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In this arbitration, the owners claimed demurrage and damages in the amount of $1,470,052.78 arising out of an amended C.(Ore) 7 form for the carriage of iron ore concentrate from Topolobambo, Mexico, to China. The dispute came before a panel of three arbitrators under the SMA Rules 2018. Charterers failed to serve their defence, and the panel made its final award on the documents submitted. The factual background a. The vessel arrived and tendered NOR at Topolobambo on March 3, 2020, and retendered on March 6, 2020; b. On May 11, 2020, the owners requested that charterers urgently advise when a cargo would be supplied, observing that the vessel had been waiting since March 3, and reserving the right to declare charterers in repudiatory breach. c. Charterers failed to provide any satisfactory response to owners’ request; d. Accordingly, on May 18, 2020, the owners notified the charterers that it terminated the Charter immediately based on the charterers’ breach and repudiation. e. On June 30, 2020, owners submitted to charterers through its broker a demand, together with supporting documents, for $1,450,052.78 in compensation, including: • demurrage of $1,111,977.78 for 74.27361 days from the vessel’s arrival on March 3, 2020, to the date it sailed on May 19, 2020; • alleged loss of earnings of $318,200 on a substitute fixture; and, • underwater cleaning costs of $39,875 allegedly incurred because of fouling of the vessel’s hull as a result of the long wait at Topolobambo. f. Owners demanded payment by July 10, 2020, but no payment was received. Discussion and decision The panel requested the owners to submit copies of correspondence received from the charterers concerning the reasons for the charterers’ failure to provide cargo. Charterers described as force majeure these alleged situations: (a) delayed issuance of export permits due to previous hacking of the server of the Department of Commerce; and (b) COVID-19, which allegedly led the government to issue a declaration that, from March 30, 2020, onward, limited or stopped mining and also limited production at a concentration plant. Held, If charterers had participated in the arbitration and asserted a force majeure defence, it would, under New York law, have had a heavy burden of proof. It would have had to prove by a preponderance of the evidence that the alleged force majeure events actually occurred and that their failure to perform arose or resulted from those events. In fact, charterers chose not to participate and did not submit any evidence regarding these matters. In the circumstances, the attribution of charterers’ breach to events of force majeure would be mere speculation and guesswork in which it would be inappropriate for the panel to engage. On the documents the owners submitted, they have established their claim. Accordingly, charterers materially breached their obligation under the Charter to provide cargo for the vessel, and after waiting more than two months at the load port, the owners were fully justified in terminating the Charter based on that breach. The panel accepted the owners’ calculation of the damages for the loss of anticipated profit. The owners applied $8,759 per day on the next fixture, less $16,150 per day, which would have been realized under the 43-day Charter. Finally, the panel accepted the owners’ claim for the vessel’s hull fouling due to the prolonged stay that required an underwater hull cleaning at the invoiced amount of $39,875. Award accordingly. Final Award, 11 November 2020. This website removes the names of the parties involved in this or other awards. The reader can find more details on Jus Mundi https://jusmundi.com/en/ . These awards mostly come into the public domain through enforcement under the NYC 1958 .

The subject vessel was chartered on an ASBATANKVOY charter party for carrying gasoil 0.5% and MOGAS 93 RON from Mailiao, Taiwan to Singapore. Procedural background Clause 8 of the rider clauses provided any dispute up to USD 50,000.00 shall be referred to a sole arbitrator in London under the LMAA SCP. Any disputes over the above amount shall be subject to the jurisdiction of the English High Court. The owner’s claim was for USD 76,472.50 but took a commercial decision to reduce it to USD 50,000.00, thereby bringing themselves within the fiscal limits of the LMAA SCP. Since the parties could not agree on an arbitrator, their solicitors made an application to the President of the LMAA, who appointed [X] as sole arbitrator. On 20 August, the arbitrator informed the charterers of his appointment and advised them to serve defence and counterclaim (if any) submissions by 17 September. Charterers did not respond. On 18 September, upon an application from the owners’ solicitors, the arbitrator made a final and peremptory order for charterers to serve their defence together with any counterclaim by 25 September, failing which he would proceed to an Award on the documents and submissions presently before him. Again, the charterers did not respond. Notwithstanding the charterer’s failure to respond and participate in the proceedings, the arbitrator’s duty was to consider the documents and calculations accompanying the owners’ submissions before issuing any Award. laytime and demurrage calculations The charter party terms relevant to the issue in the arbitration were clauses 6 “Notice of Readiness”, 7. “HOURS FOR LOADING AND DISCHARGING”, 8. DEMURRAGE” and 11. “HOSES: MOORING AT SEA TERMINALS”. Loading port Notice of Readiness tendered at 10.24 on 5 November. Vessel made ‘all fast’ at 1136 on 7 November. The delay in berthing was caused by reasons for which the vessel was not responsible. Loading of the parcel of MOGAS 93 RON commenced later that day at 15.00, with hoses being disconnected after the completion of loading at 15.48 on 8 November. Loading of the other parcel of Gasoil commenced at 17.06 on 7 November, with hoses being disconnected at 06.24 on 9 November. Owners submitted that laytime commenced at 16.24 on 5 November and, having made some allowances for bad weather at 50%, the used laytime amounted to 63 hours 48 minutes. Discharging port Notice of Readiness tendered at 09.30 on 14 November. She made ‘all fast’ at 14.48 on 17 November, discharge commenced at 16.42 and hoses were disconnected after the completion of discharge at 13.42 on 18 November. Owners submitted that laytime calculation showed a time used in Singapore of 92 hours 36 minutes having allowed for shifting time from anchorage to berth to be excluded. Held, The owners’ demurrage claim was fully supported, and, on the evidence, the facts as alleged by the owners were correct. Therefore, they had a clear entitlement to demurrage. Since the owners took a commercial decision to reduce their claim to US$50,000.00, the tribunal awarded that sum in full. Owners were awarded interest with commencement date 18 December, being 30 days after the completion of discharge. As the owners were successful, they were awarded their costs together with the costs of this Award. Final Award, 30 September 2008. This website removes the names of the parties involved in this or other awards. The reader can find more details on Jus Mundi https://jusmundi.com/en/ . These awards mostly come into the public domain through enforcement under the NYC 1958 .

