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One of the disputes in this arbitration arose from a charter under a Vegoilvoy Form for a voyage from the Mississippi River to Yugoslavia. Tug expenses at the loading berth At the loading berth, two tugs were ordered to hold the vessel in berth against the high water and the prevailing current at the time. Owners submitted that , because the terminal required such tug assistance whenever the water was over 12 feet at the Carrollton gage —which, in fact, it was — Charterers were liable for such expenses because they had failed to provide a safe berth at which the vessel could load.   Owners incurred tug expenses of $10,325.00.   Contract Clause C provides: “Loading Port. One (1) safe port/one (1) safe berth - Mississippi River.”   Contract special provision H-1 provides: “Charterers have the option of loading Two (2) safe ports, One (1) or Two (2) safe berths each port ….”   Charterers asserted that such tug expenses were for Owners' account since they were incurred not because of the character of the berth itself, but because of the conditions existing in the Mississippi River at the time of the loading, which were normal and to be expected and were or should have been known to Owners at the time of entering into the Contract.   The Panel believed that the tug assistance was essential to the safety of the berth for this vessel during her period of loading. While it was true that both parties were bound to know of certain conditions existing in the river at that time nevertheless, both Clause C and Special Provision H-1 placed upon Charterers the burden of selecting a safe berth at which the vessel can safely load.   Absent the tug assistance, the panel did not believe the Charterers fulfilled their warranty.   Owners were entitled to this tug expense, together with appropriate interest thereon. Editor’s comment: While this is a past award, similar cases have been addressed in both SMA and LMAA arbitrations, addressing expenses for tug assistance under voyage and time charter terms. The allocation of costs for tug assistance has also been discussed in English High Court cases, which led to the development of specific clauses found in modern voyage charterparties.

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator The disputes which were the subject of this arbitration arose under a NYPE Form of Charter Party. The discharge was to be carried out by the Vessel's own gear into barges while the Vessel waited in the stream for berth availability. The Port of Kandla had a procedure whereby vessels were allotted a discharging berth, which they can occupy for only seventy-two hours. If the Vessel did not complete discharge within that time, it must vacate the berth at the end of the third day. Charterers alleged that the vessel performed poorly her discharge operations because the Vessel's cranes and gear were in a state of disrepair. It was Charterers' position that Owners were in breach of Clause 15, Clause 22 and Clause 32 which entitled them to place the Vessel off-hire for a period of ten (10) days corresponding to a claim of $90,000. Charterers endeavoured to demonstrate to the Panel the poor state of the vessel's cargo gear and the deleterious effect of the gear upon the duration of the discharge of the Vessel. It was Charterers' position, that, not only were the vessel's cranes deficient and in a state of disrepair, but in addition the validity of the Cargo Gear Certificates expired during vessel's discharging operations, which constituted a breach of Clause 32, which required the Vessel to be at all times in possession of valid and up-to-date certificates. It was undisputed that the Charterers and their Stevedores, despite their belated criticism about the poor condition of the Vessel's cranes, continued to work both the cranes and the winches of the Vessel, did not interrupt discharge, did not report the alleged deficiencies to the authorities, did not conduct an independent survey, neither invited Owners to a joint survey to assess the cause, nature and extent of the malfunctions or crane breakdowns. Owners denied the Charterers' allegations noting that; (a) the Notice of Readiness at the port of discharge was accepted without notation or exception, (b) vessel had previously loaded the instant cargo of pig iron in Brazil without incident, (c) anyhow, according to Clause 8, Charterers were duty bound to load, stow, time, tally and discharge the cargo at their expense, (d) ship's Crane No. 2 became inoperable due to the negligent operation of Charterers' Stevedores. It was the Owners' position that the Master, contemporaneously with the crane stoppages, placed Charterers and the Stevedores on notice about the crane breakdowns, which he attributed to the Stevedores' negligence, inexperience and to the fact that they were lifting weights in excess of the capacity of the cranes. Finally, Owners argued that Charterers never employed more than two (2) of the