London Arbitration 2/24
In a time charter dispute based on an amended NYPE 1946 form, Owners claimed a balance of hire for $79,103.27, while Charterers denied responsibility and counterclaimed for $100,000, alleging the vessel had traveled an extra 250 miles and did not meet speed and consumption warranties.
Charterparty Clauses
The vessel was chartered for a one-time trip of 25-35 days from South America to Italy at a daily hire rate of US$13,000. Key provisions included:
Vessel:
SPD/CONS ARE ABOUT, UNDER GOOD WEATHER CONDITION I.E. THE WINDS NOT EXCEEDING BF4, EVEN KEEL, NO DECK CARGO, NO SWELL,NO ADVERSE CURRENTS, THE SEA STATE UP TO DOUGLAS SEA SCALE 3(MAX 1.25M) THE WORD ABOUT IN SPEED/CONSUMPTION REFERS TO AN ALLOWANCE OF +/- 0.5 KNOTS ON SPEED AND +/- 5% ON BUNKER CONSUMPTION RESPECTIVELY BOTH ALWAYS IN VESSEL’S FAVOUR. ANY GAIN ON TIME AND/OR CONSUMPTION TO BE SET OFF AGAINST LOSS OF TIME AND/OR CONSUMPTION – IF ANY.
ABT 12 KNOTS ON ABT 19 TONS VLSFO + 0,1 MT LSMGO IN PORT: WORKING 4MT VLSFO + 0,1 MT LSMGO, IDLE 2.5MT VLSFO + 0,1 MT LSMGO.”
Bunkers:
BUNKERS ON DELIVERY ABOUT 730-770 MT VLS IFO AND ABT 25-40 MT LS MGO BUNKERS ON REDLY ABT SAME AS ON DELIVERY SAME PRICES AT BOTH ENDS USD 750 MT VLSIFO AND USD 1175 PMT LSMGO ANY MINOR DIFFERENCES BETWEEN DELIVERY/REDELIVERY TO BE SETTLED IN THE FINAL HIRE STATEMENT AT ABOVE PRICES OWISE AS PER BASE CP CLAUSE.”
Weather Routing Clause
Clause 67 Weather Routing – The Charterers may supply an independent weather bureau advice to the Master, during voyages specified by the Charterers and the Master shall comply with the reporting procedure of the weather bureau. However, the Master remains responsible for the safe navigation and choice of route. Alternatively, the Charterers have the option to instruct the Master to report daily to a weather bureau during the execution of sea voyages. The weather bureau may subsequently produce a performance analysis report.”
Evidence of weather conditions shall be taken from Vessel’s logs. Consideration of minimum 24hr continuous good weather periods from noon to noon. No hire deductions for alleged underperformance claims. Vessel to be monitored by Charterers appointed weather routing company strictly in accordance with the performance warranty. The independent weather reporting bureau appointed by Charterers will be for their account. This does not preclude Owners from appointing their own independent weather reporting bureau for their account which evidence along with vessel’s evidence shall be taken into consideration by all parties …”
Voyage Details
Upon delivery, the master reported the remaining bunkers as 812.70 mt VLSFO and 26.31 mt LSMGO. The voyage instructions included loading in Venezuela and discharging in Italy. A Weather Routing Company (WRC) was contracted, and the master was instructed to adhere to charterparty speed unless directed to proceed at eco-speed.
The vessel’s journey included loading delays, bunker stops, and final discharge, totaling 48 days. Upon redelivery, the master reported remaining bunkers as 718.90 mt VLSFO and 20.67 mt LSMGO.
Claims and Counterclaims
Owners’ final invoice claimed a balance of US$77,288, accounting for the value of bunkers and an exchange rate difference of US$1,815.27. Charterers countered, accusing owners of misrepresentation and demanding:
– US$62,025 for misrepresented fuel consumption and/or reported to be on board upon delivery
– US$23,985 for an alleged 250-mile unreported sailing
– US$14,130 for underperformance during good weather
Disclosure Failures
Charterers requested documents on fuel consumption and vessel records, leading to an arbitrator’s mandatory order. Dissatisfaction arose due to incomplete and illegible logbooks that failed to meet SOLAS Chapter V Regulation 28 and IMO standards. The master’s reports were accepted as contemporaneous evidence.
Charterers challenged the logbooks’ authenticity and relied on their marine expert’s report, which the arbitrator later scrutinized. WRC reports were not provided until the arbitrator requested. Since the owners had no opportunity to comment on them, the arbitrator did not use any controversial data from these reports.
Performance and Fuel Anomalies
The arbitrator expressed skepticism regarding the WRC’s findings, questioning the vessel’s alleged underperformance despite favorable weather. The charterers’ expert’s data, derived mainly from WRC reports, failed to align with other evidence, including vessel logs and independent calculations.
Fuel quantity anomalies were suspected due to possible misinformation between brokers and potential adjustments by the chief engineer. The oil record book, expected to contain relevant data, was not provided, complicating the verification of fuel discrepancies.
Alleged Unreported Sailing
Charterers alleged an additional 250 nm of unreported sailing, supported by AIS data analyzed by their expert. However, the arbitrator noted inconsistencies in the data and found no corroborating evidence for the alleged movements.
Underperformance
The charterers’ expert calculated the vessel’s good weather speed at 11.22 knots, while the WRC reported 11.58 knots. The arbitrator concluded that the vessel maintained the warranted speed and fuel consumption despite a high slip, suggesting marine fouling on the hull. The vessel’s performance met the charterparty’s requirements.
Award
The charterers failed to substantiate their allegations of misrepresentation or any breach of the performance warranty. The arbitrator upheld the owners’ claim for US$77,288 and US$1,815.27, dismissed the charterers’ counterclaim, and awarded the owners 7.5% interest on these sums, along with recovering costs associated with the arbitration of £11,350.