Owners’ claim in this arbitration related to a balance payment of USD763,427.26 based on a final freight invoice itemised: freight, demurrage, despatch and detention under a voyage charter party for the carriage of Iron ore from Puerto Cortes in Honduras to a main port in China. After completion of loading and while the freight remained unpaid, the parties entered into a contract for the sale of the cargo between buyers, sellers (as charterers) and the owner (as the carrier). The charterers provided the owners with a Letter of Guarantee (see below) that recorded the various payments to be made. The Recap and additional clauses 46 and 49 of the charter party stated: “- G/A ARBITRATION IN LONDON, ENGLISH LAW TO APPLY. ARBITRATION IF ANY, THE OWNERS’ AND CHARTERERS WILL TRY TO SETTLE DISPUTES INAMICABLE WAY. IN CASE CHARTERS’ AND OWNERS DID NOT SETTLE IN AMICABLE WAY, THEN EITHER PARTY MAYSERVE NOTICE ON THE OTHER REQUIRING ANY DISPUTE TO BE SETLED WITHIN THIRTY (30) DAYSAFTER SUCH NOTICE. CLAUSE 46 – ARBITRATION IN THE EVENT OF ANY DISPUTE NOT SETTLED BETWEEN THE TWO PARTIES MUTUALLY, THEMATTER TO BE REFERRED TO ARBITRATION IN LONDON UNDER ENGLISH LAW, WITH EACH PARTYAPPOINTING AN ARBITRATOR. IN CASE THE ARBITRATORS FAIL TO REACH A UNANIMOUSDECISION, THEY SHALL APPOINT AN UMPIRE, WHOSE DECISION SHALL BE FINAL AND BINDINGON BOTH PARTIES. CLAUSE 49 – GOVERNING LAW GENERAL AVERAGE AND ARBITRATION IN LONDON AND THIS CHARTER SHALL BE CONSTRUCTEDUNDER AND GOVERNED BY ENGLISH LAW.”. The procedural background On 14th November 2014, the [X] arbitrator accepted the appointment on the LMAA Terms 2012 as owners’ appointed arbitrator. On 17th November 2014, by post and e-mail, owners’ attorneys notified the charterers of the above appointment and called upon them to either appoint its arbitrator or agree to the appointment of [X] as sole arbitrator. On 5th December 2014 by e-mail and pre-paid post, as no reply was received, owners’ attorneys sent a second notice that gave the charterers a further 7 clear days to appoint an arbitrator. They also notified the charterers that the owners would appoint [X] as sole arbitrator if they did not appoint an arbitrator. On 23rd December 2014, the owners’ P&I Club asked [X] to act as sole arbitrator since the charterers had made no appointment. On 5th February 2015, by e-mail and in hard copy by pre-paid post via the owner’s attorneys, the owners’ P&I Club served claim submissions. On 6th February 2015, the arbitrator informed the charterers by e-mail that defence submissions (and counterclaim, if any) should be served on the owners’ P&I Club (with a copy to him) no later than 28 days after service upon the charterers of the claim submissions and, allowing a reasonable time for the claim submissions to be served on the charterers, defence submissions (and counterclaim, if any) must be served no later than 12th March 2015. On 19th March 2015, the arbitrator made an order for service of defence no later than 24th March, and on 25th March, a peremptory order followed for service no later than 27th March 2015. Charterers did not serve a defence, and on 17th April, the arbitrator informed the parties that he would proceed to an award based on the materials before him. Challenging the arbitrator’s jurisdiction On 26th April 2015, the arbitrator requested the parties to make further submissions on a specific topic since the letter of guarantee that accompanied the claim submissions stated: “…that the exclusive forum and venue for the resolution of all disputes arising out of or under this Letterof Guarantee and the Voyage Charter shall be in the United States District Court for the SouthernDistrict of Florida to the exclusion of any and all other fora and venues and…to the exclusive personaljurisdiction of said court for the resolution of any and all disputes under this letter of Guarantee and the Voyage Charter to the exclusion of any and all other jurisdictions” (emphases added). The arbitrator added that the above references to the charter party could give rise to arguments as to the validity of the present proceedings. Neither party made any comments, but in the interests of fairness, the arbitrator considered before dealing with the merits of the claim each party should be given the opportunity to make submissions about the Letter of Guarantee on these arbitration proceedings. On 18th May 2015, the owners’ P&I Club made submissions, and on 3rd June, the charterers’ instructed Solicitors informed the arbitrator that they would make submissions. On 6th July, after a peremptory order, the charterers’ served their submissions challenging the jurisdiction of the arbitrator. Then, the owners’ P&I Club replied on 12th August. The arbitration claim On or before 25th August 2015, the parties agreed that the arbitrator’s decision should be contained in a separate preliminary award as to jurisdiction as envisaged by section 31(4)(a) of the Arbitration Act1996. By a final award dated 5th October 2015 (the Jurisdiction Award), the tribunal decided that the charterer’s challenge to jurisdiction failed and dismissed it. On or about 2nd November 2015, the charterers made a section 67 application to the Commercial Court to challenge the “Jurisdiction Award” and sought to have it set aside or varied so as the arbitrator had no jurisdiction over the disputes between the parties under the charter party. On 16th November 2016, owners’ P&I Club informed the arbitrator that the charterers’ solicitors were removed from the record as acting for the charterers in the arbitration claim. By e-mail on 24th July 2017, the owners’ P&I Club informed the arbitrator that by an order of Mr Justice [X] on 2nd March 2017, the charterers were ordered to provide the owners with security for its costs in the arbitration claim and the charterers had not complied with that order. By an order sealed in the High Court on 9th June, Mr Justice [Y] ordered the charterers’ arbitration claim to be stayed pending compliance with the order of 2nd March, and unless within 28 days of the service of the order by email to [….], the charterers complied with the order of 2nd March, the arbitration claim is to be struck out. The charterers failed to comply, and the arbitration claim is therefore struck out. Arbitration proceedings On 24th July 2017, the owners’ P&I Club pointed out to the parties and the tribunal that (i) the tribunal decided that it possessed jurisdiction and (ii) the charterers’ application to the High Court came to an end. Thus, the owners requested the arbitrator continue the arbitration on the merits and based on the materials before him, as the arbitrator has previously indicated, given the absence of any submissions by the charterers. In circumstances where the charterers have chosen not to participate in the arbitration, the arbitrator considered carefully the proper approach to be adopted. However, it did not involve doing the charterers’ job in defending the claim. The arbitrators’ approach was that: (a) prima facie , it remained for the owner to satisfy the arbitrator as to the validity of the claim advanced; (b) the arbitrator remained entitled to reject, disallow, etc., any parts of the claim or its amount in respect of which he was not so satisfied; but (c) it was not his role to adopt the mantle of the charterer or, subject to the points above, to advance on its behalf or rely on or adopt arguments that the charterer might have included in submissions had it chosen to serve any. Award accordingly. Final Award, 30 August 2017 This website removes the names of the parties involved in this or other awards. The reader can find more details on Jus Mundi https://jusmundi.com/en/ . These awards mostly come into the public domain through enforcement under the NYC 1958 .

