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These disputes concern not only the interpretation of a specific contractual term but also the sufficiency and weight of the evidence. A recurring question is: how can a tribunal enforce the provision that “evidence of deck logs shall be binding” when independent evidence shows that the logs are falsified, or even if it can be found that the logs are incomplete? In such circumstances, how can the logs be considered binding on the parties? Owners argue that the tribunal must give effect to the contractual terms. Charterers, however, contend that this presupposes the evidence itself is reliable.   In this arbitration, Clause 44 provided that “The basis for determining the vessel's performance shall be the statistical data supplied by the Master”.   The Panel used their best efforts to determine whether or not this statistical data was of such questionable quality that the Clause should be disregarded and that performance should be judged by the standards suggested by the Charterer in these proceedings.   The Contract tied the vessel's performance to the statistical data supplied by the Master, thus placing upon Charterer the burden of proving that the data was erroneous. The panel exercised their prerogative and accepted the Charterer's submission that the data, which we felt was more reliable than the Master's data, should apply. The Panel ignored the Master's data where it conflicted with the ship's data given to others for other purposes (weather reporting).   The Panel were more or less in complete disagreement with the Charterers' determination of distance travelled. They found, with minor exceptions, the logbooks to be a reliable source of information for assembling data in this area.   The panel agreed with neither side's allowances for exceptions from guaranteed speed on account of weather exceeding Force 5 on the Beaufort Scale. Then, they individually considered the evidence on weather and made allowances accordingly. After this long and tedious exercise , the Panel unanimously arrived at the speed at which the charter hire for the first and second year should be adjusted. SMA 1494

In the preamble of the charter party the vessel was warranted as being capable of steaming, fully laden, at about 15.5 knots in good weather conditions, which were elsewhere defined as not exceeding Beaufort Force 3. The Charterer has stated this claim as an off-hire, and while arguing that the deduction conforms to Clause 15, it founded the claim simply on the difference between the vessel's ETA at the next port given by the Master and the time the vessel actually arrived there. Charterer also contended that the vessel failed to make good its speed under good weather conditions as defined by the charter. Owners argued that the Charterer cannot selectively choose an isolated incident without considering the vessel's overall performance, and denied the claim. The owner pointed out that apart from Force 3 entries in the voyage abstract for only one or two days, the entire voyage consisted of weather in excess of that. In addition, the Owner noted that testimony from Charterer's Operations Manager confirmed that no written speed claim calculation was prepared for the voyage. Because this claim has been improperly stated, it was denied. SMA 3740 #underperformance #clause15

Owners sought to defend the speed and performance claim by asserting that the Charterers supplied bunkers being off-specification. However, as per this decision, trivial differences in fuel specification were not enough to bar a speed claim against the Owners in particular, as here, there was a significant loss of time. Therefore, the vessel’s good weather speed was considerably below her warranted speed. This reasoning applied also to a previous court case and can extend to weather elements or non-weather elements, as found in the performance clause.

There have been recent cases in which the tribunal considered whether there were major or consistent discrepancies between the WRC reports and the Master’s report (see London Arbitration 23/21, 32/22, 15/23). In some SMA awards, the panel performed a similar exercise and also considered the reported slip. In an unreported London Arbitration, the tribunal found that the deck log recorded weather conditions by at least one Beaufort force above the data from the WRC for more than half the days en route. The tribunal held that this amounted to a consistent discrepancy between the deck logs and the WRC analysis, and therefore rejected the deck logs as probative. The tribunal also found the deck logs to be unsatisfactory, as they were written in the same hand in all entries and were not contemporaneous documents. Also, the slip was missing from the document, which enables the tribunal to consider if there were external factors affecting the vessel’s SOG. The tribunal also accepted the tendency of the deck officers to overstate the wind strength and sea state. Regarding the good weather days analysis, the tribunal accepted the preference of “means/ average conditions” since this can be compared with the reported average speed, average consumption and average RPM. This somehow explains that in some instances, the ship encounters adverse weather in sub-periods of the noon to noon period, may not be enough to disqualify the entire period noon to noon or any other selected period ( COSP to Noon, or Noon to EOSP). In another unreported London Arbitration, the panel found consistent discrepancies between the deck logs and WRC analysis, as on 10 out of 13 steaming days, the deck logs recorded at least one point higher wind speed on the BF scale than the WRC. In another unreported London Arbitration, the Owners presented a log abstract, and the master reported adverse currents almost daily. The arbitrator studied the engine log and found that the log abstract was unreliable. In another unreported London Arbitration, the arbitrator had also to deal with the issue of whether there were considerable discrepancies between the deck logs and WRC reports. The tribunal found that there were considerable discrepancies as the logs recorded one point on BF scale for much of the time, which made a difference between classifying a day as “good” or “bad”. Aside from the wind speed, arbitrators have