vessel's three (3) available cranes while discharging in the stream. In fact, fifty-seven (57) of the shifts in the stream worked only one (1) crane and only four (4) shifts worked two (2) cranes. Upon berthing, Vessel discharged the balance of the cargo within the allotted seventy-two (72) hours without the assistance of shore equipment. Owners never engaged an independent surveyor to; (a) certify the true condition of vessel's cargo gear, (b) determine the cause of the breakdowns, and; (c) substantiate Owners' allegations that the negligent rough handling and inexperience of Charterers' Stevedores was the proximate cause of the gear breakdown. Decision The Panel upon weighing all of the evidence rules, that given the occurrence of an event, such as a crane breakdown, it was incumbent upon the party who prima facie was charged with the care and proper working condition of said equipment, to explain in a credible fashion, why same became inoperable and thus shift the blame to whomever was responsible for the damage. Such evidence has to be unimpeachable, and obtained contemporaneously by way of a joint survey or, at the minimum, by an independent surveyor. Charterers' reference to the expiration of the validity of the Cargo Gear Certificate, although of major concern, did not, in and by itself, trigger the operation of the off-hire clause, unless one can show the causative effect of said expiration to the loss of time occurred thereby. This was not done. Given the nature and the duration of the alleged delays and/or crane breakdowns, the Panel was surprised that neither Owners or Charterers attempted to preserve their own evidence by unbiased, unimpeachable, and certainly available to both of them, means. The testimony and evidence received by both parties fall short in meeting the standards mentioned above. Owners' reference to the fact that the Vessel had loaded cargo uneventfully in Brazil and/or that the Notice of Readiness was accepted without protest or reservation and/or that Clause 8 shifted the duty to discharge the cargo onto the Charterers, are all issues totally unrelated to the issue of the performance of the cranes while the Vessel was in Kandla. The Panel, after careful consideration and deliberation, concluded that Charterers' off-hire claim of $90,000 was inflated; however, the condition of the cranes did in fact delay discharge of the cargo and therefore awarded Charterers the sum of $38,250.00. SMA 3004 Editor’s note:  The Owners failed to establish that the crane breakdowns were caused by stevedore negligence, and evidence showed the cranes were in poor condition. Accordingly, the Charterers were held entitled to off-hire. Previous awards illustrate that stevedore damage claims failed for want of proof (arbitrators fall back on the burden of proof), though in some cases tribunals have made affirmative findings on the evidence.

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator In this arbitration, the panel awarded some items for stevedore damages less than that claimed, as the Owner had expended more than necessary. Owners sought to recover USD 25,082 for repair, based on a report and repair estimate. These repairs were conducted after the vessel’s redelivery and not at the port Tablot where the damages were sustained. The Panel unanimously concluded that the Owner was entitled to reimbursement for properly documented stevedore damage repair claims. However, the Panel believed that the Owner did not mitigate its damages at Port Talbot, where repairs could have been more reasonably done. Also, a number of Owner's claim reports were filed after the fact. Other repairs were unsubstantiated -- i.e. the Master stated new crane motors had to be used, yet no invoice was presented for the same. The Panel concluded that the Owner had only established a portion of its stevedore damage claim and awarded it $7,800.00 SMA 2190 Editor's comment: Owners can recover the reasonable cost of repairing stevedore damages. This is fact-sensitive. #stevedores

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.

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator Several issues were considered in this arbitration reference. The first concerned whether the Master had duly tendered the ETA notices to the Charterers, as failure to do so would entitle the Charterers to an additional 24 hours of laytime. The panel held that the Charterers had failed to demonstrate, by a preponderance of credible evidence, that the Master had failed in his duties, and that such failure was the sole cause of the resulting delays in berthing and loading. Therefore, the panel found that the Charterers' claim for 24 hours of extra laytime failed. The second issue concerned loading interruptions due to “shore loader breakdown”, which suspended the laytime. The owners stated that the alleged breakdowns of the shore equipment were, in fact, not caused by technical difficulties but rather due to the unavailability or shortage of cargo. The Master testified that the conveyor-belt system employed in loading the vessel would only run for short periods of time and then stop, whenever there was no cargo on the belt. The Master also testified that certain shore personnel informed him that the stoppages were caused by lack of steady cargo flow, but that he was prevented from further investigations by high barriers and sentries.   