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Archive / Maritime Articles

Marine Provisions: Are They Necessary in Commodity Contracts of Sale?

Intrinsic to long-term profitability in the commercial cargo trades is the creation of a comprehensive set of marine provisions. When buying or selling cargoes via marine transport many companies incorporate express demurrage terms defining the assessment of liability basis the type of transaction. These clauses are generally referred to as marine provisions and although some companies may apply these provisions to either sales or purchases, as the seller’s contract is generally the contract that governs the transaction, the majority of provisions are geared towards protecting the seller. Nevertheless, there are also those companies that, when selling, fail to have the foresight to incorporate specific marine provisions into their contracts.
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Archive / U.S. Maritime Cases

Apex Bulk Carriers, LLC v. DS Norden AS (The “Denise”) – SMA No. 3976, 6 Sep 2007

NYPE -- SUBCHARTER -- SUBPOENAS -- REQUEST FOR DOCUMENTS -- CONSOLIDATION OF DISPUTES -- Partial Owner Award The Vessel suffered severe damage allegedly caused by stevedore negligence, and Owners commenced arbitration to recover damages. Charterers contended that they had no first-hand knowledge of the incident, as the Vessel was under sub-charter at the time. Charterers subsequently requested arbitration against their sub-charterer and requested that the Panel consolidate all parties into one proceeding.
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Archive / U.S. Maritime Cases

Maribus Shipping Co. Ltd. v. Bottiglieri Di Navigazione SpA (The “Lacerta”) – SMA No. 3983, 12 Oct 2007

TIME CHARTER -- LATE REDELIVERY -- REQUEST FOR CONSOLIDATION -- COMMON QUESTION OF LAW -- Partial Charterer Award While under a time charter, the Vessel was sub-chartered for a single voyage. During the single voyage, the time charter expired and the Vessel was delivered late. Owners attempted to consolidate their arbitration claim for damages against both the time charterer and the sub-charterer, citing SMA rules which allow for same when the dispute against all parties involves the same common question of law. The ruling explains why the Panel rejected Owners request for consolidation.
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Archive / U.S. Maritime Cases

Progress Bulk Carriers Ltd. v. Sunbulk Shipping NV (The “C. Duke”) – SMA No. 3990, 31 Dec 07

GENCON -- VESSEL ARRESTED WHILE AWAITING BERTH -- FORCE MAJEURE -- HURRICANE -- STORM -- WEATHER -- GROUNDING -- DEMURRAGE -- Owner Award Although the loading operations were uneventful, the discharge on the Mississippi River was delayed due to a recent hurricane (Katrina) as well as the threat of another hurricane (Rita). Charterers declared force majeure, and, in the event that the Panel did not agree, also argued that the demurrage claim should be reduced during an eight day period that the Vessel was under arrest. The award explains why the Panel upheld the Owners claim in full, despite the arrest and a grounding incident.
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Archive / English Maritime Cases

London Arbitration 19/07

GENCON -- NOR VALIDITY -- TENDERED PRIOR TO LEGALLY BEING ABLE TO ENTER THE PORT -- LOCAL AUTHORITIES -- DEMURRAGE -- Charterer Award The Vessel arrived and tendered NOR at the Libyan discharge port despite not having received permission to discharge from the Libyan Port Authority. Four days after arrival, permission was granted. The Vessel had missed her turn at berth, and the port had closed for a period due to inclement weather. The Charterer rejected both the NOR and the subsequent demurrage claim. The award explains the consequences for the Owner for failing to re-tender NOR after receiving permission to discharge.
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Archive / English Maritime Cases

London Arbitration 20/07

NYPE -- TIME-CHARTER -- SPEED WARRANTY -- BUNKER CONSUMPTION -- CHARTERPARTY LANGUAGE -- APPLICATION OF MARGIN FOR "ABOUT" -- EXERCISE OF LIEN OVER CARGO (OFF HIRE) -- Partial Owner, Partial Charterer Award The Panel in this dispute was called on to determine the amount recoverable by Charterers under a time charter for the Vessel's underperformance in the warranted speed and for the over-consumption of bunkers. The award details how the Panel calculated the damages.
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Archive / English Maritime Cases

London Arbitration 21/07

ASBATANKVOY -- BILL OF LADING -- NOR TENDERED OUTSIDE PORT LIMITS -- "QUICK DEPARTURE" PROCEDURE -- PIRACY -- Owner Award Charterers presented two complaints against the Owner in this arbitration. The first was regarding a "quick departure procedure" in which a verbal agreement was made between Charterer's and Owner's agents, for the Vessel to sail the loadport without a copy of the bill of lading onboard. The second was regarding the Vessel's location when she tendered NOR at the Nigerian discharge port. The award details why the Panel rejected any agreements made by agents, and how the threat of piracy off the shore of Nigeria affected the Panel's ruling on what constituted a valid NOR.
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Archive / Maritime Articles

Weather Delays at an FPSO – Does Time Count?

As with most laytime and demurrage issues, charter party terms and conditions spell out when time starts and stops– but what happens when a Vessel loads at an FPSO (Floating Production, Storage and Offloading vessel)? Although no charter party boilerplate specifically mentions the FPSO operation, this is not an issue because it is generally incorporated by a catch-all phrase like, “…or any other loading or discharging point whatsoever to which Charterers are entitled to order the vessel hereunder” and thus all the laytime and demurrage provisions would apply. Problems can arise, however, when clauses are modified during the fixture negotiation process. In particular, since shipowners oftentimes modify the Conoco Weather Clause1 by stipulating that weather delays count in full at transshipment areas, lighterage, and for STS operations, the question arises whether this implicitly applies to FPSO operations too. Although Owners’ intention is to mitigate adverse weather delays (including wind and swells) that ships are frequently subjected to in these areas of operation at sea, said amendment may not necessarily include delays at an FPSO.
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Archive / U.S. Maritime Cases

PDVSA Petroleon y Gas SA v. Poseidon Schiffahrt GmbH (The “Pharos”) – SMA No. 3972, 6 Aug 07

ASBATANKVOY -- DELAY -- FAILURE TO PROSECUTE -- DISMISSAL -- Partial Owner Award The Charterer began arbitration to recover damages resulting from an Owner breach of contract and demanded for an immediate partial reward. However, the Charterer delayed to prosecute the manner beyond the claim’s submission and after eight years of delayed prosecution, the Owner moved to dismiss the case.
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Archive / U.S. Maritime Cases

Team Tankers AS v. Apex Energy, LLC. (The “Team Jupiter” and “Loukas I”) – SMA No. 3973, 17 Aug 07

ASBATANKVOY -- SHORTLOADING -- WITHHELD FREIGHT -- TWO BOTTOMS -- DAMAGES -- Owner Award In compensation for damages (specifically shortloading, an address commission on freight issue, legal and administrative costs) incurred by the Owner, the Charterer made an unauthorized freight deduction from the contracted pay amount. In the partial award of SMA No. 3965, the sole arbitrator ruled that the withheld freight and the claim for damages would be addressed in two different rulings. The withheld freight was addressed in the aforesaid partial award and the remaining items are discussed herein.
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