London Arbitration 11/22
A subject vessel was chartered for an estimated 25-30 days to load at a port in the Sea of Japan and discharge at a port in the South China Sea.
It was agreed by both parties that the vessel would deviate to the port of Hongai in Vietnam for a crew change mid voyage. However, the vessel encountered bad weather after leaving Hongai resulting in a delay of 1.05 days.
The owner’s final hire amount included a deduction of 4.44542 days for the deviation to Hongai, but the charterer made a further deduction of 1.05 days for the delay due to bad weather.
The owner argued that the charterer owed a balance of $17,381.92 for their deduction of 1.05 days hire and the bunkers consumed, and their deduction was a breach of the charterparty. The owner referred to The Kos [2012] 2 Lloyd’s Rep 292 which would assume that the deviation clause did not provide for an unrelated factor such as weather.
The charterer contended that the weather delay would not have happened if the vessel had made a direct journey instead of deviating to Hongai at the request of the owner.
Relevant deviation clause:
“Charterers allowed Owners change crew at Vietnam port (int: Hongai) after loading at sole load port … and directly before discharging port: int … But the deviation time/bunker/costs to be at Owners’ time/account. …”
The issues for determination were as follows:
- When did the deviation end?
- Was the owner responsible for the bad weather delay following the departure from Hongai?
The tribunal ruled that the deviation time was only regarded as when the vessel was actually on deviation, and the deviation ended when the voyage resumed. This was consistent with Voyage Charters (4th Edition, 2014), para 12.42, in Tate & Lyle Ltd v Hain Steamship Co Ltd (1936) 55 Ll L Rep 159, and with clause 17 (off hire) of the charterparty.
The tribunal also held the owner’s argument that the deviation did not increase the risk of bad weather, and therefore was not covered by the deviation clause. Because of this, the tribunal ruled that the charterer’s additional deduction was a breach of the charterparty.The owner did succeed in their claim of $17,381.92, and claimed an additional £3,400 for the cost of a senior solicitor employed by the owner’s P&I Club. The charterer then argued that the tribunal should not be allowed to award a P&I Club its costs as well as the member premium. The tribunal referenced P&I Clubs: Law and Practice by Hazelwood and Semark (4th Edition) and recognized the Club’s efforts to level the playing field in arbitrations such as this. This led to the tribunal ruling in favor of the owner and allowed them to recover their reasonable cost of legal services.