2023 Maritime Digest of Arbitration Awards and Court Rulings
SHIPPER AS CHARTERER – CARGO DISCHARGE WITHOUT BILL OF LADING – NOVATION OF CHARTERPARTY – CAUSATION – CARRIAGE OF GOODS BY SEA ACT OF 1992 – BILL OF LADING AS CONTRACT OF CARRIAGE – MISDELIVERY – BANK AS CLAIMANT
The case was brought to the Court of Appeal to review a lower court’s decision on whether a bill of lading formed a contract of carriage after a novation of charterparty. BP chartered the vessel SIENNA from Euronav to transport low-sulphur fuel oil for sale to Gulf. UniCredit Bank AG provided financing to Gulf, secured by a bill of lading, and a novation was completed shifting the charterers from BP to Gulf. Euronav delivered the cargo without requiring the bill of lading and the Bank brought a claim against Euronav for breach of contract. The Court of Appeal reviewed whether the bill of lading constituted a contract and examined the impact of the Carriage of Goods by Sea Act 1992.
NYPE 1946 FORM – EXCESS BUNKERS ON REDELIVERY – CLAIM MASTER OVERESTIMATED BUNKER QUANTITIES – BREACH OF CHARTERPARTY – DAMAGES – PRICE FOR CALCULATING EXCESS BUNKERS – BUNKER SAFETY MARGIN
A vessel was chartered to travel from Thailand to the Nacala-Cape Town range using the NYPE 1946 form. A disagreement arose between Charterers and Owners regarding the final hire statement. Charterers claimed that the master had overestimated the bunker requirements, while Owners contended that the Charterers’ breach had caused the excess bunkers on redelivery and counterclaimed for damages.
DHL Project & Chartering Ltd v. Gemini Ocean Shipping Co Ltd (The “Newcastle Express”) – Court of Appeal – (Males, Birss and Snowden LJJ)  EWCA Civ 1555 – 24 November 2022
JURISDICTION of ARBITRATION – SECTION 67 OF ARBITRATION ACT 1996 – LIFTING of SUBJECTS – FIXTURE – ARBITRATION AGREEMENT – ARBITRATION CLAUSE – FORMATION OF CONTRACT – APPEAL
DHL Project & Chartering and Gemini Ocean Shipping negotiated a proposed voyage charter for the carriage of 130,000 metric tons of coal from Newcastle, Australia, to Zhoushan, China. When the vessel, the NEWCASTLE EXPRESS, did not obtain RightShip approval, DHL informed Gemini that they were releasing the vessel. DHL did not confirm to Gemini that either the shipper or receiver had approved the vessel. Owners asserted that the charterparty had been concluded, and thus the arbitration clause was binding. Furthermore, by releasing the vessel this way, the Charterer was in breach of the charterparty. The arbitration was in favor of the Owners and later overturned in court. Charterers appealed, and the claim was then heard by the Court of Appeals.
Seastar Maritime Ltd. v. AUM Scrap and Metal Waste Trading LLC. (MT “AMIAS”) – SMA No. 4455, 12 December 2022
DEMURRAGE – CHARTERPARTY BREACH – DEVIATION – LOSS MITIGATION
The MT AMIAS was chartered by AUM from Seastar using the Asbatankvoy form with rider clauses to carry Methanol in bulk from Venezuela to 1-2 Safe Port/ 1 Safe Berth (Kandla to Chennai Range). The Vessel finished loading in Venezuela and submitted its invoice for 70% freight for payment within 10 days, per the charterparty. AUM did not pay, and the Vessel stayed in port until May 11. Seastar was forced to seek alternate employment to mitigate losses, which required calling another port. Both parties agreed upon an earlier settlement, but AUM did not pay it either.
Phillips 66 Company v. Yamuna Spirit, LLC, Teekay Chartering and Teekay Marine (The “YAMUNA SPIRIT”) – SMA No. 4454, 12 January 2023
OIL SHEEN – OIL LEAK – OIL SPILL – MARINE TERMINAL LEAK – VESSEL LEAK
On September 19, 2016, the YAMUNA SPIRIT began discharging her Arabian Extra Light crude cargo at the Phillips 66 Marine Terminal, Rodeo Refinery, California. Shortly after operations commenced, a series of odors and oil sheens were observed nearby in San Pablo Bay, San Francisco. The parties, in cooperation with the USCG and state agencies, conducted extensive investigations and testing to determine whether the source of the leak was the Terminal or Vessel. Both parties contended that the other was the source of the oil. Arbitration was sought to establish responsibility for the leak and recover the expenses associated with the oil spill responses, investigations, and legal fees.
BREACH OF COA – FAILURE TO PROVIDE SAFE BERTH – FAILURE TO NOMINATE SAFE VESSEL – DEMURRAGE – FORCE MAJEURE – WEATHER – HURRICANE – LOST TIME
SwissMarine and Mosaic Fertilizer had a COA for the carriage of phosphate rock from Peru to the US Gulf for discharge at either New Orleans Triport and/or Tampa – Port Manatee. On the way to discharge at Tampa, concerns were raised by the Port that the Vessel could not safely berth, so the vessel was diverted to New Orleans. Shortly after arrival at anchorage on the Mississippi River, the US Coast Guard limited marine traffic due to the impending arrival of Hurricane Ida. Mosaic declared force majeure, and the PRESINGE did not complete cargo operations until 38 days later. Owners alleged demurrage was due and that Charterers were in breach of COA for failing to provide a safe berth. Charterers countered that no demurrage was due because of the force majeure event, and Owners were in breach of COA for failing to nominate a safe vessel.
DEMURRAGE – GROUNDING – SAFE PORT – SEAWORTHY – NEGLIGENCE – NYPE 1981
The subject vessel was chartered for a one-time charter trip with one leg via Indonesia to China. The vessel grounded while under pilotage in the port of Chaozhou. She suffered damage to her port side hull structure. The owner claimed that the port was unsafe and in breach of the charterparty. The charterer claimed the damage was due to negligence in navigation and unseaworthiness.
Leeds Shipping Co Ltd v. Societe Francaise Bunge (The “EASTERN CITY”) – COURT OF APPEAL (Hodson, Romer, and Sellers LJJ) – 30 July 1958
UNSAFE PORT – MOROCCO – UNPREDICTABLE WEATHER CONDITIONS -GROUNDING OF VESSEL – ALLEGED NEGLIGENCE OF MASTER
Editor’s Note: This 1958 case set the industry standard for determining a safe berth and is referenced in two new recaps: London Arbitration 2/23 and SMA No. 4457 “PRESINGE.”
Leeds Shipping and Societe Francaise were parties to a voyage charterparty with the vessel discharging in “…One or two safe ports in Morocco…” This appeal challenged a previous decision in favor of Leeds Shipping, which claimed Charterers ordered the vessel to an unsafe port, Mogador, where she ran aground and sustained damage. Societe Francaise denied that Mogador was an unsafe port and asserted by accepting the voyage, Owners had consented to the vessel going to Mogador. Charterers also claimed the negligence of· the Master caused the vessel’s grounding.
DAMAGES – COVID-19 – COA BREACH – BURDEN OF PROOF
A December 2, 2019 contract of affreightment between XCoal Energy and Classic Maritime stated XCoal was to provide cargos for 6 – 7 vessels during the year 2020. Due to the Covid-19 pandemic, XCoal was only able to provide cargo for two vessels. Classic believed they should have been awarded damages of over US$ 4.4 million for the breach, however, XCoal asserted they owed far less, claiming Classic did not meet the burden of proof to warrant this higher claim.