Seastar Maritime Ltd. v. AUM Scrap and Metal Waste Trading LLC. (MT “AMIAS”) – SMA No. 4455, 12 December 2022

Summary of Facts

On March 3, 2022, 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 MT AMIAS finished loading in Venezuela and submitted its invoice for 70% freight for payment within 10 days, per the charterparty. However, no funds were received.  Seastar considered this a breach and termination of the charterparty. The parties then agreed that AUM would pay USD500,000 lumpsum for the charterparty termination. After Seastar received no payment the second time, the arbitration process commenced.

Arbitration Process and Decision

Once Seastar appointed its arbitrator, no communication was received by AUM within the time period set forth in the charterparty for AUM to nominate an arbitrator. Seastar appointed an arbitrator for AUM according to the charter. AUM’s legal representative acknowledged the arbitration and expressed interest in settlement discussions, but no other communication was received from AUM throughout the entirety of the proceedings. 

After AUM failed to pay the 70% freight fee within the stipulated 10 days, they offered no explanation for not paying the balance. Seastar sought to mitigate the damages of the fully laden vessel that remained in Venezuela with substitute employment, thus incurring additional expenses. The total laytime with the credits owed to AUM and the cost of calling at an additional port under the substitute charter totaled USD465,042.21 which was invoiced to AUM. 

AUM never objected, defended its interests, or participated in proceedings. Since AUM had previously acknowledged its potential liability, the Panel concluded that Seastar was entitled to recover the full USD 500,000 in damages and attorney and arbitration fees. 

If AUM did not pay the full payment within 30 days, the award due was to collect interest.