London Arbitration 29/22
A subject vessel was chartered on an amended New York Produce Exchange (NYPE) 1946 form for four to seven months. After redelivery, the owner issued a Final Hire Statement, which showed the charterer owed a balance of US$226,688.69. The charterer denied they owed any balance to the owner.
The following issues were brought before a panel of arbitrators: speed and consumption, redelivery, redelivery of bunkers, armed guards, hull fouling, damage, and Mississippi River tug assistance.
Relevant charterparty provisions include:
“… SPEED/CONSUMPTION BASED ON GOOD WEATHER CONDITIONS UP TO BEAUFORT SCALE 4 AND DOUGLAS SEA STATE 3. NO ADVERSE CURRENT AND NO NEGATIVE INFLUENCE OF SWELL
BALLAST ABT 14 KN ON ABT 35 MT IFO 380 + 0.2 MT MDO
LADEN ABT 13.5 KN ON ABT 35 MT IFO 380 + 0.2 MT MDO…
Clause 88: Independent Weather Bureau
“Charterers may supply independent weather bureau advice (from a reputable independent weather bureau as selected by Charterers, except WNI and Ocean Routes) to the Master during voyages specified by the Charterers….The Master is to comply with the reporting procedures of the routing service selected by Charterers. If, during the currency of the Charter Party, the speed of the Vessel be reduced and/or fuel oil consumption be increased, after production to Owners of a documented claim supported by the weather bureau, charterers shall have the right to deduct from hire an amount equivalent to the time lost and/or cost of any extra fuel consumed…
Clause 82: Bottom Cleaning
If the vessel is in port or idle… for a total of 20 consecutive days (shifting within same port/anchorages are to be ignored) or longer, charterers are to arrange for an underwater inspection by divers at charterers’ cost and time. If the Vessel’s bottom and/or propeller is fouled, charterers are to arrange for hull bottom and/or propeller cleaning… Charterers are to bear the cost of such hull bottom and/or propeller cleaning and the Vessel is to remain on hire during the cleaning…”
SPEED and CONSUMPTION METHODOLOGY
The charterer claimed that the vessel did not perform up to the standard of clause 19, and they made deductions from the hire according to clause 88. To back up this claim, the charterer took advice from two expert weather bureaus to assess the vessel’s performance in association with the weather during the voyage.
The tribunal held that the charterer’s weather bureau experts ignored the “good weather” indications stated in clause 29 and were inconsistent with the parties’ agreement on how to assess weather periods. For this reason, the tribunal did not support the deductions that were made under clause 88 and ruled them unlawful. This first claim was dismissed.
OFF-HIRE and BUNKERS
The second claim that was made was the owner insisting the vessel remained on hire after the dropping of the last outward sea pilot (DLOSP) because the armed guards remained, and the vessel still needed cleaning. The tribunal ruled in favor of the charterer on this issue and held that the DLOSP ended the charterer’s liability to pay hire. However, the tribunal said that the owners were entitled to damages for the time taken and cost of the cleaning.
The third issue was that there were short quantities of bunkers on redelivery. For this the tribunal ruled that the charterers must compensate the owners at the agreed differential.
BIMCO PIRACY CLAUSE and COSTS of ARMED GUARDS
The fourth issue in this case was the owner claiming that the charterer should be liable for the time and costs of the armed guards employed after the end of the last voyage and until their departure at Fujairah. They cited the “BIMCO Piracy Clause for Time Charter Parties 2013” as well as clause 82 contending that the guards were only a measure to minimize risk. The tribunal sided with the owner that they were entitled to compensation under the BIMCO Piracy Clause for the time spent and fuel consumed between the vessel’s last discharge and the drop off of the guards.
In the fifth issue, the charterer denied liability for any costs related to cleaning and maintenance after the last discharge port, even though the vessel remained at that port for 22 days triggering clause 82. It was held that the fouling discovered upon inspection was a result of the charterer not arranging an inspection during the 22 days. The owner was entitled to compensation for an inspection, cleaning, and the time it took to get there.
DAMAGES from LOADING / DISCHARGING
The sixth claim was the owner demanding the cost of unrepaired damage to the vessel on redelivery. This was a breach of clause 4 of the charter which stated that the charterer was obliged to return the vessel in good order and condition as on delivery. The charterer countered that there had been no damage done by loading or discharging cargo, and no repairs had been found necessary since the only damage (rusting) was long standing.
The tribunal held that the damage identified in the post discharge report did occur during loading and discharging. Because of this, the charterer was found to be liable for the cost of repairs.
ADDITIONAL TUG COSTS
In the last disputed issue, the terminal had suspended loading because the vessel was moving away from berth and required tug assistance. The charterer claimed that during this time the vessel was off hire and deducted costs from the hire balance. However, other vessels at the terminal were also seeking tug assistance and the charterer did not provide evidence that the crew failed to maintain adequate mooring watch. On this final disputed issue, the tribunal held that the charterer was responsible for hire because they ordered the vessel to load at a location on the river where currents and countercurrents were common.
The owners were awarded US$185,306.90. Since they were largely successful and a disproportionate amount of time was taken up by the charterers’ claims, the owners were entitled to their costs as well as interest and fees.