London Arbitration 23/21

On February 5, a single-deck geared bulk carrier loaded 24,200 tons of SBM in Argentina.  The voyage was estimated to be for 55-days. She arrived on February 27 at the first discharge port in Cuba. On March 5, an underwater survey found fouling of the vessel’s hull. March 13, the ship sailed to the second discharge port, arriving on March 16. The vessel berthed on March 21, unloaded the cargo and was released to the owner.

The charterer employed a weather routing company (WRC) to monitor the vessel for the contract period, instructing them to utilize clauses 74 and 67 of the charter party as standards. On March 18, the WRC analyzed the voyage and determined the ship’s movements achieved a good weather performance speed of 10.63 knots, falling short of the 12.5 knots warranted in the charter. Further, the data indicated an excess sailing time of 87.78 hours between the first and second discharge ports, causing overconsumption of bunkers.

Based on the WRC data, a performance dispute arose with the charterer claiming off-hire and excessive bunker consumption. The owner asserted the WRC data was not collected nor calculated per charter party provisions. The parties were both adamant their weather reporting was valid. The charterer alleged the ship’s log was falsified, and the owner asserted the WRC’s interpretation of “good weather” was inaccurate.  

The parties sought arbitration. Sent initially to Small Claims Procedure, the arbitration shifted to be under the LMAA Term 2017, with the sole arbitrator capping the recoverable costs of the proceedings.  

Relevant charter party provisions included:

Clause 74 

“VSLS TC DESCRIPTION FOR CP PURPOSES

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)… 

ABT 13 KNOTS ON ABT 20 TONS VLSIFO + 0,1 MT LSMGO ECO SP/CONS:

ABT 12 KNOTS ON ABT 18 TONS VLSFO + 0,1 MT LSMGO…” 

Clause 67 of the Additional Clauses provided 

“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… Alternatively Charterers have the option to instruct the Master to report daily to a weather bureau during the execution of sea voyages. The weather bureau will subsequently produce a performance analysis report.

Evidence of weather conditions shall be taken from Vessel’s logs. Consideration of minimum 24 hours 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…”

Arbitration

After careful examination, the sole arbitrator found that the WRC report, although detailed and thorough, did not use the “good weather” parameters detailed in clause 67 and provided by the charterer. While the WRC data may have represented the vessel’s actual performance, it did not evaluate it per the terms of the charter party.   

The arbitrator did acknowledge, however, that the hindcast data detailing the weather conditions of the voyage were valid and, as such, could be used in rendering a decision. To fairly compare the evidence in the WRC report and the master’s noon reports, the arbitrator gathered data as follows:

1. Winds were assessed using data from the US National Centers for Environmental Prediction GFS global analysis.
2. Wave data came from NOAA Wave Watch III third-generation wave model and was simulated using wind data from the global analysis above.
3. Current data was gathered from the HYbrid Coordinate Ocean Model (HYCOM) of the National Oceanographic Partnership Program (NOPP) as part of the US Global Ocean Data Assimilation Experiment (GODAE) for the US Navy and NOAA.
4. Finally, current set and drift values were measured at each dead reckoned interval throughout the voyage, with the current factors only displayed for good weather periods.

On the first leg of the trip, the ship averaged an all-weather speed of 10.6 knots. The WRC data of the sea wave heights correlated to the anticipated wave heights of the Beaufort Wind Scale. The arbitrator was confident that the WRC wind strength data and corresponding sea wave height were accurate and consistent.

The vessel data was more difficult to substantiate since it was gleaned from subjective observations from the crew members and represented the weather at noon, the ship’s time, not the day’s average. The observations were conducted without any instrumentation and varied from observer to observer. The arbitrator considered these measurements to be crude estimates at best; however, the ship’s data for the first leg of the trip was consistent with the WRC report.  

The second part of the voyage presented a challenge, for the ship recorded wind strengths from one to two BF codes above the WRC data. After careful consideration, the arbitrator concluded that the ship’s records exaggerated both wind and sea state from February 9-15; therefore, the WRC data was the more reliable record of voyage weather conditions. 

The arbitrator then examined ships similar in size and type to the vessel. The design speed for these ships was about 14.5 knots, working at 100 percent hull and propeller efficiency, with zero slip in ideal weather conditions. After ten years in service, this rate would decrease to an average of 12.5 knots due to reduced propellor efficiency and increased skin friction. Slip figures were expected to increase to 5-15 percent, based on time to last dry dock and maintenance.

The March 5 underwater survey showed the propellor to be in good order, but the hull had evidence of fouling, causing the vessel to underperform in speed. This underperformance constituted a breach of the charter party by the owners, for the vessel was not “in every way fit for the service to be undertaken.” The resulting loss of time put the ship on off-hire under clause 15. The speed deficiency was determined to be over 1.5 knots, with the vessel unable to maintain a speed over 11 knots even with clause 74 “good weather” conditions. Fuel consumption was calculated at 20.1 tons daily.

The arbitrator ruled the charterer was due compensation for the time lost on the voyage, which was extended 67.65 hours, or 2.819 days, and attributed to the fouled hull.  

The charterer was awarded $53,211.55, plus interest from April 21 to the payment date. The off-hire period was $16,940.40, with $36,271.15 allocated for the extra fuel consumed. The arbitration costs were divided at £10,000 for the charterer and £4,000 for the owner.