also considered the wind direction, and wind wave or swell, as well as the reported currents (the ship reported daily adverse currents but the slip and/or the WRC reflected the opposite- this was enough for the arbitrator to find Owners breached clause 11). In some instances, the weather routing clause specifies “ in the event of discrepancies between the deck logs and WRC report analysis”. Despite that, there are some challenges. In The Punica ( SMA 3513), addressing variances between the deck logs and Ocean Routes Reports, the panel held “ Attempting to match the data to logbook positions and weather reports is thus an approximation at best. ” In an unreported London Arbitration, the arbitrator also recognised that the timings in the deck logs cannot match with the periods reflected in the WRC reports, but the comparison between the noon time and that in the WRC was sufficient to test both sets of evidence. There is a tendency among many weather routing companies to reject any argument made on the slip, but both SMA and LMAA Arbitrators did not ignore this, as some cases prove. [ Note: the above are just observations and not the Author's opinion on the matter ]. #decklogs #underperformance

The owner of a vessel is generally bound by the entries made in the log book by the ship's officers. The presumption is that the officer would not have made the entry unless he believed it to be true ( The Law of Seamen, Ch 7.11, citing The Georgian, 76 F2d 550 ( 1935, CA 5 Fla). ` The veracity of the deck logs, as evidence, has been tested in numerous cases in English courts, as well as in arbitration cases. The declared weather conditions were examined in disputes involving collision, salvage, insurance matters, cargo damage, and even crew accidents ( Lloyds Law Reports are replete with such cases).In some cases, courts and tribunals have accepted meteorological evidence as a means of resolving disputed issues of fact.  This is not a new matter- The Atheltarn [1934]  48 LIL Rep 83; The Dimitrios  N. Ralias [1922] Vol 13 L.l.L Rep 363; The Iran Vojdan [ 1984] 2 Lloyd’s Rep 380. In some instances, judges—independent of the weather reports—have drawn inferences based on the surrounding circumstances. A similar approach has been adopted in recent London arbitration proceedings, where arbitrators have inferred fouling or propeller damage from elevated slip levels observed during fair weather conditions. In such instances, direct evidence was not deemed necessary, and the arbitrators made their findings and corresponding awards for loss based on the circumstantial indicators.   In recent arbitration awards( see London Arbitration 15/23 and 32/22 and 23/21), the arbitrator held that: ·         the master's remarks concerning current were exaggerated. It was with regret that the arbitrator concluded that the ship's records did not accurately represent the environmental conditions experienced, which was a breach of clause 11 of the charterparty. Notably, the Master was keep reporting strong adverse currents and neither WRC agreed with such an assessment of currents ·         The weather, sea state and other factors as reported by the master were compared with the WRC values.  The Masters’ weather reports were significantly above the WRC values of between 0.8 and 1.2 m for the combined sea. That persuaded the tribunal to find the noon reports repeatedly exaggerated on both sea and swell, in breach of clause 11 ·         As a consequence of the arbitrator’s findings, there was no need to further consider the logbooks, as the arbitrator was satisfied that the master failed to maintain a true and correct log in breach of clause 11. He exaggerated the wind and sea conditions recorded in the log from sailing from Recalada until 16 February. It appears that the argument concerning a breach of Clause 11, specifically regarding the maintenance of proper logs, has been previously raised in SMA arbitrations. Accordingly, this is not a novel issue. Chapter 22 of Time Charters (7th edition 2014), dealing with sailing directions and log, is relatively brief on this topic.  Paragraph 22 A.7, citing US Law, cited several cases to highlight the need for the master to provide full and accurate logs to the charterer , and the correct log entries are particularly important to the charterer with respect to speed or performance claims. In the Largo ( SMA 1230) the panel found the log was not sufficiently complete to assist in evaluating the ship’s performance. In the Bertina ( SMA 3144) the logs contained entries that were erased or whited out and the panel drew adverse inferences from the inadequate log keeping. In The Bertina, the panel stated that judicial recognition of the crucial roles logs play as contemporaneous records of a vessel's life is embedded in our jurisprudence, and the consequent adverse impact on the Owners' case occurs when the evidence establishes improper log-keeping. This seems to align as well with The Silver Palm, 94 F.2d 754, 762 (9th Cir. 1937), Court of Appeals, which is also cited by the authors in The Law of Seamen (4th edition, Chapter 7 ( para 13)- " original log book entries should not be altered by erasure and sustitution, as such alternation casts suspicion on the vessel's case..." Moreover, the failure to produce the logs created an inference that if the log had been produced it would not have aided the vessel's case. Austin Dooley, dissenting, in another SMA arbitration- The Myrina SMA 3846- expressed the view that the panel was presented a log book written in one hand and unsigned by bridge watch-officers which by definition does not qualify under clause 11 that “…the Captain shall keep a full and correct Log of the voyage…, which are to be patent to the Charterers… when required.” Just like any vessel documents used in support of a claim, logs, if they do not pass muster as “full and correct,” which in my mind includes the concept of being original contemporaneous vessel documents, can be put aside in favor of more accurate representations of the facts of the matter   These observations are notable in several cases even today, as the Owners would avoid disclosing the logs on the premise that this creates unnecessary delay, but this was found to be a breach of clause 11. In another arbitration, this affected the Owners' "time bar" defence because the Owners could not withhold the logs and assert the claim was time-barred. They should have cooperated and disclosed the logs in a timely manner. Both prior SMA awards and recent LMAA awards underscore the significance of maintaining comprehensive and accurate logs, noting that a failure to do so may constitute a breach of Clause 11. #decklogs #clause11

