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Everyone that has access to the circulated vessel’s position list in the market, containing the vessel’s description clause, will observe that more or less the clause includes one of the following terms about “extrapolation”. EXTRAPOLATION OF “GOOD WEATHER” PERFORMANCE FOR “BAD WEATHER” PERIODS IS NOT ALLOWED. NO EXTRAPOLATION IS ALLOWED. EXTRAPOLATION FROM GOOD WEATHER TO ALL WEATHER IS NOT ALLOWED. NO EXTRAPOLATION OF GOOD WEATHER PERFORMANCE OVER THE ENTIRE VOYAGE OR FOR PERIODS OF BAD WEATHER. DAYS EXCEEDING THE AGREED ABOVE-MENTIONED GOOD WEATHER CONDITIONS ARE TO BE EXPRESSLY EXCLUDED WHEN THE VESSEL’S SPEED EVALUATION IS CONDUCTED, NO OTHER EXTRAPOLATION WILL BE ALLOWED. When a dispute arises over the vessel’s performance, some weather routing companies will argue that the above wording is not clear enough to change the standard position adopted in the Didymi and recently applied in the Ocean Virgo and the Divinegate. Therefore, they submit a report with extrapolation to all weather and support their position on the following grounds: Owners focus on the word “extrapolation” but ignore the full clause or what is missing from the wording of the clause. The wording supports that only extrapolation is not allowed from bad weather periods. The report does not extrapolate using unknown values, based on the meaning of extrapolation in mathematics “Graph, curve or range of values by inferring un-known values.” The CP refers only to the first step in establishing a claim, whereas establishing the damages is another step that the CP says nothing about. Under English Law (The Didymi, as reaffirmed in the Ocean Virgo and recently applied in the Divinegate), it is a fundamental principle that any deficiency of underperformance in good weather to be measured against the entire voyage. To change a very established legal precedent the parties should have used very clear wording stipulating that the Didymi principle is not to apply, much less any wording no extrapolation of a good weather deficiency against the overall voyage is allowed, which could be challenged. Owners’ contrary approach raises questions about whether they had described their vessel’s performance in good faith. As observed, the owners defended these contentions saying that the WRC has mistaken their role and function under the charter party terms. Over-elaboration was unnecessary: the meaning of this word in mathematics was irrelevant, and words should be construed in their context. The purpose of these words was to remove any doubt concerning what was agreed upon. Whether this is now clear or not in the minds of the WRC is neither here nor there. From the words used by the parties, one had to try to ascertain their mutual intention (not what the WRC thought the terms to mean). Commercial parties, such as the owners and charterers, would understand the words “no extrapolation” in this sense without any room for argument. To argue as the WRC has done, it was to stretch the language beyond its limits to breathe life into this dead claim. Note: The WRC expressed the view that the wording “ the Didymi principle is not to apply ” was missing from the CP. However, the parties rarely use this proposed wording in charter parties (as a matter of practice), and if you exclude the Didymi in general , how do you establish a claim? (the 1st stage will not apply as well). The commercial parties feel confident with simple language. Still, there are some instances that the parties later dispute the meaning of the words used after receiving some feedback from a weather routing company. For example, would that require including something like “any variation of speed and/or consumption from the warranted charter party speed and/ or consumption under good weather conditions should not be applied with all necessary adjustments and extrapolated to all sea passages and in all weather conditions (the 2nd stage of the Didymi does not apply)”? Or would that be a linguistic overkill, and the market has not yet shown any need for such detailed wording in the charter parties? Note: The above is only a brief reference to the parties’ arguments based on my observations in handling claims for owners and charterers. It is not the editor's opinion on the matter. These were the arguments presented concerning solely a breach of the performance warranty, not other issues like fouling/ engine issues/ intentional slow steaming that must be properly addressed.

By a voyage charter party on amended  Asbatankvoy, Owners claimed $553,071 in demurrage allegedly owing under a charterparty  for the carriage of various chemical products loaded at Jiangyin and Jingjiang, China and Kaohsiung, Taiwan (the "Load Ports") and discharged the Cargo at Mumbai, Dahej and Kandla, India (the "Discharge Ports"). With respect to demurrage, the dispute between the parties concerns three issues:   1.      When did laytime commence at the loadport of Jiangyin? 2.      When did laytime commence and/or count at the discharge port of Kandla? 3.      Should the laytime claimed by Owners for the discharge port of Mumbai be reduced? Decision Commencement of laytime at Jiangyin The Vessel arrived at Jiangyin and tendered its notice of readiness on September 15, 2022 at 20:42LT - i.e. before the "date stipulated in Part I. As per the the "Narrow Down Clause", the parties agreed to narrow the laycan to the period from September 17-19, 2022. Charterers contend, and the Panel agrees, that the effect of this narrowing was to make September 17, 2022 the "date stipulated in Part I", so that laytime could not commence before 00:00 on that date. Nevertheless, Owners count as laytime and include in their laytime calculation the time from 02:42LT on September 16 to 00:00 on 17 September - a total of 21.3 hours. The Panel found that all time prior to 00:00 on September 17, 2022 should be excluded from laytime. Charterers contended that laytime at Jiangyin could not commence for at least a further 6 hours after 00:00 on September 17- Clause 6 of ASBATANKVOY. The Panel disagreed. As the authors of a leading treatise have observed:   Laytime cannot start running earlier than the time "stipulated in Part I". However, the owner is obliged under clause 6 to give notice of readiness on arrival if the vessel is ready unless the charter specifically precludes the early tender of notice of readiness. The six-hour franchise in clause 6 can count before the stipulated time. The six-hour period is not laytime as such, but rather time before laytime can start. That period can, therefore, run before the time stipulated in Part I. T. Young, et al, Voyage Charters, 5th Edition, Chapter 38.2 (2022). See also Chapter 38A.7 of the same publication: The majority view among New York arbitrators is that absent provision to the contrary: (a) a notice of readiness can be effectively tendered prior to the date stipulated in Part I(B) which will trigger the six-hour "free period" so that laytime commences to run as soon as permissible under the charter, i.e., at 0000 hours on the first layday specified in Part I (B).   