2025 Maritime Digest of Arbitration Awards and Court Rulings
SALES CONTRACT -- FORCE MAJEURE -- EXPLOSION -- CUSTODY TRANSFER -- DEMURRAGE -- Partial Final Seller Award
During discharge, an apparent shoretank leak at Buyer's facility caused an explosion which destroyed storage tanks inclusive of cargo being discharged and cargo discharged during previous deliveries not yet paid for by Buyer. The Buyer declared force majeure and contends that it is excused from paying for all cargo destroyed in the shoretanks, cargo remaining onboard the Cape Bruny yet to be discharged and the resultant demurrage.
ASBATANKVOY -- CARGO CONTAMINATION -- BURDEN OF PROOF -- DEMURRAGE CLAIM WITH RESPECT TO DELAYS -- Owner Award
The first, second, and third foot samples of ULSD cargo were off-spec with respect to flashpoint (a key commercial criterion for this cargo) resulting in offloading and further Vessel cleaning. Although there was a dedicated line from the shore tank to the terminal manifold, an additive was injected at the terminal manifold (from bulk containers and drums) which could have affected the ULSD flashpoint. Thus, Charterer failed in proving by a preponderance of credible evidence that the Vessel’s tanks were the cause of the cargo damage. Furthermore, the burden is on the Charterer to prove that the Vessel did not exercise due diligence in tank preparation which he failed to do.
Oftentimes, demurrage claims issued by commercial trading partners under contracts of sale are disputed and a copy of the ship owner’s demurrage claim is requested, allegedly to support the merit of the claimant’s invoice. However, unless the stipulation to provide the Owner’s claim is expressly required within the contract terms, it is unnecessary to be disclosed as demurrage is not considered an indemnity (compensation for a loss suffered). Contrary to popular belief that a party cannot benefit by demurrage, English law holds that there is an absolute obligation to pay demurrage incurred under the terms of a sales contract. There is nothing to prevent a profit from being made on a legitimate demurrage claim [Houlder Brothers Co. Ltd. V. Commissioner of Public Works [1908] AC 276].
BREACH OF SAFE PORT WARRANTY -- BEYOND CHARTERER'S CONTROL -- WHETHER DELAY COUNTED AS LAYTIME -- DEMURRAGE -- Owner Award
After nominating the loadberth an accident occurred forcing its closure for repairs. Owner claimed demurrage for the time spent by the Vessel awaiting the repair of the berth, but Charterer refuted the claim basis the notion that the accident was beyond Charterer’s control. In addition, the Court was asked to determine whether the berth was safe at the time it was nominated due to the complex mooring maneuvers required in order for vessels to safely berth.
NYPE -- PIRACY -- CHARTERPARTY LANGUAGE -- WHETHER VESSEL CAN BE CONSIDERED OFF-HIRE -- Owner Award
Charterer appealed to have all time that the Vessel was held by pirates count as off-hire. The High Court examined whether the Vessel was prevented from working due to any of the three causes listed in the charter party: a) detention by average accidents to ship or cargo; b) default and/or deficiency of men; c) any other cause.
NYPE -- CLEANLINESS OF HOLDS -- VESSEL FIT FOR SERVICE -- OFF-HIRE -- Owner Award
The Vessel was approved for the first voyage under a time charter and carried out the first voyage without incident. Prior to the second voyage, the holds were rejected due to stains from a cargo carried just prior to the commencement of the time charter. After five days of cleaning, the holds were approved. In dispute is Charterer's claim for off-hire and expenses during the cleaning.
NYPE -- OFF-HIRE -- SEAWORTHINESS -- WAITING TIME -- Owner Award
After waiting eight days at the loadport to berth, cracks were found in the Vessel's hull necessitating repairs. Charterer argues that the deficiency invalidates the waiting time and that the Vessel was off-hire or, alternatively, presents a claim for damages due to demurrage lost under a sub-charter.
ASBATANKVOY -- NOTICE OF READINESS PRIOR COMMENCEMENT OF LAYDAYS -- USCG COC INSPECTION -- CONTRACT CONSTRUCTION -- Owner Award
The Vessel arrived and tendered Notice of Readiness (NOR) just prior to the commencement of laydays, but waited several days because the port was closed due to a hurricane. On berthing, the Vessel had to obtain a Certificate of Compliance (COC) before any loading operations could begin. Charterer refuted Owner's demurrage claim, declaring that the Notice of Readiness (NOR) was invalid as the NOR was tendered prematurely (prior to the laydays) and Vessel was not legally ready to load without the COC. The arbitrator reviews the charter terms and facts to determine the validity of NOR and the commencement of laytime.
EXXONMOBILVOY 2000 -- DRAFT RESTRICTIONS -- LIGHTERAGE EXPENSES -- PROMISE TO PAY -- SAFE BERTH -- TIME BAR -- Charterer Award
The Master was instructed to load the Vessel to meet a brackish water draft to safely transit the channel in the discharge port, but used an incorrect factor to make his calculations. On arrival, the Vessel's draft was too deep and she had to be lightered in order to proceed to the discharge berth. The Panel was asked to determine whether the discharge berth was a "safe berth" and decide which party was responsible for lighterage delays and costs. This dispute also addressed whether a late-presented claim could be time-barred considering the respondent had initially promised to pay.
GENCON -- RIGHT TO CANCEL -- VALID NOTICE OF READINESS -- ARRIVED SHIP -- WHETHER AGENT WAS SERVANT OF CHARTERER OR OWNER -- CALCULATION OF DAMAGES -- Charterer Award
Due to miscommunications with the Agent, the Vessel did not file a timely 96-hour Notice of Arrival to the loadport and was precluded from berthing when ordered to do so. As the Vessel did not gain clearance until after the cancelling date, Charterer cancelled the fixture. In its ruling, the Panel had to consider which party bore responsibility for the Agent's actions, whether the Vessel's NOR was valid, and if the Vessel was "in all respects" ready to load.
