2024 Maritime Digest of Arbitration Awards and Court Rulings
ASBATANKVOY -- UNSEAWORTHINESS -- FREIGHT DIFFERENTIAL -- MITIGATION COSTS -- EXTRA INSPECTION COSTS -- Charterer Award
An extension of SMA 4016, the central issue to be decided is whether the cargo was adequately described in the charter and whether Charterer is obliged to notify Owner as to the cargo's sensitivity to iron thereby requiring tank coatings to be intact. This Award affirms that the Q88 should reference the Vessel’s current condition as opposed to the "as built" condition and that there is a breach of the Charter Party should the Vessel’s tanks not conform with the Q88.
NYPE -- TIME CHARTER -- RISK OF PIRACY -- DEVIATION AND SECURITY GUARD EXPENSE -- Owner Award
Due to the prevalence of piracy, Vessel deviated to take on security experts. The Panel deemed the deviation to be a reasonable act, consistent with due diligence and good seamanship. Furthermore, the Panel considered the deviation to be in the interest of both parties and as such, the Vessel was on-hire throughout the deviation with the cost of the security personnel shared equally by Owner and Charterer.
ASBATANKVOY -- SHORTAGE AND CONTAMINATION -- DAMAGES SET-OFF AGAINST DEMURRAGE -- Partial Final Award
When Vessel suffered a lengthy breakdown at Charterer’s supplier’s berth, Charterer withheld demurrage payment whilst claiming damages from Owner. Citing an earlier Court decision, the Panel ruled that "Unless there are explicit and clear provisions in the Charter Party permitting deductions from freight, Shipowner is entitled to freight regardless of Charterer’s claim for damage, shortage and contamination."
ASBATANKVOY -- CARGO CONTAMINATION -- COGSA -- DEMURRAGE -- Owner Award
Due to discrepancies in samples taken at the load port and tests done at the discharge port, Charterer was unable to prove that contamination of a cargo of diesel occurred onboard the ship despite a clean Bill of Lading (B/L) having been issued.
TIME CHARTER -- ANTICIPATORY REPUDIATORY BREACH -- EARLY REDELIVERY OF THE VESSEL -- DAMAGES -- Owner Award
Well prior to the contractual end of the Charter Party, Charterer notified Owner of its intention of premature redelivery unless Owner reconsidered the daily hire. Owner took Charterer’s statement to be an anticipatory repudiatory breach and in order to minimize losses Owner looked for alternative employment and took the Vessel back 653 days before earliest redelivery. Owner was subsequently awarded the balance of hire owed and loss of earnings being the difference between the net charter party rate and the net market rate.
CONSECUTIVE VOYAGE CHARTER -- REPUDIATORY BREACH -- DAMAGES -- Owner Award
When Charterer repudiated a Consecutive Voyage Charter (CVC) 4.5 years early, and as there was no comparable market at the time of the repudiation with Vessel subsequently traded on the spot market, the Court ruled that damages paid to Owner were to reflect the difference between what Vessel would have earned under the CVC and what the Vessel earned on the spot market (i.e. the Vessel’s actual losses) less 1.5% to account for the accelerated receipt and less 1.5% to reflect "catastrophic contingencies" such as the possibility that the Vessel would become a total loss prior to when the CVC would have concluded. The emergence of a comparable market after the repudiation was deemed moot in regards to the calculation of damages as it needed to exist at the time of repudiation to be taken into consideration.
SALES CONTRACT -- FOB SALE -- CONTAMINATED CARGO -- DAMAGES -- HEDGING LOSSES FLOW NATURALLY FROM BREACH -- SALE OF GOODS ACT 1979 -- Buyer Award
Given that the quality of naphtha originating from the Port Harcourt Refining Company (PHRC) in Nigeria was variable, the naphtha was sold "as is" and “PHRC naphtha quality”. Thus, the Court ruled that when the naphtha was found to be contaminated with MTBE, Buyer was not obliged to accept the cargo given that it contained a contaminate not normally present in naphtha produced by PHRC.
BPVOY 4 -- SAME BERTH CALLED TWICE -- CARGO NOT READY WITHIN LAYDAYS -- WAITING TIME AND BUNKER COSTS -- DETENTION OR DEMURRAGE -- SUPPORTING DOCUMENTS -- TIME-BAR -- Charterer Award
The Vessel was required by Charterer to attend to the same load berth twice with Owner subsequently claiming for the time and bunkers consumed. At the disport, Owner invoiced for excess time used as demurrage. Charterer agreed to and paid a "final agreed demurrage invoice" which covered demurrage and then claimed that the load port expenses should have been submitted as demurrage. Owner subsequently altered the load port claim such that it was for demurrage with Charterer subsequently denying it twofold; first, demurrage had already been settled in full and secondly, the claim for demurrage at the load port was now time-barred.
SYNACOMEX 2000 -- CONSECUTIVE VOYAGE CHARTER -- UNPAID DEMURRAGE -- COMMENCEMENT OF TIME-BAR -- Owner Award
Chartered for three consecutive voyages, a dispute arose over the time bar provision which required arbitration to be commenced "within 12 months of final discharge or termination of this Charter Party".
It is important to understand that the chartering terms, "Laycan" and "Expected Ready", relate to the same general subject but are separate and distinct obligations. Laycan stands for laydays commencement and cancelling; it specifies the earliest date on which laytime can commence and the latest date, after which the charterer can opt to cancel the charter party. It is Owner’s obligation to present the vessel ready to load within this window (and, likewise, the charterer is obligated to provide cargo). Conversely, the Expected Ready term narrows the vessel’s anticipated load readiness to a specific date within the Laycan. It is a good faith representation by the owner to the charterer in which charterer relies for scheduling purposes and sales contract obligations. As such, the Expected Ready term adds value.
