Author: Haugen Consulting
TIME CHARTER -- ANTICIPATORY REPUDIATORY BREACH -- EARLY REDELIVERY OF THE VESSEL -- DAMAGES -- Owner Award
Well prior to the contractual end of the Charter Party, Charterer notified Owner of its intention of premature redelivery unless Owner reconsidered the daily hire. Owner took Charterer’s statement to be an anticipatory repudiatory breach and in order to minimize losses Owner looked for alternative employment and took the Vessel back 653 days before earliest redelivery. Owner was subsequently awarded the balance of hire owed and loss of earnings being the difference between the net charter party rate and the net market rate.
CONSECUTIVE VOYAGE CHARTER -- REPUDIATORY BREACH -- DAMAGES -- Owner Award
When Charterer repudiated a Consecutive Voyage Charter (CVC) 4.5 years early, and as there was no comparable market at the time of the repudiation with Vessel subsequently traded on the spot market, the Court ruled that damages paid to Owner were to reflect the difference between what Vessel would have earned under the CVC and what the Vessel earned on the spot market (i.e. the Vessel’s actual losses) less 1.5% to account for the accelerated receipt and less 1.5% to reflect "catastrophic contingencies" such as the possibility that the Vessel would become a total loss prior to when the CVC would have concluded. The emergence of a comparable market after the repudiation was deemed moot in regards to the calculation of damages as it needed to exist at the time of repudiation to be taken into consideration.
SALES CONTRACT -- FOB SALE -- CONTAMINATED CARGO -- DAMAGES -- HEDGING LOSSES FLOW NATURALLY FROM BREACH -- SALE OF GOODS ACT 1979 -- Buyer Award
Given that the quality of naphtha originating from the Port Harcourt Refining Company (PHRC) in Nigeria was variable, the naphtha was sold "as is" and “PHRC naphtha quality”. Thus, the Court ruled that when the naphtha was found to be contaminated with MTBE, Buyer was not obliged to accept the cargo given that it contained a contaminate not normally present in naphtha produced by PHRC.
BPVOY 4 -- SAME BERTH CALLED TWICE -- CARGO NOT READY WITHIN LAYDAYS -- WAITING TIME AND BUNKER COSTS -- DETENTION OR DEMURRAGE -- SUPPORTING DOCUMENTS -- TIME-BAR -- Charterer Award
The Vessel was required by Charterer to attend to the same load berth twice with Owner subsequently claiming for the time and bunkers consumed. At the disport, Owner invoiced for excess time used as demurrage. Charterer agreed to and paid a "final agreed demurrage invoice" which covered demurrage and then claimed that the load port expenses should have been submitted as demurrage. Owner subsequently altered the load port claim such that it was for demurrage with Charterer subsequently denying it twofold; first, demurrage had already been settled in full and secondly, the claim for demurrage at the load port was now time-barred.
SYNACOMEX 2000 -- CONSECUTIVE VOYAGE CHARTER -- UNPAID DEMURRAGE -- COMMENCEMENT OF TIME-BAR -- Owner Award
Chartered for three consecutive voyages, a dispute arose over the time bar provision which required arbitration to be commenced "within 12 months of final discharge or termination of this Charter Party".
ASBATANKVOY -- DEADLINE MISSED FOR LIFTING SUBJECTS -- DAMAGES FOR HIGHER FREIGHT ON SUBSTITUTE CHARTER -- Owner Award
Incurred during a volatile and rising market, this dispute hinges on whether Charterer can prove subjects were lifted prior to the deadline. As Charterer had no written proof subjects had been lifted and with Charterer’s broker claiming subjects were lifted prior to the deadline and Owner’s broker claiming time had run out, the Panel weighed various testimony concluding that Charterer did not fulfill their burden.
ASBATANKVOY -- PRODUCTION PROBLEM -- INABILITY TO PROVIDE CARGO -- FORCE MAJEURE -- DEADFREIGHT -- Owner Award
When problems in the plant caused the supplier to fail to provide a cargo of CAN, Charterer notified Owner and attempted to locate an alternative supply. A week later when it was apparent additional cargo would not be located, Charterer formally declared force majeure. In awarding Owner deadfreight, the Panel majority held that Charterer had failed to promptly provide the force majeure notice, failed to alert Owner as to the extent or duration of the delay (as contractually required), and failed to prevent or minimize the effects of the force majeure event.
GENCON -- FAILURE TO PROVIDE CARGO -- REPUDIATION OF CHARTER -- DETENTION -- DAMAGES -- Owner Award
Having awaited cargo at the load port for 40 days without proper assurance that same was forthcoming, Owner repudiated the Charter Party and fixed a voyage with another Charterer to mitigate damages. The Panel awarded Owner the freight differential between the repudiated Charter and the mitigating Charter and 40 days of detention at the demurrage rate. Owner’s claims for bottom cleaning, time loss due to slow steaming and over consumption of bunkers on the mitigating voyage, all allegedly due to bottom fouling itself a result of the prolonged stay at load port, failed due to a general lack of documentation.
SALES CONTRACT -- FORCE MAJEURE -- TERMINAL EXPLOSION AND FIRE -- NEGLIGENCE -- Seller Award
In the earlier Partial Final Award, SMA No. 4073, the Panel determined Buyer was responsible for cargo in shoretanks destroyed by an explosion whilst Vessel was discharging. The Panel held off in determining whether Buyer’s force majeure defense applied to the cargo remaining onboard the Vessel until after the cause of the explosion was determined. In this Final Award, SMA No. 4083, the Panel concluded that the cause of the explosion was due to human negligence and, as such, is not within the scope of force majeure. Buyer is responsible for the extra expense in disposing of remaining product.
NYPE 1946 -- TIME CHARTER -- OPTION TO ADD OFF-HIRE PERIOD TO CHARTER PERIOD -- OPTION NOT DECLARED -- VESSEL NOT DELIVERED WITHIN INITIAL CHARTER PERIOD -- Charterer Award
During the initial time charter period the Vessel was off-hire for 159 days with the charter party giving Charterer the option to add the off-hire to the charter period. Charterer, without formally advising Owner that they were exercising this option delivered the Vessel two months after the initial period. The Panel determined that either there was no need for Charterer to formally advise Owner of Charterer exercising the option or, even if there was a need, Charterer’s actions leading up to the initial redelivery date and when continuing to trade the Vessel after the initial redelivery date was Charterer advising Owner that off-hire would be added to the initial charter period.