Numerous disputes have arisen concerning the parties’ respective obligations regarding hull cleaning following prolonged port stays. In some cases, the parties incorporate the BIMCO Hull Fouling Clause (2013 or 2019), while in others, bespoke wording is used within the charterparty. Where the vessel remains in port beyond a specified threshold—say 20 days or any other agreed—the Owners typically expect the hull to be cleaned. However, practical and legal challenges frequently arise in this context. In a previous arbitration case, the arbitrators determined that, although the Charterers’ orders led to an extended stay and consequent bottom fouling, the Owners remained liable for the vessel’s speed deficiency due to a windlass malfunction, which impeded the Charterers’ ability to undertake complete hull cleaning. Because of the defect, the vessel could not be moved to a more sheltered location for the completion of its bottom cleaning. This reasoning may equally apply to other operational issues such as cargo hold rejections, crane failures, or similar ship-related deficiencies that prolong the port stay and result in the prescribed time threshold being exceeded. In certain instances, despite extended port stays, the prevailing weather and port conditions did not lead to fouling. Furthermore, the condition of the hull upon delivery and before the extended stay was assessed, as this may influence the determination of liability. Accordingly, while it may initially appear that the Charterers are responsible for hull cleaning, liability is not always so clear-cut. #fouling #underperformance

The incorporation of the weather factor into performance assessments has been mentioned in both SMA awards and London Arbitration decisions dating back nearly five decades. The underlying rationale was that if weather and currents are excluded as a contributing factor, any remaining deficiency in performance must be attributable to vessel-related issues. In practice, its application remains a subject of debate. Critics often argue that the weather factor introduces a level of imprecision that undermines the reliability of the analysis. Conversely, proponents maintain that the law does not demand absolute precision in loss calculations ( the burden is on balance) and that such imprecision should not preclude the methodology’s use. Even the Didymi is not perfect; it is based on assumptions to derive an approximate loss calculation. Arbitration decision Charterers deducted an amount from hire for alleged speed deficiency because the Vessel was unable to make her Charter Party speed of about 13 knots in good weather. Charterers attributed the speed deficiency to the fact that the turbocharger for the main engine was damaged and had to be cemented and certain exhaust valves had to be repaired. Charterers furthermore pointed to engine manufacturer's specialist's recommendation that under such impaired circumstances the engine be operated at something less than 88.4 RPM as opposed to 100 RPM intended by the Chief Engineer. Owners alleged the speed deficiency claim was excessive and that Charterers' claim ought to have taken into account a “weather factor” of 0.8 knots in addition to the “ “current factor” of 0.4 knots set forth in Charterers' calculations compiled by a weather routing service. This would then show 83.24 hours of lost time due to slow speed.  Owners also maintained that the entire claim for speed deficiency was more than offset by the actual fuel savings Charterers enjoyed under the Charter Party representation. Therefore, it should be denied. The panel held that the 88.4 RPM restriction imposed by the Engineers for the Vessel's main engine operation during the voyage under review most definitely constituted a “ “defect or breakdown to machinery”, within the meaning and scope of Clause 15. Therefore, Disponent Owners were responsible for damages arising out of this deficiency, which included the time lost by reason of the speed deficiency and the equivalent fuel consumed during this period. The Panel furthermore found that Clause 15 authorises Charterers to “deduct from hire”, both the time lost and the cost of any extra fuel consumed in consequence of such deficiency when such results are known to Charterers from factual data that has emanated from the Vessel or her Owners or from some other reliable sources. The Panel also allowed the extra fuel consumption and rejected the Owners’ petition that they be given credit for alleged fuel savings over the entire voyage for the simple reason that the N.Y.P.E. Form of Charter Party did not provide for a fuel consumption bonus to effect the Vessel's speed default. [Note: the above are observations and not the Author's opinion] #underperformance #engine #clause15

This summary pertains to an arbitration award under the LMAA Terms 2021. Following the Respondents' failure to appoint an arbitrator, Mr. X accepted appointment as sole arbitrator in accordance with clause 10 of the LMAA Terms. The relevant charter party, an amended Norgrain form, contained, inter alia, provisions stipulating that it was to be governed by English law, with any disputes arising thereunder to be referred to arbitration in London. It further provided that such arbitration was to be conducted in accordance with “the LMAA rules”, which was construed as a reference to the LMAA Terms. Notably, discrepancies arose between the respective calculations at the loading port of Toledo and one of the discharging ports, Rio Haina. For the loading port, the difference was attributable to the fact that the Charterers had only counted time from 0800 hours on 23rd October to 0700 hours on 30th October at a 50% rate. Loading port As the arbitrator found, the Charterers must establish why laytime should not run and/or demurrage should not accrue at a 100% rate, and they had chosen not to serve any submissions justifying their calculations. Very fairly, Owners mentioned that in exchanges between the parties, the Charterers had purported to rely on clause 71 of the charterparty. However, clause 71 dealt exclusively with the effect of strikes at a port of discharge; it had no bearing on the effect of strikes at the port of loading. Once the vessel came on demurrage at the port of loading, the Owners correctly calculated that demurrage accrued at 100% rate except that they suspended the accrual of demurrage while the vessel shifted and while a draft check was carried out.  