Team Tankers Deep Sea v. Tauber Petrochemical (MT “TEAM TOCCATA”) – SMA No. 4441, 18 March 2022

The vessel Team Toccata was to perform a voyage from Houston to India beginning on February 27, 2020, per the charter. On March 25, 2020, the Gujarat Maritime Board issued a declaration of a Force Majeure Event at Dighi Port where the Team Toccata was due to berth after its discharge was completed at Kandla on April 19, 2020. All parties involved explored alternative ports but maintained Dighi as the discharge port. 

Team Toccata arrived at Dighi and tendered NOR on April 21 at 08.00, and the six hours of free time expired at 14.00. However, the port remained closed from then until April 23 at 13.36 (47.6 hours). The port reopened, but from April 23 at 13.36 to April 26 at 12.30 (70.9 hours) the berth was occupied by another vessel.

The owner, Team Tankers Deep Sea,  initially claimed that the charterer, Tauber Petrochemical, owed demurrage for the entire 118.5 hours of waiting at Dighi. However, after all, other disputed costs were settled on October 29, 2020, Team Tankers offered for Tauber to pay only 50% of the first 47.6 hours if they paid 100% of the second 70.9 hours.

On October 30th, Tauber responded to the offer claiming that they should not be liable for any of the 118.5 hours because of force majeure. On November 6th, Tauber sent another message to the owner agreeing to pay the entire 118.5 hours at 50% because neither party could have foreseen the effect of the COVID-19 pandemic. 

Team Tankers did not send any response to Tauber’s offer between then and January 25, 2021. On November 20, 2020, Tauber remitted the cost of 50% of the 118.5 hours (US$ 230,030.12) in good faith that it would settle the dispute.

Team Tankers did not accept Tauber’s November payment of US$ 230,030.12 as the full and final settlement and instead used it to reduce the amount Team Tankers claimed was due, leaving a balance of US$45,295 for the last 50% of the 70.9 hours. Team Tankers asserted they were owed this amount, plus interest, attorney and arbitration fees. 

When Tauber discovered Team Tankers did not accept their payment as full and final settlement, they revised their position, arguing they did not owe any of the costs for the 118.5 disputed hours, or $167,447, due to force majeure.  A counterclaim was filed reflecting a balance due of $62,583, plus interest, attorney and arbitration fees. 

Team Tankers contended that Tauber failed to meet its burden to prove force majeure conditions existed, and since Tauber voluntarily paid $ 230,030.12, none of this sum could be recovered.   

Force Majeure or Berth Congestion?

The panel agreed with Team Tankers that the 70.9 hours waiting at Dighi was due to port congestion, not force majeure and therefore would count in full as demurrage. The Panel used clause 6 to explain its reasoning because it stated that NOR can be tendered “berth or no berth.” 

The issue of the 47.6 hours for the port closure was a more difficult dispute to resolve. It was agreed that this time waiting was due to the pandemic, so the panel turned to the charter to see how the risk of port closure was allocated. Clause 6 allowed the Vessel to tender NOR “berth or no berth” but also stated, “where delay is caused to Vessel getting into berth after giving notice of readiness for any reason over which Charterer has no control, such delay shall not count as used laytime.”  However, the parties amended Clause 9 and agreed “reachable on her arrival” would not necessarily mean ‘available on her arrival.’ 

The amendment eliminated the argument that  Clause 9 “reachable on arrival” provision negated or inhibited the Clause 6 “has no control” provision if the berth on arrival is “reachable” but not available.” Both Voyage Charters (3d ed. 2007) at 59.21 – .28 and The Mountain Blossom, SMA 3067 (1994) supported this position.  The amendment, though, did not create an exception to laytime, only that if the berth is not “available” upon arrival, Tauber was not in breach of its Clause 9 obligation to procure a berth “reachable” upon arrival. 

The Decision

The Panel decided the delay at Dighi was a force majeure since the language of rider clause 4 included delays due to “compliance with any … order imposed by any state, local, port, or pilot(s) authorities…which by the exercise of due diligence the party concerned is unable to overcome.”

The arbitrators also ruled Tauber exercised due diligence to try to overcome the delay for Tauber, Team and their agents considered alternative discharge ports.  The panel determined the 47.6 hours did not count for it was a force majeure delay.  Team was owed $167,447 plus the value of the 70.9 hours, $76,808, for a total of $244,256.  Since Tauber had remitted $230,030, the balance due was $14,255.

Tauber was ordered to pay Team US$14,255.52 plus interest, $5,000 for attorney fees, and 60% of the arbitration fees, for a total of $21,351.87.