Charterers asserted that the stoppages were a result of mechanical breakdowns and that the Statement of Facts for Yuzhny, which was signed by the Master, clearly identified the stoppages as “shore loader breakdowns”. Neither the Master nor Owners ever, at any time protested these stoppages or their notation in the Statement of Facts, and therefore the signed Statement of Fact speaks for itself, and the time so lost does not count as Charterers' time, but qualifies as an exemption from laytime pursuant to Clause 5.   Charterers, cognizant of their burden to prove their prima facie case, to show the ‘breakdowns' were exceptions to laytime which would fall within the ambit of Clause 5, assert that they have done so, and that the signed Statement of Facts provides the proof, being a business record prepared in the ordinary course of business and signed by all parties. Not to be able to rely on the truth of the facts asserted in a signed Statement of Facts would surely jeopardise the normal operation of the maritime industry.   Charterers countered that Owners have failed to prove that the “shore loader breakdowns” were not the mechanical breakdowns, shippers and therefore Charterers claim them to be, and that Owners therefore failed in their attempt to upset Charterers' prima facie case and to alter the facts recorded in the Statement of Facts.   The Panel found for Charterers. The circumstances at Yuzhny at the time of the vessel's stay were undoubtedly ambiguous, but the Panel found that Owners have failed to show by a preponderance of credible evidence that the stoppages were not caused by breakdowns, as Charterers claim they were. The Statement of Facts, as signed by the Master, provided the only tangible evidence . The Owners' failure to promptly act on the Master's report concerning the circumstances at Yuzhny and the coercion under which the Master allegedly had to sign this document did not convincingly persuade this Panel to find otherwise .   Thus, the breakdowns of shore loading equipment fall within the scope of the exemptions from laytime as enumerated in Clause 5 of the Charter Party.   Clause 5 is quoted below for reference:   “The cargo to be shipped at the rate of 2500 metric tons and to be discharged at the rate of 1000 metric tons per clear working day of 24 consecutive hours, Sundays and Holidays and bad weather always excepted. Time lost at any time by reason of all or any of the following causes shall not be computed in the loading or discharging time, viz: War, Rebellion, Tumults, Civil Commotions, Insurrections, Political Disturbances, Epidemics, Quarantine, Riots, Strikes, Lock-outs, Stoppage of Miners, Workmen, Lightermen, Tugboatmen, or other hands essential to the Working, Carriage, Delivery, Shipment of Discharge of the said Cargo whether partial or general, or Accidents and/or breakdowns at the Mines, at Shipper's or Receiver's Works or Wharf, Landslips, Floods, Frosts or Snow, Bad Weather, Interruption of River and/or Canal Navigation, Intervention of Sanitary Customs and/or other constituted Authorities, Partial or Total Stoppage on Rivers, Canals or on Railways, or any other cause beyond control of Charterers, unless steamer is already on demurrage. Calculation of time at each end shall be based on weight inserted in Bill of Lading and shall not be subject to adjustment with weight agreed for freight settlement. In case of deadfreight then the time allowed for loading and discharging shall be calculated on basis of tonnage for which freight is paid and not on the actual quantity loaded.”   SMA 2096   Editor’s Comment: Regarding the first issue, reference may be made to certain published LMAA Awards ( one is also cited in Schofield's textbook). In one such award, the tribunal held that even if the Master failed to serve one of the ETA notices, this did not constitute a breach of the charter, and no delay resulting from such failure was proven. Accordingly, even where a charterer alleges a breach of the ETA notice provision—whether in support of a claim for damages or as a defence to a demurrage claim—it must be demonstrated that the alleged breach directly caused the delay. The author has also observed in his practice that this issue also arises in the context of sales contracts involving demurrage provisions. Regarding the second issue, several LMAA published awards are dealing with SOF entries and exclusions from laytime, some of which are cited in my guidebook “ Snapshot Guide to Laytime and Demurrage”(2 nd edition), which can be downloaded for free in the publication area of this website.

