2025 Maritime Digest of Arbitration Awards and Court Rulings
TIME CHARTER -- EARLY REDELIVERY -- MEASURE OF DAMAGES -- Owner Award
The Court reaffirmed the tribunal’s decision that when assessing damages for early redelivery under a time charter the difference between the contract rate and the market rate is awarded. The tribunal assessed the "market rate" utilizing the Vessel’s actual fixtures as its basis and awarded damages for the remainder of the minimum charter period (despite the fact that the Disponent Owner redelivered the Vessel 22 days prior to the contractual expiry to the Head Owner). The Court ruled that early redelivery by the Disponent Owner is irrelevant when assessing damages unless the early redelivery resulted from Sub-Charterer’s breach.
FOSFO -- HAZARDOUS CARGO -- REPUDIATION OF CHARTER PARTY -- DEADFREIGHT -- DETENTION -- Owner Award
Vessel’s inoperable smoke detection system caused Charterer to refuse to load cargo of bulk sulphur citing OSHA’s claiming the cargo to be hazardous (subsequently requiring a smoke detector system) despite IMO, SOLAS, USCG, Charterer’s supplier and LLOYD’s deeming the cargo to not be hazardous nor requiring the Vessel to have smoke detectors. Owner repudiated the charter and was awarded deadfreight (less savings from not performing the voyage). Owner was not awarded detention basis an express term stipulating damages for non-performance will be "proven damages not exceeding the estimated amount of freight." Panel had already awarded the value of the freight.
Contracts are negotiated by parties to suit their individual commercial purposes and should be written with a keen eye to avoid ambiguity that could give rise to disputes down the road. Not only must each clause be clearly drafted but all the terms of the contract must be considered in their entirety and be capable of working harmoniously together in order to give meaning and effect to all the terms. Despite this being widely recognized, it is not always accomplished. And, inadvertently, contracts can be silent on some points subsequently triggering disputes.
SHELLTIME 3 -- TIME CHARTER -- UNPAID HIRE -- WITHDRAWAL OF VESSEL FOR UNPAID HIRE -- DETENTION OF VESSEL -- CONSUMPTION OF BUNKERS -- SECURITY -- Partial Charterer Award
Partially overturning the High Court’s ruling, the Court of Appeal held that absent an express or implied agreement, Owner is not due remuneration during the period that the Vessel was withdrawn from Charterer’s service for failure to pay hire. Then, having been directed by Charterer to discharge the cargo, Owner was reimbursed for cost of bunkers used for the cargo operations as that fell within the scope of care of the cargo; however, bunkers consumed during the Vessel’s withdrawal period were not recoverable. The Court of Appeal agreed with the judge that the Owner was entitled to costs for the security guarantee.
SHELLVOY 5 -- NOTICE OF READINESS -- FAILURE TO OBTAIN FREE PRATIQUE WITHIN 6 HOURS -- TIME-BAR -- Charterer Award
In overturning the High Court judgment, the Court of Appeal ruled that the Vessel’s original NOR was invalid since free pratique was not granted within 6 hours as stipulated in the amended Shellvoy 5. The Vessel’s subsequent NOR tendered via email (after receipt of free pratique) was deemed valid, however, Owner’s alternative demurrage was barred since the valid NOR document, considered "an essential document of every demurrage claim", was not submitted timely with the claim.
NYPE -- TIME CHARTER -- HOLDS REJECTED UPON DELIVERY -- COST OF CLEANING -- CAUSATION OF WAITING TIME -- Part Owner Award, Part Charterer Award
Upon delivery the Vessel’s holds were rejected which subsequently took 6 days for cleaning and approval, followed by 4 days spent waiting to berth. The Panel ruled that Charterer was to be reimbursed by Owner for the cost of the cleaning and that only the delay specifically related to the holds failing inspection was to be for Owner’s account. Charterer was responsible for the berth occupancy upon the Vessel’s arrival and the berth occupancy once the Vessel’s holds were approved yet another vessel was brought in.
NYPE 1946 -- VESSEL REJECTED DUE TO LACK OF COFR (CERTIFICATE OF FINANCIAL RESPONSIBILITY) -- CALCULATION OF DAMAGES -- Owner and Disponent Owner Award
When Owner failed to provide the COFR, Sub-Charterer and subsequently Charterer cancelled the Time Charter (hereinafter, "Charter"). Given that the applicable clause in the Charter and Sub-Charter provides a remedy for delay due to not having the COFR and said remedy does not include cancelling the Charter (or Sub-Charter as the case may be), Panel rules in favor of Owner and subsequently Charterer (also referred as “Disponent Owner”) with the party wronged to be put into the position they would have been in had the Charter and Sub-Charter been fulfilled. The damages to be awarded are basis the market rate versus the Charter and Sub-Charter rates, respectively.
TIME CHARTER -- TIME CHARTER PREMATURELY ENDED -- WHETHER TERMINATION JUSTIFIED -- Owner Award
The Panel ruled that Charterer had prematurely ended a time charter when Charterer relied upon a dispute regarding another vessel in the same management.
GENCON -- LAYTIME DURING PERIODS OF HEAVY SWELL -- WEATHER WORKING DAYS -- RESULTING SHIFTING EXPENSES -- SAFE BERTH -- Charterer Award
Basis a charter party stipulating cargo to be discharged at an average rate "per weather working day" the Panel determined laytime was not to count during a period of port closure due to Ressac swells. The Owner was responsible for the cost of unberthing and reberthing during the port closure as Charterer had not breached their safe berth warranty as the port closure was at the direction of the harbormaster and the Vessel was able to unberth and reberth safely.
NYPE -- SAILING ORDERS -- OFF-HIRE -- Owner Award
Charterer's choice of language in giving a Vessel orders to sail must be clear.
