Summary prepared by Prokopios Krikris FCIArb, Arbitrator Inconsistencies or contradictions between terms due to relaxed draftsmanship often arise in charterparties as seen in practice. There is ample authority setting a guidance on how to address construction issues in such instances. In this arbitration, the question of the Owners' right to claim demurrage depended upon the interpretation that was to be given certain clauses of the charterparty. Clause 18 stated: “cargo is to be loaded …. at the rate of 500 metric tons per workable hatch per weather working day of 24 hours. Sundays and Holidays excepted unless used ….” Clause 19 stated: “At load port time from 5:00 PM Friday …. until 8:00 AM Monday …. not to count unless used”. Moreover, Clause 23 stated: “Owners to make available 2 workable holds and hatches for this cargo ….” Clause 24 provided: “Charterers' privilege to work two hatches at all times ….”. The decision No one takes pride in the authorship of these clauses for in no way can they express a clean-cut agreement. We have concluded that Clause 19 should prevail over Clause 18 in that it is a specific term that excludes Fridays from 5:00 PM to Monday at 8:00 AM from the calculation of laytime unless used. Load port laytime provides for 1000 metric tons to be loaded per weather working day of 24 hours and time not to count from 5:00 PM Friday to 8:00 AM Monday unless used. Note: this is for information purposes only.

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator There are many examples of this in practice, showing that quantifying loss can be as challenging as establishing liability. In The Divinegate [2022] EWHC 2095, at paragraphs 120–122, the Court accepted that damages should not allow recovery twice for the same loss—referred to by counsel as “double dipping”. In this arbitration( well before the Divinegate), there were numerous issues that were not addressed in detail here, but one had to do with the effect of “double dipping” on loss quantification. Two disputed periods of time loss overlapped. Dispute 1: the Charterers made a claim for time loss while the Vessel was adrift or proceeded at a reduced speed and deducted close to 17 hours, which occurred within a two-day period failling within the period of sailing from port A to port B. Dispute 2: During the transit (which included the two-day period above), the Charterers also raised a claim for the Vessel’s underperformance and claimed time loss. The Charterers succeeded in part of their claim, since the Vessel underperformed only on two days, which appear to be the same days as those referred to above that the Vessel stayed adrift ( possible for maintenance or engine related issues), and the claim was restricted to that period only as in the other steaming days the Vessel performed. It was recognised that recovery under both heads of claim would amount to double recovery, or “double dipping”, for the same loss, contrary to the compensatory principle. As the tribunal had already awarded damages for the two days of underperformance, no additional damages or off hire (due to staying adrift or slow steaming) could be awarded for the same loss. Note: This is for information purposes only.

This is a SMA Award published in 1972 arising under a NYPE Form 1946 charterparty as amended. One of the issues referred to the failure to perform the warranted speed and the Charterers claimed time loss, as "off hire" time under clause 15. Charterers had the vessels’ performance examined by a firm of weather analysis experts who developed a procedure of feeding into a computer the weather and performance shown in vessel’s logs and then comparing the ship's accomplishments against performance curves the firm compiled from 10,000 voyages of 70 other vessels which were supplemented by any known weather conditions reported by current vessels on or near the same track positions traversed by the vessel on her numerous voyages over the 2 year charter. The experts' computer output evaluation was that the vessel was only capable of 11.9 knots “in a calm” weather. Charterers used this alleged 1.1 knot deficiency to arrive at a total hire loss of 26.2 days after it had been applied to all steaming time of the vessel subsequent to the first 3 voyages, charterers conceding that the represented “about 13 knots” speed was attained on those 3 voyages. Although the logs showed no “breakdown or defect in hull or machinery” the charterers asked the panel to infer that a reduction from 105/109 rpm on the first 3 voyages to about 100/104 rpm on all subsequent voyages must have been due to an engine deficiency that vessel personnel failed to report, and this defect entitled them to a refund of hire under clause 15 of the charter. The panel felt that any computer input based on the imprecise nature of unverified weather reports from vessels at sea not employing uniform standards of data recording, could only render the resultant output inconclusive. Nor could the panel accept testimony given that any one set of curves could have equal application to other vessels. The panel thereupon employed formulae of their own, taking into consideration (1) vessel's attained speeds in good weather up to Force 4, (2) wind, sea and current conditions on all passages both loaded and light, (3) engine performance including an unrealistic constant fuel consumption in the logs of 20 tons daily regardless of weather or engine power notch setting, (4) that the description of weather conditions in vessel's log books appears exaggerated and other data unreliable, and (5) the panels interpretation that this vessel's contracted speed in good weather is 12.6 knots after allowing .5 knot for ““about” and adding 0.1 knot for the vessel not being always fully laden. The result was the decision and award of the arbitrators that the vessel's speed was deficient and caused loss of time to the extent of 9.165 days over the charter period, together with extra consumption Note: This is provided for information purposes only. Whether such a recalculation is appropriate in the circumstances is a matter I leave for readers to consider.