Night Navigation Restriction Charterers said that because of a night navigation restriction at Jiangyin, laytime there could not commence until 09:00 local time on September 17. The Panel disagreed. There was nothing in the charter that delays the commencement of laytime beyond 00:00 LT on September 17 and the charter contained no exception to the running of laytime for restrictions on night navigation. Therefore, laytime at Jiangyin commenced at 00:00 LT on September 17, 2022.   Commencement of laytime at Kandla The dispute between the parties about laytime at Kandla concerns the effect of the arrest of the Vessel at that port on the running of laytime. As noted above, The Vessel arrived at Kandla and tendered its NOR on November 2, 2022 at 04:12 LT. There was significant congestion at the port - as of November 5, 2022, the local agents were anticipating a berthing delay of 9-10 days due to the "bunching of waiting & expected vessels". The Vessel was therefore unable to berth or commence discharging operations on arrival. On November 4, 2022, an Order of Arrest of the Vessel was issued at Kandla port due to a balance owed by Owners to local agents for the Vessel for a prior call at the port. As a result of the Arrest, the berthing of the Vessel, scheduled for November 8, was cancelled. Owners paid the outstanding amount, the Vessel was released from Arrest on November 11, 2022 and proceeded to berth and discharged her cargo on November 12.   Charterers assert that, because of the arrest, the notice of readiness tendered by the Vessel on November 2, 2022 was invalid. As Charterers put it: Owner knew that it owed money to its prior port agent who was in a position to arrest the vessel for the overdue funds....Owner knew of the pending claim and that the vessel could not claim to be ready to discharge the cargo. Therefore the NOR was not tendered in good faith and should be considered void. Charterers did not cite and the Panel was not aware of any authority supporting the foregoing contention. On November 2, 2022, when the Vessel tendered its NOR, it was not under arrest and there was no legal impediment to its proceeding to a berth and discharging its cargo, once a berth became available. Therefore, the NOR tendered at that time was valid.   The subsequent order of arrest issued for the Vessel on November 4 did not invalidate the NOR tendered on November 2. If, as it appears, the Arrest Order caused a delay in berthing and discharge of the vessel from November 8 to November 12, the appropriate remedy was to exclude such time from the calculation of laytime at Kandla. In fact, Owners have now revised their demurrage claim to exclude this time.   Laytime used at Mumbai Charterers asserted that "at the discharge port of Mumbai, the pumping and waiting time had to be pro-rated with the other cargo discharged at the port, reducing the laytime used to 1.70675 days." Charterers relied for this contention upon Clause 14A of the Rider Clauses, which provides: A. Any time waiting for the same berth, or time in berth waiting for cargo handling to commence or recommence, at a port where cargo(es) for other cargo interests are to be loaded/discharged, is to be prorated based on the ratio of the tonnage of Charterer’s affected cargo(es) to the total affected cargo to be loaded /discharged; provided that time will not count if lost solely by reason of a deficiency, difficulty or any other reason involving cargo belonging to others.   Owner’s laytime calculation for Mumbai appears to prorate the time used there, subtracting from 84.20 "Total Hours Used" 36:37 hours of "Pro Rata Laytime". Charterers did not provide any support for their calculation of laytime at Mumbai. As Owners have pointed out, Charterers "have not explained how they have determined which parcels of cargo belong to a third party and how, on account of the same, the laytime used at Mumbai should be 1.70675 days instead of the 1.8875 days used in Owners' calculation for demurrage at Mumbai." Without any such explanation or evidence, the Panel could not accept the Charterers’ figure as correct.   Charterers’ counterclaim Charterers contended that Owners breached Clause 6C by failing to immediately notify Charterers of the Vessel’s arrest or the circumstances giving rise to that arrest and that, as a result of the Owners breach, Charterers’ two notify parties/receivers of cargo at Kandla made claims against Charterers. Charterers asserted that they issued credit notes for a total of $150,000 - $75,000 to each customer - to settle those claims and that they should be entitled to set off that amount against the demurrage claimed by the Owners in this arbitration. Owners asserted that the alleged conduct which, according to the Charterers, constituted the breach of Clause 6C did not, in fact, come within the scope of that Clause. The Panel agreed with the Owners’ contention. By its express terms, Clause 6C required Owners to inform Charterers immediately only of situations "which may result in tendering later than the cancelling date, or a change of itinerary or change of port rotation which would delay completion of loading or discharging operations of the voyage, or create a risk of damage to the vessel/cargo, or otherwise affect performance of the voyage." Here, there was no situation which might result in a late tender or change of itinerary or change of port rotation. The arrest or the potential arrest of the vessel did not cause or threaten to cause any of those events. Hence, Clause 6C did not apply and there was no breach of that clause by Owners. The panel awarded Owners $531,501 in demurrage  and denied the counter-claim   SMA No 4489- 11 Dec 2024, published in Jus Mundi | AI-Powered Search for International Law & Arbitration #laytime

The vessel was fixed on an amended NYPE form for one trip from a USA Gulf Port to a port on the W.C. India. On the passage from Tampa to Port Said the vessel encountered delays due to adverse weather conditions, as asserted by Owners, or engine problems per Charterers' claim. The Charterers considered the time lost as off hire/under performance and made pertinent deductions from hire. Charterers rejected the Master's allegations that their WRC was negligent in reporting certain weather conditions. Charterers further contend that the vessel, from the beginning of the voyage had problems with pumping IFO out of double bottom tanks, which continued during the voyage, arguing that this might have necessitated to stop the engine on November 13-14. Charterers also pointed to the log book records on December 1, showing that some cracks were found in ballast water tanks, numbers 2 and 3, which could explain in part the over consumption of IFO. In addition, they said that on November 13, it was unusual to have the main engine governor checked under such weather conditions. This job should have been done under calm weather conditions, under normal speed and with the help of shore specialists. Furthermore, they say on November 26, the engine was stopped between 12.00 and 16.00 hours while the log book showed that a LO connection was leaking, contending that these successive stoppages apparently caused the different ETA's to Port Said reported prior to and after the stoppages. Also, Charterers pointed to the engine spare parts shipped to the vessel at Port Said and the Suez delays encountered due to repairs and overhaul of the main engine turbo charger and replacement of