2024 Maritime Digest of Arbitration Awards and Court Rulings
WHETHER REPAIR WORK CARRIED OUT AT ANCHORAGE CONSTITUTES OFF HIRE -- LIGHTERAGE COSTS INCURRED WHEN MASTER FAILED TO COMPLY WITH LOAD DRAFT INSTRUCTIONS -- DELAY INCURRED BY FAILURE TO PAY DISBURSEMENT ACCOUNT -- Owner Award
The Charterer began arbitration proceedings to recover losses from four issues that arose under a time charter contract; three are recapped. At arbitration, the Charterer argues that the repair work undertaken at anchorage constitutes an off-hire, that the lighterage charges resulting from an incorrect sailing draft should be due Owner, and that the detention time at disport was avoidable and faulted by the Owner.
SHELLTIME 3 -- TIME CHARTER -- SPEED WARRANTY -- CONSUMPTION WARRANTY -- PERFORMANCE -- TIME-BAR -- Partial Charterer Award
This arbitration award resolves three separate disputes which center upon the speed and consumption warranties provided within the time-charter contract. Without receiving substantiating performance reviews, the Charterer withheld varying freight amounts from voyages basis estimated values. The Owner, however, argued that they should be reimbursed for disputed claims raised by them before time-bar, for voyage over-performance, and because of unrepresentative assessment of vessel performance during short voyages.
ASBATANKVOY -- CARGO -- COA -- FAIRLY EVENLY SPREAD -- SPOT MARKET RATE -- CARGO NOMINATION REJECTED -- FAIRLY EVENLY SPREAD -- Charterer Award
The Owner refused to nominate a vessel to lift the final COA cargo tonnage on the grounds that a third voyage in one month violated the contracted "fairly evenly spread" nomination requirement. The Charter subsequently had to load the remaining cargo at the substantially higher spot market rate and began arbitration to recover the resulting losses.
ASBATANKVOY -- SHORTLOADING -- WITHHELD FREIGHT -- TWO BOTTOMS -- DAMAGES -- Partial Owner Award
In light of Owner violations to the voyage charter by splitting the cargo onto two vessels,, the Charterer made an unauthorized deduction from Owner’s freight payment to compensate for damages incurred during voyage. At arbitration, the Owner believed that the withheld freight payment and the Charterer’s damages should be treated as separate issues.
ASBATANKVOY -- PUMP WARRANTY -- INTEREST ON UNDISPUTED DEMURRAGE -- ASDEM PUMPING PERFORMANCE EQUATION -- Charterer Award
Because the Vessel did not meet the pump warranty at disport, the Charterer rejected any excess pumping time billed to them by the Owner. The Owner argued that the terminal was incapable of receiving the cargo at the contracted rate and therefore made a reduced claim for pumping time basis the ASDEM Pumping Performance equation.
Demurrage, as a means to compensate the shipowner for delays to his or her Vessel, is clearly defined within the majority of voyage charters. Not so clearly defined is the payment of detention or how long a Charterer is able to leave a Vessel on demurrage prior to incurring detention. In the below, we will examine the payment of detention while reviewing a couple of examples of the historical precedent (there are many) which work to form the industry’s current perception of detention. Finally, we will review contemporary boilerplates, which, in reacting to the historical precedent attempt to protect the Charterer (and hinder the Shipowner) by defining detention in terms of demurrage.
FROZEN BALLAST -- PROOF OF PUBLIC HOLIDAY -- SUBSTANTIVE PROOF -- Charterer Award
Two separate demurrage issues arose over the course of the voyage. At loadport, the Vessel appeared to be fully loaded when, in fact, there was frozen ballast water remaining on board. The Charterers argued that the time spent waiting for the ice to thaw and loading recommencement should not count as used laytime. A second arbitration issue concerned the Charterers’ belief that December 27 was a national holiday (and a laytime exception) at disport.
TIME CHARTER -- WRONGFUL CANCELLATION -- WAR OUTBREAK -- COMPENSATION FOR MARKET LOSS -- Charterer Award
The Owners began arbitration when the Time-Charterers returned the Vessel in 2001, several years before the conclusion of their time charter period without reimbursement for the remainder of the charter. The Owners argued that the Time-Charterers were liable for the outstanding payment and demanded compensation. Conversely, the Time-Charterers cited a wartime exception clause which made them indebted only up to the Second Gulf War in 2003.
GENCON -- IMPORT -- CARGO -- POSSESSORY LIEN -- DETENTION AT DISPORT -- ARBITRATION ACT 1996 -- PROPER CHARTER PARTY CANCELLATION -- Owner Award
Because the Receivers recently had their import license revoked, the Vessel was unable to discharge cargo at the nominated disport. The Owners responded by exercising their possessory lien on the cargo and ordered the Vessel to remain outside of port while concurrently accruing demurrage. The Owners began arbitration with the threat of charter party cancellation if the cargo was not received commercially acceptable time.
FRAME CONTRACT -- VOYAGE -- TIME-BAR --CARGO CONTAMINATION -- LIMITATIONS ACT 1980 -- Seller Award
This arbitration began as a result of two disputed "frame contract" voyages between the same Buyer and Seller. The first dispute centered around a potential time-bar exception under the Limitations Act 1980 to the Buyer’s presented claim. The second dispute concerned contaminated cargo onboard the Vessel, the resulting demurrage at disport and the liability of such contamination and delays.