The subject vessel was chartered on an amended NYPE Form 1946 to carry grains from Black Sea to Bangladesh. The owners claimed for hire allegedly due and owing USD 2,116.353.11, and the charterers denied liability. As a result, the matter came before two LMAA Arbitrators to determine the owners’ application for a partial final award under section 47 of the Arbitration Act 1996 that the charterers resisted in full. To determine this application and without pre-judging the counterclaims, the question that the tribunal had to determine at this stage of the arbitration was whether, and if so, to what extent, the charterers were entitled to withhold hire on the basis that they had counterclaims which gave rise to a right of equitable set-off against hire. The charterparty terms Clause 46 read as follows: “Charterers to pay 15 days hire within three banking days of delivery. Charterers to pay for bunker value on delivery with first hire payment. Charterers are not allowed to make any deductions from the hire except with Owners’ prior approval.” Clause 15 as amended: “That in the event of the loss of time from deficiency and/or default of owners, men or stores or fire,breakdown or damages to hull, machinery or equipment, grounding, detention by average accidents to ship or cargo, dry docking for the purpose of examination or painting bottom, or by any other cause unless such causes are due to charterers and/or their agents and/or their servants (including pilots,linesmen, boatmen, mooring men) preventing the full working of the vessel, the payment of hire shall cease for the time thereby lost… and all direct and proven extra expenses shall be deducted from the hire, fully documented with supporting evidence.” The tribunal also considered clauses 4, 5, 18 “Lien clause”, and 55 “suspension”. The scope of clause 46 The owners maintained that clause 46 prohibits deductions from hire (except with their consent). In response, the charterers argued that this only applied to the first hire payment (since clause 46 dealt with first hire payment) and, in any event, clause 46 could not prohibit deductions made from hire permitted by the terms of the Charter party and as a matter of English law. Further, the charterers contended that, as a matter of principle, an agreement by the parties to prevent deductions from hire was unenforceable under English law. The owners’ interpretation of clause 46 was that (a) it was not obvious what (if any) deductions could ever be made legitimately from the first payment of hire, and (b) there was no obvious reason for requiring the Owners’ prior approval for deductions from the first payment of hire but not for deductions from any other payments of hire. Held, Clause 46 dealt with hire and bunkers generally, and there was nothing in the wording of the prohibition on deductions to suggest that it had a limited effect. The charterers cited no authority in support of their proposition, and there was no reason why the parties to a charter party should not enter into a legally binding agreement that the charterers will not be entitled to exercise a right of equitable set-off against hire. Clause 46 does not purport to interfere in any way with the entitlement of the charterers to bring counterclaims against the owners; it merely provides in effect that, unless and until the charterers make good any such counterclaims, the owners are entitled to the hire due to them under the charter party. In short, it addresses cash flow and nothing else. The tribunal preferred the owners’ interpretation of clause 46, viewing also the typed amendment of clause 5 that made it clear that the owners’ prior authority has to be obtained even for cash advances to the Master. This reinforced the conclusion that the parties’ intention was the charterers’ obligation was to pay the full amount of hire unless owners gave their prior approval to deductions being made. The tribunal concluded that clauses 46 and 15 could be read together. Clause 15 contains the mechanism for deciding when and if a vessel was off-hire, and this must be fully documented with evidence, as produced by the charterers with their off-hire claim. If owners agreed under clause 46, the relevant period was treated as off-hire. If all else failed, including negotiations, arbitration would have to follow. This might seem unusual and possibly harsh on the charterers, but it was what the parties agreed by specific amendments to Clause 15 and the inclusion of Clause 46. This was also consistent with clause 5. The Charterers counterclaims It was appropriate to consider whether, in the exercise of their discretion to make a partial award, the charterers should be given the benefit of the doubt so far as the hire due in respect to any periods falling within clause 15. The charterers’ case in response to the application was that owners were responsible for cargo contamination as rejected by the receivers because foreign material had been found and that prejudiced the charterers in their ability to discharge the cargo from holds 2 and 4 and were entitled to deduct by way of equitable set-off a counterclaim equivalent to the value of hire and bunkers consumed on the relevant period. The charterers’ further and alternative case was that they had been deprived of the vessel’s services for several periods due to the owners’ purported exercise of a lien over the cargo – and then due to their arrest of the vessel and cargo. The periods that the lien was exercised were: (i) 22nd May to 25th May, 2018; (ii) 7th June to 14th June, 2018; and (iii) 25th July to 13th August, 2018. The charterers asserted that the owners’ lien was wrongful and unlawful and that they had a claim for damages which would extinguish the Owners’ claim for hire during the periods in question. The charterers’ position was that owners had no proprietary interest in the cargo since the bills of lading were freight pre-paid, and clause 8 of the sub-charter (as incorporated) limited any lien over cargo for outstanding freight and demurrage. Also, due to the owners’ refusal to discharge the cargo, the charterers were facing substantial claims for cargo damage due to the deterioration in the cargo’s condition over the delay period. The claim for cargo was based on a notice received under the sub charter party and charterers would seek indemnity from owners but no particulars were given. To determine this application and without pre-judging the counterclaims, the question that the tribunal had to determine at this stage of the arbitration was whether, and if so, to what extent, the charterers were entitled to withhold hire on the basis that they had counterclaims which gave rise to a right of equitable set-off against hire. Held, In respect to the alleged cargo contamination claim, a cargo claim cannot give rise to a right of equitable set-off against hire (see The “Nanfri ” [1978] at page 144). Even if the charterers’ counterclaims were a consequence of claims by the sub charterers and /or cargo interests they could not therefore give rise to a right of equitable set-off against hire (The Lok Manya (1979], Time Charters (7th edn) 16.70). Concerning the charterers’ case that they were deprived and/or prejudiced in their ability to discharge the cargo in no. 2 hold from 0930 on 7th June to 2nd August 2018 “as a result of the cargo contamination”, the charterers were not entitled to withhold hire for that period. Tuning to the above periods that owners purported to exercise a lien over the cargo, on the evidence, there could be no doubt that at all material times, there was a significant balance due and owing by way of hire to the owners, and they were entitled under clause 55 to exercise a lien over the cargo. Even if they were not entitled to do so, they were still entitled to withhold performance since the hire was outstanding. Therefore, the tribunal did not have to consider whether, on the authorities, the purported exercise of the lien was in line with the charter party terms. However, as noted, if charterers were correct and the lien clause in the sub-charter only provided for lien over outstanding freight then on their own case they were in breach of clause 18 of the NYPE since they have failed to safeguard the owners’ right to exercise a lien over the cargo (The “Aegnoussiotis” [1977]) About the period that the vessel was under arrest as a result of steps taken by the owners, as a matter of English law, it is difficult to make good a claim for damages for wrongful arrest. According to Bangladeshi law, there was no suggestion that the arrest was wrongful. During the period of arrest, no hire was paid, and the owners were entitled to withhold performance. Therefore, the charterers could not prove damages since the withdrawal of the vessel was a direct consequence of charterers’ failure to pay hire. Accordingly, the owners were entitled to the hire claimed, including interest and costs. Partial Final Award, 4 December 2018 This website removes the names of the parties involved in this or other awards. The reader can find more details on Jus Mundi https://jusmundi.com/en/ . These awards mostly come into the public domain through enforcement under the NYC 1958 .

