Arbitration- Time loss due to grounding failed under clause 15

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator

This arbitration was brought under the LMAA Small Claims Procedure. The dispute arose after the vessel, trading under an amended NYPE time charter, arrived at disport and had to proceed in the river port to discharge her cargo. She reached the pilot station just after high tide and while slowing down to take on a pilot, she grounded outside the buoyed channel. Charterers argued that she was off-hire until tugs used to re-float her and proceed to the berth on the next day with high tide.

The owners’ position was that the grounding caused no loss of time because, even if the vessel had not grounded, she would not have been able to berth on the morning tide and would in any case have had to wait until the next high tide. Much of the later argument revolved around this “tidal window” point, although the owners were criticized by the arbitrator for submitting relevant documents late, contrary to the rules of the Small Claims Procedure.

On the substantive issues, the arbitrator held that the burden of proof in an off-hire claim lies with the charterers, and in this case, they had not shown that the vessel could have berthed that morning but for the grounding. While he did not make a positive finding that the ship would definitely had to wait for the next tide, he found that the charterers had not proved their case on the balance of probabilities. As a result, the off-hire deduction was not justified.

Editors’ note: Tidal ports are inherently subject to fluctuations in water depth, which may give rise to incidents of grounding and consequent disputes over off-hire and liability for tug assistance. In the present case, the charterers did not discharge the burden of demonstrating that the vessel’s effective service was interrupted, i.e., that she was prevented from performing the next operation required under the charter. A vessel is not rendered off-hire merely by reason of encountering a navigational impediment such as insufficient depth of water. The charterers were further required to establish a net loss of time, in the sense of a delay or interruption in the immediate service required of the vessel. On the facts, that immediate service was to await the next tide. Accordingly, no net loss of time was shown. No other information can be provided for this award.