2024 Maritime Digest of Arbitration Awards and Court Rulings
CONTRACT OF AFFREIGHTMENT -- REPUDIATORY BREACH -- CONTRACT CONSTRUCTION -- DAMAGES -- Owner Award
A three-year contract of affreightment (COA) was fixed basis six liftings per year from 2009 to 2011. Charterer failed to declare laycans for the last two shipments of 2009 and for all shipments the following year. At arbitration the Disponent Owner was awarded damages in the form of lost revenues, being the difference between the COA and market rate. Charterer appealed claiming that the Tribunal erred at law and serious irregularity. Namely, that after the sudden collapse of the freight market in 2009 the Owner’s financial position had deteriorated to a point that would have prevented them from being able to provide the required vessels; the tribunal’s belated request for supporting documents from Owner; and, the tribunal’s failure to consider the issue of Owner’s dishonesty raised by Charterer.
LONG-TERM PERIOD TIME CHARTERS -- CHARTER RESTRUCTURING AGREEMENT (CRA) -- SEMI-ANNUAL HIRE ADJUSTMENT -- CONTRACT CONSTRUCTION -- Owner Award
Due to the financial challenges brought on by the market collapse of 2008/9, Owner and Charterer restructured the long-term period time charters for eight VLCCs. Under this new agreement, the hire would be derived on a month-to-month basis relative to the Clarkson Index and adjusted semi-annually. Disagreements arose with respect to the proper construction of the contract and interpretation of the semi-annual adjustment clause.
What is a Public Dock Clause and why has it been getting so much attention lately by oil majors, chemical producers and trading companies?
GENCON -- FAILURE TO PROVIDE CARGO -- BEST EFFORTS -- DAMAGES -- Owner Award
After the Vessel’s arrival at the loadport, the Charterer’s representative notified the Disponent Owner that they were unable to provide a cargo for the Vessel and had to cancel the charter party. The Disponent Owner brought arbitration proceedings against the Charterer to recover costs associated with their breach.
SUGAR CHARTER PARTY 1999 -- FIRE DAMAGE AT TERMINAL -- MECHANICAL BREAKDOWN DEFINED -- OBLIGATION TO NOMINATE ALTERNATE BERTH -- FORCE MAJEURE -- GOVERNMENT INTERFERENCE -- Owner Award
The Vessel was delayed in berthing due to a fire that had destroyed the conveyor belt system at the Charterer’s regularly-scheduled terminal. Charterer submitted their case to the Court of Appeal for consideration that this situation should constitute a mechanical breakdown and likewise exempted from the Owner’s laytime calculation.
GROUNDING -- PERIL OF SEAS OR NEGLIGENCE OF CREW -- MARINE INSURANCE -- MEASURE OF DAMAGES -- Owner Award
The Vessel grounded while she was at anchorage awaiting berth and the insurance underwriters refused to compensate the Owner. The underwriters argued that the Owner had not proven how the grounding occurred. In ruling for the Owner, the Panel held that whether the grounding was due to peril of the seas or negligence of the crew, either was sufficient for insurance compensation.
NYPE -- CHAIN OF TIME CHARTERS -- CONTAMINATED BUNKERS -- WHETHER CHARTERER PREJUDICED BY FAILURE TO PARTICIPATE IN EARLIER CONSOLIDATED DISPUTE -- Owner Award
After bunkering, the Vessel sailed to the next port prior to receiving the bunker test results showing that the bunkers were off-spec (after the bunkers were already partially consumed). At the consolidated proceedings, the Owner was deemed liable for the resultant machinery damage but was awarded costs for debunkering, tank cleaning, rebunkering, and associated costs. At issue in this dispute is whether the last Charterer in the chain, who freely chose not to participate in the consolidated proceedings, is liable to indemnify the Time Chartered Owner.
ASBATANKVOY -- CARGO CONTAMINATION -- CARRIAGE OF GOODS BY SEA ACT (COGSA) -- Owner Award
Charterer alleged that their cargo of Acrylonitrile (ACN) was allegedly contaminated onboard the Vessel resulting in a yellowing to a color rating of APHA 13 (exceeding the maximum resale spec of APHA 10).
SHELLTIME 4 -- TIME CHARTER -- OIL MAJOR APPROVALS -- WRONGFUL EARLY REDELIVERY -- MEASURE OF DAMAGES -- Owner Award
At dispute is whether the Charterer’s clause requiring three Oil Major approvals throughout the duration of the time charter is ambiguous when blanket approvals are no longer given; and, whether Charterer’s early redelivery was wrongful.
TIME CHARTER -- REPUDIATION OF CONTRACT BY CHARTERER -- MEASURE OF DAMAGES WHEN NO SIMILAR MARKET EXISTS -- Owner Award
After non-payment of hire for 10 consecutive months, Owner withdrew the Vessel and sought restitution from the Guarantor of Charterer’s liabilities for the unpaid hire up to the point the time charter contract was deemed repudiated, damages for the unexpired period remaining, and restitution for bunker costs.