One of the disputes in this reference concerned damages due to charterers’ breach of the bunker clause. The disputes came before three arbitrators that conducted the reference under the LMAA Terms. The redelivery bunker quantities dispute The vessel was delivered with 330 mt IFO and 79 mt MDO. Bunkers ROB at redelivery at Chittagong were reported to be IFO 43.00 mt and MDO 5.6 mt. Owners claimed the difference between delivery and redelivery quantities at prices paid at Chittagong on different dates after redelivery. The amounts finally claimed were US$40,563.70 for 287 mt IFO and US$5,209.54 for 73.40 mt MDO. The bunker clause “ bunker cls: bor to be same as bod same prices to apply bends Prices usd500/700 pmt for ifo and mdo resp. Bod abt 320 ifo and abt 65 mt mdo……. Any small discrepancies on del/redel qties to be settled as per cp prices…….” The charterers defence Charterers argued that the inclusion of the word “abt” in the Owners’ estimate of the bunkers on delivery indicated an intention that the redelivery quantities should also be qualified by “abt” and that Charterers should therefore have an allowance of 5%. The decision Bunker quantities The tribunal was surprised that Owners conceded this point. The tribunal held that based on their reading of this provision, the word “about” is intended only to reflect the fact that, at the date of the fixture, Owners could only estimate the quantity of bunkers on delivery, which was information Charterers would need to have for their voyage planning. Therefore, it is not permissible simply to imply an intention to apply “about” to redelivery quantities when the parties have chosen not to use the word when describing such quantities, despite using it twice to qualify delivery quantities in the next sentence, as well as in numerous other parts of the recap. The provision that bunkers on redelivery match the quantity on delivery seems to be inserted essentially for accounting certainty. It is implicitly accepted by the clause (“Any small discrepancies…”) that in practice, redelivery quantities can never precisely match the same figure as on delivery. However, that does not mean that the parties did not intend to base their financial rights and obligations on the principle that delivery and redelivery quantities would be the same. The advantage of such an arrangement is that there is no room for argument as to quite what is meant by “about”. Although Owners said in their Reply and Defence to Counterclaim that they have revised their calculations to reflect Charterers’ point concerning “about” being applied also to redelivery quantities, thereby reducing them by 5%, the Hire Statement attached to those submissions still shows shortfalls of 287 mt IFO and 73.40 mt MDO. The same quantities were also used in Owners’ further revised Final Hire Statement. The tribunal has assumed that the Owners overlooked the concession they made and accordingly the tribunal reduced the shortfall quantities as follows: Actual bunker quantities on delivery IFO 330.00 mt MDO 79.00 mt Contractual redelivery quantities with 5% allowance IFO 330.00 mt +/- 5% = Min 313.50 mt – Max 346.50 mt MDO 79.00 mt +/- 5% = Min 75.05 mt – Max 82.95 mt Actual redelivery quantities IFO 43.00 mt MDO 5.60 mt Shortfalls IFO 313.50 mt less 43.00 mt = 270.50 mt MDO 75.05 mt less 5.60 mt = 69.45 mt Bunker prices to apply Both parties considered that the proper measure of damages for the shortage of hunkers on redelivery was the difference between the charter party prices (USD500 and 700 for IFO and MDO respectively) and the market prices at Chittagong. The charter party prices are intended to measure the value of bunkers physically on board at delivery and redelivery, which is a different function to measuring a party’s loss in the event of a breach, although such prices will determine whether any claim exists in the first place. One member of the tribunal was troubled by the issue of redelivery bunkers, quantities and prices, but on reflection, he was wrong, and the tribunal has therefore accepted the parties’ submissions, in principle at least. Held, that the average price paid by Owners for IFO at Chittagong was US$641.34 and US$770.97 for MDO and that such prices represented market prices at the time. Redelivery bunker claim Difference between Chittagong prices and charterparty prices IFO US$641.34 less US$500 = US$141.34 per mt MDO US$770.97 less US$700 = US$70.97 per mt Owners’ loss IFO 270.50 mt x US$141.34 = US$38,232.47 MDO 69.45 mt x US$70.97 = US$4,928.87 Total bunker redelivery claim = US$43,161.34 Final Award, 31 January 2014 Note: This website removes the names of the parties involved in this or other awards. The reader can find more details on Jus Mundi https://jusmundi.com/en/ . These awards mostly come into the public domain through enforcement under the NYC 1958 .

Disputes arose concerning off-hire at Chittagong due to the ship’s trim and stability issues, a cargo shortage claim, and a customs fine. The disputes were referred to a sole arbitrator under the LMAA SCP. The charterers failed to serve their Defence submissions after an order, followed by a peremptory order, and the arbitrator informed the parties that he would proceed to an award. The claims The off hire The owners’ position was that the SOF stated during the disputed period that the mother vessel had stability or trimming problem. Delays due to trim and stability problems did not constitute an off-hire event because, even if the problems had arisen because of the action of the Master, there had been no inefficiency of the vessel or her equipment. Further, a mistake by the Master was not an off-hire event because it was not a default within the meaning of the off-hire clause, clause 15 (The Saldanha [2011] 1 Lloyd’s Rep.187). Further, the owners asserted that the jetty had been obstructed by a shore crane that prevented discharge from holds 1 & 5, and stevedores worked on other holds that affected the vessel’s trim. To defend the owners’ position, the master inserted remarks in the SOF and took photographs of the shore cranes preventing the discharge. Cargo shortage of 527 bags The owners settled a shortage claim and produced the R&R forms. In addition, the shortage resulted in a custom fine paid in cash. Consequently, the owners sought to recover both claims from the charterers according to the Hague Rules, the USCOGSA or the implied indemnity under clause 8. The owners said that the holds were sealed upon completion of loading, and seals were found intact at the discharge port. They submitted that the explanation for the shortage was that the cargo had not been shipped, and the charterers were liable. In particular, the owners submitted that they could recover under Article III, Rule 5 if charterers presented bills of lading for cargo that had not been shipped. Alternatively, it was an implied term under clause 8 of the NYPE that the bill of lading should relate to goods actually shipped and should not describe goods which were known to be incorrect (The Boukadoura [1989] 1 Lloyd’s Rep. 393). The tribunal’s decision Off- hire Held, that even if the Master had been negligent, that would not bring the charterers within clause 15 because such negligence would not constitute “default” within the meaning of the clause. However, the evidence shows that the presence of shore cranes prevented the discharge of cargo from holds nos. 1 and 2. This was clear from the SOF, the master’s working reports and the photographs produced. The charterers and their agents had been responsible for arranging the berth and for ensuring that the vessel could discharge. They failed to do so and so the costs and expenses must be for their account. Shortage-customs fine Held, that the reports from the discharge port showed a shortage of 527 bags under the heading “Balance on Board”. If, indeed, there was a balance still on board, responsibility lay with the charterers who had the obligation to discharge all the cargo. It is, in fact, more likely, that the bags were never shipped. The holds were sealed at the load port and were found to be intact at the discharge port. The charterers are to indemnify the owners for the loss under Article III rule 5 of the Hague Rules/USCOGSA. In addition, the charter incorporated the NYPE ICA which states that claims arising out of the loading of the cargo are to be for the Respondents’/charterers’ account. If the shortage arose from pilferage, the Respondents as charterers would bear 100% of the claim. Accordingly, however the claim is analysed, the charterers are liable. Accordingly, the charterers were to reimburse the owners for the customs fine, which would not have been incurred but for the breach of charter by the charterers. The charterers were also ordered to pay the costs along with interest. Final Award, 13 August 2018 Note: This website removes the names of the parties involved in this or other awards. The reader can find more details on Jus Mundi https://jusmundi.com/en/conflict-checker . These awards mostly come into the public domain through enforcement under the NYC 1958 .

