London Arbitration 11/25
The dispute arose under a time-charter on an amended NYPE form for one voyage from Qingdao, China to Nanaimo, Canada. The claimant owners sought unpaid hire of US $73,945.02, while the respondent charterers denied liability.
The vessel sailed from Qingdao on 13 September and arrived at Nanaimo on 2 October. The charterers employed a weather-routing company (WRC) to advise on the route. Two days before departure the WRC recommended a course north of Japan to avoid a typhoon forecast to move east of Shanghai. On 12 September, however, the master requested a route via Wakayama, Japan, so that the owners could change crew there. The recap provided that any deviation for crew change would be for owners’ account. Later that same day the WRC repeated its advice for a northerly route, warning of gale-force winds and seven-metre seas in the typhoon’s path, but recommending that such a route would safely clear the system.
Despite this, the master decided to proceed through the Kanmon Strait and south of Japan. The owners said this was the safer course, given the typhoon’s uncertain path, and they later produced a report from another routing agency stating that the southern route could reasonably have been chosen to avoid funnelled winds in the Sea of Japan. The charterers maintained that the only reason for the southern route was the owners’ crew change and that the voyage covered 320 miles more than the recommended track, causing 1.192 days’ delay and 21.9 tonnes of extra fuel. The owners accepted off-hire for 2.3 hours at Wakayama but denied any further deviation loss.
The sole arbitrator held that the master’s decisions must be judged on the information available at the time, not on later analysis. The contemporaneous forecasts did not show a genuine navigational threat, and the master’s request to route via Wakayama made no mention of weather or safety. The WRC’s own forecast showed the storm would enter the Sea of Japan several days after the vessel would have cleared the area. The arbitrator therefore found that the decision to pass through the Kanmon Strait was driven solely by the owners’ wish to change crew, not by safety concerns. Consequently, the owners were liable under clause 4 of the recap and clause 8 of the charterparty for the additional time and bunkers, and the WRC’s simulation figures were accepted as accurate. The charterers thus succeeded on the deviation issue.
A separate claim concerned under-performance. The charterers had deducted US $15,017 from hire for alleged loss of speed and excess fuel consumption. The WRC report on which they relied admitted that no “good-weather” days—defined as Beaufort 4 or below and significant wave height not exceeding 1.25 metres—occurred on the voyage, but the WRC nonetheless modelled what the vessel should have achieved by adjusting for current and weather. The owners argued that performance must be measured only in actual good-weather conditions; without such periods, no claim lay. The charterers contended that modern performance modelling allowed the tribunal to determine what speed the ship ought to have achieved even without good-weather days, citing a passage from Time Charters (7th ed.) suggesting that such modelling might one day provide a reliable test.
The arbitrator rejected the charterers’ argument. The passage relied on was aspirational and not authority for replacing the contractual test. Under the charter, performance could only be assessed in defined good-weather periods, and none had occurred. The charterers therefore had no claim for under-performance, and their deductions were wrongful.
At Nanaimo the charterers also alleged that one of the ship’s cranes had failed for two hours, putting the vessel off-hire. They relied on agents’ e-mails and a stevedore’s log recording problems with crane No. 4. The owners objected that the claim was introduced too late and that the log itself suggested only forty-five minutes’ stoppage. The arbitrator found that the burden of proof rested with the charterers and that the stevedore log, a contemporaneous record, was more reliable than the agents’ second-hand reports. The claim was allowed but only for forty-five minutes.
After accounting for all adjustments, the owners’ hire claim succeeded in the sum of US $17,222.56, with interest at 5.5 per cent per annum compounded quarterly. Because the deviation issue occupied most of the proceedings and was decided for the charterers, each side was to bear its own costs, but the owners were to pay £3,500 toward the charterers’ costs, being 70 per cent of the SCP limit of £5,000. Interest on those costs was awarded at 6 per cent per annum. However, the owners had been required to pay the SCP fixed fee of £4,000 in order to obtain the award; since the charterers had not tendered the amount eventually found due before arbitration, they were ordered to reimburse that fee with interest.
The overall outcome was an award for a modest balance in the owners’ favour but with liability on the major deviation issue resting on them. The final award ordered the charterers to pay US $17,222.56 plus interest and to reimburse the SCP fee, while the owners were responsible for part of the charterers’ costs.