some main engine injectors. Charterers further argued that since the vessel performed satisfactorily, after repairs at Suez, the engine problems must have arisen during the prior leg of the voyage. Charterers quantified their speed claim at 1.770833 days lost and over consumption of IFO 81MT and DO 18MT. Owners contended that the vessel in the early stage of the voyage encountered very heavy weather which caused the Master eventually to reduce speed, stop engines, drift and deviate for safety of the vessel, cargo and crew. Owners submitted evidence from other weather provider to assert that Charterers’ WRC report was erroneous. Based on the information contained in these weather reports and the prevailing local conditions, Owners contended, the Master considered WRC’s report inaccurate and therefore, decided to adopt various maneuvers; slow down, stop engines, drift and deviate in order to avoid storm ahead of the vessel. Owners concluded that the Master, being the sole judge in navigational matters, acted in a prudent way for safety of the vessel, cargo and crew. Owners contended that under such circumstances the delays encountered due to adverse weather conditions were unavoidable and therefore should not be considered as time lost and off hire. The Owners’ received weather reports from National weather services and Metro- France at that time showed: Thundery low about 1010 in vicinity 28N 42W moving north deepening expected 1003 near 32N 40W . . ." and at 22.30UTC stating "Developing storm 28N 43W 1007MB moving NNW 15kts. over forecast waters winds 25 to 35kts. seas 10 to 18ft. off 38NE of 50W . . ." Further, at 16.30UTC stating "Developing storm 32N 42W 1003MB moving NNW 15kts. will turn more NW later winds 35 to 45kts. seas 14 to 21ft . . . ." The Decision It was evident from the records and evidence presented that the vessel encountered or was threatened with heavy weather conditions, which compelled the Master to exercise his navigational prerogatives and adopt various sailing maneuvers of slowing down, deviating, stopping engines and drifting for safety reasons and in order to avoid severe heavy weather conditions. The panel considered Master's decision as a prudent action. In the absence of any concrete evidence concerning Charterers' allegations, that the delays encountered prior to November 14 may have been due to engine troubles, the panel was unconvinced that such allegations had merit. Based on the information contained in the vessel's log abstracts submitted in evidence, the panel determined that the vessel has met the warranted speed provided in the Charter Party. However, based on the vessel's IFO and DO ROB, it was determined that the vessel under performed by excess consumption of IFO 39.74MT and DO 1.17MT. The vessel encountered delays, as reported, due to engine repairs including deviation for bunkering in Aden amounting to 23.5 hours or .98 days or a total of $ 9,310.00. The IFO and DO consumed during these stoppages and deviation were considered in the computation of IFO and DO over consumption for the voyage based on vessel's ROB records. The panel allowed Charterers' deductions from hire but basis the revised figures above. Author’s note:  The initial quantification of the off-hire deduction appears unsupported. The CP consumption was IFO 22 MT and DO 2.5 MT. Even using the initially claimed 1.770833 days lost, the estimated consumption should approximate 1.77 x 22 + 1.77 x 2.5 , or a similar calculation. However, the reported consumption of IFO 81 MT and DO 18 MT cannot be justified based on these parameters. The revised calculations—39.74 MT of IFO and 1.17 MT of DO—seem more reasonable. Considering the bunker ROB, the panel applied a different methodology that factors in the Departure/Arrival ROBs rather than the approach adopted in London Arbitration 15/05. Several "good weather" methods have been utilized over the years in practice and maritime arbitration. The contrasting approaches are particularly evident in LA 12/14. A similar view expressed in another London Arbitration that as long as the ship performed as described, there is no basis to hold that engine issues or fouling affected her performance and allow any claim ( since there is no loss).   SMA, 3644 #underperformance #engine #Master

Owners argued that they were entitled to recover for stevedore damages suffered by the vessel, despite the fact that the Master may not have given the appropriate notices as required in the charter parties. In this respect, Owners insisted that the on/off hire surveys must be considered in conjunction with the notice clauses, especially when hidden or obscure damage is involved. Owners further claimed that the damage items indicated in the comparison survey were not fair wear and tear, and that the estimated repair costs were fair and reasonable. They claimed entitlement to the repair cost regardless of whether the repairs were ever carried out. Charterers' and Subcharterers' positions were essentially similar. They stated that Owners were not entitled to recover for the stevedore damages because the Master failed to file protests or written advices of damages that would reasonably have been detected at the time they occurred. Similarly, no notice was given of possible hidden hold damages. They also argued that the alleged damages were minimal for the carriage of a steel products cargo, especially in light of the large number of existing hold structure damages noted in the Subcharter on-hire survey. The additional damages should be considered as wear and tear. Charterers and Subcharterers further pointed to the fact that the vessel's holds and tanks subsequently passed Special Survey, after tank cleaning and gas freeing, without any requirement that the damages be repaired. As respects the stevedore damage issue, it was conceded that whatever damage occurred was the result of the Subcharterers' steel cargo; therefore, Charterers seek indemnification from Subcharterers should they be found liable. The Panel was of the unanimous conclusion that Owners' claim for stevedore damage be denied. In reaching this decision, the Panel considered the following points: a) The failure of the Master to give the requisite notice, while not fatal to the claim as a whole, renders defective those damages that were readily discernible at the time they occurred. The on/off hire survey must be read together with the notice provision to give any sort of commercial sense to these apparently conflicting clauses in the charter party. It is obviously impossible to give notice of stevedore damage at the time it occurs if it is hidden beneath a mass of cargo as it is loaded. b) The failure of Owners to properly document the quantum of their loss by securing shipyard bids on repair specifications makes it virtually impossible for this Panel to assess repair costs, were they to decide Owners' entitlement to these damages. The Panel placed no weight on the testimony of Owners' Superintending Engineer fixing monetary estimates on the damages established by the comparison survey. He had never viewed the damages and, therefore, was not able to identify where they were and how severe they appeared. His estimates were without any scientific or commercial foundation. c) Owners failed to establish they