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

Case citation: Imperial Marine Company v Pasquale della Gatta; Imperial Marine Company v Filippo Lembo (638/10) [2011] ZASCA 131 (15 September 2011)- Supreme Court of South Africa Deviation- off-spec bunkers- engine damage- expert evidence- performance claims- prima facie case This brief post does not aim to address the various claims advanced in detail but focuses exclusively on the performance claims and the observations made in relation to expert evidence (which can be helpful). Nevertheless, the other claims remain of general interest and warrant consideration by readers. The issues related to the arrest of two vessels as security for claims pending arbitration in London, following disputes under a long-term time charter party on NYPE form. A dispute arose in 2005 when the vessel suffered damage to its main engine and underwent repairs at Pylos, Greece.  For the first two years under charter, there appear to have been no significant problems. The present disputes originate with the provision by Charterers of a bunker stem at Yeo Su, Korea on 4 March. The vessel then sailed for Dampier in Australia and started burning these bunkers. Whilst the vessel was en route to Port Hedland the chief engineer received a report that the bunkers delivered in the first bunker stem at Yeo Su were not in accordance with specification. This is accepted as correct, at least insofar as the Kineamatic viscosity of the bunkers is concerned. The engineer’s response was to stop burning those bunkers and to switch to others. The unwillingness to use the initial Yeo Su bunker stem meant that when the vessel left Port Hedland it had insufficient bunkers to reach its destination at Redcar in the United Kingdom and it accordingly diverted to Colombo in Sri Lanka to take on additional bunkers. Its onward route was via Suez where there was a brief stoppage because of engine problems. Shortly thereafter it became apparent that the main engine had suffered major damage and required repairs. The evidence showed that the vessel continued to operate under the charterparty after the repairs had been undertaken at Pylos. No complaint was made of any malfunctioning of the engine or under-performance arising from its operating with repaired cylinder blocks. Charterer claims that the reason for the breakdown in the main engine was a failure on the part of Owners to fulfil its obligations to provide a vessel with its machinery and equipment in a thoroughly efficient state and its further obligation to maintain it in such state. It accordingly contends that the detour to Colombo was an improper diversion and that the vessel was off-hire during that period as well as the periods of the breakdown at Suez and repairs at Pylos. Owners disputed these claims. It laid the blame for the damage to the main engine on the first Yeo Su bunker stem, which led to the vessel burning bunkers with excessive viscosity. It accordingly counterclaimed for the unpaid hire and the cost of the repairs to the main engine at Pylos. Over and above this it claimed an unspecified amount for the diminution in the value of the vessel arising from the manner in which the repairs to the engine’s cylinder blocks were undertaken. Observations on expert opinion ( see Paras 24-26) Where the applicant asks the court to draw factual inferences from the evidence they must be inferences that can reasonably be drawn from it, even if they need not be the only possible inferences from that evidence. If they are tenuous or far-fetched the onus is not discharged. Second the drawing of inferences from the facts must be based on proven facts and not matters of speculation. As Lord Wright said in his speech in Caswell v Powell Duffryn Associated Collieries Ltd: ‘Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish … But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture.’7 (citation [1939] 3 All ER 722 (HL) at 733E-F, cited in Motor Vehicle Assurance Fund v Dubuzane 1984 (1) SA 700 (A) at 706B-D. See also Great River Shipping Inc v Sunnyface Marine Limited 1994 (1) SA 65 (C) at 75I-76C and particularly the statement that ‘evidence does not include contention, submission or conjecture.’) In a trial action, it is fundamental that the opinion of an expert must be based on facts that are established by the evidence, and the court assesses the opinions of experts on the basis of ‘whether and to what extent their views are founded on logical reasoning’.8 ( citation- Michael & another v Linksfield Park Clinic (Pty) Limited & another 2001 (3) SA 1188 (SCA) para 36 and generally paras 34 – 40) If not then the expert’s opinion is worthless because it is purely hypothetical, based on facts that cannot be demonstrated even on a prima facie basis. It can be disregarded. If the relevant facts are