As of 21 March 2016, BP Shipping Ltd. has released BPVOY5; the long-awaited successor to the 1998 BPVOY4 charter party. There have been quite a few changes made to the 18-year-old boilerplate. Most of these changes, however, are essentially updates to outdated language and none seem to be especially onerous. Here are a few that stuck out to us (both inside demurrage and out).
ARBITRATION – COUNTERCLAIM SUBMITTED AS DEFENSE DURING ARBITRATION – QUESTION AS TO WHETHER COUNTERCLAIM TIME BARRED – Charterer Award Four contracts were negotiated between two parties regarding the charter of floating cranes. Later, the owner brought an arbitration case in an attempt to recover detention. With its defense at the arbitration, the charterer counterclaimed for demurrage. The arbitration panel found that the charterer’s counterclaim was time-barred. The charterer appealed.
COA – CARGO CONFISCATED BY GOVERNMENT - WHETHER DEMURRAGE IS OWED BY CHARTERER – WHETHER CHARTERER ENTITLED TO LAYTIME – Owner Award A COA was negotiated for eight shipments of nickel ore. During the second delivery, operations were stopped and the ship, inclusive of cargo loaded, was confiscated due to suspicions that the cargo was illegally mined. After release of the Vessel a couple months later and then the completion of the operation, a few months after the release, the owner claimed that the charterer was liable for demurrage and was not to receive allowed laytime given charterer had failed to load a cargo. The charter rejected this contention and the owner brought the case to arbitration.
TIME CHARTER – WHETHER CHARTERER CAN ORDER VESSEL TO CONDUCT ADDITIONAL VOYAGE AFTER FIRST VOYAGE – Charterer Award A time charter was negotiated regarding a voyage that allowed for multiple load and discharge ports. During discharge at the final port, the charterer ordered the vessel to begin an additional voyage. The owner rejected the assertion that the charterer was within their rights under the charterparty to conduct additional operations. An arbitration panel ruled in favor of the charterer with the owner subsequently appealing to the High Court.
MASTER’S VS AGENT’S SOF - BURDEN OF PROOF - RAIN PERIODS - CRANE BREAKDOWNS - OFFICIAL HOLIDAYS NOT TO COUNT - Owner Award The agent’s statement of facts (SOF) included periods of rain which were not included in the Master’s SOF. The burden of proof lay on the charterer to prove any laytime exception. Also at controversy is how to properly prorate time when the vessel was under utilizing her available hatches and cranes as well as which holidays to consider as non-working days.
BUNKER SUPPLY CONTRACT – INCORRECT SULPHUR CONTENT PROVIDED – VESSEL DETOURED TO ACQUIRE PROPER FUEL – WHETHER BUNKER SUPPLIER RESPONSIBLE FOR DAMAGES – UCC VERSUS U.S. MARITIME LAW - WORKMANLIKE WARRANTY - Owner Award The owner negotiated a contract for low sulphur fuel oil to be loaded at an agreed upon location. However the incorrect bunker fuel was supplied, preventing the vessel from traveling to a port on the voyage route. An alternate location was then chosen and the appropriate fuel was loaded. After the operation was conducted, the owners submitted a claim for damages against the bunker supplier.
BPVOY3 – FREIGHT RATE CALCULATION DISAGREEMENT – WHETHER RATE IS TO BE DETERMINED BASED ON COMPLETE VOYAGE – Owner Award A charterparty was negotiated for a voyage from a predetermined load port to one or two discharge ports with an addendum regarding the freight rate calculation. A disagreement ensued over the wording of addendum to how freight should be calculated; namely, whether the rate should be determined by taking into account the voyage in its entirety.
TIME CHARTER - CHARTERER’S FAILURE TO PROVIDE OR REFUND BUNKERS UPON REDELIVERY - WHETHER OWNER OBLIGATED TO MITIGATE LOSS - Owner Award A vessel was time chartered with the provision that Charterer would supply bunkers before redelivery. When Charterer was unable to pay for bunkers upon redelivery and further failed to reimburse Owner for when Owner arranged and paid for the bunkers, Owner commenced arbitration. In turn, Charterer claimed Owner failed to mitigate losses when Owner allegedly wasted 2 days arranging the bunkers.
SUMMARY JUDGMENT – CONSIGNEE’S LIABILITY TO CARRIER FOR DEMURRAGE/DETENTION AS SIGNER OF BILLS OF LADING – NOTIFY PARTY – ENDORSEMENT – BREACH OF CONTRACT – UNJUST ENRICHMENT – ACCOUNT STATED – Plaintiff Award The consignee failed to unload cargo from the vessel as the third party buyer was no longer in business. The cargo remained on the vessel as demurrage and detention fees accumulated. This action was brought before the court by carrier in an attempt to recover those damages from consignee basis a breach of contract by consignee, an account stated, and unjust enrichment. [dropcap]T[/dropcap]his dispute arose at the...
FOB SALE - VALIDITY OF SUBSTITUTE VESSEL’S NOMINATION - PRE-ADVICE AND NOMINATION PROVISIONS - WHETHER BUYER IN REPUDIATORY BREACH OF CONTRACT - Seller Award Buyer nominated a substitute vessel one day before the original vessel was to arrive and load her cargo. Seller rejected both vessel nominations and cancelled the contract basis Buyer’s repudiatory breach of the provisions laid out in the contract. A GAFTA tribunal ruled one way, a board in another, whilst in this instance the the High Court supported the GAFTA tribunal.