suffered any monetary loss . The vessel was admittedly sold to an associated company without repairs being made to the stevedore damaged portions of the vessel. There was no demonstration of any diminution in the sale price of the Vessel as a result of the unrepaired damages. SMA 1278 In a more recent SMA 2190, The Panel unanimously concluded that the Owner was entitled to reimbursement for properly documented stevedore damage repair claims. However, the Panel believed Owner did not mitigate its damages at a previous port where repairs could have been more reasonably done. Also, a number of Owner's claim reports were filed after the fact. Other repairs were unsubstantiated -- i.e. the Master stated new crane motors had to be used yet no invoice was presented for same. The Panel concluded that the Owner had only established a portion of its stevedore damage claim. Comment: It is not uncommon in practice for Owners to submit a cost estimate prepared by their technical department as part of their claim for reimbursement; however, this alone is insufficient. In recent London Arbitration Awards, contracts specified that reimbursement would be granted only upon the submission of a final invoice, deeming cost estimates inadequate for this purpose. In London Arbitration 29/22, the charterers were liable to reimburse the owners for the cost of repairs against an invoice for the repairs when done, subject to that event occurring within a reasonable time. Since the owners submitted no invoice following the drydocking, the tribunal presumed that repairs were either not carried out or had been incorporated with other repairs. The owners had proven no loss. In a recent case that was settled during arbitration, the Owners were claiming damages to the ship’s structure. The ship was sold after the arbitration commenced. There was no proof of any diminution in the sale price of the Vessel as a result of the unrepaired damages.   Note: These posts are for informational purposes only and do not reflect the views of the author. #stevedores

By way of analogy to the case of The Kostas Melas [1981] 1 Lloyd’s Rep. 18, the Owners submitted that they were entitled to a prompt determination of their claim for hire akin to applications for partial awards for hire on The Kostas Melas principles. It will be necessary for the Claimant to demonstrate that on the evidence before the arbitrators an ascertainable minimum sum is due. If the Respondent seeks to rely on a cross-claim he will have to establish that he has made out a prima facie  case on the merits of the claim which would involve that it is made in good faith and on reasonable grounds.  In Exmar BV v National Iranian Tanker Co (The "Trade Fortitude") [1992] 1 Lloyd's Rep 169, at 175rhc-176lhc, Judge Diamond QC said: "It is clear both on the authorities and as a matter of principle that arbitrators have a complete discretion to decide whether or not to issue an interim award in favour of one of the parties. As to the authorities, I have referred already to The Angelic Grace. In that case Lord Denning, M.R., (p. 293) pointed out that s. 14 of the Arbitration Act, 1950 provides that the arbitrator or umpire may if he thinks fit make an interim award. Lord Denning then continued: Under that section the arbitrator has a complete discretion. He may, if he thinks fit. Those words seem to me to enable the arbitrators to impose any proper condition which they think fit on the making of an interim award. It is well within the jurisdiction of arbitrators to impose a condition ... It seems to me that, in making an interim award, the arbitrators can and should look at all the circumstances of the case. They can look at the other two arbitrations as well as this one. They can apply the principle of equitable set-off such as was considered in The Nanfri (Federal Commerce v. Molena) [1978] 2 Lloyd's Rep. 132; [1978] Q.B. 927. I should also refer to The Leon, [1985] 2 Lloyd's Rep. 470 at p. 476 where Mr. Justice Hobhouse, after deciding that a cross-claim by charterers for discrepancies in bunker consumption could not be set off against the hire, refused leave to the owners to amend their notice of motion to claim an award for the full amount of the hire. His Lordship refused to allow the amendment on the ground, inter alia, that: … whether or not in any case to make an interim award in favour of owners as opposed to dealing with the matter in a final award and, if so, on what terms is a matter for the discretion of the umpire. It follows in my judgment from the wording of s. 14 and from the above authorities that as a matter of practice there will often be two separate questions to be considered by arbitrators on an application by one of the parties to the reference for an interim award in respect of a minimum sum claimed to be due. The first stage will often be to consider whether on the evidence before the arbitrators the claimant has established his entitlement to a minimum sum due. That question will be governed by the luminous judgment of Mr. Justice Robert Goff, as he then was, in The Kostas Melas , [1981] 1 Lloyd's Rep. 18 at pp. 25-27. It will be necessary for the claimant to demonstrate that on the evidence before the arbitrators an ascertainable minimum sum is due. If the respondent seeks to rely on a cross-claim he will have to establish that he has made out a prima facie case on the merits of the claim which would involve that it is made in good faith and on reasonable grounds. He will also have to establish that the cross claim is one which falls within an express contractual right of deduction or is one for which the remedy of equitable set-off is available. If the arbitrators come to the conclusion at the first stage that on the evidence before them there is a minimum sum due to the claimant they will then have to go on to the second stage of the matter and consider how to exercise their discretion under s. 14. They have a discretion not to issue an interim award at all but to deal with the claims and the cross-claims together in a final award. They also have a discretion if they are minded to issue an interim award to impose conditions for the issue of such award, for example that the claimant shall provide reasonable security for the respondent's cross-claims. All this is clear from the authorities which I have mentioned....... Therefore, as it was stated in this article:  Reflections on speed and performance claims B.1.1 Kostas Melas-type applications London maritime arbitrators have ample powers to proceed without delay in making an “interim” or “partial” award in cases involving underperformance claims. 5  It should be noted that although the terms “interim award” and “partial award” are regularly used interchangeably even today, the term “interim award” “is a constant source of confusion and should be abandoned” 6  (as it will be in the present article). Whether such applications will succeed depend on many factors: section 47 empowers the tribunal to make a partial award, but the tribunal exercises its powers by having regard to section 33 of the Arbitration Act 1996 (AA 1996), which sets out the general duty of the tribunal in very broad terms. Furthermore, as most speed and performance disputes fall within the LMAA Small Claims Procedure (SCP), such applications will succeed in exceptional cases. 