Oslo Caribbean Carrier v Knowles Construction & Development Co. Ltd. (The “SEA CARRIER”), SMA No. 4463, 3 August 2023

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Oslo Caribbean Carrier, owner of the M/V SEA CARRIER, was chartered by Knowles Construction & Development Co. Ltd. for the transport of bulk aggregate sand from Kingston, Jamaica, to Nassau, Bahamas. Owners sought payment for $53,918.80 of outstanding demurrage, or alternatively, damages for detention including pre-award interest, additional interest on the outstanding amount, attorney’s fees, and arbitration expenses.

Background

The charterparty dated September 27, 2022, was for the transport of bulk aggregate/sand from Kingston, Jamaica, to Nassau, Bahamas. The arbitration clause, Clause 19 (b) of the charter party, mandated resolution in New York following the rules of the Society of Maritime Arbitrators, Inc.

Clause 19(b) of the charterparty provided as follows:

This Charter Party shall be governed by and construed in accordance with Title 9 of the United States Code and the Maritime Law of the United States and should any dispute arise out of this Charter Party, the matter in dispute shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for the purpose of enforcing any award, this agreement may be made a rule of the Court. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc. For disputes where the total amount claimed by either party does not exceed the amount stated in box 25**the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Arbitrators.”

On November 8, 2022, Oslo Caribbean invoiced Knowles for demurrage. Despite subsequent revisions to the claim and repeated requests for payment, Knowles did not comply. Oslo Caribbean then engaged Nordisk Defence Club for collection, which, on November 22, 2022, demanded payment from Knowles. After some correspondence, Knowles acknowledged the debt on December 5, 2022, expressing a commitment to resolve the matter promptly.

Arbitration Proceedings

In the absence of payment, arbitration proceedings commenced on December 20, 2022, with Ms. Molly McCafferty appointed as Oslo Caribbean’s arbitrator. The Respondent failed to nominate an arbitrator, leading to the appointment of Mr. David Martowski on January 12, 2023, and subsequently, Mr. David Gilmartin as the third arbitrator and Panel Chair on May 31, 2023.

Despite numerous attempts to secure a response from Knowles, the Respondent did not formally accept the Panel. The Claimant submitted its Initial Statement of Claim on June 13, 2023. On June 25, 2023, the Panel set a deadline of July 14, 2023, for Knowles to respond, warning that non-compliance could lead to adverse consequences. Multiple attempts were made to contact Knowles, but no formal response was received until July 14, 2023.

In this response, Knowles admitted the debt, promising payment by the next week. However, as of July 21, 2023, no payment had been received. The Claimant requested the Panel to proceed with deliberations.

Award

The Panel, considering Knowles’ unopposed claim and acknowledgment of the legitimacy of the demurrage claim, awarded Oslo Caribbean damages of $81,859.30, including the outstanding demurrage, interest, and attorney fees.

The award stipulated that if not satisfied within 30 days, interest at the prime lending rate would accrue. The award was deemed final and enforceable in court in accordance with the charter party terms.

Oslo Caribbean successfully pursued arbitration against Knowles, securing an award for outstanding demurrage, interest, attorney fees, and arbitration expenses based on the unopposed nature of the claim and Knowles’ acknowledgment of the debt.