Arbitration- Performance Claim rejected for want of proof

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator

The disputes arose from a Baltime form Charter Party.

Clause 56 stated inter alia that "During the currency of this Charter Party if speed of the vessel be reduced and/or fuel/diesel oil consumption be increased the time lost and/or cost for extra fuel/diesel oil consumed to be deducted from the hire".

The Panel, after reading the transcript and Owners ' Post-Hearing Brief and examining the Exhibits presented in support of the Owner and Charterer's claim, unanimously found that the Owners were entitled to recover from the Charterer the deducted amount due to an alleged speed and fuel consumption claim.

The Panel held that Charterer had failed to sustain its burden of proof that the vessel did not meet its speed and fuel consumption warranty as per Charter Party terms.

Owners rejected the Charterer's speed and overconsumption claim for the following reasons: (aa) Charterer has failed to meet its burden of proving any speed deficiency or overconsumption by the vessel. (bb) Charterers claim was defective because: (i) the distance used is that reported by Oceanroutes, Ltd. rather than that in the vessel's log; (ii) it is based on “all weather” rather than the good weather and smooth water standard of the Charter Party; (iii) it is based on 13 knots rather than 12.5 knots to give credit for the word “about” in the speed description; (iv) it includes fuel amounts consumed in Port; (v) it is based on an Oceanroutes Ltd.'s weather service report from Kent, England rather than on the weather data from the vessel's log.

SMA 2003

Editors' comment: In matters concerning breaches of Clause 15 or Clause 8 of the NYPE Charterparty, Charterers have contended that the “about” margin is inapplicable, on the basis that such claims pertain to categories other than underperformance. A close examination of the loss calculations in The Divinegate indicates that both experts applied the “about” margin in determining the loss of time. Similarly, in London Arbitration 15/23, which concerned hull fouling, the arbitrator also adopted the “about” allowance. Conversely, certain entities conducting twin-model performance analyses did not incorporate the “about” allowance in some recent cases under negotiation. The question, therefore, arises as to whether this approach accords with English law and prevailing arbitration practice. I refrain from expressing any opinion and leave the matter to the reader’s judgment.