7 Take as an example that the charterers advance a cross-claim or a counterclaim for loss due to underperformance to challenge the owners’ claim for hire. In these cases the tribunal is required to determine first whether the charterers have either a right of deduction or set-off against hire and, if so, they will have to establish that the charterers made out a prima facie case on the merits of the claim, which would involve that it is made in good faith and on reasonable grounds. The burden to defeat such an application is a light one; the charterers merely need to demonstrate a reasonably bona fide defence. If the charterers fail, the tribunal will decide whether to exercise its discretion to issue a partial award or dispose of all issues (including the underperformance claim) in a final award. If the tribunal proceeds with a partial award dealing only with the owners’ claim (it need not determine the counterclaim), the charterers can bring a counterclaim later if they can adequately justify it with evidence. Putting these in context, in London Arbitration 1/22, 8  the charterers advanced a counterclaim as off-hire due to the vessel’s underperformance. They relied on a performance report and comments from the WRC to support their claim. However the charterers had not persuaded the tribunal that the above met the test formulated by Robert Goff J in The Kostas Melas. In particular, the charterers had neither justified their off-hire claim nor addressed the point made by the owners that the qualified words “in good faith” meant there was no warranty of speed or consumption. Seemingly, the charterers adduced no evidence or offered no indication to support their case to make a prima facie case of off-hire, thus resisting an immediate partial award in the owners’ favour. For example, in other instances where the charterers advanced their underperformance claim as off-hire, they submitted a performance report and evidence to bring themselves within the ambit of the off-hire clause or other clauses relevant to their claim. 9 Recent Arbitration Cases In London Arbitration 14/24, Owners made an application for a partial  award in respect of hire, and even without a substantiated counter-claim at that stage from Charterers, the tribunal made an award “for the US$1,300,873.10, being the difference between the owners' claim for hire and bunkers, and the charterers' intimated counterclaim .” The counter-claim lacked proper evidence at that stage, yet the tribunal allowed the set-off.   In a partial final award issued on 15 August 2024 (reported in Jus Mundi)  by a sole arbitrator under the LMAA Terms 2021, the Owner served claim submissions and included an application for a partial final award in the sum of  USD 83,293.30  as an admitted balance of hire due as per the Charterer's own final hire statement. The Owner claimed US$124,442.39 as a balance due under their Final Hire Statement. The Charterer had prepared their own Final Hire Statement, admitting that a balance was due of US$83,293.30. The two final hire statements covered the same period. The tribunal wrote to the parties that “"I note the submission that there is an admitted balance due; and no response has been received from the charterers to my direction that they comment on the timetable within last Thursday 25 July…” Charterers failed to respond, and a peremptory ordered followed, with sanctions for non-compliance as per Arbitration Act 1996 the arbitrator made an award on the basis of the submissions and documents presently before him, to the exclusion of anything received thereafter without express permission or direction from him.   Clearly, the claimant fulfilled the requirements under “The first stage will often be to consider whether on the evidence before the arbitrators the claimant has established his entitlement to a minimum sum due” ( the admitted sum here).    However, it is important to mention that the Charterer never explained to the Owner why they had withheld payment, and the Owner applied for a partial final award pursuant to the jurisdiction established in The Kostas Melas [1981] 1 Lloyd's Rep 18 to award a sum that was indisputably due and reserve the balance in dispute.   The charterer had corresponded with the tribunal (regarding the orders) and made no attempt to deny that the figure they had calculated in their own Final Hire Statement was due. Therefore, the tribunal found that the Owner was entitled to an award in their favour for this minimum sum due under the Charterparty, which was US$83,293.30. It was the admitted and undisputed amount due that the tribunal allowed in its partial award. In dealing with performance disputes, the Charterer will usually submit a performance report from a weather routing company. It is more likely the tribunal to deal with both issues, claim and cross-claim, in a final award. Discussion:   The arbitrator retains full discretion; however, this discretion must be exercised as a balancing act, having regard to Section 33. Notably, LA 1/22 resulted in significant arbitration costs, which appears to conflict with Sections 1 and 33. For commercial parties negotiating and drafting performance clauses it is clear that the words "in good faith" do not have the effect of the words "without guarantee" (the award summary is extremely brief to understand the tribunal's reasoning and the relevance of the comments submitted by Charterers' appointed weather routing company). Seemingly, the charterers adduced no evidence or offered no indication to support their case to make a prima facie case of off-hire. Therefore, London Arbitration 1/22 is an exceptional case. Most specialist arbitrators can determine with limited evidence put before them that the vessel was underperforming due to vessel's issues, and not due to the weather conditions. The burden to oppose such an application is relatively low. In most speed and performance disputes, submitting a performance report will suffice. Additionally, indirect evidence—such as documented instances of high slip or other factors that suggest hull fouling or technical issues (e.g., intentional slow steaming, engine damages, low RPM)—establishes a prima facie case to potentially resist such an application. For example, LA 1/22 and LA 23/21 can be compared. In the latter case, even in the absence of direct evidence, sufficient circumstantial evidence enabled the tribunal to determine that fouling had occurred, thereby constituting a breach of Clause 15. Furthermore, significant discrepancies between the masters’ reported figures and those analyzed by the weather routing company may establish a prima facie  case for a breach of Clause 11 (NYPE 1946), thereby providing grounds to potentially resist an application for a partial award. Concerning small claims, partial award applications may not succeed even when the contract prohibits set-off, and there is a cross-claim to be supported with evidence (as per above). The Anna Dorothea case did not involve a small claim (two maritime arbitrators awarded the Owners US$2,147,717.79), a factor requiring consideration. Note:  The above observations are drawn from recently published and some unpublished arbitration awards and do not represent the authors' opinion.