Therefore, the Owners' calculation was correctly carried out in accordance with the provisions of the charterparty and the documentary evidence. Discharging port At Rio Haina the Owners calculated that laytime started running at 1835 hours on 13th November 2023, which was when discharging commenced. They calculated that the vessel was on demurrage for 11 hours and 58 minutes, giving rise to a demurrage claim of US$8,227.08. The Charterers' laytime calculation, however, showed that they had only counted time from 0800 hours on 14th November 2023 which meant that despatch in the amount of US$497.65 had accrued. However, as was validly pointed out on behalf of the Owners, the Charterers' calculation overlooked the provision in clause 7 of the recapitulation email, which read:  "shinc tendering at disch port and time to start counting 12 hrs after NOR Tendered unless sooner commenced". Therefore, the Owners' calculation was correct. Observations It is noteworthy that parties often overlook the precise wording to be adopted in the governing law and arbitration clause. The reference to the “LMAA Rules” in the present matter illustrates this point, as it appears to have been intended as a reference to the LMAA Terms. This underscores the importance of clarity in contractual drafting if the intention is the strike-related time exclusions to apply to both loading and discharging ports. It is somewhat surprising that certain periods in question could have been adequately assessed in the laytime calculations and potentially resolved prior to the matter being brought before the tribunal, thereby avoiding the need for formal determination. For more information, Readers may visit https://jusmundi.com/en #laytime #strikes

A continuous debate has emerged within the shipping industry in recent years concerning alternative methodologies for assessing a vessel’s performance. The necessity for such methods has arisen primarily due to the increasingly restrictive performance warranties imposed by shipowners. However, vessels are often delivered in fouled conditions that significantly impact their performance, or they fail to operate as described, necessitating a fair and objective assessment of the resulting loss. In a recent case, the ship remained in warm seawaters for nearly 40 days while discharging its previous cargo. No cleaning was conducted before delivery, and the vessel's performance fell significantly below expectations. The Owners' primary defence was that there was no evidence that fouling caused underperformance (even though the diver's report showed 70-80% heavy fouling), and, if so, the presence of bad weather prevents a claim as off-hire. To deal with these or other similar situations, there have been attempts to introduce new formulas into the market to provide an objective framework for performance assessment, with some relying on generic curves and others utilizing different analytical approaches. The most straightforward and effective method for evaluating a vessel’s performance is to meticulously examine the factual evidence. As noted by the tribunal in LA 12/24, some WRC fail to include the minimum evidentiary standards required for a comprehensive performance assessment. Nevertheless, this information can be found in the deck and engine logs or other relevant documents. Regarding speed and power curves, this is not a novel issue. A maritime arbitration award from 1975 references power curves and states: “The curves show the effect on hull speed of various wave heights at different angles to the vessel’s heading. The effect is indicated as slip in terms of nautical miles per time frame.” The arbitral panel further observed: “The speed curves currently in use, although significantly improved compared to historical versions, still require additional refinements before they can be deemed sufficiently reliable for measuring vessel performance. The existing curves are limited in number and cover a diverse range of vessel types. It is evident to the panel that additional speed curves are required to properly account for the effects of sea and swell on a broader variety of hull forms operating at differing speeds.” If the weather, as an element, is being excluded, then it is likely that the drop in performance is due to fouling/ technical issues or intentional slow steaming. Careful consideration of the weather, engine parameters, daily fuel consumption, bunker surveys, etc., will show a potential ship's issue or the causative reason for underperformance. This reasoning aligns with the tribunal’s findings as endorsed in The Pearl C  (2012) Is it a new concept or just a common-sense approach? Not a new concept: in a 1960 arbitration ( 50 years before The Pearl C), the panel held: “Since there was prima facie evidence that the speed deficiency in good weather was so significant as to indicate defects in the vessel or a breach of the Owners’ speed warranty, the Charterers were entitled under Clause 15 of the Charter to deduct from the hire the loss of time. If the speed deficiency was not attributable to weather conditions, the only other plausible explanations were defects in or breakdown of any part of the hull, machinery, or equipment, or failure of the Captain under Clause 8 to ‘prosecute his voyages with the utmost dispatch,’ or misrepresentation by the Owners regarding the vessel’s speed in the Charter Party.” The analysis of propeller pitch and RPM as a means of assessing performance is an established practice. A 1960 arbitration award noted: *“A careful analysis of the logs revealed the following facts regarding the vessel’s performance during sea voyages between pilot stations. On 29 days of good weather, when wind forces did not exceed Force 3, the vessel covered a total distance of 5,707 nautical miles in 638 hours and 36 minutes—an average speed of 8.937 knots. The average slip was recorded at 10.45%, which is not abnormal for a vessel of this type operating at full load draft. A noteworthy observation is that the propeller revolutions were abnormally slow, resulting in a developed propeller distance of only 6,373 miles, equating to less than 10 miles per hour. The highest recorded speed for a 24-hour period was 9.42 knots, recorded on June 10, under variable wind conditions at Force ½ and slight sea conditions. According to the logs, approximately 63.4 revolutions per minute were required to achieve a propeller distance of 240 nautical miles per day. Hence, attaining a hull speed of 10 knots would necessitate between 67 and 70 RPM, depending on the slip.”