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator One of the issues in this arbitration was whether the additional insurance costs could be recovered. Another issue was whether there was enough reliable evidence to prove that the amounts claimed had already been paid. Similar issues arise in other categories of claims' recovery. Clause 18 of the contract stated that, “Extra insurance on cargo, if any, due to vessel's age, flag, classification or ownership shall be for Owner's account.” Furthermore, Rider Clause 49 of the contract provided that: “In the event performing vessel is over age, extra insurance on cargo and Charterers' cargo liability insurance are for Owners' account.” The Charterers relied on a statement from the receivers that the vessel was over the normal insurance rate, and an extra premium applied, citing as well an invoice showing the receivers as the assured and the basis of the extra premium calculation and seeking to recover from the Owners. The panel held that the Charterers’ claim had a proper basis in contract but absent evidence that they had previously paid the receivers’ extra premium bill ( i.e. lacking proof of payment) they were not entitled to recover. Note: this is for information purposes only.

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator Stevedore damage claims are very common for those of us working in shipping operations/ post-fixture claims. Crane wire damage is perhaps one of the most common, along with damage to cargo (especially spillages) or to the ship’s equipment, such as ladders and rails. Crane wire damage can result from poor maintenance, stevedores’ mishandling or other causes. In one case, metallurgical analysis showed that the wire itself was defective, even though it was brand new. Such incidents often lead to disputes over off-hire periods (or suspension of laytime under a voyage charter) and the cost of replacing the damaged wire. Whether such claims succeed will largely depend on the quality of the evidence. The arbitration case One of the issues in this arbitration concerned the costs of replacing a damaged crane wire as sustained during loading log cargo, as alleged being caused by stevedores’ mishandling. In short, the Owners relied on the fact that the crane had been tested on the same day being damaged by stevedores, the chief engineer indicated to the Owners and Charterers’ surveyors that it was caused by rough handling, and the Charterers’ surveyor’s report mentioned that the cause of the damage was brought by improper handling of the crane. The nature of the damages indicated a sudden and block slacking of the runner and jib simultaneously at the lowest limit of the limit switch. Owners further said that pointing to pre-existing defect while suffered a minor breakdown does not constitute corroborative evidence and fails to carry charterers’ burden of proof in rebuttal. Charterers queried why there was no damage to any other cranes in loading or discharging, expect for this crane. The surveyors indicate into their report that they did not witness the breakdown, merely reported what the Master and Chief engineer said. Charterer contended that a sudden blockage of the hydraulic oil supply was the type of problem that can manifest itself inconsistently under working conditions, and there was no basis to suggest that the only possible cause was lowering with excessive speed. Charterer questioned the practical reliability of the test before classification for its test of the crane with a 30 ton lift which was accomplished prior to discharge commencement. The test conducted alongside a berth and had to have a static test performed, the crane was not tested under the working conditions and there was no indication that the limit switch was tested or that the crane was lowered during the test on the point where the limit switch was engaged. Charterers contended that the Owners did not submit the deck and engine logs, records of maintenance or repairs of the crane for the period covering four voyages immediately proceeding to this voyage, and submitted that the arbitrator should draw adverse inferences from the Owners’ failure to submit the documentation, which would possibly reflect pre-existing mechanical problem with the crane. Charterers pointed to absence in this case of credible eyewitness verification that the stevedore crane operator was observed to have lowered the crane too fast, absent which unless the Master's allegation was accepted at face value, Owners’ claim had to fail for want of proof. The arbitrator held that the Charterers sought to assert pre-existing defect. From the facts, the arbitrator could not conclude with certainty whether or not the damages were caused by rough handling of the stevedores or that there was a pre-existing defect. It was straining coincidence, absent eyewitness evidence the crane operator was observed to have lowered the crane too fast, that the crane's breakdown as soon as placed into service for both loading and discharge was exclusively caused by mishandling of the crane by the crane operators. The remainder of the Vessel's cargo gear functioned without fault throughout cargo operations at both ports. Why were only the operators of the damaged crane at both ports guilty of carelessness? There were a number of apparent alternative possibilities the casualty was engendered by the crane, its limit switches and motor possessing defects responsible for the crane failure. The Owners had not demonstrated that the casualty was attributable to stevedores’ mishandling. Nothwithstanding the Masters and Chief engineer’s allegations, there was no eyewitness evidence presented, enabling a conclusion the cause was exclusively one of crane operator's negligence. The Owners’ claim failed. The fact that Owners did not respond to Charterer's request for production of specified documentation covering the four previous voyages which might have indicated a history of operational difficulties with crane created adverse inference, which did not assist Owners with its claim. Note: This is for information purposes only. The picture shown is from a different case and is unrelated to this arbitration.n.