A WRC argued that the tribunal departed from established precedent, concerning the definition of “day” and the interpretation of no adverse currents. Due to multiple errors in the performance report and the application of “and/ or” (a point made by the Charterers in their submissions) in the application of the benchmark conditions, the WRC asserts that these affected seriously the tribunal’s decision deviating from precedent and found against the Charterers. The inclusion of “and/or” (as interpreting the warranted benchmark conditions) addressed a distinct issue from the interpretation of the term “good weather day.” It did not serve as the sole rationale for the arbitrator’s departure from precedent and the ruling against charterers. Another WRC expressed the view that LA 32/22 was wrongly decided and the wording “24 hours consecutive good weather” was missing from the performance warranty. In essence, WRC, or rather their external legal advisers, argued: “Why not say it?” i.e. 24 hours of consecutive good weather if that was the intention of the parties. Legal practitioners and P&I Clubs have also raised the below challenging points: The award summary "held" section does not explicitly confirm that it accepted the Owners' argument regarding the requirement for 24 consecutive hours of good weather. Industry Practice dictates the inclusion of precise language, such as "24 consecutive hours of good weather between noon-to-noon positions," to reflect the Owners' intended position. Since this interpretation functions as a limitation or exclusion clause, it requires unequivocal and unambiguous wording. It is well known that other contracts in the market include this wording. This is part of the background knowledge available to the parties or part of the factual matrix (ICS [1998] 1 W.L.R 896 ) In the Ocean Virgo, Teare J did not address the interpretation of the term "good weather days" but rather the implication argument ( Interpretation and implication are two logically distinct exercises with separate rules- Marks and Spencer per Lord Neuberger at [26], [29], Trump International v Scottish Ministers [ 2016] 1 WLR 85 per Lord Hodge at [35] ). A literal interpretation of the word "day" could result in different durations (e.g., 23, 24, or 25 hours) due to the ship's passage through time zones, potentially leading to an illogical or absurd result. Even if this is considered as a ship's day, it is not 24 hours. The deck logs contain entries for the vessel's sea passage in periods of less than 24 hours ( departure- noon, and noon- arrival position). It is the sea passage that is relevant for the ship's performance evaluation. The tribunal's examination of the sub-section pertaining to adverse currents is notably cursory, rendering its reasoning difficult to discern. Even in judicial proceedings involving concise arbitral awards, it has been observed that " it is difficult to discern their full import given the brief reports available " ( The Globe Danae  [2023] EWHC 1683 (Comm) and " The report of the case is extremely brief and it is not possible to discern what arguments were presented or whether there were any other provisions of the charter, or features of the factual matrix, that supported the conclusion reached " ( The "Archimidis" [2007] EWHC 1182 (Comm) and This decision was rendered by a sole arbitrator, based on limited evidence under the Small Claims Procedure (SCP)). It has not been subsequently followed in other cases, further diminishing its precedential value. Note: These are brief observations gleaned from handling performance claims, not indicative of the author’s perspective on whether the decision was correct or whether the word “day” means, in this context, 24 hours. It is common for Owners to include precise wording if they intend periods of 24 consecutive hours of good weather to apply. This growing practice started after The Ocean Virgo case. The need for clear drafting has been highlighted several times even by P&I Club claims handlers and lawyers. So, why not clearly say it and avoid disputes?

The charterers relied on a report issued by [X] WRC to support an underperformance claim. The charterers based their claim on a breach of the performance warranty, alternatively, the vessel was misdescribed, or the charterers entered into the charter party by a negligent misrepresentation or there must have been a defect in hull, machinery or equipment causing the loss. The owners denied that the vessel underperformed and/or misdescribed and submitted a report from a [Y] WRC to support that there was no contractual good weather on the voyage. The Y company’s report was prepared in strict conformity with the wording of the clause, and in particular, only considered “days” of 24 hours of consecutive good weather, excluding periods with adverse currents since the charter party referred to “no adverse currents”. The dispute was referred to a sole arbitrator, as agreed by the parties, in London. Held, Breach of the performance clause 1.The X company’s report considered periods of less than 24 hours to evaluate the vessel’s performance, contrary to the wording “good weather days ”. The WRC considered periods with adverse currents and applied a positive current factor. Therefore, the charterers have failed to support an underperformance claim on the basis of the X company’s report. Misdescription 2. On some of the analysed bad weather days in the X company’s report, the vessel performed very close to the minimum good weather speed. On other bad weather days, her performance speed was again not far from the minimum good weather speed. No evidence was submitted concerning the charterers’ instructions about the service speed at all times. Thus, on the evidence, the claim failed. Defect in hull, machinery or equipment 3.The charterers submitted no evidence to support their allegations and the claim failed. Comment: the vessel performed and the claim was based on the application of positive currents. Therefore, the tribunal did not address further the term "good weather days". The website removes the names of the parties involved in the proceedings. No other information can be provided for this award.