established on a prima facie basis then the court must consider whether the expert’s view is one that can reasonably be held on the basis of those facts. In other words, it examines the reasoning of the expert and determines whether it is logical in the light of those facts and any others that are undisputed or cannot be disputed. If it concludes that the opinion is one that can reasonably be held on the basis of the facts and the chain of reasoning of the expert the threshold will be satisfied. This is so even though that is not the only opinion that can reasonably be expressed on the basis of those facts. However, if the opinion is far-fetched and based on unproven hypotheses then the onus is not discharged. Performance claims (see para 77)- without guarantee- “standard system”? There were a number of performance claims based on allegations that the vessel was at various times and on various voyages not able to steam in accordance with the speed and consumption figures given in clause 62 of the charterparty. The first problem with these claims is that these figures were given subject to certain weather and sea conditions and without guarantee. They are advanced in the draft amended points of claim on the basis of an allegation that ‘the vessel failed to achieve the performance warranted under clause 62 of the charterparty’. However there was no guarantee. Most of the claims were not included in the charterer’s provisional final hire statement. They were based on what was said to be a standard system of measurement of the performance of vessels but no basis was laid for its application to this charterparty and these voyages. In addition the vessel appears to have been under sub-charter during the voyages in question and there is no evidence that the sub-charterers advanced such claims, nor any response to the statement by Imperial Marine’s attorney that the sub-charters contained the same performance figures on a back to back basis. In my view no prima facie case was established in respect of these claims and counter-security should not have been ordered in respect of them. Editors’ comment: regarding the reference to a “standard system of measurement of the performance of vessels,” it remains unclear which system the charterers relied upon, as no supporting evidence was submitted. The featured picture is indicative and unrelated to the ship in the case #underperformance #bunkers #experts #enginedamage #offspecbunkers

The dispute arose under an ASBATANKVOY charter party, wherein the Charterers alleged that the Owners had engaged in the conversion of cargo, specifically by utilising a portion of it as bunkers. This necessitated a detailed analysis of the vessel's fuel consumption during the voyage, as well as an evaluation of the energy efficiency of the engine(s). The engine logs were thoroughly examined, as is customary in cases involving the analysis of bunker consumption. As found, given the inaccuracies contained in the logs, which open all log entries to considerable doubt, the ship's cargo figures were unreliable and that the shore figures must control. It became clear at an early point in the arbitration that the logs were inaccurate and that crude oil had entered the engine space and bunker tanks, Owner did not present anyone from the vessel to offer any explanation. In these circumstances, the inaccuracies in the logs could not be overemphasised. As the court said in The Silver Palm, 94 F.2d 754 (9th Cir. 1938) at p. 762: “Once you find there has been tampering with a log, as I have had occasion to say before in other cases, the court at once looks with suspicion at the whole matter.” Fuel consumption The analysis of the fuel consumption on the voyage was the point under discussion here. That was relevant since considering the bunker consumption at sea with the bunker reserves could identify if the cargo was converted to bunkers. The engine consumption, distance of the voyage, and RPM were considered on each voyage, so the average consumption per day was calculated. Both parties relied on expert evidence to calculate the vessel’s energy requirements. The primary issue was the total amount of IFO the vessel actually consumed during the voyage. It seemed clear that at approximately 87 or 88 rpm, it required about 7 metric tons per day for auxiliary equipment. The owner took the position that an additional 42 tons would be required to run the main engine at that rpm. The charterer contended that the consumption of the main engine had to be much higher. In both voyages, independent bunker surveys were used to calculate actual consumption. According to the Owners’ expert, his calculation was based on the vessel's performance curves published by the engine manufacturer. Based on that, the power developed at 85 RPM was 12800 BHP and specific consumption 154 