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator One of the issues in this arbitration concerned the Owners’ claim for hire for a period being disputed by the Charterers. In particular, the Owners calculated hire up to DLOSP Las Palmas, where bunkers were supplied by the Owners, due to Charterers’ breach of redelivering the Vessel at Casablanca with the agreed quantities. However, this was rejected in the arbitration, holding that since the Vessel was scheduled to call Dakar after Casablanca and the bunkering port was en route to the scheduled port, the Owners were not entitled to compensation for the voyage from Casablanca to Las Palmas, but only for deviation from the plotted track. According to the Master's report, the deviation from the Casablanca/Dakar track was 50 nautical miles. For the deviation and the stay at Las Palmas, the Vessel calculated a bunker consumption of 2.8 M/T IFO and 3.33 M/T MGO. Since the Vessel also took bunkers and freshwater for Owners' account, the Owners were not allowed to recover any port expenses which, in the normal course, would have been recoverable. They were entitled to recover the bunker costs and deviation time/port stay. Note: this is for information purposes only.

One of the disputed issues under the amended ASBATANKVOY charterparty concerned the owners’ claim for approximately USD 30,000 in standby tug costs incurred during two separate periods. During the first period, following damage to a terminal railing caused by a passing vessel, the Master arranged for a tug to assist in maintaining the vessel alongside the berth. During the second period, two tugs were engaged to push the vessel alongside the berth while cargo loading operations were carried out. There was no clear evidence of the exact nature of the terminal’s facilities or how the vessel was secured to the available buoys and bollards. The deck log indicated that the Mississippi River current had a velocity close to 3 knots during said periods. The Charterer asserted that there was evidence that the ship did not put out sufficient lines to take advantage of all available mooring points, but the evidence on this point was insufficient to support such a finding. Despite the unsatisfactory state of the evidence, it was found that the master did not act unreasonably in considering that existing conditions required tug assistance to ensure the vessel's safety and to avoid interruption of the loading operation. The owners' claim succeeded. Editor’s note: Several published LMAA and SMA awards have considered similar issues arising at river ports, where prevailing weather and river conditions necessitated the employment of tugs to keep vessels safely alongside during loading and discharge operations. #unsafe #tugs