* The assertion in Divinegate  that alternative methods for assessing vessel performance exist but have not been tested refers specifically to the absence of judicial scrutiny in court proceedings. However, alternative methodologies have been the subject of arbitral discussions for decades. Even before the Didymi , when New York and London Arbitrators had reciprocal influences, numerous alternative assessment methods had been documented in past cases and commentaries. Furthermore, many arbitrators, as evidenced by appeal cases before the courts, possessed practical experience as former mariners or engineers. It would, therefore, have been straightforward for them to apply the RPM method or evaluate propeller slip alongside other relevant parameters. Recent London Arbitrations (23/21,15/23, 4/25) reflect that tribunals may consider other methods, depending on the tribunal's experience. However, referring to a singular “good weather” method is misleading, as multiple methodologies exist under this category. When the foundation of the performance calculation is based on good weather conditions, the performance deficiency—however quantified—remains intrinsic to the good weather methodology. An objective assessment of the loss is required in cases of fouling/ engine damage but lacking good weather. Ultimately, the resolution of any dispute regarding a vessel’s performance under specific conditions lies within the factual matrix of the case. A thorough examination of the factual evidence is paramount, as the facts will dictate the outcome of the performance assessment. Note: The above are generic observations. #fouling #engine

To pursue a claim against Charterers for engine damage, Owners must overcome two principal challenges. First, they must establish that the Charterers supplied bunkers that breached contractual obligations concerning bunker quality. Second, Owners must demonstrate that the fuel provided by Charterers directly caused the alleged engine damage. The burden of proof with respect to this second requirement often poses significant challenges for Owners. In disputes of this nature, the resolution largely hinges on the quality and availability of evidence. It is crucial that, if engine damage is attributed to substandard bunkers, evidence is collected promptly and thoroughly. This includes engaging surveyors to inspect the engine, taking fuel samples, preserving damaged components for analysis, and retaining all relevant documentation—such as logbooks, alarm records, oil record books, and maintenance records—for comprehensive review. The collected evidence, alongside the results of sample analyses, will play a pivotal role in substantiating the claim. If sample testing fails to identify a contaminant in the fuel supplied by Charterers, Owners may face significant difficulty in satisfying the burden of proof. Specifically, they may struggle to establish (i) that the fuel was non-compliant with specifications and (ii) that it was the proximate cause of the alleged engine damage. Additionally, Charterers may invoke a defense asserting that Owners should mitigate their losses and must not exacerbate damage by continuing to use potentially contaminated bunkers. Should the vessel continue consuming fuel that Owners suspect to be defective, despite indications of possible engine damage, Charterers may argue that any further harm resulting from such consumption falls within the responsibility of the Owners. For a more complete discussion on the above, readers may consider reviewing an article published in The ARBITRATOR, SMA Vol 1, January 2020 Underperformance Typically, the performance clause and other relevant provisions addressing bunker quality (see BIMCO Bunker quality clause etc) stipulate that Owners shall not be held liable for any underperformance arising from the consumption of off-specification bunkers. In certain circumstances, Owners may assert a defense that the vessel's underperformance was attributable to the use of such off-specification bunkers. However, it is important to note that the mere presence of off-specification bunkers does not inherently provide Owners with a valid defense to an underperformance claim. Owners must demonstrate that the consumption of off-specification bunkers directly resulted in the vessel's underperformance. This requires clear evidence establishing a causal link between the quality of the bunkers supplied and the alleged reduction in performance. Without such proof, the defense is unlikely to succeed. In a recent case that was resolved through settlement, the vessel's performance both before and after consuming the alleged off-specification bunkers was closely examined. It was determined that the vessel had been significantly underperforming prior to the consumption of the bunkers supplied by the Charterers en route to the discharge port. The root cause of this underperformance was identified as pre-existing fouling. Arbitration Awards ·         London Arbitration 6/21- trivial differences in fuel specification may not bar a claim against the Owners in particular, as there was a significant loss of time; thus, the vessel’s good weather speed was considerably below her warranted speed. ·         Nippon Yusen Khaisa v Alltrans Group of Canada Ltd (1984 LMLN 116 3)- Charterers’ duty is absolute and not merely one to exercise due diligence; modern forms now specify the details of the bunkers required. ·         London Arbitration 1/88 -the Charterers’ obligation to supply bunkers of proper quality is absolute. ·         London Arbitration 