London Arbitration 24/19


After Owners claimed against Charterers for the alleged underperformance of the Vessel and failure to redeliver the Vessel to Owners with the correct amount of bunkers. The Tribunal was then left to determine whether the Charterer provided adequate proof to deny any amount due to Owner.

[dropcap]U[/dropcap]nder an amended NYPE charterparty form, the subject Vessel was chartered for a time charter trip for the carriage of titanium slag in bulk from South Africa to New England. Owner’s final hire statement of $79,941 comprised mostly of a claim for the alleged underperformance of the Vessel whilst also including a $2,042 claim for the alleged failure to redeliver the Vessel to Owners within the contractual allowance of bunker quantities. Charterers in turn rejected that any amount was due to Owners. Clause 57 regarding the Vessel’s speed and bunker consumption is as follows:

“Speed/Consumption is about. Under good weather condition, ie the winds not exceeding BF4, no deck cargo, no swell, no adverse currents, the sea state up to Douglas Sea Scale 3 (Max 1.25M).

The word about in Speed/Consumption refers to an allowance of +/- 0.5 knots on speed and +/- 5% on bunker consumption respectively both always in Vessel’s favour any gain on time and/or consumption to be set off against loss of time and/or consumption – if any.

Abt 12.5 knots on about 18MT IFO RMG 380 + 1.5 MT MGO.”

Owners argued that in order to be considered a good weather period, the following criterion must be present: winds not exceeding B/F 4, no swell, no adverse currents, and sea state up to Douglas Sea Scale 3 (max 1.25m). Whilst Charterers had submitted that in conditions where either wind waves and swell waves exceeded 1.25m then there was no “good weather” as the effect of such wind waves may differ from the effect from ocean swells.

It was held that the Tribunal initially agreed with Owner’s position of stating that there was no provision that allowed for any swell factor to be considered as good weather given both parties agreed to no swell in the aforementioned clause. Although, the question arose in determining the full effect of the swell on the subject Vessel. The swell could indeed cause the Vessel to roll, heave, pitch, yaw, sway, surge, or any combination of such Vessel movements. However, the effect on the Vessel’s speed by any of those movements, as a result of the swell, is dependent on the Vessel’s characteristics in relation to the length and height of the swell.

It was determined by the Tribunal that the Vessel was likely not affected by any low and long swells as the Vessel was a handy size Vessel and would likely lose little speed from such swells. Furthermore, where there was swell along the Vessel’s voyage, Charterers failed to provide any detail regarding the swells length in relation to the Vessel. Leaving the Tribunal with their initial decision that any identifiable swell would define the time period in question as not good weather. 

As the Charterer’s failed to provide adequate evidence to define how much time was lost due to adverse weather, the Tribunal then looked into any possible underwater fouling and technical problems to possibly explain why the Vessel underperformed by 2 knots than expected. Clause 15 provided the following in regards to the lost of time due to:

“defect … breakdown or damages to hull, machinery or equipment … or by any other cause for which Owners are liable under the terms of this Charter Party preventing the full working of the vessel, payment of fire shall cease for the time thereby lost.”

Despite Owners providing extensive disclosures to Charterers along with copies of the Vessel’s deck and engine logs, Charterers were unable to prove that the Vessel experienced any mechanical problems during the voyage. Therefore, resulting in the Tribunal rejecting Charterer’s counter performance claim against Owners.

As for Owners claim against Charterers for the failure to redeliver the Vessel within the contractual allowance of bunker quantities, the Tribunal found that Clause 57 adequately provided that the Vessel is to be redelivered with bunker quantities within 5% of the Vessel’s original bunker quantities on delivery. Given Charterer’s redelivered the Vessel with a shortage of 19.45 MT of MGO, Owner’s were then found entitled to the claimed amount of $2,042. 

As the final result, Owners were found entitled to the full balance of $79,941 claimed under the final hire statement.