Two LMAA arbitrators held that , under these events , the owner’s refusal to discharge against an LOI was justified; the issue of a replacement set of bills of lading was both illegal and unlawful; the replacement bills of lading claused “Clean on board” were patently unlawful; Charterers had no claim either as off-hire or damages. Owners’ claim failed for hull cleaning costs and redelivery bunker prices. The Background The main issues in this arbitration concerned prolonged off-hire periods caused by owners’ refusal to berth and discharge the cargo against an LOI, including deviation & stoppage without charterers’ consent. Charterers denied the owners’ claims for US$367,941.81, arguing that the owners’ unreasonable and unlawful conduct caused the vessel to suffer delays and consequently being off-hire. Additional issues related to MGO supplied due to vessel’s prolonged stay, hull cleaning and redelivery bunker prices. The vessel was chartered under an amended NYPE Form to load consignments of steel coils from Haiphong and Ho Chi Minh City and discharge them in Mumbai and Dammam. A total of six bills of lading were issued by agents at the two Vietnamese ports, with remarks as to the condition of the cargo based on the P&I Surveyor recommendations as per charter party terms. The charterers issued a second set of seven bills of lading for the same cargo. However, the Consignees and Notify parties differed in four replacement bills, the three initial consignments were split into four, and the specific remarks by the surveyor were not included, but a more generic wording was used. Two bills of lading showed the cargo was loaded “Clean on board” and were ante-dated. Consequently, the owners made clear to the charterers that the cargo would only be discharged against the presentation of the original bills of lading, and the owners refused to allow the vessel to berth. The ship arrived at Mumbai on 25 March 2011, berthed on 21 April, that commenced discharging against surrender of the original set of the bills of lading and discharging completed on 25 April. Then, the ship stayed at OPL Dubai from 29 April, when she arrived, until 13 May she sailed for Dammam. The parties contentions The charterers’ primary case was that the owners should have discharged the cargo immediately upon the vessel’s arrival at Mumbai, following their instructions. In the alternative, the owners should have agreed to discharge the cargo on 5 April 2011, as soon as the charterers confirmed that the original bills of lading would be returned at Mumbai. Owners contended that the LOI fell short of their legitimate demand that delivery takes place against the original set rather than the replacement set, which misdescribed the shippers of the cargo and included different remarks. Charterers accused the master of failing to obey their orders in breach of clause 8. Owners responded and justified their position by reference to the general law principles: “It must be the duty of the Master to act reasonably upon receipt of orders. Some orders are of their nature such that they would, if the Master were required to act reasonably, require immediate compliance. Others would require a great deal of thought and consideration before a reasonable master would comply with.”( Midwest Shipping Company Limited v D. I. Henry (Jute) Limited [1971] 1 Lloyd’s rep 375, Donalson, J ) and the Court of Appeal in the Houda [1994] 2 Lloyd’s Rep. 541 where it was similarly held that it was reasonable of the Master to refrain from delivering the cargo without the production of original bills of lading notwithstanding instructions from the charterers to do so. The decision The tribunal consisted of two LMAA arbitrators who decided the issue on four sets of submissions: Claim, Defence, amended Defence, and Reply; the charterers failed to serve their rejoinder despite an order, followed by a peremptory order from the tribunal. Held, that the entire case, in reality, turned upon whether or not the owners acted properly and reasonably when confronted with these events. The issue of a replacement set of bills of lading was both illegal and unlawful ( Standard Chartered Bank v Pakistan National Shipping Corporation and Another [1998] 1 Lloyds Rep. 684, The Atlas [1996] 1 Lloyds Rep. 642, applied ). The owners were entitled, as they claimed, to expect that the specific remarks and not others of a generic nature, such as those contained in the replacement set of bills of lading, be inserted in the relevant bills. Therefore, the replacement bills of lading claused “Clean on board” were patently unlawful. Relying on their experience, the tribunal agreed with the owners that India and Saudi Arabia were jurisdictions that particularly favoured their local traders/ receivers and that, accordingly, the owners were entirely justified in fearing heightened risks of delays and penalties arising from possible misdeliveries, fraud or cargo claims. Accepting the charterers’ requests, the owners risk prejudicing their protection and indemnity insurance cover. Accordingly, there was no just cause, either under the terms of the charter party or in damages resulting from breach of charter, for the vessel to be placed off-hire either in Mumbai or OPL in Dubai, where the ship waited until the problems with the Dammam cargo were resolved. MGO Supply The vessel deviated and stayed at off-port Dubai to lift MGO to perform the voyage to Dammam safely. The ship was running low on MGO due to her prolonged stay at the previous port due to BL issues. The charterers accepted the cost by crediting the entire quantity’s value based on the delivery prices (885 USD/ PMT) and sought reimbursement of the remaining balance on redelivery by applying posted Dammam price (995 USD/PMT). The owners claimed the cost of MGO lifted in Dubai based on 1,016 USD/pmt, which was the acceptable way. Redelivery bunkers The clause stated, “as per actual place prices on the time of delivering, the same – for the cost of bunker on redelivery”. Charterers applied posted prices for Dammam (685usd/PMT) without any supporting evidence, and owners applied posted prices for Kuwait (639 USD/ PMT) that was about 250 miles distant. The tribunal rejected the owners’ approach and accepted the charterers’ applied price for calculating the value of bunkers on redelivery. Hull Cleaning The tribunal rejected the owners’ claim for hull cleaning due to the prolonged stays at Mumbai and OPL Dubai as a result of the charterers’ breaches. The owners have failed to prove their case by submitting proper evidence. In particular, when the vessel had last drydocked, what compositions had been used to protect the hull, how its performance had been affected and the like. Moreover, no invoices in support of the alleged cost of cleaning were produced or for superintendents and legal fees. Costs and interest The owners were entitled to their recoverable costs as well as to the fees and costs of this arbitration, which follow the event in the normal manner. The owners were entitled to compound interest on the amount awarded from the date of redelivery, and compound interest of their recoverable costs to run from the date of this Award. Final Award, 2 April 2012 This website removes the names of the parties involved in this or other awards. The reader can find more details on Jus Mundi https://jusmundi.com/en/conflict-checker . These awards mostly come into the public domain through enforcement under the NYC 1958 .

