London Arbitration 12/25

The dispute arose out of a short-period time charter trip performed under an amended NYPE form, with an anticipated duration of around thirty to thirty-five days.

The owners advanced a claim for a little over seventy-one thousand dollars in unpaid hire, while the charterers resisted liability. The dispute naturally divided into three broad themes: the consequences of underwater fouling and the operation of the BIMCO Hull Fouling Clause; the question of bunker quantities on redelivery; and the owners’ alleged deviation from the route recommended by the charterers’ weather routing company. The vessel in question had proceeded from delivery to Richards Bay to load cargo for India, remained at anchor there for a lengthy period, sailed east of Madagascar according to the master’s chosen route, and later discharged and redelivered at Paradip.

The first area of contention revolved around the BIMCO Hull Fouling Clause, which had been incorporated as Clause 95. The clause suspended speed and consumption warranties if the vessel remained at waiting areas in excess of the agreed threshold period without undertaking a sufficient sea passage to clear marine growth. It contemplated joint underwater inspection at the charterers’ risk, cost and time, and provided that any required cleaning would likewise fall upon the charterers. The clause acknowledged that cleaning might be impracticable or postponed and required that, if inspection or cleaning could not be carried out before redelivery, the parties were to agree a lump-sum payment in lieu no later than the time of redelivery.

The vessel had remained at anchor in Richards Bay for twenty-six days, which clearly engaged the clause. The owners requested underwater inspection; the charterers arranged it; and the inspection revealed significant fouling of the propeller and recommended cleaning of the sea chest gratings as well. The charterers did not arrange cleaning at Richards Bay and it could not be done at Paradip due to port conditions. The owners therefore arranged cleaning at Singapore, where the vessel bunkered on the way to its next employment, and later additional cleaning at Shanghai. Their final hire claim included both the Singapore and Shanghai costs.

The tribunal concluded that the charterers were not in breach of Clause 95 for failing to clean the vessel at Richards Bay because the clause expressly permitted postponement of cleaning. Even if a breach were arguable, no loss flowed from it. Since cleaning could not be completed before redelivery, the parties ought to have agreed a lump-sum settlement under Clause 95, but did not. The tribunal held that the owners were nonetheless entitled to be paid the amount that ought reasonably to have been agreed. On the factual findings, the only cleaning properly falling within the clause was that of the propeller and sea chest gratings at Singapore, which cost fifty-five hundred dollars. The owners’ broader contention that the charterers were obliged to redeliver the vessel in like good order could not succeed, as the specific hull-fouling regime displaced general redelivery obligations.

A second significant dispute concerned bunkers on redelivery. The recap required that VLSFO on redelivery be about the same as on delivery, with “about” carrying a five per cent allowance. The vessel had been delivered with just over six hundred sixty-two tonnes of VLSFO, requiring a redelivery figure no lower than six hundred twenty-nine and a half tonnes. The owners maintained that the vessel was redelivered with only six hundred eight tonnes, while the charterers asserted that over six hundred thirty-six tonnes were on board.

The factual dispute essentially turned on what quantity had actually been stemmed at Paradip. The owners contended for five hundred thirty-nine tonnes, and produced detailed contemporaneous documentation from the master. His statement of facts recorded that the chief engineer had reported only that amount as being delivered and that attempts to insist on the full order quantity had been rebuffed by the bunker barge, which claimed that no more fuel was available. He telephoned the charterers, who, according to him, advised him to sign the bunker delivery note and issue a letter of protest. The letter of protest reflected the short delivery and noted that the received quantity had been written in the remarks section of the bunker delivery note. The master also produced a “to whom it may concern” statement explaining that he had wished to cross out the computerized BDN figure but was informed by the bunker manager that he was prohibited from doing so.

The charterers relied upon a copy of the BDN that lacked the master’s handwritten remark and upon a redelivery certificate in which bunker quantities had been written in by hand. The tribunal considered the redelivery certificate unreliable, observing that the VLSFO figure appeared in different handwriting from the rest, sloped differently, and showed signs of an earlier erased entry, possibly using correction fluid. These features, coupled with the relative darkness of the handwriting, suggested alteration.

The tribunal placed considerable weight on the master’s contemporaneous records and telephone communication with the charterers. The arithmetic on consumption also aligned more closely with the owners’ figures: prior to bunkering, the vessel had seventy-seven tonnes of VLSFO aboard; adding five hundred thirty-nine tonnes, and subtracting the likely small consumption in reaching the pilot station, produced a figure in the vicinity of six hundred eight tonnes, which matched the owners’ asserted redelivery quantity. The tribunal therefore found that the vessel redelivered with six hundred eight point two-three tonnes of VLSFO. The missing bunkers, calculated at the charterparty price, resulted in damages of just over seventeen and a half thousand dollars. A further small differential was awarded in respect of the shortfall against the minimum redelivery quantity, assessed using the difference between the charterparty price and the supplier’s invoiced price at Paradip.

The final issue concerned deviation. The charterers asserted that their weather routing company had sent instructions for the vessel to follow a route passing west of Madagascar. The owners said that no such message had been received and that the master had chosen the eastern route as a safer option. The tribunal did not accept the owners’ position. The message must have been received; if it was ignored or went to spam, that did not relieve the vessel of the obligation to follow the contractual routing instructions. The master’s claim that the eastern route was safer had been raised late and without evidential support. The fact that the charterers’ preferred route would take the vessel closer to a high-risk piracy area did not suggest that the vessel would enter one or that there was any real threat. Accordingly, the charterers were entitled to the off-hire deduction of just over a quarter of a day.

In closing, the tribunal explained that it did not have sufficient information to restate the final hire account itself. Several figures and adjustments required explanation that had not been addressed in submissions. While it seemed likely that a small balance would eventually be found due to the owners, their partial success meant that a split or partial costs order might be appropriate. Interest was reserved. The tribunal expressed confidence that the parties could now settle the accounting between themselves