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator Author's comment: The recurring issues in disputes concerning the rejection of holds include: the status of surveyors (i.e., whether they are official or independent) so that to trigger the "holds condition" clause, the construction of net or period off-hire clauses (where wording is critical), evidential questions (such as whether a rejection was unreasonable or whether appropriate test methods were applied), delays in arranging re-inspections and the resulting time loss, and whether the holds condition clause operates as a complete code or whether Charterers retain a parallel right to claim damages. -------- In this LMAA Arbitration, the vessel arrived at the loading port, where the intended berth was occupied. At that stage, the Sub-Charterers’ agents ordered a pre-inspection of the holds at the anchorage. The Charterers’ surveyors rejected the holds during this pre-inspection, citing the presence of residues from previous cargoes. Photographic evidence was produced in support of these allegations. The Sub-Charterers consequently rejected the initial Notice of Readiness when it was tendered a few days earlier. The vessel eventually berthed several days later, whereupon the holds were inspected and passed by surveyors acting on behalf of the terminal, the Charterers, and the Sub-Charterers. Charterers subsequently deducted from the final hire statement an additional amount equivalent to despatch payable under the voyage sub-charter. Their position was that Owners had breached the charterparty, thereby invalidating the initial NOR, on the basis that the vessel was not ready when the NOR was tendered. This, they argued, resulted in increased despatch under the sub-charter. The tribunal was therefore required to determine the condition of the holds at the relevant time and the consequences for both Owners and Charterers. The initial pre-inspection lasted approximately two hours and was conducted using the “glove-test” method. Owners contended that this method was not representative of the true condition of the holds, that the surveyors were not independent (having been appointed by the Sub-Charterers), and that their report was not binding. Owners further relied on the holds condition clause, submitting that the vessel would not be off-hire if cargo had not otherwise been prevented from being loaded. As the berth was occupied, no time was lost, and Charterers had no right to make deductions from hire. According to the Owners, Charterers’ sole remedy would have been to place the vessel off-hire, and in any event, the damages claimed were too remote and unforeseeable. Charterers, on the other hand, argued that at the time the NOR was tendered, the vessel was not in fact ready to receive the intended cargo as required under the charterparty provision that “upon arrival at the first loading port the ship will be ready to receive….”. They contended that Owners were aware of the nature of the cargo to be loaded and of the strict cleanliness requirements, and therefore should have ensured that the holds were prepared en route to the loading port. In addition, they noted that the Master had signed the pre-inspection report without qualification, and the Owners subsequently arranged cleaning of the holds at their own expense. Charterers also adduced expert evidence which supported the conclusion that the vessel was not “grain clean” at the relevant time. Much of the discussion focused on London Arbitration 24/16 [Editors' note: which was distinguished as it also happened in other unreported cases]. . The arbitrator considered the expert evidence, together with the contemporaneous reports, and concluded that the vessel’s holds were not in a suitable condition when the NOR was tendered. As no time was lost due to berth congestion, the arbitrator did not need to decide whether the pre-inspection survey itself was sufficient to engage the holds condition clause. However, the arbitrator found that it was reasonably foreseeable that a failure to arrive at the load port with grain clean holds, and/or a failure to tender a valid NOR, would result in time not counting under a sub-charter and/or affecting the berthing schedule. This, the arbitrator noted, reflected normal industry practice. The arbitrator ultimately held that Charterers were entitled to claim damages for Owners’ breach of lines 21–22. Nothing in the terms of the contract excluded the Charterers’ right to damages in addition to off-hire, and such an exclusion would have required clear and express wording. Accordingly, Charterers were entitled to recover damages corresponding to the increased despatch liability incurred under the sub-charterparty. Editor’s note: In other cases, Charterers have relied on London Arbitration 4/10 , where they sought damages equivalent to the demurrage they would have earned under the sub-charter but for the vessel’s defective condition, together with the despatch they actually paid following the vessel’s return to the loading port and the tendering of a second NOR. Owners argued that such damages were too remote, contending that they had no knowledge of the sub-charter or its laytime provisions. The tribunal, however, upheld the Charterers’ claim, finding that “loss and liability was manifestly caused by the Owners’ breach; and the financial consequences were not too remote.” The use of “pre-inspection” arrangements has been a recurring source of dispute in such cases. This position was illustrated in London Arbitration 9/22 .