The costs of escort boat and armed guards for trading in Nigeria were for charterers’ account but not the hull cleaning costs. Likely, this is the only published LMAA award that touches on the  BIMCO Bunker non-lien clause.  The Background The vessel was chartered under an amended NYPE Form to discharge salt in bulk at Port Harcourt, Nigeria. After completion of the voyage, the owners produced their final hire statement and claimed about 94 k from the charterers. Charterers denied liability and raised various counterclaims. The parties’ claims and counterclaims related to the costs of armed escort boats and guards while calling Port Harcourt, Nigeria, various off-hires, and hull fouling costs under the Bimco Hull fouling clause. The disputes were referred to arbitration under the LMAA Small Claims Procedure (SCP), and a sole arbitrator made his award in April 2022. There is a detailed discussion of the proceedings in arbitration and how the parties dealt with procedural matters under the SCP, but this was not added to this post. However, the tribunal considered it to award costs (see the last para). Armed escort boat On 25 January 2021, the charterers advised the master that an armed escort boat would meet the vessel at Bonny Fairway Buoy. Per the port agent message, the ship is not needed to drift at 100-250 nm, and “Bonny anchorage is safe”. According to the berthing prospects, the vessel would berth immediately upon arrival. On 26 January, the vessel’s underwriters advised that this proposal was unacceptable and required an escort from 3° N. The owners made it clear that gunboat escort is from North of 3° N; if that were not accepted, the vessel would remain outside the High-Risk Area, always on hire. Then, as no reply was received from the charterers, the owners advised them that they would arrange for an escort and invoice the charterers accordingly. On 28 January, the owners received further feedback from the underwriters and passed it to the charterers. Then, the charterers sent a revised message to the master advising that the meeting point with the gunboat changed to 3 degrees North / 7 degrees East. Master responded to this message and asked whether the berth was free to proceed to the meeting point and the ship would not move at the inner anchorage waiting for berthing. Per the agent info, the vessel would stay 24 hours at the inner anchorage. On 29 January, a berthing meeting took place, and the Harbour Master suspended berthing at the anchorage with immediate effect due to congestion. The charterers responded to the owners and said the ship would only wait a couple of hours. The berth was due to be vacated on 30 January, and if the vessel did not stay at the inner anchorage, she would lose her turn to berth and be off-hire. Also, the insurers’ view was wrong as no recent piracy incidents existed. The tribunal held that the owners complied with the strict requirements imposed by the charter party and the vessel’s insurers. Contrary to what the charterers have suggested, the master’s refusal to proceed without a berthing allocation was not an excuse but an explanation for his acting as he did, strictly by the charter party terms. The owners were not required to step outside the terms of the charter party nor to ignore the head owners’ and their underwriters’ requirements. As to the cost of escorts, these were for the charterers’ account per charter party. As the charterers failed to make arrangements, the owners said they would do so. In the end, the owners agreed to bear one-half of the total costs, and the tribunal followed their lead on that concession. Underwater inspection-cleaning The charter party included the BIMCO HULL FOULING CLAUSE FOR TIME CHARTERS. Owners sought to recover USD 7000 for an underwater inspection and cleaning/polishing of the propeller at Takoradi, Ghana, following her redelivery. The parties disagreed on whether the vessel remained in a single location for at least 15 days to trigger the clause. Further, no discussions were made before the vessel’s redelivery to engage para (b) and (c) of the clause. The tribunal looked at the evidence overall and held that the condition of the vessel’s hull was generally good, with no more than intermittent light growth. The propeller, while more generally affected, exhibited limited growth. There was no significant evidence of the vessel’s performance before, during, or after the vessel’s voyage to Port Harcourt. But there was some evidence that the tribunal accepted that the ship stayed idle for an extended period at Itaqui, Brazil, before her delivery into this charter party, so it was not satisfied that the owners had made a good claim under this head. Charterers’ counterclaims The vessel was off-hire as it lost its turn to berth because of the masters’ wrongful refusal to proceed and follow their orders. This was not accepted since the master was fully justified in refusing that order. The cost of the escort boats for inbound and outbound legs and the cost of the armed guards on board while the ship remained at the inner anchorage are for owners’ account. The owners have given credit for the cost of the outbound transit, but it is for the charterers to bear the cost of the inbound leg as per the owners’ insurers’ requirements. Owners took no responsibility for the cost of the guards remaining on board while at inner anchorage, as the ship also remained on hire for that period. The vessel is off-hire for 0.18 days due to a dispute concerning documentation that delayed the bunkering. This issue turned on the available evidence and the proper interpretation of the Bimco bunker non-lien clause. The tribunal considered the relevant email exchanges between the parties before the bunkering operation. The tribunal held that even if it is unclear whether the charterers complied with para (b) (ii) that required to notify the owners in writing of the identity and contact details of the bunker supplier, the owners had all the information needed via exchanges between the master and the traders. Of importance, the last-minute requests for compliance with the requirements of the clause affected the owners’ position as this would cause at least some delay. As a result, the vessel was off-hire. Vessel was off -hire due to crane stoppages supported with a copy of a detailed statement of facts. As suggested, there was no evidence that the stevedores caused this incident and the charterers’ claim succeeded. Costs and Interest It is in the tribunal’s discretion how to award interest and costs, subject to the constraints imposed by the SCP. The owners have succeeded in making good by far the more significant part of their claims and defeating many of the Charterers’ challenges. Further, the charterers have failed to engage fully with the procedures, and if they had followed the tribunal’s orders, the reference could have run more smoothly and less costly. The owners were awarded an outstanding balance of about 80k, along with their costs and interest. Note: This website removes the names of the parties involved in this or other awards. The reader can find more details on Jus Mundi https://jusmundi.com/en/conflict-checker . These awards mostly come into the public domain through enforcement under the NYC 1958; the operative provisions of the Convention have been transposed into the law of England and Wales by Part III of the Arbitration Act 1996. For more information about the Bimco Bunker non-lien clause and hull fouling clause, you can visit BIMCO’s website: https://www.bimco.org/

The bagged rice was damaged by the rough and careless handling of the stevedores at both ports of Freetown and Dakar in West Africa. Under paragraph 8(b) of the ICA, it falls 100% to the Charterers . The background The vessel was chartered under an amended NYPE 1946 Form to carry bagged rice from Tuticorin to Freetown, Sierra Leone and then to Dakar, Senegal. Disputes arose between the parties and referred to arbitration under the LMAA Terms, according to the applicable “BIMCO Standard Law and Arbitration Clause” in the charter party. Owners appointed an arbitrator, and the Charterers have failed to appoint an arbitrator despite being given notice. Thus, the Owners appointed [X] as the sole arbitrator in the reference. Owners served Claim Submissions and claimed various indemnities and sums pursuant to the settlement of two cargo claims under the 1996 InterClub Agreement (“the ICA”), together with interest and costs. Then, the tribunal ordered the Charterers to serve their defence. Upon their failure to comply, the tribunal made a peremptory order, notifying them that he would proceed to an award without further reference to Charterers if they failed to serve their defence within the time limit. Again, the Charterers failed to comply. The relevant terms cited in the award were: clause 8 “That the captain shall prosecute his voyages with the utmost despatch..” and the ICA that sets the liability apportionment between the parties for cargo claims. Freetown During discharging, the [X] company attended the operation to inspect the cargo on behalf of the receivers/ underwriters. According to their report, the cargo was damaged by the stevedores’ negligence and rough handling. The claims against the Owners by the holders of the bills of lading were circa 160k, and the Owners have properly settled at 100k. Dakar [Y] Company attended the operation to inspect the cargo on behalf of the receivers/ underwriters. Their report also stated that the cargo was damaged by the stevedores’ negligence and rough handling. Therefore, the claims against the Owners by the holders of the bills of lading were circa 105k, and the Owners have properly settled at 46k. The claim In summary, the Owners claimed indemnities or a monetary award for: (i) US$146,000.00 pursuant to their settlement of the Freetown and Dakar claims (per para 8(b) of the ICA fell 100% on the Charterers); (ii) £15,166.45 and € 9,160.00 in respect of Club correspondent’s costs (para 3(c) of the ICA); (iii) interest; and (iv) costs. The arbitral tribunal Having carefully considered all the evidence submitted by the Owners, the tribunal was satisfied that the cargo was damaged by the rough and careless handling of the stevedores at both Freetown and Dakar, which, under paragraph 8(b) of the ICA, fall 100% to the Charterers. Furthermore, in the absence of any contrary evidence or challenge by the Charterers, the tribunal accepted the Owners’ evidence that they had properly settled the two cargo claims according to their obligations under paragraph 4(c) of the ICA. Owners were awarded their claims in full, along with interest and costs, under the normal rule that costs follow the event. Note: This website removes the names of the parties involved in this or other awards. The reader can find more details on Jus Mundi https://jusmundi.com/en/conflict-checker . These awards mostly come into the public domain through enforcement under the NYC 1958; the operative provisions of the Convention have been transposed into the law of England and Wales by Part III of the Arbitration Act 1996.

