for a laden voyage carrying oil cargoes. The charter was subject to obtaining suppliers' approval of the vessel within a four-day deadline. When the deadline passed without Trafigura obtaining suppliers' approval, the charter was abandoned. Nautica claimed damages for the charterer's alleged breach of charter of the difference between the profit it would have gained on the prospective charter and the (lesser) profit made on the fixture entered.
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Shagang Shipping Co Ltd v HNA Group Co Ltd (The “Dong-A Astrea”) – Supreme Court (Lord Hodge DP, Lord Briggs, Lord Hamblen, Lord Leggatt and Lord Burrows JJSC) UKSC 34 –  5 August 2020

BRIBERY - ENFORCE CHARTERPARTY AGAINST GUARANTOR - TORTURE - CONFESSION EVIDENCE OBTAINED BY TORTURE – LIABILITY OF GUARANTOR The appeal was based on whether a charterparty's guarantor (HNA) could avoid liability under the guarantee because the charterparty was allegedly obtained through bribery and so was unenforceable. The bribery charge was based on confessions made in Chinese criminal procedures by individuals who reportedly paid and received the bribe.
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Playa Shipping Corporation v Citgo Petroleum Corporation (M/T “Mambo”) – SMA 4418, 16 March 2021

DISPONENT OWNER – US SANCTIONS – TRADE SANCTIONS – ASBATANKVOY – DEMURRAGE – EXECUTIVE ORDERS – SECURITY AWARD - VENEZUELA The claim was for outstanding demurrage and port expenses from the Owner to Charterer. The Charterer did not contest the amount owed but maintained that sanctions imposed by the US Government on Venezuela prevented it from paying unless and until the Owner obtained a special license from the US Office of Foreign Assets Control (OFAC). The current arbitration was a Partial Final Award and focused on the Owner's request for an Interim Award requiring Charterer to post security for Owner's claims.
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Priminds Shipping (HK) Co Ltd v Noble Chartering Inc (The “Tai Prize”) – QBD (Comm Ct) (HHJ Pelling QC) [2020] EWHC 127 (Comm) – 31 January 2020

BILL OF LADING – DAMAGED CARGO – LIABILITY FOR DAMAGED CARGO – INDEMNITY – DISPONENT OWNERS – TIME CHARTER – HAGUE RULES When a vessel commenced unloading in China, receivers discovered the soybean cargo had heat and mold damage. The Chinese courts upheld a claim by the receivers against the shipowner for US$ 1,086,564.70. The shipowner sought arbitration in London against Noble Chartering, the head charterer/disponent owner, for fifty percent of the amount paid to the receivers. Noble then requested London arbitration against its charterer, Priminds Shipping, claiming indemnity and legal fees. Priminds appealed the arbitration ruling to the High Court.
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London Arbitration 21/21

ASBATANKVOY - FRUSTRATION – VOLGA-DON SHIPPING CANAL (VDSC) – WINTER CLOSURE – ADDITIONAL FREIGHT - DEVIATION – INTERIM PORT CLAUSE – ALTERNATIVE DISCHARGE CLAUSE – DEADFREIGHT – DEMURRAGE - DELAY A sea-river vessel was chartered on an amended Asbatankvoy to transport fuel oil. The vessel was to sail from Turkmenbashi, Turkmenistan, to OPL Kavkaz, Russia, via the Volga-Don Shipping Canal (the VDSC). The VDSC accelerated its official closing for the season, and the vessel was refused “commercial” entrance. The charter was frustrated, and the vessel was forced to retrace its route back to the Caspian Sea. Owners claimed additional freight, deadfreight, deviation, quantum meruit demurrage, and damages for detention.
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Transportacion Maritima Mexicana, SA. de C.V. v Alia Global Logistics, S.A. de C.V. (M/T “King Gregory”)  – SMA 4429, 1 November 2021

ASBATANKVOY – TERMINATION OF CHARTER – DAMAGES – NON-PAYMENT – FAILURE TO PROVIDE CARGO Owner claimed Charterer failed to present a cargo to be loaded onto the vessel. Owner and Charterer agreed to cancel the charter; however, Owner claimed damages because of the cancellation. Charterer agreed to pay damages but did not remit payment.
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K-Line Pte Ltd v Priminds Shipping (HK) Co Ltd (The “Eternal Bliss”) – Court of Appeal (Sir Geoffrey Vos, MR, Newey and Males LJJ) [2021] EWCA Civ 1712 – 18 November 2021

NORGRAIN - DEMURRAGE - DAMAGES - LIQUIDATED DAMAGES- APPEAL – IMPLIED INDEMNITY - LAYTIME The Court of Appeal has overturned the High Court's decision in K-Line Pte Limited v Priminds Shipping (HK) Co Limited (the "ETERNAL BLISS") [2021] EWCA Civ 1712, which acknowledged the long-standing question of whether a shipowner can recover damages in addition to demurrage when a charterer's only breach is failure to load/discharge the ship within the contractually agreed time. Please note this is a successful appeal of an award already recapped. Search in TANKVOYager via "Eternal Bliss" for the original award. K-Line Pte Ltd v Priminds Shipping (HK) Co Ltd (The "Eternal Bliss") – QBD (Comm Ct) (Andrew Baker J)[2020] EWHC 2373 (Comm) – 7 September 2020
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Demurrage Exposure – Port Charters Converted to Berth Charters!

A golden rule when assessing a contract is to read the contract as a whole and give meaning to all clauses in conjunction with each other. A recent NY Arbitration, SMA 4272, combined with an older award, SMA 2477, shows how simple phrasing, reinforced via a lack of options and market constraints, can overwhelm other charter terms and convert a port charter to a berth charter.
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BPVOY5 Has Arrived…

As of 21 March 2016, BP Shipping Ltd. has released BPVOY5; the long-awaited successor to the 1998 BPVOY4 charter party. There have been quite a few changes made to the 18-year-old boilerplate. Most of these changes, however, are essentially updates to outdated language and none seem to be especially onerous. Here are a few that stuck out to us (both inside demurrage and out).
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Industry-Accepted NOR Procedure Tested by Oiltanking Texas City

Tendering a valid NOR for Oiltanking Texas City just got a little harder to do thanks to a recent change of policy for the 555,000 cbm storage facility. On Wednesday, 13-Jan-2016 an Oiltanking representative released a new “Oiltanking Texas City’s ‘NOR’ Acceptance Procedure” that is in direct opposition to the current NOR tender policy for the Houston / Texas City area.