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator The key disputed issues in this arbitration were the validity of the NOR at an ice port area, and the weather-related delays during discharging at St Petersburg, resulting in the Owners claiming unpaid demurrage of USD 136,250.00. Charterers denied liability.   The vessel was fixed under a Baltimore Berth Grain Form for a voyage from ports in the US Gulf to St Petersburg, Russia. The cargo was to be discharged “free of risk and expense to the vessel (free out discharge) at the average rate of 1,500 tons per weather working days of 24 consecutive hours, Sundays and holidays excepted, even if used (WWDSHEX EIU);”. The vessel loaded a cargo of exactly 30,010 metric tons of yellow corn and no disputes arose at the loading port.   For the discharge port, the ship arrived and tendered NOR near fairway buoy No. 10, as recommended by the icebreaker, a location approximately 17 miles west of the port's inbound pilot station. Some ten other vessels were also anchored and waiting at this anchorage. Contemporaneous ship-to-shore communications following the vessel's arrival at the ice edge attested to some concern over where and when NOR could legally be tendered.   The panel of arbitrators was constituted in accordance with the arbitration clause. Three evidentiary hearings were held to hear the testimony of three witnesses, and substantial documentary evidence was introduced into the record by both sides. Post-hearing and Reply Briefs were exchanged.   Owner's claim for demurrage at St. Petersburg was premised on its contentions that 1) the vessel properly tendered her NOR to trigger the running of laytime; 2) the primary cause of the delays was attributable to shortages of railway wagons, rather than the “bad weather” alleged by the Charterer. The owner also rejected the Charterer's assertion that there were weather delays, which suspended laytime under the charter party's “weather working days” provision.   Owner dismissed Charterer's weather records as inadequate, self-serving and in stark contradiction to the detailed weather information it had obtained through the U.S. Department of Commerce, National Climatic Data Centre, as well as the vessel's contemporaneous logbook entries and those from two other unrelated vessels in port, discharging corn for Charterers at the same time.   Charterers’ defence was that first, the NOR tendered on January 15, 2002, when the vessel was short of the ice edge near buoy No. 10 and before she had arranged for icebreakers, was premature and ineffective; second, the laytime exclusions allowable for bad weather were properly applied; and third, Owner failed to demonstrate that the railcar shortages were deficiencies attributable to the Charterer, and materially affected the working of the vessel and adversely impacted the counting of laytime. Indeed, it argues that not only was the NOR invalid, it was never tendered to the proper party and accordingly laytime did not commence until the commencement of discharge.   As to the weather, Charterer, and for that matter all the parties doing business with the port, relied upon the information collected and disseminated by the official state agency, the Russian Federal Agency for Environmental and Hydrometerological Monitoring, at its station in the port of St. Petersburg. Indeed, the periods of rain and snow recorded by that agency accurately match those used by Owner's agent in its timesheet and laytime statement. From January through March, there was a considerable amount of precipitation that frequently precluded unloading of agricultural commodities. By contrast, Owner's weather data had been recorded by unofficial sources at some remote observatory before being made available to the National Climatic Data Center in the USA and, for that reason alone should be considered unreliable, or at least inappropriate for the intended purpose.   The panel decided as follows:   The charter party described the discharge port as “ONE (1) SAFE PORT, ST. PETERSBURG, RUSSIA,” which by definition makes this a “port charter” and so obliges the vessel to reach jurisdictional limits of the port before she can be considered an arrived ship. The position off the outer ice edge near buoy No. 10, although considered part of the fairway into port, clearly was outside the port's fiscal limits. Whereas the vessel herself may have been physically ready in all respects to discharge her cargo, she was not at the ready disposition to the Charterer. Further, the custom of the port required the vessel to tender her NOR from the pilot station in order to be considered for a berth assignment. The prevailing ice conditions did not provide relief either; the charter party, in no uncertain terms, required the vessel to either be able to navigate in “icy waters” or, if she was not ice-strengthened, to make arrangements for ice breaker service. Applying the doctrine of “substantial readiness” the panel, however, finds that it was permissible for the vessel to tender her NOR from the ice edge position, being substantially ready to discharge, only that time would not start to count until she actually reached the pilot station.   If indeed a berth had been available for the Vessel upon her arrival, she could have entered the port and proceeded to her berth which was to be assigned by Charterer/Receiver. The proximate cause for the delay at St. Petersburg was the lack of an available discharging berth and not whether the vessel tendered her NOR at the ice edge or at the inbound pilot station. In light of the panel's finding on this issue as set forth above, Charterer's argument that laytime should commence upon the commencement of discharge failed.   