Due to strong river currents, the master may request tug assistance to bring the vessel in or hold it alongside to facilitate cargo operations performed by the stevedores. That may result in disputes about the extra tug expenses and laytime issues when experiencing delays waiting for tugs or during cargo operations.  In the present dispute, the stevedores suspended operations because, based on their assessment, it was unsafe to conduct operations when the ship was not fully secured to the berth. As a result, the master requested tug assistance to keep the vessel fully secured at berth, and there was a slight delay before tugs came alongside. So, the parties disagreed on: who would pay the additional tug costs and who would bear the time lost waiting for tug assistance (laytime or damages). The procedure After a few rounds of correspondence, the Owners served an arbitration notice under the LMAA SCP. The Charterers agreed that one of the three proposed arbitrators would act as a sole arbitrator in the reference. Before proceeding, the parties engaged in protracted exchanges that contained an analysis of authorities, law textbooks and LMAA awards. The below summarizes the parties’ main arguments with relevant citations (where possible) for the readers’ easy reference. The Owners claim(and reply to defence) The Owners’ primary claim for tug expenses and laytime (or damages in the alternative) was founded upon an alleged breach of the safe port/berth warranty. Owners provided evidence supporting that this terminal requested other vessels to seek tug assistance during that period, so it was prima facie an unsafe berth. Alternatively, as the matter happened during loading operations, the “loading clause” bites, not the specific “tug assistance” clause. According to the ‘loading clause’, the Charterers remain responsible for loading the vessel and stevedores’ actions; stevedores were unreasonable, incompetent and failed to follow the masters’ instructions. Lastly, the tug assistance was part and parcel of loading as it facilitated the Charterers’ loading operation. Therefore, such a loss must lie where it fell, namely on the Charterers( London arbitration 22/04 was considered). Alternatively, the Owners asserted that the “tug assistance” clause is ambiguous and since it started life in the Charterers’ proforma, it must be construed against them. Applying the principles of contract interpretation as expounded by Popplewell J ( The Ocean Neptune [2018] EWHC 163 (Comm) at para 8), reading the contract as a whole and in a commercial way as commercial people negotiated it, the Charterers’ construction of the charter makes other terms of the contract redundant. Charterers argued that Owners seek to rewrite the contract. In response, the Owners said they were not seeking to invoke commercial convenience to rewrite the contract retrospectively. But if a strict literal approach to interpretation is applied -including what Charterers’ lawyers now think the contract terms to mean in the aftermath- it undermines the commercial parties’ presumed intentions upon negotiating/ entering into this charter. And applying an over-textual analysis negates other relevant contract terms with equal effect and application. Owners further argued that they are not barred from recovering damages in mitigation ( McGregor on Damages para 24-072) as the ship stayed and operated alongside instead of shifting out, and Charterers have a corresponding obligation to indemnify the owners against loss; expert evidence showed that the characteristics of the specific berth could not be known to the Owners and it cannot be said that Owners assumed any risk ( Carver on Charterparties para 1-030 ). Further, the stevedores/ Charterers controlled this terminal, so a party cannot benefit from his wrongdoing. Lastly, the costs of the tugs were high, and no proper invoices were submitted to support the actual cost. Thus, the owners advanced their claim in three distinct ways; as a claim for an indemnity, as a claim for damages for breach of contract, and as a claim for restitution(recoverability of such payments was governed by the law of restitution, itself based upon the principle of unjust enrichment- London Arbitration 13/1 was considered). As for the terminal tariff terms to justify the invoiced sums, these were brought to the Owners’ attention after the formation of the charter party. Therefore, these terms are not part of the contract between Owners and Charterers. Concerning the Charterers’ primary defence based on The Isabelle, the Owners tried to distinguish The Isabelle on various grounds: it concerned a dispute that arose out of a voyage charter in the SHELLVOY 3 form dated Dec. 8, 1980 and was decided basis ‘the scheme of the charter-party (see The Isabelle , 367, col 2). The decision concerned the Ressac, but the facts of that case distinguished it from the present one, and it is therefore of no assistance( See also London Arbitration 11/10 ). In any event, each case is individual and had to be decided on its own merits and, in particular, its facts having regard to the purpose of the contract- Per Bingham LJ, citing the observation of Lord Diplock-‘ First, The Evia was the subject of a time and not a voyage charter. This is not an immaterial distinction , as Lord Diplock’s express reservation (at pp. 310 and 749E of the reports) makes clear. Some practical differences are obvious …’ ( The APJ Priti , 40 col 2). No doubt, there are obvious differences between a SHELLVOY 3 form and an amended [X] form. Tankers, compared to bulkers, do not infrequently operate at off-shore installations or- by analogy- to mooring facilities of this kind. Turning to the decision of Axel Brostrom & Son v Louis Dreyfus & Co , it considers the point of safety during navigation or transit to or from berth and not whilst the ship is alongside ; hence not using “her own steam”. Further, the question of ‘safe port’ is a question of fact, a 1932 decision relating to a different port, a different vessel, and different facts is of no assistance in the present case. The Charterers defence The charterers denied the owners’ claim and argued that there is no breach of the safe port/ berth warranty; the presence of adverse currents does not make a port unsafe- the locus classicus is the well-known definition set out in the judgment of Sellers LJ in The Eastern City . The tugs were immediately available, and the request for a hold-in tug is part of good ordinary seamanship(falling on Owners). Also, Owners bear the burden to prove that the danger experienced by the vessel at the terminal did not affect every berth to the same extent ( The A.P.J Priti [1987] 2 Lloyd’s Rep. 37 referred ). It would be tough to recover the expenses without physical loss or damage; here, there was no damage(see London Arbitration 2/86 ). Further, the costs of taking ordinary measures to safeguard the ship fall upon the Owners( Voyage Charters para 5.85; Axel Brostrom v. Louis Dreyfus ; The Isabelle ). Then according to the specific provision “tug assistance” the cost is for the Owners; based on the rule of construction, specific displaces the general(see also The Interpretation of Contracts 6th Ed. Ch 7, s 5). Lastly, there is no ambiguity in reading the term contra proferentem, and its literal meaning should apply. A tribunal will not seek to rewrite an expressly agreed term to achieve a commercial convenience for one party. Lastly, operations