2024 Maritime Digest of Arbitration Awards and Court Rulings
TIME CHARTER - VESSEL FAILED SPEED WARRANTY DUE TO FOULING, ITSELF RESULTING FROM A PROLONGED WAIT IN TROPICAL WATERS - WHETHER FAILURE TO MAINTAIN SPEED THE RESULT OF COMPLIANCE WITH CHARTERER'S ORDERS
Due to an underperformance caused by fouling on the Vessel, itself caused by extended stay in tropical waters as ordered by charterer, charterer claimed off hire. Owner countered stating the underperformance resulted from compliance with the charterer’s orders.
TIME CHARTER – PIRACY CLAUSE – OWNER TAKES SHORTEST ROUTE THROUGH DANGEROUS WATERS - ADDED SECURITY AND INSURANCE OBTAINED – CHARTERER CLAIMS THEIR PROVIDED ROUTE WAS SAFE – OWNER REQUESTS REIMBURSEMENT FOR COSTS
A vessel was chartered to conduct a voyage from New Orleans to India. The Owner of the vessel traveled the shortest route possible, through a high piracy risk area, ignoring the Charterer’s order to proceed via a safer route. The Owner supported their decision by saying that it saved on steaming and bunker costs, and claimed reimbursement for insurance and the extra security obtained.
NORGRAIN 89 – HOLDS REJECTED – NOR RE-TENDERED AFTER LAYCAN – LAYCAN EXTENSION AGREED TO SUBJECT TO OWNER ACCEPTING CARRYING CHARGES – OWNER DID NOT RESPOND TO CHARTERER’S EXTENSION REQUIREMENT - OWNER CLAIMED DEMURRAGE – CHARTERER CLAIMED FOR CARRYING CHARGES
With a prior NOR being deemed invalid due to holds being rejected, the vessel tendering NOR after the laycan but within a laycan extension. The Charterer stated the laycan extension was amenable subject to carrying charges being for owner’s account. Owner was silent when confronted with this requirement. Upon completion of the voyage, the owner claimed demurrage. The charterer rejected this claim, and counterclaimed for carrying charges.
NYPE TIME CHARTER - UNDERPERFORMANCE - SHORT LOAD - BALANCE OF ACCOUNT - LMAA SMALL CLAIMS PROCEDURE - WHETHER CHARTERER OR OWNER RESPONSIBLE FOR COST OF SURVEYOR AND CRANE HIRE - SUEZ CANAL NRT - WITHOUT PREJUDICE AGREEMENT LATER REVOKED
The redelivery of a vessel from an 18 month time charter resulted in charterer withholding hire due to vessel short loading, claiming underperformance in regards to speed, and claiming damages related to a misrepresented Suez Canal NRT. Owner countered all of these and likewise claimed for the cost of surveyors present whilst de-bunkering and the cost of a shore crane.
TIME CHARTERS NOVATED UPON NEW VESSEL OWNERSHIP - WHETHER NEW TIME CHARTERS ARE TO UPHOLD THE SAME SPEED AND PERFORMANCE WARRANTIES AS ORIGINAL CHARTERS - TRUE CONSTRUCTION OF CHARTERPARTIES
Time charters contained speed and consumption warranties. Upon new ownership these charters included a phrase which owner contended replaced the original warranties with a warranty that the vessels would perform as they were the minute the new charters were concluded. Charterer disagreed and the panel was tasked to determine which warranties were contained in the new charters.
TIME CHARTER/ SUB-CHARTER – CARGO SHORTAGE AND CARGO DAMAGE – CLAIM SETTLED BETWEEN REGISTERED OWNER AND RECEIVER – DISPONENT OWNER DISPUTES COST ALLOCATION – WHETHER COSTS TO BE APPORTIONED WITH CHARTERER
A vessel was time chartered by a registered owner to a disponent owner, and then subsequently spot chartered to a sub-charterer to transport sugar. After the voyage, it was discovered that there was a cargo shortage and damaged and lost cargo. After the registered owner concluded a settlement with the receivers for damages, the registered owner attempted to collect the same amount from the disponent owner with an apportionment of the costs subsequently coming into question.
TIME CHARTER - DEFINITION OF REDELIVERY - WHETHER REDELIVERY MUST STRICTLY ADHERE TO CHARTERPARTY TERMS - WHETHER VESSEL IN FACT REDELIVERED TO OWNER
Under a time-charter, Charterer and Owner disputed the redelivery of a vessel. An arbitration panel determined the legal test in respect of redelivery and applied the facts surrounding the case. Albeit not redelivered as stipulated within the charter, the panel majority concluded the ship had been properly redelivered but Owner applied for permission to appeal the ruling to the High Court.
A golden rule when assessing a contract is to read the contract as a whole and give meaning to all clauses in conjunction with each other. A recent NY Arbitration, SMA 4272, combined with an older award, SMA 2477, shows how simple phrasing, reinforced via a lack of options and market constraints, can overwhelm other charter terms and convert a port charter to a berth charter.
COMMENCEMENT OF LAYTIME - WHETHER SHINC TERM TRUMPS OFFICE HOURS - DESPATCH
After NOR was tendered and loading commenced on a Sunday, the Owner and Charterer disputed when laytime commenced. Owner noted the laytime allowance referenced “shinc” allowing for laytime to commence on Sunday whereas charterer noted NOR was only to be tendered Monday through Friday.
EXTENSIVE DELAY PURSUING CLAIM IN ARBITRATION – WHETHER DELAY INORDINATE AND INEXCUSABLE – WHETHER SETTLEMENT NEGOTIATIONS ONGOING DURING DELAY - WHETHER NEGOTIATIONS CONSTITUTED A STAY OF PROCEEDINGS
Respondent requested an arbitration claim be withdrawn citing an inordinate and inexcusable delay in moving forward with proceedings. The claimant countered that the delay was due to both parties agreeing to stay proceedings whilst working towards a settlement.
