London Arbitration 14/22
A subject vessel was chartered on April 9th to carry a shipment of soybean oil from San Lorenzo, Argentina to Iran “1 SP/1SB BIK OR BANDAR ABBAS IN CHOPT”.
Relevant charterparty provisions included:
Clause 6(c)
“Notwithstanding anything contained in paragraphs (a) and (b) of this clause, the Charterer warrants that the cargo shall be discharged at the ports and berths specified in Part I. Any change in … discharging ports or berths shall be made only as a result of special agreement in writing between Charterer and Owner, and in such case, Charterer shall assume all cost incident to such change, including the value of the vessel’s time if the voyage is prolonged thereby.”
Clause 37
“CHARTERERS SHALL BE DISCHARGED AND RELEASED FROM ALL LIABILITY IN RESPECT OF ANY CLAIM OWNERS MAY HAVE UNDER THIS CHARTER PARTY (SUCH AS, BUT NOT LIMITED TO, CLAIMS FOR DEADFREIGHT, DEMURRAGE, SHIFTING EXPENSE OR PORT EXPENSES) UNLESS A CLAIM HAS BEEN PRESENTED TO CHARTERERS IN WRITING WITH AVAILABLE SUPPORTING DOCUMENTS … WITHIN NINETY (90) DAYS FROM COMPLETION OF DISCHARGE OF THE CARGO CONCERNED UNDER THIS CHARTER PARTY …”
On May 29 the charterer chose Bandar Abbas as the discharge port and requested that the vessel tender a notice of readiness and stay at the waiting place outside Iranian territorial waters. On June 20 the owner let the charterer know that waiting outside port limits was adding war risk premium that would not apply within port limits. After this, the charterer still did not give any alternate voyage orders.
The vessel shifted into berth on August 12 where agents informed the owner of a likely shift to a second berth to complete the discharge of cargo. That day the owner sent two separate emails to the charterer stating that only one safe berth was approved and shifting to two or more berths was not an option unless all of the owner’s terms were agreed upon.
The owner’s terms included:
“aa) ALL shifting costs to be settled directly by Charterers – Owners will not be making any payments to agents. Shifting time to count in full with no deductions, as laytime or time on demurrage, if on demurrage.
bb) Charterers to confirm in writing that the already outstanding AWRP invoice, has been accepted and will be paid by them.
cc) Owners will forward today the bunker invoice for shifting to Fujairah and back for bunkering. Charterers to confirm same will be paid together with the 10-day waiting time invoice submitted already today.
Amounts bb) and cc) to be paid before Vessel departs from berth (remind you that bb has been outstanding for 2 months already).”
The charterer asserted the alleged agreement could not be enforced because it was made under duress.
The charterer claimed these terms were “blackmail,” but reluctantly accepted all terms and charges put forward by the owner and was allowed to proceed to a second berth for the completion of discharge. However, on August 14 no payment had been received by the owner according to their terms for a second berth.
The owner brought arbitration, claiming that the charterer was liable for the cost of bunkers consumed and the war risk premium incurred while waiting OPL Bandar Abbas as well as the cost of bunkers consumed while shifting to Fujairah for bunkering before the second berth. The owner stated that these costs were agreed upon in the “special agreement” of August 14 and were within the meaning of clause 6(c) of the charterparty.
The charterer countered that the August 14 “special agreement” would have only included the costs of shifting to the second berth and the extra hire time. The charterer argued that even if a special agreement had been made, the tribunal would not have jurisdiction based on the arbitration clause in the charterparty. In addition, the alleged agreement could not be enforced because it was made under duress. The charterer also stated that the owner’s claim for the cost of bunker consumption while waiting OPL at Bandar Abbas was barred under clause 37 of the charterparty.
The tribunal found that the parties did indeed enter into a valid “special agreement” on August 14 under clause 6(c). They ruled that the owner subjected the charterer to commercial pressure rather than illegitimate pressure, and that it was the charterer, not the owner, that needed to have the terms of the charterparty changed. The tribunal also stated that the owner’s claim to costs, besides the costs associated with shifting to a second berth, were valid due to the future tense being used in the owner’s message to the charterer about their terms on August 12.
In the case of the bunker consumption while waiting OPL at Bandar Abbas, the tribunal concluded that they did in fact have jurisdiction considering that a “special agreement” under clause 6(c) fell within the scope of the arbitration clause. They ruled that the charterer did not owe the cost of bunker consumption in this case because it was not appropriate to charge additional value that would typically be covered by the demurrage paid.
The owner was awarded US$94,714.20 for the additional war risk premium and US$8,836 for bunker consumption. US$103,558.20 total was awarded with interest at a commercial rate.