Weather delays   The parties were at odds with respect to the prevailing weather conditions and the impact on the counting of laytime. The Panel found that the most realistic proof for the weather conditions and the effect upon the cargo operation is the contemporaneous entries in vessel's logs, work reports for the port, other vessels discharging the same cargo and the vessel's stevedoring records. With the presence of the Vessel’s logs, the burden was upon Charterer to disprove Owner's assertions conclusively. The vessel recorded snow a total of 40 hours 43 minutes of rain during the vessel's stay at St. Petersburg, compared to the Charterer's number of 549 hours 5 minutes.   To produce a document stating that it rained on a given day without, however, stating the amount of precipitation is not very helpful in assessing the effects upon the corn discharge. For the days the vessel was waiting at the pilot station, it would have been necessary for Charterer to produce the log for a vessel in port discharging a grain cargo. However, in the absence of such information, the panel saw no justification to apply laytime deductions on the basis of the existing record.   The owner has cited occasions when the vessel discharged cargo during periods, which the Charterer has excluded as “bad weather.” If the vessel works in what could possibly be considered excepted periods, the Charterer was not entitled to a suspension of the running of laytime for those periods. In a “free out” situation, the Charterer/Receiver controls the discharge operations, and the Owner acts according to their directions. Therefore, delays caused by the shore workforce/stevedores were Charterer/Receiver borne risks. Considering the total available information on the prevailing weather conditions, the panel was not persuaded that the vessel's logs were incorrect or prejudicial.   The panel has considered Charterer's general data obtained from the Russian Federal Agency for Environmental and Hydrometeorological Monitoring and compared it to vessel's logs, the Master's testimony as well as that of the Port Captain, the actual working periods and the information provided by the U.S. Department of Commerce National Climatic Data Center. The panel did not find that the cumulative effect of these submissions establishes that the vessel's observations should be ignored. Therefore, the panel accepted the vessel's logs as prima facie evidence of the prevailing weather conditions. The panel's decision was further supported by Owner's Port Superintendent, who testified during these proceedings. The Panel found the record keeping was not a model of clarity and required the Panel's interpretation of entries from various documents in order to determine when the vessel went on demurrage.   The panel awarded the Owners USD 93,357.64 of their demurrage claim. SMA 3835 Editorial Note:  In several analogous matters, it fell within the province of the tribunal to evaluate the evidentiary record and adjudicate upon the legitimacy of delays asserted on the basis of “weather” conditions. In certain proceedings, the parties adduced meteorological data from local weather stations in support of their respective contentions. For reference to LMAA awards concerning weather-related delays, readers are directed to the Snapshot Guide to Laytime and Demurrage  (P. Krikris, 2nd ed.), available free of charge for download in the publications section. Additionally, Readers can check other award summaries on the "Arbitration List- Laytime," located next to the blog section, which is updated periodically with new awards.

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.

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator In this LMAA arbitration, one of the issues in dispute concerned the cost of a stand-by tug at the Suez Canal. The vessel was unable to pick up one of the mooring boats and, as a general rule, transit was not permitted unless the vessel was escorted by a tug for safety reasons. The Charterers argued that the cost of the tug did not fall within the scope of clause 2 of the NYPE form, as it did not constitute a usual expense. The Charterers’ defence was based primarily on the contention that the Owners had failed to deliver the vessel in an efficient condition and properly fitted for the service. Furthermore, the Owners had warranted that the vessel would comply with the requirements of the Suez Canal and that its equipment would remain in proper working order. The Owners, on the other hand, sought to transfer liability to the Charterers, asserting that the difficulty did not arise from the crane’s lifting capacity but rather from the slings provided for the mooring boats, which could not pass over the vessel’s rails without modification. On that basis, the Owners held the Charterers liable for all port and canal expenses pursuant to clause 2 of the charterparty. Both parties relied upon documentary evidence, requiring the tribunal to undertake a detailed examination of the material submitted. However, neither party produced direct evidence of the events at the Suez Canal. [Editor’s note: the parties relied on survey reports and a volume of documents that would likely exceed the ambit of the SCP]. The tribunal ultimately held that the vessel did not comply with the Suez Canal Rules of Navigation and that the Owners were in breach of the charterparty. It further concluded that the cost of the stand-by tug could not be regarded as a usual expense within the meaning of clause 2. Editor’s Note:  The leading textbooks provide a concise analysis of clause 2 of the NYPE form. Reported LMAA awards addressing this issue are limited, as reflected in the decisions published in LMLN ( see e.g. London Arbitration 15/04) . Relevant analysis can be found in published SMA awards. No further information can be provided for this award.