Several disputes arose under a contract for the vessel’s services off the coast of Nigeria and were referred to arbitration in London. The present award was concerned solely with the discrete issue of the claim for unpaid hire made by the Owners. The Charterers admitted that hire in the sum claimed has not been paid but asserted a defence by way of equitable (or transaction) set-off regarding a sum counterclaimed. The tribunal did not seek finally to determine the merits of the counterclaim – that remained to be determined later — but merely whether it was available as a set-off. If it was, the claim for hire must await determination along with the other issues in the case; if it is not, the hire should have been awarded now, through a Partial Final Award, together with contractual interest. Part of the relevant charter term stated, ” Payments of Hire, bunker invoices and disbursements for the Charterers’ account shall be received within the number of days stated … in full without discount . .” One of the Owners’ arguments was that ‘hire was expressly payable “without discount” and thus no set-off was permissible.’ The tribunal rejected this argument and held that: We think it axiomatic in English law that if parties wish to exclude generally available common law rights, they must do so in clear terms. We do not consider that the term “without discount” has the requisite level of clarity to exclude the right of equitable set-off. There is a variety of well-known contractual phrases which may exclude the right of set-off and “without discount” is not one of them. The tribunal rejected most of the owners’ arguments (this post does not mention all of the arguments) but, for other reasons, concluded that the defence of equitable set-off was not available as a defence to the claim for hire in this case. Partial Final Award, 8 January 2016 Note: for more information about the other Owners’ arguments and discussion on the authorities, the reader can check on Jus Mundi https://jusmundi.com/en/ . These awards mostly come into the public domain through enforcement under the NYC 1958 .

A dispute arose where the Charterers deducted an amount from the Owners' hire payment, claiming the vessel underperformed in speed and over-consumed fuel during the voyage. The Owners contested, citing adverse currents and disputing the reliability of the Charterers’ weather data (provided by X WRC) compared to the vessel’s logs. The tribunal found that the Charterers’ weather data was more reliable but ruled that the Charterers failed to meet contractual requirements, as their performance claim did not cover the entire voyage, as specified by the CP terms. Consequently, the Charterers' claim was deemed waived. The vessel initially performed a ballast voyage and then a laden voyage from South Africa to China. According to the charterers’ WRC, it found two good weather days on the laden leg. During these days, the ship performed at about 1 knot below the warranted speed, indicating underperformance. The weather routing clause defined "good weather days" and included a protocol for performance claims. It required weather evidence primarily from the vessel’s logs unless significant discrepancies existed, in which case independent weather reports would take precedence. It also specified that performance claims must consider the entire charter duration and required written submission within 20 days after the relevant sea passage. The tribunal concluded that Charterers' failure to comply with procedural and evidentiary requirements, as stipulated by the charterparty, negated their claims for vessel underperformance. Charterers’ claim failed as they did not provide an analysis for the entire charter period, instead focusing solely on the laden voyage. As the tribunal held, Charterers’ WRC collected data from independent, recognized weather sources, including weather satellites, stationary and drifting buoys, and local weather stations. They used intermediate waypoints spaced at three-hour intervals, and data was then used to calculate the overall mean conditions for selected periods. In contrast, the noon reports from the deck log or data provided by a bridge equipment instrument represented only snapshots of weather conditions at specific times. Observations The tribunal’s decision emphasised that the burden lay firmly with the Charterers to ensure that their performance claim complied with the contractual requirements in full. Specifically, the clause outlined clear stipulations: any performance claim regarding speed and consumption needed to account for the entire charter duration, submit a complete calculation, and be presented in writing within 20 days of the sea passage's end. This allocation of responsibility thus protected Owners from having to raise objections proactively, placing the onus on Charterers to meet all contractual requirements precisely when submitting performance claims. Despite the length of the voyage, the parties seems to accepted that the two-day period was sufficient to calculate underperformance . The tribunal further clarified that "weather" strictly refers to meteorological phenomena, encompassing atmospheric conditions like temperature, humidity, cloud cover, wind, and precipitation, but does not include currents. However, the term “no adverse currents” had already been addressed in The Divinegate decision (the award predates The Divinegate). The tribunal’s analysis regarding the bridge equipment—despite not involving ECDIS in that specific case—suggests that even with ECDIS, certain challenges persist, even under contracts requiring 24 consecutive hours of favorable weather. This highlights a contrast between monitoring real-time, consecutive conditions and the practice of using “mean” conditions over selected periods. Author’s note: No other information can be provided for this London Arbitration award of two arbitrators. The above are just observations and not the Author's opinion. #underperformance #timebar #ECDIS #decklogs

Upon completion of loading, the charterers placed the vessel off-hire under Clause 15, alternatively claiming damages, due to a delay of approximately three days required to finalize the loaded figures. This delay was allegedly caused by the vessel’s inability to assess its own weight accurately, leading to a discrepancy of nearly 1.4% between shore weights and draft surveys of total cargo (about 900 mts difference). There were draft surveys conducted at berth and some at the anchorage, under the effect of weather. Subsequently, the vessel's departure was further delayed due to bad weather, preventing the fumigation team from boarding. The charterers sought to claim this additional delay period under Clause 15 as "all extra related expenses." Based on the evidence presented, the tribunal determined that the draft surveys at the loading port were inaccurate—likely due to imprecise water ballast measurements. Even accounting for weather-related discrepancies, the tribunal found the discrepancy to be excessive, concluding that it resulted from a fault on the vessel's part, thereby placing the owners in breach of Clause 1. The tribunal accepted the off-hire period and further determined that the additional delay due to adverse weather fell within the scope of Clause 15, encompassing “all extra related expenses.” According to the tribunal, when a breach causes the charterer to incur losses in terms of costs, expenses, or time, the owners are liable for these losses, provided the delay is directly attributable to the breach. Author's comment: no other information can be provided for this SCP award summary. #clause15 #surveys