G/BHP/HR, giving 47.308 MT/ DAY but an allowance must be made for heavy oil use and normal fouling. A reasonable estimate would be 2.5 + 2.5 percent giving an expected consumption of about 49.0 long tons/ day (Forty-nine long tons was equal to about 50 metric tons). The panel found the above as the most persuasive evidence. Based on this analysis, it dealt only with the main engine and did not encompass any additional fuel required for the auxiliary machinery. It was also clear that this estimate of main engine consumption was very conservative and was based on 85 rpm which was slightly less than the actual rpm of the vessel during the voyage. It only gave a 2 1/2% allowance for the use of heavy fuel. The performance curves were developed using a fuel with calorific value of 10.25 Kcal/kg which was higher than that of the fuel actually consumed during the voyage. Owner's and Charterer's experts used a calorific value of 9.6 or 9.8 Kcal/kg. It was clear, therefore, that the 2 1/2% allowance would not cover the difference in fuels. Moreover, a 2 1/2% allowance for a normal fouling must be considered conservative. Most importantly, no allowance was made in the calculation for the vessel's age. The vessel was almost 10 years old and a 10% increase in fuel consumption based on age alone, could be considered reasonable. The panel considered the Owners’ evidence and found that the main engine had to consume at least 50 metric tons per day. Another 7 metric tons would be required for the auxiliary machinery. When this total consumption of 57 tons per day (well over 60 tons if an allowance was made for age) was compared with the average consumption of 44 listed in the logs, or even the 47 tons per day based on inventory, it was clear that a large discrepancy existed. Over a voyage of 25 days the discrepancy between the average daily consumption listed in the logs and what the vessel must have consumed was well over 300 tons. Given this discrepancy there can be no doubt that the vessel must have burned cargo to supplement its bunker consumption. SMA, published in 1986 (M/T TRISUN) Editor’s Comment:  there appears to be no published London Arbitration awards dealing with performance curves. Therefore, seeing how other arbitrators approached this matter in different jurisdictions was interesting. In practice, the points raised in challenging performance curves were largely consistent, with the exception of considerations related to calorific value ( this point was not raised), but even if, it requires expert evidence( a similar observation that can be found on the publications article " vague terms remain in speed and consumption clauses" ( f199d9_34c597db0f884a1d925467ec69312357.pdf ) The foregoing highlights several challenges inherent in analyses based on past records or sea trials. Even by applying the cubic law, using the reported bunkers/ speed on each voyage on a diagram, it could be easily observable that there was something wrong with the masters' reported bunkers. Discrepancies and inaccuracies in the engine logs have raised concerns about their reliability, thereby casting doubt on the validity of the entire dataset. Notably,  The Silver Palm  has been cited in other SMA awards. Similar cases also demonstrate that engine logs may, in certain instances, be deemed unreliable (this will be discussed in another post). When available and subject to no dispute, official bunker surveys remain the primary reference point for determining actual consumption ( a usual clause stating the results will be "binding" cannot be ignored; it would also cause double dipping by amending the redelivery bunkers for hire purposes and not the arrival bunkers for performance analysis). On another note, deductive reasoning is frequently employed to establish the accuracy of these surveys, particularly in cases of discrepancies between ships and surveyors' figures. This often involves working backwards to assess daily consumption as a means of validating the survey results ( this was also applied in two unreported arbitrations). A similar approach was adopted here, having the consumption at sea as a common ground based on the surveys, working on whether the vessel’s reported “daily” consumption was in line with the engines’ specifications. It was not. Thus the vessel consumed a portion of the cargo for bunker purposes. #enginelogs #underperformance

