London Arbitration 32/22 

The subject vessel was chartered on an amended NYPE  to transport steel from Brazil to Baltimore.  After the voyage, the owners claimed a balance of hire which the charterers subsequently denied. Under dispute were speed and consumption, vessel weather reporting, and the report from the weather routing company.

 The charterers claimed data from the weather reporting company indicated good weather existed from April 8 at 18:00 through April 10 at 15:00, during which time the vessel traveled 505 miles at an average speed of 10.52 knots, well below the 15 knots specified in the charterparty.  This resulted in an overconsumption of fuel.  

The owners denied the breach and claimed the WRC report should not be used because 1) the vessel experienced adverse currents, 2) the vessel weather reports contradicted the WRC data, 3) sea swells were not taken into account, and 4) the recap stated good weather “days” which indicated if bad weather occurred at any time, the day no longer qualified as good weather.  

The recap defined good weather days as “Beaufort Force 4 and/or Douglas Sea State 3 (with max combined significant wave height 1.25 m) with no adverse current or swell”.  The charterers asserted the key word in the clause was “or” and required the WRC to use one of the two criteria to determine the weather.

The owners countered that the clause must be read in conjunction with the word “and” cited multiple London Arbitrations supporting their position. (See London Arbitration 15/07, London Arbitration 21/18, London Arbitration 22/18, and London Arbitration 26/19).  Furthermore, the recap discounted favorable currents from being considered.

In addition, the owners claimed the use by charterers of Polaris Shipping Co Ltd v Sinoriches Enterprises Co Ltd (The Ocean Virgo) [2018] Lloyd’s Rep Plus 101 was not applicable for the charterparty did not specify that good weather days were to be measured in 24-hour increments, noon to noon.  Thus, if bad weather occurred at any time during a day, it could no longer be considered a good weather day.

Relevant charterparty clauses included:

“… – SPD/CONS: AVERAGE UNDER GOOD WEATHER AND SMOOTH SEA CONDITIONS ABT 15 KN B / ABT 14 KN L ON ABT 33 MTS IFO 380 CST PLUS ABT 0.15 MT LSMGO … – AN UNDERPERFORMANCE CLAIM CAN ONLY BE SUBMITTED IN RESPECT OF DAYS ON WHICH THE VESSEL ENCOUNTERED WIND UPTO BEAUFORT 4 AND/OR DOUGLAS SEA STATE 3 (WITH MAX COMBINED SIGNIFICANT WAVE HEIGHT 1.25M) WITH NO ADVERSE CURRENT OR SWELL. SPEED IS NOT TO BE DEBITED DUE TO FAVOURABLE CURRENTS.

– ALT SPEED/CONS: ABT 13 KN B / 12 KN L ON ABT 23 MTS IFO 380 CST PLUS ABT 0.15 MT LSMGO O/WISE AS ABV …”

The Rider Clauses provided:

“Clause 46. Speed and Consumption:  Speed/consumption average under good weather and smooth sea conditions ABT 15 KN B/ABT 14 KN L ON ABT 33 MTS IFO 380 CST PLUS ABT 0.15 MT LSMGO … Any performance disputes to be decided as final by the weather routing organisation as selected by Charterers (usually Weather Routing Company) but always in accordance with Charter Party and Owners to be given copies Weather Routing Company reports …

Clause 57 … – DELETE ANY REFERENCE TO ‘WOG’ IN THE DESCRIPTION. ECO SPEEDS TO BE GUARANTEED.

Clause 89. Weather Routing

Charterers’ option to appoint [WRC]/other ocean routes. Being independent routing company to advise the master during the voyage specified by the charterers. The master is to comply with the reporting procedure of this weather service except for reasons of safety, in which case this is to be clearly and promptly communicated both to charterers and the WRC.

… Owners warrant that at the date of delivery, the Vessel shall be of the description set out in the main terms recap and c/p. Owners and charterers agree that evidence of the weather, sea state and other factors affecting the vessel’s performance shall be taken from both the Vessel’s log book and final report of an independent weather routing service. An underperformance claim can only be submitted in respect of good weather days on which the vessel encountered wind up to beaufort 4 and/or Douglas sea state 3 (with max combined significant wave height 1.25 mtrs) with no adverse current or swell. Speed is not to be debited due to favourable currents. In the event of a dispute over the vessel’s performance in this c/p and unless a commercial solution is found, the matter shall be referred to London arbitration small claims procedure to apply.”

Speed and Consumption Warranty

The arbitrators held that the recap and clause 46  set the benchmark conditions for underperformance to be (a) in wind strengths not exceeding Beaufort Force 4, provided no adverse current or adverse swell was experienced; or alternatively (b) in sea conditions where the combined significant wave height of sea and swell did not exceed 1.25 m, provided no adverse current or adverse swell was experienced.

If adverse currents were present, these periods were to be excluded from the performance measures, however, favorable currents were to be included without adjustment since they were to the owners’ advantage. 

The warranty further required disputes to be resolved using the charterparty and clause 89 indicated data would be taken from both the vessel’s logs and the WRC report.

Adverse Currents

Per vessel logbooks, adverse currents coexisted with good weather periods.  The WRC reflected these currents three times: at 18.00 on 8 April, at 00.00 and 06.00 on 10 April.  The six-hour intervals were judged to represent 18 hours of adverse currents in a 48-hour period, and this time was, therefore, to be excluded from benchmark conditions.

Swell

Vessel logs reported a swell of over 2m in some good weather periods, while the WRC report stated “Wind force Beaufort Force 4, Significant wave height 1.25 m (Douglas Sea State 3, no adverse current.”  The tribunal found the WRC report did not make specific reference to swell, and instead combined the wave height of sea and swell into one data point which made it impossible to determine if swell conditions were adverse, favorable, or neutral.   

Evidence of weather conditions

Per charterparty clause 89, data for determining weather, sea state, and performance factors were to be gleaned from both the vessel log and the WRC report.  A correlation was sought between these two data sources, and when significant differences were discovered between the vessel logbooks and the WRC reports, the tribunal concluded the vessel reports of sea and swell were repeatedly inflated.

However, the WRC report was not completed based on charterparty terms and was therefore in violation of the contract and unenforceable.  Hence, it could not be used for an underperformance claim, and so the deductions were unlawful.

The owners’ claim succeeded in full, and charterers were ordered to pay US$40,873.08 plus interest.