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator This arbitration addressed a common topic of disagreement. The contract provided for suspension of laytime during riots, strikes, etc., or “any cause whatsoever beyond the control of charterer”. lt was held that laytime continued to run during delays for insignificant routine maintenance of shore loading equipment. Moreover, on the facts, the tribunal found that Charterers cannot exclude time for draft survey and noted that " it certainly must be considered proper operational procedure and management that Owners tried to ensure the appropriate loading progress and cargo intake". If the contract is silent on whether intermediate or initial draft survey is excluded, parties typically disagree. There are several LMAA Awards addressing this matter.   The events referred to in this dispute are described as breakdowns. They are minor in nature; the Port Log/Statement of Facts lists the following interruptions: a) delay account electrical problem --35 minutes, b)  delay account tightening belts--30 minutes, c)  delay account washing impact rollers- 15 minutes and d) delay account reclaimers overloaded- 10 minutes   The tribunal noted that Clause 4 did not focus on insignificant problems as enumerated above, but refered to “riots, strikes, lockouts,” “accidents to machinery,” “fire, floods, frosts, fogs, storms”. To bring minute loading delays, which, by their descriptions were clearly matters of routine maintenance (or more correctly the lack thereof), under the provision “any cause whatsoever” or the ejusdem generis rule was, in the tribunal’s opinion, neither justifiable by the language of the contract nor in the spirit of the commercial enterprise.   Clause 4 refers to “any cause whatsoever beyond the control of the Charterer,” but there has been no evidence that the events were beyond Charterers' control. It was insufficient merely to hold the event itself as proof positive.   The burden of proof to the entitlement to an exception rests with the claimant, which has not been met. Furthermore, Charterers made the arrangements for the loading under the FIO provision of this contract and, therefore, if there was a problem or deficiency with the loading procedure, it was a matter of Charterers having to deal with their sub-contractors. Charterers cannot simply shift responsibility, expressed in the loss of laytime, to Owners who had bargained for a cost- and risk-free loading.   With respect to the “draft checks,” Owners contended that pursuant to Clause 48, laytime should not be affected for those periods when draft surveys were being conducted. Charterers, on the other hand, say that Clause 48 only applied to the final draft survey and any time used for draft readings taken by the vessel should be for Owners' account.   The tribunal held that based on the specifics of this case, any time lost for the checking of vessel's draft prior to, during and after completion of the loading was for Charterers' account.   If indeed Charterers wanted only to accept the responsibility for the final draft survey, then they should have stated so in the clause. In the alternative, if Charterers wished to distinguish between official draft surveys and those done by vessel's officers, this again could have been provided for.   One of the reasons for reaching that decision was the fact that the Bill of Lading quantity was determined by a draft survey. Unlike the loading in Norfolk/Newport News, where railroad weights apply, the vessel, under these circumstances, had no certain way to determine the quantity on board. A further point, which required the close monitoring of the cargo loaded, was the fact that specific draft limitations were imposed through the prevailing conditions at the berth.   Considering that the contract provided for named terminals, under which Owners were imputed to have specific knowledge of the port limitations, it certainly must be considered proper operational procedure and management that Owners tried to ensure the appropriate loading progress and cargo intake

By Prokopios Krikris, FCIArb, Arbitrator Speed and consumption claims have long generated considerable interest and debate within the shipping industry. These claims encompass factual and legal questions, as well as matters relating to market practices (see "Reflections on Speed and Performance Claims", Part IV, in I-LAW). A recent trend is the establishment by certain major shipping companies of internal departments dedicated to performance analysis. For instance, when a dispute arises, these companies present their own "in house" analysis to support a claim and a corresponding deduction from hire . A typical question raised is whether this satisfies the tests formulated in The Kostas Melas [I leave this to the Readers' consideration]. In London Arbitration 15/23 , for example, the tribunal approached such internal analyses with caution. Moreover, in London Arbitration 12/24, the tribunal said that WRC must remains impartial. Based on my observations, Owners have raised several issues in challenging these types of claims: Owners have argued that Charterers rely on methodologies that have not been tested in English Courts or London Arbitration (at least as the published awards corroborate). This point, for instance, arose as a significant concern in the Divinegate  case. Owners have asserted that the Charterers’ in-house analysis does not constitute an “independent” assessment required under the relevant weather routing clause. Charterers, in response, contended that the claim was not a typical “performance claim” but something distinct. Owners maintained that, regardless of how Charterers seek to frame their case, they must produce a proper report that applies the terms of the charterparty- see e.g. T he Ioanna, The Pearl C and The Divinegate. Owners further relied on London Arbitration 15/23 , in which the tribunal rejected the use of an in-house analysis. The Owners said that an unofficial analysis in house carries no evidential weight. Although Charterers submitted that they could provide evidence in support of their position, Owners contended that such evidence must be “independent” and satisfy the requirements applicable to expert evidence. In a recent case, it was noteworthy that the Weather Routing Company report reflected the vessel’s performance as warranted. The Charterers’ in-house team, however, produced an alternative method that applied a weather factor derived from the Molland curves. They argued that, due to fouling, their internal analysis could recalculate the additional resistance attributable to such fouling and thereby determine the corresponding extra consumption. Although the vessel’s daily actual consumption remained within the permitted limits and there was no time loss during the voyage, the Charterers argued that, had the vessel been delivered with a clean hull, consumption would have been even lower—even if still within the allowance, so they can claim the 'extra' consumption. Owners averred that this is against the very purpose of claiming damages as Charterers suffered no loss and the ship performed. Important Note: This article summarises certain brief positions advanced by the parties and does not reflect the authors’ own views on the issues discussed.

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