This dispute originated under a Time Charter Party based on the NYPE form and was brought before a Panel that rendered its decision in 2010. Notably, similar disputes have been presented before London arbitration tribunals and the High Court in England concerning deviations and delays in transiting the Gulf of Aden (GOA) due to piracy-related incidents. Such incidents remain a subject of significant debate, as the prevailing conditions in the Red Sea and GOA continue to be volatile. Charterers fixed the Vessel for a voyage from Dumai to Dublin. Thereafter, the Owners advised the Charterers by email that in view of "lots of piracy incidents" off Somalia and in the Gulf of Aden, in order to protect the Vessel, her crew and Charterers' cargo, it would be prudent to route the Vessel via the Cape of Good Hope and not via the Suez Canal. The Owners advised further that if the Charterers ordered the Vessel via Suez, the Owners would engage a security service to place three unarmed security experts on board the Vessel at Salalah (Mina Rasut), Oman and disembark these experts at Djibouti, and that as a result of complying with Charterers' orders to proceed via the Gulf of Aden, the resultant risks, additional costs and time lost "would rest with Charterers only." The Charterers asserted that the deviation was unwarranted and, consequently, deducted the sum of $ 25,346.58 in respect of the time lost and additional bunkers consumed, as well as refused to pay the cost of the security experts. Owners argued that the sole purpose of the deviation was to take on security guards to protect life (i.e., the crew) and property (i.e., the vessel and her cargo) and that the cost of the security experts flowed directly from Owners' compliance with Charterers' voyage orders. Charterers have argued that Clause 74 of the Charter Party describes "the type of deviation agreed to between the parties with respect to the Somali pirate problem." The Panel found that - given the circumstances prevailing in the Gulf of Aden at that time- the Owners' decision to deviate to embark those security experts was not unwarranted and was, in fact, quite reasonable. In that regard, reasonable deviation was provided for by Section 4(4) of the Carriage of Goods by Sea Act of the United States as well as by similar sections of the Hague Rules and the Hague-Visby Rules, which were all incorporated into the Charter Party under Clause 31(a), the Clause Paramount. Indeed, the many advisories issued by governmental and other international maritime agencies recommend the engagement of security personnel as an element among the counter-measures to be taken by vessels to deter attack by pirates. Moreover, even Charterers acknowledged that "we do not fault the Owner for taking further precautions, beyond the Charter Party precautions, if it felt those precautions were suddenly warranted. Nevertheless, the Charterer cannot unilaterally be expected to bear the costs of the Owner's further precautions." Therefore, the deviation and the employment of the security team must be seen to have been reasonable exercises of due diligence and good seamanship in order to protect the Vessel, its crew and its cargo under the circumstances existing in the Gulf of Aden at that time, and which continue today. The Panel opined that the Charterers should not unilaterally bear the entirety of the costs associated with this claim, as the deviation served the interests of both parties. Regarding the deduction of hire, the Panel awarded the Owners the full amount deducted, along with interest. SMA, 2010   Editors’ comment: The Gulf of Aden has long been classified as a "High-Risk Area" by the marine insurance industry due to its persistent history of piracy, including hijackings and ransom demands. Following a series of attacks by Houthi forces during November and December 2023, the region's security concerns have further disrupted commercial shipping operations, affecting the rights and obligations of parties under various contractual frameworks. Disputes arising from transits through the Gulf of Aden have frequently required adjudication by English courts and arbitration tribunals, addressing pivotal issues such as: (1) Costs under the BIMCO Piracy Clause, (2) Allocation and determination of additional expenses incurred during high-risk transits, (3) Evaluations of shipmasters' decisions to deviate from charterers' instructions, particularly avoiding the Suez Canal due to piracy-related threats, (4) Off-Hire Claims: Disputes arising from vessel seizures by Somali pirates, specifically regarding hire payment obligations and (5) Interpretation of Key Clauses: Legal scrutiny of the BIMCO Piracy Clause and CONWARTIME Clause. In some disputes, the reasonableness of a master’s decision was a central consideration. Such decisions must balance the duty to safeguard the vessel, its crew, and its cargo against the specific risks presented by the prevailing conditions. Reasonableness is inherently a question of fact, evaluated in light of the circumstances at the time of the decision. Nonetheless, the assessment of risk often diverges between stakeholders ashore and the crew on board, who confront the realities of the situation directly. Picture: powered by Netpas #Deviation #Piracy #Master