London Arbitration 13/22
A subject vessel was chartered for a balance period from October 9 to December 9. The quantification of loss stemming from two admitted breaches by the charterer was disputed. The first breach was the quantity of bunkers that were required on board at redelivery. The second breach was the notice of redelivery to the owner by the charterer.
The breaches by the charterer were primarily due to a sub-charterer’s last-minute decision to redeliver the vessel to the charterer rather than continue with another voyage. This caused the charterer to then redeliver the vessel to the owner on short notice.
Excess Bunkers
The charterer claimed a balance of $86,153.76 for the excess bunkers. The owner counterclaimed damages for the admitted breaches by the charterer.
The fixture recap included:
“BUNKERS ON REDELIVERY TO BE IFO ABT 500 MT, LSMGO PLUS MGO ABT 90 MT.
PRICES: IFO USD334 PMT, LSMGO/MGO USD495 PMT…”
“THE CHARTERERS SHALL GIVE THE OWNERS NOT LESS THAN 20/15/12/10/7 DAYS NOTICE OF THE VESSEL’S EXPECTED DATE AND PROBABLE PORT OR PLACE OF REDELIVERY AND 5/3/2/1 DAY(S) NOTICE DEFINITE PORT OR PLACE OF REDELIVERY.”
The vessel was redelivered with 1,277.919 mt of IFO and 117.204 mt of MGO on board. The charterer argued that allowance should be offered to them because of the term “ABT” used in the contract. The tribunal decided to allow only 5% over the contractually agreed upon amounts for the term “ABT” in the same way that 5% allowance is given for daily consumption.
Even though the price to be paid for the quantities of bunkers on redelivery was previously contractually agreed upon, both parties suggested alternative prices. The tribunal approved the charterer’s claim of market price to be paid for the excess bunkers according to the decision of the Court of Appeal in The Good Helmsman [1981] 1 Lloyd’s Rep 377. Market price was determined based on an average of the prices quoted by Platts for Hong Kong and Shanghai on November 14.
The breaches by the charterer were primarily due to a sub-charterer’s last-minute decision to redeliver the vessel to the charterer rather than continue with another voyage.
Early Delivery of Vessel
The charterer decided to redeliver the vessel to the owner early, and tendered notice on November 9 for redelivery on November 13/14. The owners claimed damages at the amount that they should have incurred had they been given the full 20 days notice and the vessel been redelivered to them on November 14. However, the tribunal ruled that the damages awarded would only be calculated accounting for if the vessel had been redelivered 20 days after the notice was tendered on November 9 citing The Great Creation[2015] 1 Lloyd’s Rep 315.
The tribunal ruled the owner owed the charterer US$86,153.76 for the excess bunkers, and the charterer owed the owner US$33,206.25 for their counterclaim of insufficient redelivery notices. The final balance awarded to the charterers was US$52,947.51.