8/98 -charterers are liable for delivering contaminated bunkers. ·       London Arbitration 14/84-the cost of cleaning the sludge tanks is for the Owners; unless demonstrated that the fuel was of unusual specification. ·         London Arbitration 20/16 -Owners can recover the cost of surveyors’ attendance on de-bunkering. ·         London Arbitration 15/00-fuel supplied did not meet specification, and Charterers successfully relied on exemption clause deeming bunker firms to be servants of the shipowners. ·         SMA 3885: Owner who failed to prove that bunkers supplied by time charterer were unsuitable for use held liable for time and expenses in debunkering vessel and supplying replacement bunkers. ·         SMA 3740: Time expended to remove and replace non-conforming bunkers is not chargeable to charterer since it was accomplished while vessel was off hire for engine repairs, the need for which was not caused by charterer. Charterer cannot be required to provide bunkers which meet certain specifications that were not included in charter party. Also, performance claim supported based on changes in ETA failed. Note:  The above brief observations are based on the author’s professional experience in handling claims and do not reflect the author’s personal opinions on the matter. These observations are shared solely for informational purposes. Additionally, the list of awards mentioned is not exhaustive. #bunkers #underperformance

Charterers deducted 3.42 days for an alleged underperformance claim and submitted a report from their appointed WRC to support the claim. 1. Lack of Defence Submissions The Charterers deducted 3.42 days for an alleged underperformance claim and submitted a report from their appointed Weather Routing Company (WRC) to support their position. However, the Charterers’ solicitors ceased representation during proceedings, and no Defence Submissions were served. After two procedural orders, the tribunal issued a final and peremptory order, which the Charterers failed to comply with. Consequently, the Owners requested the tribunal to proceed to an award, which the tribunal deemed appropriate. Pursuant to Section 41 of the Arbitration Act 1996, titled "Powers of the Tribunal in Case of Party’s Default," the tribunal applied the sanction stipulated under Section 41(7)(c), allowing it to "proceed to an award on the basis of such materials as have been properly provided to it." The Charterers' failure to participate in the arbitration resulted in no submissions being made regarding fouling and an alleged breach of Clause 8. The tribunal observed that while a breach of Clause 8 of the NYPE form was possible, no submissions to that effect were presented- which could lead to a different decision. It is noteworthy that the tribunal is not obligated to assume the role of the Respondent in defending the claim. This does not imply an automatic default award in favor of the Claimant; rather, the tribunal is required to assess the evidence presented to ensure that a valid claim exists. The tribunal examined the weather routing reports and the evidence before it. 2. Slip and Fouling The tribunal’s decision is consistent with recent arbitration findings, indicating that a high slip in favorable weather conditions suggests fouling, which consequently results in an RPM reduction to avoid " an exponential increase in consumption" , as per the principles of Cubic Law. The tribunal concluded that the weather routing reports submitted by the Charterers were non-compliant and inadequate for a verifiable evaluation of any loss arising from the tribunal’s findings. Had the Charterers provided substantive submissions on this issue, the outcome might have differed. Even where a performance report is deemed non-compliant, loss calculation is feasible, as evidenced by previous cases (e.g., London Arbitration 23/21 and 15/23). 3. WRC Report and Other Considerations The WRC report failed to include the slip percentage, which would typically assist in identifying the limited number of WRCs that may have been involved in this case. Several observations can be made regarding the Owners' arguments and the report (and other points): The Owners' assertion regarding speed reduction in heavy traffic could be verified by cross-referencing reported RPM, engine consumption, and engine load (by analogy, see The Kefalonia Wind  case). It is uncommon for ballast speed and consumption figures to be identical (e.g., "about 14.2 knots on about 35.5 mts IFO"), both in ballast and laden conditions. The performance warranty specifies conditions such as "no adverse current, negative influence of swell... at the condition of clean bottom ," with the restrictive language preceding the "clean bottom" condition. It has been argued that since the condition of the hull differed and it was a condition to apply the strict definition, an alternative way should be adopted. The clause stipulates "negative influence of swell," which, when read in conjunction with "no adverse currents," (as it sits next to it) extends the "no" to the negative influence of swell(i.e. no negative influence of swell). The clause defines the significant wave height as 1.25 meters, whereas the report indicated a swell height of 1.6 meters. The wording as adopted in the clause is not drafted correctly. The clause states that a minimum of 24 hours of steaming time, and the tribunal interpreted it as "a minimum of 24 consecutive hours". The word " consecutive" was added, and extended to "noon to noon" reports. The tribunal determined that during the identified periods, most weather conditions met the criteria of Beaufort 4 or less with low swells. Consequently, the existence of representative periods, even if not strictly good weather, could have enabled an objective calculation of loss due to fouling had the Charterers participated and submitted adequate arguments. A swell of 1.6 meters does not always have a negative influence. The drop in performance was significant ( about 2 knots in laden). The percentage deficiency, if applied to the sailing time, objectively reflects the prolongation of the voyage and the loss of time (Clause 15) or damages (Clause 8), along with the corresponding consumption. Another loss application is based on the increased slip and voyage prolongation. The