Category: U.S. Maritime Cases
Shipping industry court rulings and arbitration awards under U.S. law.
Shell Trading U.S. Company v. Vinmar International Ltd. (M/T “SOLAR NESRIN”) – SMA No. 4461, 26 June 2023
BREACH OF COA – FAILURE TO PROVIDE SAFE BERTH – FAILURE TO NOMINATE SAFE VESSEL – DEMURRAGE – FORCE MAJEURE – WEATHER – HURRICANE – LOST TIME
SwissMarine and Mosaic Fertilizer had a COA for the carriage of phosphate rock from Peru to the US Gulf for discharge at either New Orleans Triport and/or Tampa – Port Manatee. On the way to discharge at Tampa, concerns were raised by the Port that the Vessel could not safely berth, so the vessel was diverted to New Orleans. Shortly after arrival at anchorage on the Mississippi River, the US Coast Guard limited marine traffic due to the impending arrival of Hurricane Ida. Mosaic declared force majeure, and the PRESINGE did not complete cargo operations until 38 days later. Owners alleged demurrage was due and that Charterers were in breach of COA for failing to provide a safe berth. Charterers countered that no demurrage was due because of the force majeure event, and Owners were in breach of COA for failing to nominate a safe vessel.
Phillips 66 Company v. Yamuna Spirit, LLC, Teekay Chartering and Teekay Marine (The “YAMUNA SPIRIT”) – SMA No. 4454, 12 January 2023
OIL SHEEN – OIL LEAK – OIL SPILL – MARINE TERMINAL LEAK – VESSEL LEAK
On September 19, 2016, the YAMUNA SPIRIT began discharging her Arabian Extra Light crude cargo at the Phillips 66 Marine Terminal, Rodeo Refinery, California. Shortly after operations commenced, a series of odors and oil sheens were observed nearby in San Pablo Bay, San Francisco. The parties, in cooperation with the USCG and state agencies, conducted extensive investigations and testing to determine whether the source of the leak was the Terminal or Vessel. Both parties contended that the other was the source of the oil. Arbitration was sought to establish responsibility for the leak and recover the expenses associated with the oil spill responses, investigations, and legal fees.
Seastar Maritime Ltd. v. AUM Scrap and Metal Waste Trading LLC. (MT “AMIAS”) – SMA No. 4455, 12 December 2022
DEMURRAGE – CHARTERPARTY BREACH – DEVIATION – LOSS MITIGATION
The MT AMIAS was chartered by AUM from Seastar using the Asbatankvoy form with rider clauses to carry Methanol in bulk from Venezuela to 1-2 Safe Port/ 1 Safe Berth (Kandla to Chennai Range). The Vessel finished loading in Venezuela and submitted its invoice for 70% freight for payment within 10 days, per the charterparty. AUM did not pay, and the Vessel stayed in port until May 11. Seastar was forced to seek alternate employment to mitigate losses, which required calling another port. Both parties agreed upon an earlier settlement, but AUM did not pay it either.
DAMAGES – COVID-19 – COA BREACH – BURDEN OF PROOF
A December 2, 2019 contract of affreightment between XCoal Energy and Classic Maritime stated XCoal was to provide cargos for 6 – 7 vessels during the year 2020. Due to the Covid-19 pandemic, XCoal was only able to provide cargo for two vessels. Classic believed they should have been awarded damages of over US$ 4.4 million for the breach, however, XCoal asserted they owed far less, claiming Classic did not meet the burden of proof to warrant this higher claim.
DEMURRAGE – COVID-19 – FORCE MAJEURE – DUE DILIGENCE – PANDEMIC
On March 25, 2020, the Gujarat Maritime Board issued a declaration of a Force Majeure Event at Dighi Port where Team Toccata was due to berth after its discharge was completed at Kandla on April 19, 2020. Team Tankers Deep Sea claimed that the charterer, Tauber Petrochemical, owed demurrage for the entire 118.5 hours Team Toccata waited at Dighi before proceeding to the berth regardless of the force majeure event.
AMERICANIZED WELSH COAL CHARTER – DEMURRAGE – SECOND DISCHARGE BERTH – QUARANTINE INSPECTION – REPOSITIONING CREDIT
Xcoal Energy & Resources chartered Astir Holdings Inc. for carriage of coal from Mobile to one safe berth at Jingtang. En route, Xcoal changed its discharging port from Jingtang to Lanshan, and claimed a repositioning credit since Lanshan was closer to the vessel’s next port. Astir approved the request to unload at two discharging berths instead of the one that was contractually agreed upon, however exceptions to laytime and demurrage at the second berth were not discussed at the time. Arbitration was sought to determine if the charterer’s exceptions to time counting as demurrage should apply for the second discharging berth.
FORCE MAJEURE – ANTICIPATORY BREACH – COVID 19 – HURRICANE DAMAGE – CARGO CONTAMINATION – REPUDIATORY BREACH – DEMURRAGE
The MV Gladiator was chartered under a Contract of Affreightment to transport salt from Brazil to Alabama from March-December 2020. The disponent owner, Eagle Bulk, disputed load port demurrage from the first lifting, unpaid freight charges, and losses for a breach of contract due to the charterer, Salt Source, failing to nominate a second cargo. Salt Source counterclaimed for damages to a portion of their cargo which they claimed had been contaminated during the voyage and claimed force majeure due to Covid-19 and Hurricane Sally for the cancellation of the remaining contracted voyages.
DAMAGES – UNSTABLE CARGO – TIME BAR CLAUSE
The MT Monax was chartered to make two voyages, one from Ontario to New York carrying Residual Fuel Oil (RFO), and the second from Ontario to Belgium carrying clean products. The voyages were completed between July 1 and September 3. On September 23, 2021, the owner, Stolt Tankers, submitted a claim for damages stating that the RFO was unstable, preventing complete discharge and requiring extensive tank cleaning. The charterer, Stryker Fuels, countered that the claim should be dismissed because it was made outside of the time bar period.