Category: Maritime Articles

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

London Arbitration 23/21

NYPE FORM 1946 – BREACH OF CHARTER – PERFORMANCE WARRANTY – SPEED AND CONSUMPTION CLAIM – WEATHER DISCREPANCY – WEATHER ROUTING COMPANY
A single-deck geared bulk carrier was chartered on an NYPE 1946 form for a one-time charter trip to transport soya bean meal (SBM) from Argentina to Cuba. The voyage was estimated to take roughly 55 days. The charterer employed a weather routing company (WRC) to monitor the vessel for the contract period. Based on the WRC data, a performance dispute arose with the charterer claiming $ 78,489.47 off-hire and excessive bunker consumption. The owner asserted the WRC data was not collected nor calculated per charter party provisions.

BP Oil International Ltd v Glencore Energy UK Ltd – Queen’s Bench Division (Commercial Court) [2022] EWHC 499 (Comm) – Moulder J – 9 March 2022

CONTRACT OF SALE – FAILED NEGOTIATIONS – CONCLUSION OF CONTRACT – POOR QUALITY OF CRUDE OIL – DAMAGES – DEMURRAGE – SALE OF GOODS ACT 1979, SECTION 53
In an April 2019 contract of sale for Russian crude oil, Glencore agreed to sell 100,000 mt +/- ten percent to BPOI. Email correspondence between the two companies indicated the contract was confirmed; however, the parties disagreed on whether the governing terms included the Glencore Sales Contract, which specifically required the loading terminal certificate of quality to be conclusive. The cargo was sold and resold multiple times between BPOI and its affiliated companies, and upon final discharge, BPOI sample tests indicated organic chlorides contaminated the cargo. BPOI claimed damages for the loss of cargo value, storage and transportation costs of the contaminated oil, cargo volume losses, and demurrage paid on other vessels due to the delay.

Tricon Energy Ltd v MTM Trading LLC (The “MTM Hong Kong”) – QBD (Comm Ct) (Robin Knowles J) [2020] EWHC 700 (Comm) – 23 March 2020

DEMURRAGE – TIME BAR – FAILURE TO PROVIDE ALL SUPPORTING DOCUMENTS WITHIN 90 DAYS OF DISCHARGE – AMENDED ASBATANKVOY

Tricon Energy contracted the “MTM HONG KONG” under an amended ASBATANKVOY charter to deliver cargo from Antwerp, Belgium, to Houston, Texas. As a result of delays at the load and discharge ports, the owners, MTM Trading, filed a $56K claim for demurrage. Charterer claimed the owner had failed to provide all documentation within the 90-day period, specifically the bills of lading, so the claim was time-barred. The owner took the case to arbitration, and the claim was upheld. Charterer appealed to the High Court.

Palmali Shipping SA v Litasco SA– QBD (Comm Ct) (Foxton J) [2020] EWHC 2581 (Comm) – 1 October 2020

CONTRACT OF AFFREIGHTMENT – FAILURE TO HONOR MINIMUM QUANTITY OF CARGO CONTRACT – LOSS OF PROFITS – TRANSFERRED LOSS PRINCIPLE
Palmali sought US$1.9 billion in damages from Litasco under a long-term contract of affreightment (COA). Palmali contended the COA gave it exclusive rights to carry oil products for Litasco between multiple ports in the Caspian Sea, Black Sea and the Mediterranean. Further, Palmali asserted the COA guaranteed Litasco would ship a minimum quantity of 400,000 MT (the Minimum Quantity Obligation), with a total monthly volume of 700,000 MT/month.

Laysun Service Co Ltd v Del Monte International GmbH [2022] EWHC 699 (Comm) (Calver J) – 28 March 2022

CHARTERPARTY – CONTRACT OF AFFREIGHTMENT – COA – FORCE MAJEURE – APPEAL AGAINST ARBITRATION AWARD – ARBITRATION ACT 1996, SECTION 69
In December 2017, Del Monte entered into a contract of affreightment (COA) with Laysun to transport refrigerated bananas from the Philippines to Iran. The agreement was for 36 voyages from January 1, 2018 – December 31, 2018. After 17 shipments, Del Monte stopped providing cargos. Layson sought arbitration for Del Monte’s failure to supply the remaining shipment. Del Monte claimed force majeure due to US Sanctions against Iran and the resulting import restrictions. Laysun appealed the arbitration citing error of law under section 69 of the Arbitration Act 1996.

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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