summary supports the notion that alternative methods exist to calculate losses resulting from fouling or similar issues, although reliance solely on the WRC report may be insufficient. However, the data and parameters within the WRC report could serve as valuable reference points for third parties or the tribunal in certain contexts to make proper factual findings. The absence of strictly good weather does not preclude an underperformance claim due to fouling, engine issues, or intentional slow steaming. A reasonable and objective loss assessment is deemed sufficient without necessitating an excessive evidential burden or complexities. A thorough examination of the facts of the case and the available evidence will allow a specialist or an experienced arbitrator in such disputes to render a well-informed decision. This fact-finding exercise is not within the scope and role of the WRCs. Note:  This commentary serves as an analytical perspective and does not constitute a reproduction of the original award summary, which can be accessed through LMLN. #Fouling #underperformance

The Background This is the trial of a claim and counterclaim arising under a trip time charter dated 18 September 2019 of a bulk carrier called “DIVINEGATE” during her voyage via the Baltic Sea to the Mississippi River in the USA. The cargo was loaded in Riga and discharged in New Orleans. The Vessel was delivered into the Charter party at Rotterdam at 0700 on 21 September 2019, and the trip covered (and hire was payable for) the ballast leg from Rotterdam to Riga, and then the laden leg from Riga to New Orleans. The Vessel was redelivered to the Claimant at 0415 on 3 November 2019. It is common ground that the Defendant’s instructions were for the Vessel to steam at eco-speed on the laden voyage. The Claimant, as disponent owner, claims outstanding hire, bunkers and some expenses while the Charterers (defendant) seeks deductions from hire and also claims damages for breach of charter regarding the Vessel’s performance. It also makes a separate counterclaim as damages in tort (this is not discussed in this post). The court made directions for ADR at an early stage and both parties expressed disappointment at the matter going to trial, pursuant to clause 92 of the charter party. The Claimant’s claim The Claimant’s claim was for payment of outstanding hire, bunkers and some expenses totalling some US$99,982.79. It alleges that this sum is contractually due to it on a reconciliation of the final charterparty accounts and that the Defendant, in breach of the Charterparty, has failed to pay such sums. The Defendant’s counterclaims The Defendant contends that the Master did not comply with instructions to proceed at eco-speed and his failure to do so amounts to (a) “a default of Master, officer or crew” entitling the Defendant to put the Vessel off-hire for time lost under clause 15; or (b) a breach of the clause 8 obligation to prosecute voyage with utmost despatch or (c) a breach of the obligation under clause 1 to provide a Vessel that was “tight, staunch, strong and in every way fitted for service” and maintain her as such (d) a breach of the performance warranty at the time of delivery entitling the Defendant to recover damages for resulting losses or deduct the same amount. Evidence Both parties relied on expert evidence, and a large amount of documentary evidence was considered. Notably, the vessel was relatively new (2019) when entering the charter party. She stayed at Paradip for an extended period and an underwater cleaning was performed later. It was disputed whether her hull was satisfactorily cleaned at Trincomalee in Sri Lank before she entered into the charter party. Following completion of discharge at New Orleans, a surveyor from Fernandez Maritime Consultants LLC (“FMC”) attended on board on 1 November 2019 to inspect the Vessel on behalf of the Defendant. Their report states that “the vessel had considerable marine growth (barnacles) on her visible hull area….” The Charter party terms The relevant terms considered under the amended NYPE 1946: lines 21-22, clause 1(maintenance), clause 8 (outmost despatch), clause 15 ( off-hire), Clause 74 ( weather routing clause), the vessel’s description in the recap, clause 92 (dispute resolution clause) and clause 102 (Performance Claims Clause- time bar issue) The counterclaim for underperformance There were two distinct aspects of the Defendant’s counterclaim relating to underperformance, namely slow steaming and hull fouling. Here, the main issues were: a) Is the claim time-barred? b) is there a sufficient sample of good weather on the laden voyage over which to assess the Vessel’s performance? c) if so, whether the Defendant can show underperformance, including whether allowance should be made for positive currents? d) if there is no good weather period for assessing performance, can the Defendant still establish a claim for underperformance, including whether breach of clause 8 and/or clause 15 (and consequential damages) can be established by reference to the Vessel’s engine speed as operated on the laden voyage? e) the existence, extent and effect of any hull fouling on the Vessel’s delivery under the Charterparty, including whether any claim for time lost arising out of hull fouling was already covered by the claim for time lost in respect of slow steaming? The decision 15. The judge answered these questions as follows: a) The Defendant’s case was preferred and its counterclaim is not time-barred( [60]-[62]) . b) The 32 hour period on 23/24 October 2019 was a representative period of good weather within the Charterparty parameters, and appropriate for assessing the Vessel’s performance against the agreed warranty. Owners’ expert also agreed that this period of time would be sufficient ( [103] ). The 24 hour period between noon on 22 and 23 October 2019 was also a representative period of good weather since .. the record of adverse currents in the deck log were unreliable ( [105] ). c) There was a failure to proceed with utmost despatch since it established an unjustified underperformance by reference to the Vessel’s speed during the good weather period. This can be extrapolated against the entire laden voyage since if she underperformed in good weather she will do so in bad weather too (The