In this relatively recent arbitration under an amended Exxon Mobil VOY2005 form , disputes arose concerning the Owners' claim for the cost of bunkers, a liability which the Charterers denied.  The central issue in the dispute pertained to the interpretation of the phrase "extra expenses and bunkers consumed," which appeared in the "waiting for orders" clause. The Owners submitted a claim for the time spent and the bunkers consumed during the waiting period. The Charterers, however, contended that the demurrage rate already included an allowance for bunkers and that "extra" referred to something beyond the standard consumption of bunkers during idling. The Owners, in contrast, argued that the term "extra" in the phrase applied only to expenses and not to bunkers. The tribunal found in favor of the Charterers, concluding that, as a matter of principle, the Owners could not claim the cost of idle bunkers when compensated for detention at the agreed demurrage rate (The Eternal Bliss considered). Regarding the Owners' interpretation of "extra," the tribunal was not convinced and held that "extra" applied both to expenses and bunkers. Observations Another potential issue that arises in practice is whether the Master’s statement alone is sufficient to substantiate the claim for the bunkers consumed during various stages of the voyage ( sailing, waiting for orders, calling at an intermediate port, etc). As this constitutes a claim for reimbursement, the Charterer may have the right to request additional customary documentation, such as engine logs or printouts from the integrated automation system, among others. Editors' note: no other information can be provided for this London Arbitration Award. The featured image on the post is indicative and not the vessel involved in this arbitration. See also Voyage Charters page 921 " Demurrage, as liquidated damages for delay, compensates the owner for the ordinary running expenses of the vessel in port including bunker consumption" For SMA awards: "Owner’s claim for bunkers consumed during discharge detention period denied because provision for bunkers deemed included in the daily demurrage rate" ( SMA, 3339) "Bunker consumption is an element of the contractual demurrage rate, and panel refused to award both demurrage and claim for bunker consumption when vessel was delayed while waiting for Charterer’s orders" ( SMA, 3452) "Owners’ claim for bunkers consumed and demurrage was not accepted, but the daily detention value for the waiting time should be calculated at the daily demurrage rate" ( SMA, 4081) #laytime #tankers #demurrage

The vessel was fixed under an amended GENCON 1994 to carry steels from Odessa to Karachi.  The claim was against the charterer as damages for detention for delays at Odessa due to delayed departure for repairing the stevedore damages. Charterer denied liability and said that it was the Owners’ obligation to use maximum efforts to recover directly from the stevedores. They also argued that there was a delay by the claimants in making the claim. During loading, a bundle was dropped by the stevedores resulting in damage and a puncture of the post side tank top in hold no 7, and damage to no 4 fuel oil tank( physical damage). The vessel completed loading on the same day 12 December and other part cargo on 15 December 17:30 hours. Before her sailing, the physical damage had to be repaired. The stevedores arranged and paid for the repairs that completed on 18 December 23:00, and the vessel sailed on 19th December 01:40 hours. The Owners said that the vessel was detained for reason of the physical damage and consequent repairs from 14 December 20:00 till 19 December 01:40, a period of 4.24 days. The claimant used two different rates for calculating damages: USD 35,000 for the period up to 15th December and then USD 27,500 being the daily rate of hire and expenses which the Owners were paying in their capacity as time charterers under the head time charter. The stevedore damage clause stated:  “stevedore damages, if any, to be settled directly between owners and stevedores w/out chrts interference. In case owners are unable to get such settlement, chrts to by all means assist in getting this settlement and remain ultimately responsible” Charterers said that the absence from the charterparty of detention provisions means that they had no liability for the delay caused whilst the physical damage were being repaired. Held, The parties agreed that if the Owners were unable to obtain settlement of the stevedore damages, the Charterers were to remain ultimately responsible. In certain circumstances it was true that the absence of a contractual provision can be determinative of parties’ rights and obligations, but it did not necessarily follow that such an absence means that a party was relieved from liability. There can be no doubt that the loading ( free in terms) was at the risk and expense of the Charterers. In breach of the charterparty the damage was caused by the admitted failure or negligence of stevedores. It was obvious that there would be occasions ( such as those at Odessa) when the physical damage required immediate repair, which could delay either further operations on the vessel or departure. It would be illogical if an Owner was expected to bear the cost of delay without the opportunity to seek recompense elsewhere. Indeed, such an outcome would be inconsistent with a charterparty regime which imposed the expense and risk of loading upon the charterers. Time sheets and a statement of facts show that the loading of the other cargo was not completed until 15 December 17:30, so the delay commenced at that point of time and not at 14 th December 20:00. The period between 18th December 23:00 and 19th December 01:40 was occupied by the normal operations of obtaining port clearance- operations which would in any event had to have been undertaken if the vessel had been able to sail on a previous day. Therefore, this was not part of the detention claim. Then, the Charterers said they were not liable because the Owners were under an obligation to exercise maximum endeavour to recover from the stevedores. Held, Unfortunately for the Charterers, there were no such words in the relevant clause. The clause required the Charterers  “ to by all means assist” the Owners. So, if anything, the maximum endeavor was required on the part of the Charterers- a commercially sound approach in the context of a loading which was undertaken at their risk and expense. The evidence was that there were numerous discussions between the parties and that neither the Owners nor the Charterers were able to make progress with the stevedores on the question of compensation for the delay in sailing. Furthermore, the Charterers said they could do no more despite what they described as their efforts to assist the Owners in every way. Held, On the evidence, the Charterers have used all means they could to assist the Owners. However, the use of those means did not discharge the Charterers from liability because, as the words of the clause state, the Charterers remained liable. Those words can only mean that if the Owners were not successful in effecting a recovery from the stevedores, then the Charterers would pay. Such a construction makes sense. The other ground of defence was that the Owners delayed to present their claim for five months. Held, Even if the Owners had delayed ( and it found this was not the case as an invoice was sent to Charterers on 31th December) delay in itself was not a ground of defence. In any event the Owners were trying to obtain recompense direct from the stevedores, then some delay was inevitable. Award accordingly. LMAA SCP, September 2007 ( LMAA Full Member)- published in Jus Mundi | AI-Powered Search for International Law & Arbitration Editor's Note: See also London Arbitration 4/87 (and commentary in Voyage Charters about LA 4/87) involving recovery from Stevedores. The featured picture is indicative and unrelated to the dispute in this arbitration. #stevedores #detention