were suspended during the weekend and time is excluded in any event ( SSHEX terms). Then, the Owners revised their position and claimed damages on the ground that the stevedores were incompetent and unreasonable in suspending operation. Thus, the Charterers are in breach of their obligation to employ competent stevedores and/ or under an implied duty of co-operation (not hinder operations- See London Arbitration 8/07 ) and/or under their duty to act with reasonable diligence and load the cargo. There was no allegation of improper mooring arrangements. Settlement Charterers maintained their position based on the specific tug assistance provision and The Isabelle. WPSATC offers were submitted during the exchanges, and the parties commercially settled the dispute. Some other authorities or arbitration decisions that were not cited but considered are : London Arbitration 11/99 (Owners meet the cost of tugs under a voyage CP), London Arbitration ( Tug expenses and line handling expenses- NYPE), The Trade Green[2000] 1 Loyd’s Rep 451 ( per Moore- Bick J), London Arbitration 1/04( under NYPE CP), Brostrom (Axel) & Son v. Louis Dreyfus & Co., (1932) 44 Ll.L.Rep. 136, The Universal Monarch [1988] 2 Lloyd’s Rep. 483 (Owners sought to recover costs of extra tugs – Whether charterers in breach of safe port warranty), London Arbitration 11/10 ( the Isabelle was distinguished), London Arbitration 2/86 (operation suspended due to bad weather), The Isabelle [1982] 2 Lloyds Rep 81( shifting and tug boat expenses to keep the vessel in place at berth), Voyage Charters ( paras 5.58,5.85, C. 62), Summerskill on Laytime 6th Ed 7-01( currents are not bad weather), London Arbitration 21/19 (Charterers connected to terminal), London Arbitration 18/05 ( delay caused by stevedores failing to follow the masters’ instructions), Voyage Charters 11.12 citing The Sinoe (acts or omissions of stevedores), London Arbitration 18/13 ( whether stevedores incompetent), London Arbitration 5/94( stevedores acted reasonably), London Arbitration 15/17 & London Arbitration 16/04 (request of original invoices) .

London Arbitration 21/22 & 22/22 considered issues about jurisdictional challenge and peremptory order . This practice area only cites general observations and not the above awards. General observations-comments A tribunal will dismiss an unsuccessful jurisdictional challenge and award costs on the general principle that “costs should follow the event” unless the tribunal determines otherwise (s 61 of AA 1996, para 3 (a) & para 8 of LMAA SCP 2021). Notably, based on the Arbitration Act 1996 ss 30-32, the tribunal may rule on its own jurisdiction, a party can challenge the tribunal’s substantive jurisdiction, and the court may determine a preliminary point of jurisdiction. In addition, s 67 provides that a party can apply to the court to challenge an award because the tribunal had no substantive jurisdiction. Sections 41 (5) to (7) empower the tribunal to make peremptory orders when a party fails to comply with an order or direction. In appropriate cases, s 42 provides for orders to be enforced by the court. In a previous decision, the Charterers raised the point that section 34(3) of the Act applied in the situation covered by section 41(7), namely breach of a peremptory order. The tribunal held that there was no authority that section 34(3) did qualify section 41(7). The whole point of a peremptory order was to prevent parties from disregarding the tribunal’s orders. Another point made by the Charterers’ solicitors was that the tribunal did not indicate which alternative penalties would apply under s 41 (7). However, the tribunal said that “ the Act did not require the tribunal to do that. Normally that was something the tribunal would do, but in the present case, the tribunal was focused on whether it should be a peremptory order and, if so, of what duration, something the Act did require to be specified..”. Therefore, it may be desirable to state the intended sanction to be imposed under s 41 (7) upon giving notice to a party of failure to comply with a peremptory order to avoid further debate and argument. Such an order must expressly state it is a peremptory order and include a time limit for compliance.

The vessel was chartered on an amended EUROMED 1983 charter party to load from 1 sb or 1 sa (A) and discharge at 1sb/sa (B) + 1sb/sa (C) in Nigeria. The parties disagreed on calculating laytime (reversible or not) at the 2nd discharging port, including for bad weather stoppages resulting in a dispute of circa 60k. The relevant clause for the 2nd port stated, “ X mt per WWD of 24 consecutive hours Saturday, Sunday, holiday included, always excluding super holidays.  NOR to be tendered UPON ARRIVAL ANY TIME Monday to SUNDAY. laytime to count upon arrival provided within working hours otherwise from 1st resumption of work unless vessel already on demurrage “. The vessel arrived at the 2nd discharging port and was waiting her turn to berth due to congestion. At that time, the SOF recorded bad weather periods. So, the Charterers’ laytime calculations excluded these periods because the vessel was not on demurrage by applying reversible laytime. The Owners contended that based on their non-reversible laytime calculations, as supported by the wording “ unless vessel already on demurrage “, the ship was on demurrage from the first discharging port and remained on demurrage upon her arrival at the 2nd port. Therefore, no weather interruptions apply based on the old maxim “once on demurrage, always on demurrage”. Alternatively, if the Owners’ interpretation of the clause is wrong and reversible laytime applies, the Charterers submitted insufficient evidence to prove that the ‘bad weather’ affected the operation at the berth. Therefore, time counts without interruptions. To support this contention, the Owners said that ‘bad weather’ entries in the SOF were insufficient to interrupt laytime while the ship waited at the anchorage. These entries are much too general and could be interpreted as the presence of differing degrees of bad weather. Adding to this, the SOF was unhelpful in determining whether the operations were suspended at the berth. Then, the parties provided additional evidence to support their position but lacked consistency. Therefore, the issue turned on the quality of the evidence. If the Owners’ construction of the clause is correct, they were entitled to about 60k demurrage. Otherwise, there was a minor despatch amount due to Charterers. Therefore, the main issues were: (a) whether laytime is reversible or non-reversible on the true construction of the charter party, and (b) Whether the ‘bad weather’ periods (either part or all of them) should be excluded from laytime. Finally, the parties disagreed on the construction issue but agreed on some vague entries of “bad weather” periods in the SOF to count. Thus, the agreed demurrage amount was reduced to circa 10k. Likely, the parties would have avoided protracted exchanges if the clause stated “ Laytime to be reversible between 1st and 2nd discharging port ” or similar wording. Other interesting cases on this point will be added in due course to this section. Some of the arbitration decisions considered or referred by the parties are London Arbitration 6/12, London Arbitration 7/92, London Arbitration 9/11, London Arbitration 21/00, London Arbitration 8/16 & (1981) 32 LMLN 3. #BadWeather #Euromed #ReversibleLaytime #SOF