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator The dispute arises under the terms of a GENCON form of Charter Party, with these issues for determination:   a)    Whether Good Friday was to be counted as a holiday under the Charter Party since it was not listed as one in the BIMCO Holiday Calendar for the State of New York. b)    Whether the Port of Nanjing is considered within the “Shanghai area” as stipulated in the Charter Party … and as a consequence … c)    Whether Notice of Readiness (NOR) can be tendered/accepted at the CJK anchorage at the mouth of the Yangtze River and outside the Port of Shanghai … or … upon reaching the anchorage (or berth) at the nominated discharge port of Nanjing   The holiday period   Clause 20 of the charterparty stated, “ It is understood the word ‘holidays' as it appears throughout this Charter Party includes local and/or national and/or public and/or stevedore holidays.”   The owner argued that the BIMCO Holiday Calendar should apply notwithstanding that there was nothing to that effect in the Charter Party. The BIMCO Holiday Calendar did not list Good Friday as a holiday in the State of New York. However, it was well known in chartering circles that cargoes of scrap loaded in New York Harbour were actually loaded at piers in the State of New Jersey, for which the BIMCO Calendar clearly lists Good Friday as a holiday. Besides being a well-known fact in tramp shipping circles that Good Friday was a recognised labour holiday in New York harbour, it was also a Wall Street and bank holiday, which was widely reported every year in the international press.   The panel denied the Owner's claim and also noted that the Owner has overlooked the Saturday after Noon excepted provisions of Clause 18 when preparing its Load Port Laytime Statement [ Editor's comment: It is unsurprising that, in several cases, parties devote insufficient attention to laytime calculations even at the stage of arbitration. Such oversight may adversely affect their overall position, including the allocation of costs. ]   The “Shanghai area” vs. Nanjing issue   The ship arrived at the mouth of the Yangtze River, dropped anchor at the C.J.K. anchorage off Shanghai and tendered Notice of Readiness. The ship waited until the following morning when a sea pilot boarded and guided her to Nanjing. At the same day the ship anchored, the sea pilot left the ship and a river pilot boarded. The ship waited until daylight and then resumed her passage to Nanjing. The vessel arrived and anchored at Nanjing's “Q” anchorage, where she waited for a berth.   The panel considered the following in coming to its decision:   The expression “Shanghai area” was not uncommon in the scrap trade. It was pretty well accepted that “Shanghai area” was understood to include all the scrap discharge ports along the Yangtze River -- e.g. Shanghai, Zhangjiagang, Yangzhou, Nanjing.   Since the discharging rate in Nanjing was the slowest and included a longer manoeuvring time on the river, a higher freight rate was often paid to compensate. It was also not unusual for charterers to fix a set of ports along the Yangtze, or “Shanghai area, including Nanjing”, to avoid misunderstanding. Some owners often try to specifically exclude Nanjing to avoid the longer time on the river, including frequent fog delays and slower discharge.   It was also fairly common for owners who know the trade to spell out in the charter party where NOR is to be tendered. Unless the Charter Party spells out that the NOR can be tendered upon arrival at the sea pilot station at CJK pilot station (the Yangtze River mouth), it was a custom of the trade that NOR will only be accepted upon arrival at Nanjing port.   Therefore, once the Charterer named Nanjing as the discharge port, the Owners were obliged to accept or protest that nomination. The fact that the Owner did not dispute or question the nomination of Nanjing, as it was given, persuaded the panel to conclude that the Owner accepted the nomination as presented .   Therefore, the notice of readiness procedures for the port of Nanjing should apply. The Charterer's laytime statement appears to be correct.   SMA 3798   Editor’s Note:  In practice, numerous disputes have arisen concerning the validity of NOR tendered at CJK anchorage. These disputes prompted the development of contractual clauses specifying the precise place and time for tendering NOR. Regarding the BIMCO Calendar, there are several awards, both in London and New York, that address this matter. #laytime #demurrage #NOR

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator Disputes concerning pilotage fees have been the subject of determinations in both London and New York arbitrations. A number of these cases are referenced below: 1.    Cost for North Sea Pilotage Charterers deducted USD 2,878.08 from the hire for North Sea Pilotage fees, asserting that Charterers were only required to pay for “compulsory” pilotage. However, the charter party plainly and without qualification allocated the cost of pilotage to the Charterer. No restrictive or qualifying language lessens Charterers’ responsibility to pay for all pilotage that the Master considered necessary or advisable. The Panel awarded $2,787.08.   The Clause cited was “ 2. That whilst on hire the Charterers shall provide and pay for all of the fuel except as otherwise agreed, Port Charges, boatage on Charterers' business, Pilotages, ...”   SMA 2043   2.    