London Arbitration 3/21

SYNACOMEX 2000 – DEMURRAGE – LOW WATER – DELAYED BARGES – FORCE MAJEURE – LACK OF WAREHOUSE SPACE – STEVEDORE DELAYS – TIME BAR – DEVIATION COSTS – REJECTED CARGO – BUNKERS CONSUMED BETWEEN PORTS

The tribunal ruled on the six claims listed below. Decisions and/or awards are at the end of each section.

1 – Events at Load Port

Of the US$ 318,047.34 claimed by the owner, US$ 112,793.06 in demurrage was incurred at the load port. Inclusive of a couple of deductions, the owner initially submitted this demurrage claim in the amount of US$ 108,536.32 on 21 October 2016. 

The charterer argued for additional deductions and the suspension of laytime for two separate periods. The first was for a delay of the cargo reaching the vessel and subsequently suspended loading operations. Regarding the former delay, barges were used for transport. The charterer argued that the barges were delayed reaching the load port due to the river’s abnormally low water level, which caused difficulties for the barges’ navigation. Subsequently, the delayed loading was a case of “force majeure” per clause 8 of the Synacomex 2000 charterparty. It stated:

 “Any delays caused by ice, floods, quarantine or by cases of ‘force majeure’ shall not count as laytime unless the vessel is already on demurrage.” 

The tribunal rejected the charterer’s claim because the clause only applied to cargo operations and not cargo transport. Thus, the tribunal found clause 8 did not apply to the delay of the cargo reaching the load port. Moreover, the charterer could not prove the water levels were unusually low or that the delays due to the low water level were unavoidable.  The Panel also noted that charterer could have loaded less cargo on the barges reducing draft and used more barges.

The second period the charterer argued for suspension of laytime was due to the alleged unwillingness of the master to load the cargo directly from the barges. The charterer argued the master was unreasonable, resulting in delays of loading.  However, the tribunal rejected the charterer’s argument finding no fault of the vessel or her crew. 

Subsequently, the owner was due $180,536.32 in demurrage for the load port. 

2 – Events at First Discharge Port

The vessel originally intended to discharge all cargo at the first discharge port on 20 October 2016. Initially, the port authorities rejected the cargo in holds 4 and 5 but later agreed to allow all five holds to discharge if certain conditions were met. Issues arose because there was not enough space in the warehouse for all cargo to be discharged. The charterer ordered the vessel to move from berth to anchorage to avoid fines for occupying a berth without performing operations. On 2 November 2016, the port authorities ordered the vessel to the outer anchorage, and later on that day, it ordered the ship to sail. 

The charterer tried to argue that the delay was the fault of stevedores not allowing the cargo to be discharged; thus, the delay fell upon the owner. However, this was not the case, as the charterer failed to allocate adequate space to discharge the cargo into the warehouses. The tribunal found no fault lay with the stevedores or the owner. 

3- End of Time at the First Discharge Port

Because no cargo was discharged at the first intended port, the charterer requested the vessel sail to a second discharge port. Laytime ran from the first port through the end of the second port and included the vessel’s transit time between the two locations. 

The charterer argued the owner’s laytime calculation was time-barred as the terms allowed a 15-day period to submit the claim, and it had surpassed the 15-day period from the first discharge port. Clause 16 of the fixture recap stated:

“DEMURRAGE PAYABLE WITHIN 20BD AFTER OWNS’ PRESENTATION OF LAYTIME CALCS (EVEN BY FAX/E-MAIL), DRAWN IN ACCORDANCE WITH C/P TERMS AND CONDS IF OWNS FAIL TO PRESENT DEMURRAGE CALCULATIONS WITHIN 15 CALENDAR DAYS (TIME START TO COUNT FROM SUPPORTING DOCUMENTS (SOF, NOR, TIMESHEET) RECEIPT, THE CHARTERERS WILL NOT BE RESPONSIBLE FOR ANY DEMURRAGE AS PER AGREED C/P.”

The owner countered that, although this time bar was applicable for the original charterparty, the parties had agreed to an Addendum on 7 February 2017, which read:

[IT IS] AGREED AS FOLLOWS FOR THE SHIP’S DEVIATION FROM [SECOND DISCHARGE PORT] TO [THIRD DISCHARGE PORT]:

1. Deviation cost USD90,000 to be paid prior to vessel’s arrival at [third discharge port]. Demurrage will start counting after 72 hours (sshinc) upon tendering NOR at the rate of USD6,500 pdpr.

2. Demurrage will be paid as follows;

(i) USD150,000 – to be paid on Tuesday, 7 February 2017,

(ii) USD200,000 – to be paid before vessel arrives at [third discharge port],

(iii) Balance to be paid by installments latest on 31/05/2017,

(iv) Demurrage at [first and second discharge ports] will count until vessel sails from [those ports]

… Otherwise as per Charterparty dd 18/08/2016.”

The charterer’s time-bar claim failed. Per clause 2(iv) of the Addendum, one calculation for demurrage was allowed for both ports, so time commenced after loading was complete at the second discharge port. 

4- Events at the second discharge port

An additional delay occurred at the second discharge port when authorities refused to berth until they could review results of a sample analysis on the cargo in holds 4 and 5.   After some time, the authorities cleared the non-rejected cargo, however, holds 4 and 5 were rejected again.

The charterer tried to blame the owner for all delays from 20 October to 3 January; however, the tribunal disagreed. Accordingly, laytime and demurrage amounts for the first two ports, US$ 723,115.12 gross, were approved.

5 – Events at the third discharge port

With cargo rejected at two ports, the vessel sailed to a third discharge port. The Addendum required the charterer to provide a signed and stamped indemnity letter against discharge.  This was not completed in a timely manner. The owner insisted the vessel was ready to discharge upon tendering NOR, so the time spent waiting at roads were the charterer’s responsibility. The charterer did not dispute the owner’s claim, so the tribunal accepted the figures provided.

6 – Bunker deviation costs

Upon completion of final discharge, the owner gave the charterer a complete statement of account, with a balance due of US$ 318,047.34, which included US$ 15,000 for “deviation costs” of bunkers consumed between the second and third discharge ports. The owner claimed it was implied that the charterer would pay costs and expenses of additional port calls.

The tribunal assumed the US$ 15,000 was a lump sum for bunkers consumed rather than actual consumption because the owner also claimed demurrage for the time element. Since the Addendum did not specify responsibility for freight or transit from the first to the second discharge port, the owner’s claim failed. 

The tribunal held the owner was due US$ 303,407.34, plus interest and costs.