Didymi) ([109]) . Positive currents were to be disregarded absent clear wording, which reduced the time loss. As stated “in the absence of wording excluding the benefit of positive currents (or weather that is better than “good weather”) such benefit is not to be deducted in measuring the Vessel’s speed for the purpose of the performance warranty. ([100]) d) The judge considered the law in applying the performance warranty ([90]-[94]) and adopted the traditional approach which is the good weather method. However, the judge accepted that this is not the only available methodology for making a claim for underperformance, and it does not bar compensation being claimed on alternative methods ([91]). However, any alternative method must be established as reliable and consistent with the express performance warranty, especially in circumstances where the conventional method has been adopted for many years in an area of significant expertise, resources and innovation ([94]) . Further, the judge concluded that “Even if it had been open to the Defendant to ignore the performance warranty and seek damages on an alternative basis, the RPM method was not a reliable method to identify loss of time ([113]). e) The researchers suggest that there is no established formula for the practical measurement of the impact of fouling on speed. The judge said that “given that I have rejected the claim based on the RPM method, it was not necessary to decide whether allowing recovery under the RPM method and also the lost time calculated ..for hull fouling would have allowed double recovery for the same underperformance (what counsel described as double dipping). In circumstances where the Claimant had established a loss from the slow steaming under the good weather method, there would be double recovery if .. calculation was added since the good weather method covers underperformance by reason of hull fouling (and any other matter affecting performance) ([120]-[123]). Comment The decision highlights that tribunals and courts will not easily depart from the traditional way of establishing breach and loss (The Didymi); whether one seeks to establish a claim/ counterclaim under clauses 1, 8 or 15, the obligation must be construed in light of the parties’ express agreement as to warranted performance during good weather . The issue of whether the positive currents apply or not in the performance assessment is now judicially settled. This is also in line with the bulk of published arbitration awards after 2012 (London Arbitration 21/18, 6/19, 26/19, 27/19) and commentaries from LMAA arbitrators (See, for example, B. Williamson’s articles).On the issue of positive currents, the author is also aware of three unpublished awards that adopt the same reasoning as in London Arbitration 15/07. Lastly, as the judge stated, “The charter provisions are to be applied (whether by the parties themselves, arbitrators or the court) in light of the fact that the parties, when contracting at least, will generally have expected to achieve certainty and commercially pragmatic solutions”. The decision also highlights the Owners’ obligation to maintain their vessel’s hull in a proper state and to perform the voyage with the utmost despatch, whereas ‘bad weather’ will be determined in the light of the facts before providing a potential defence to the Owners for slow steaming. Again, the decision is balanced for both parties and offers guidance on the grounds that Owners or Charterers could support or defend such claims that raise issues of law, fact and practice . For example, the logs were found unreliable on the adverse currents; what if ECDIS printouts were provided in evidence? Or if Owners give valid reasons to justify any slow steaming? There are some points that Owners left unanswered. Another issue (not considered here but arises in practice) is how any loss is quantified for events happening during the voyage and trigger clauses 1/8/15 (net loss), not as it happened here at the commencement of the voyage. Depending on the methodology applied, this sometimes leads to inflated claims, which can be quickly challenged. In  The Divinegate  the judge accepted that 24 or 32 hours of good weather were sufficient samples to assess the vessel’s performance based on the evidence (two expert reports). On a closer reading, the above periods represented circa 5.8 per cent and 4.4 per cent of good weather for the entire voyage. By analogy, in  The Ocean Virgo , a sole specialist arbitrator noted that any speed and consumption analysis was a sampling exercise and that “the sample size must be sufficiently large as to be representative of the voyage in its entirety”.The arbitrator held that periods of good weather corresponding to 5.1 and 5.3 per cent were not representative. However, this was an approach to assessing the evidence the tribunal was entitled to. That was a finding from a specialist tribunal (Captain Paines) tailored to the circumstances of the particular case. Courts are generally slow to distort tribunals’ findings of fact; arbitrators are the masters of fact. Therefore, it will be for the tribunal to assess this matter on a case-by-case basis. In a published article, C. Barcley (LMAA arbitrator and marine engineer) discussed the RPM method. Also, a published London arbitration award in 1980 considered the RPM method. However, after the Didymi, it seems that no published awards considered the RPM method, and the reasons can be discerned from this new decision. However, in practice, the RPM method was used along with another proposed method to establish breach and loss, causing extensive debate between the parties. Lastly, it remains unsettled how a reliable performance assessment will be established without good weather. There is still no proper guidance on the point. In a previous London Arbitration award, the tribunal awarded damages when the ship was performing at a slow speed due to technical issues, and bad weather prevailed. Some points for consideration: how to approach conflicting expert evidence and its limitations, questions for clarifications as to the applied methodology may reduce the weight to be attached to the report, dealing with conflicting evaluations, damages (over compensation). The judgement can be found here: https://www.bailii.org/ #Underperformance