Cost for Several pilotage and related expenses in Northern Europe     The Master requested and obtained pilots on several occasions for trips in the North Sea and Baltic. The amounts in question were not disputed. The Charterer argued that these charges were not customary for vessels of this type and supported its position with letters from agents and the Danish Government, showing that only a small minority of such vessels utilised this type of pilotage. Therefore, such expenses should be for the Owner's account under Clause 2.  Moreover, the Owner had failed to furnish convincing evidence to support its contention that such pilotage was customary and therefore properly chargeable to the Charterer.   The Panel found that these pilotages and related expenses were of a non-customary nature and, therefore, were for the Owner's account. The Vessel should have obtained Charterer's approval before employing pilots that the Owner intended to be for Charterer's account.   The difference of this case from the above SMA 2043 was that Clause 2 included qualifying words: Charterers shall pay for “Customary” pilotages.   SMA 2189   3.    Pilotage costs with Atlantic Pilotage Authority and Laurentian Pilotage Authority   The Pilotage invoices, which the Owner was obligated to pay when the Charterer defaulted, were properly reimbursable, and the Panel awarded $7,740.68 for payment by Owner to the Atlantic Pilotage Authority and $11,144.71 for payment to the Laurentian Pilotage Authority.   SMA 2039     4.    Dardanelles Pilotage fees “compulsory”     Clause 2 of the NYPE 1946 was amended to include “compulsory” pilotage. Owners stated that although not compulsory, any prudent master would use a pilot in the straits, citing a Guide to Port Entry as a recommendation, which stated that pilotage was advisable for this area. They also cited other reasons to take pilotage in this area, to make a case that the word” compulsory” should not be given a narrow meaning. The tribunal rejected the Owners’ position and held that the addition of the word “compulsory” under clause 2 was to cut down the charterers’ obligations; this was also the effect of giving the word its natural meaning. The Owners were liable for these fees.   London Arbitration 10/86   Editor’s comment: The recurring disputes concerning the cost of pilotage services gave rise to the development of Clause 2 of the NYPE 1946, which has since undergone several amendments to incorporate specific qualifications. BIMCO has, in the past, issued a circular advising its members to refrain from using clauses that refer to “customary” pilotage. In a reported case summary, the umpire ruled that the charterer was liable for the cost of the North Sea Pilot under the unamended Clause 2 of the NYPE. Both parties sought to rely on the implied qualification of the term “reasonable”; however, the umpire dismissed this line of argument as an unproductive controversy, noting that the express wording of Clause 2 was determinative. It is not uncommon to exercise caution in implying terms, unless the proposed implication satisfies the established legal tests, for which there is now ample guidance from higher courts.

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator The vessel failed three inspections conducted by X Surveyors at the loading port. The Owners, however, produced their own inspection report, which stated that following the initial rejection of the cargo holds, they were cleaned overnight and rendered fit and ready for loading. The Charterers’ primary position was that the vessel was not delivered until the holds passed inspection. In the alternative, they contended that the vessel remained off hire from the time of the first rejection until the holds were subsequently accepted, several days later by several surveyors. The dispute was referred to a sole arbitrator under the LMAA Small Claims Procedure, appointed by agreement between the parties. In light of the conflicting evidence presented, the arbitrator was required to determine both the status of the survey company and the evidential weight of the inspection reports. The Charterparty stipulated that the shippers’ officially appointed surveyors were to inspect the holds. The Owners argued that X Surveyors were not the shippers’ formally appointed representatives. They further maintained that the inspection which ultimately led to acceptance of the holds had been carried out by multiple surveyors, each acting on behalf of different shippers under separate Bills of Lading. The arbitrator adopted a broad interpretation of the term “shipper,” noting that there were multiple shippers involved and that a party could qualify as a shipper of cargo even if it was not expressly named on a Bill of Lading. Despite the Charterers’ various attempts to clarify the position, the arbitrator remained uncertain as to on whose behalf the surveyors had attended the vessel. In addition, the arbitrator found that the surveyors’ reports were deficient in content, failing to identify the instructing party and recording only that the holds had been rejected due to the presence of cargo residues, without specifying the precise areas of concern. Ultimately, the Charterers were unable to persuade the arbitrator that, under the terms of the Charterparty, the vessel’s holds were not clean during the period between the Notice of Readiness and the third inspection. Editor’s note: The arbitrator undertook a careful examination of the evidence. The outcome was highly fact-specific. No further information can be provided for this award.