London Arbitration 22/19

CHARTERPARTY – ADDITIONAL FREIGHT – DEMURRAGE – LAYTIME – PREMATURE – NOTICE OF READINESS – DELAYS IN CARGO OPERATIONS – SLOW DISCHARGE – “ONCE ON DEMURRAGE, ALWAYS ON DEMURRAGE”

London Arbitration 22/19

A vessel was chartered to carry a part cargo of logs from Brazil to China. During the voyage the vessel owners agreed to change the discharge port with the charterers paying $2.25 per cubic meter in additional freight for the entire cargo. The vessel arrived at her load port on the 16th of August with 15,016.825 cubic meters worth of cargo onboard. By September 8th, the vessel had loaded the charterer’s cargo of logs and was headed for the discharge port. The vessel arrived at her discharge port on the 24th of October and eventually discharged her full cargo a few days later on October 31st. From this voyage, the owners claimed a total of $89,326.51 and the charterers claimed a total of $55,301. 

Shortly after the vessel arrived at her load port on August 17th, the vessel underwent an inspection and failed. The vessel was subsequently required to undergo fumigation of her decks and holds. On August 18th the vessel completed fumigation of her decks, unberthed, and went to anchorage where further fumigation of the vessel’s holds would occur. The vessel tendered NOR on the 16th of August and retendered on the 23rd, 28th, and 30th. However, it was found that none of these NORs were valid. The first NOR was tendered whilst the vessel was still en route and 15 mins before she anchored, and thus it was deemed invalid as she had not yet reached her destination. The NORs following the initial were found invalid as they were retendered while the vessel was still undergoing fumigation and before the holds passed inspection.The tribunal found that it was only after the vessel’s holds had passed inspection that a valid NOR could be tendered.The vessel’s holds eventually passed inspection on September 3rd at 10:00 and it was agreed that laytime would then subsequently commence.

The tribunal found that the “same for owner’s account” was in reference to the costs and not the actual time spent lashing.

Lashing of the deck cargo occured from 23:30 on September 6th to 01:30 on September 7th. Charterers argued that this time should not count basis clause 13 which provided that the cargo would be loaded at the charterer’s risk with lashing performed by the crew and that same would be for owner’s account. However, the tribunal found that the “same for owner’s account” was in reference to the costs and not the actual time spent lashing. In turn the charterers argued that the lashing surpassed the 5 hours maximum as stated in clause 43, but as the vessel was already on demurrage during this time period, the 5 hour maximum was not applicable.

The charterers ended demurrage at 05:30 on September 7th, however, the owners argued that demurrage should run until 24 hours later on September 8th due to re-stowing of the charterer’s cargo. It was due to the charterer’s stevedores that the cargo was not initially stowed sufficiently, and thus the Tribunal found the owners to be correct.  

 Due to the delay that the fumigation caused at the load port, the charterers claimed $53,301 in costs and expenses by referencing the third and fourth paragraphs of clause 66.  It was based on these paragraphs that costs and expenses may be claimed due to contamination from cargo residue. However, the charterer’s counterclaim was rejected as it could not be proven that it was cargo residue from the previous cargo that caused the contamination.  

Unlashing of the cargo by the crew was a requirement of clause 43. While this clause had a provision for time counting in regards to lashing, it did not include a provision for time spent unlashing.  Thus, it was held that the time spent unlashing would count as laytime. The charterers protested this and argued that the unlashing could have been completed whilst the vessel was at anchorage, however, the charterer’s failed to make a specific request for this and thus their argument was found mute.

The charterers also argued for an approximate 12H deduction from 18:00 on October 30th to 17:30 on October 31st due to some mixing of the charterer’s logs and the other logs onboard. While the fixture recap required that “MATERIALS FOR CARGO MARK-OFF TO BE PROVIDED BY THE OWRS AT THEIR EXPENSE”, the charterer’s could not identify what the owners should have done to keep the cargoes separated. A physical barrier could have been inserted between the two cargoes between loadings, however, the reference to cargo mark-off was not sufficient enough to require that the owners take physical action on separating the cargoes onboard. Thus it was found that the ability to identify between the two cargoes met the requirement for cargo marking as stated in the recap. However, the discharge was slowed during this 12 hours time period and without a clear explanation for this the Tribunal agreed to deduct 12 hours from the owner’s claim in the charterer’s favor.