Tribunal Rejects Court Surveyor Performance Analysis

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator

The dispute arose under an amended NYPE form for a voyage of granite blocks from India to Europe.

On the first part of the voyage from Mangalore to Suez Canal, the ship performed. From Port Said to Santander, the vessel encountered heavy weather and delays, which form the basis of the Charterer's claims for loss of time and underperformance.

Charterer, without any warning to Owner or Master, near completion of discharge of cargo at Antwerp, claimed substantial under-performance and obtained a Court order to detain the vessel and have a Court-appointed Nautical Surveyor investigate and peruse the vessel's records to determine and report the causes of the alleged excessive delays encountered during the voyage.

The Court appointed investigator examined and perused all the vessel's records including deck and engine log books, charter party, official documents of the vessel, repair records, weather reports for the voyage in question, interrogated the Master and Chief Officer and took their statements and finally issued his report which was submitted to the Panel in its entirety not as binding on the Panel but as informative.

The Nautical Commission surveyor found that the vessel was in good physical condition with no evidence of any malfunction or unseaworthiness. He further determined that during the 1st. leg of the voyage - Mangalore/Port Said, the vessel had met the warranted speed in the charter. He further considered the heavy weather encountered during the 2nd. leg of the voyage – Port Said/Santander with a view to determining whether the vessel performed the voyage with the utmost dispatch and/ or met the warranted speed despite heavy weather conditions.

The Nautical Engineer concluded that the vessel should have made at least about 75% of the warranted speed of about 11 knots as long as she was encountering heavy weather with wind force less than 7 on the Beaufort scale, which he considered normal for that area. For this period, he indicated the vessel did not meet about 75% of the warranted speed he deemed plausible; therefore, the Owner should be liable for a reduced delay of a total of 118 hours or 4 days and 22 hours.

Decision

Considering all the terms of the contract, it was evident that the parties intended to qualify the vessel's capability under good weather conditions.

Examination of the daily weather station reports, the many periodic reports of the Master as well as the daily entries in the vessel’s log book confirmed that the vessel during the entire period in question encountered heavy weather with wind force in excess of 3 and as much as 7-10 Beaufort Scale. Charterers as well as the Court Nautical Surveyor did not dispute or question the details of heavy weather encountered; instead, they argued that the vessel should have made at least 8 knots in weather with wind force not exceeding 7 otherwise it can be assumed that the Master did not prosecute the voyage with utmost dispatch.

The Panel, however, considered that the Master and officers on board the vessel deemed to be the best judges on the spot of actual weather conditions with heavy duty and responsibility for safety and appropriate actions. The fact that the weather conditions were of wind force 5-10 with adverse current and swell and the vessel being extremely stiff due to unlashed granite blocks of up to 25-28 M/T each, compelled the Master to act, at his judgment, and reduce speed justifiably, therefore, not only the period of heavy weather Port Said/Crete of wind force 7-10 should be excluded as the Court surveyor determined but the remaining period Crete/Santander with wind force always in excess of 3 and up to 7 must be excluded for not meeting the limited warranted performance.

There was no evidence whatsoever that the Master did not prosecute the voyage with the utmost dispatch.

The Panel further considered unacceptable the basis adopted by the Court investigator in Antwerp to exclude a period of heavy weather of wind force 7-10 and not exclude the period of wind force from 4 to 7, arbitrarily assume and decide that the vessel should have made at least 8 knots per hour during weather of wind force not exceeding 7.

Such a conclusion was arbitrary and apparently based on personal assumptions contrary to the terms of the Time Charter; therefore, it was inapplicable here because the Panel must abide by the agreed Charter Party terms.

The Court investigator's evaluation and arbitrary adjustment of Charterer's claim was improper and beyond his function to determine the condition of the vessel and causes of delay. He was not appointed to judge or make a quantitative determination of the Charterer's alleged claim. That function was one reserved for the arbitrators.

The Panel was unanimous in its decision that the prevailing weather conditions of wind force between 5-10 with adverse currents encountered during the entire passage of the voyage in question, Port Said/Santander, were serious enough to warrant the Captain's decision to seek shelter at Crete (along with 25 other vessels) and reduce the speed of the vessel for safety reasons, therefore, in conjunction with the terms of the Charter, the period of this part of the voyage on which the claim is made did not breach the performance warranty.

The Panel found no justified basis for Charterer's claims as presented to the Panel for determination. Therefore, all Charterer's claims were unanimously denied.

The Panel considered the arrest of the vessel wrongful and unjustified under the circumstances because Charterers could have started their investigation of alleged speed loss at the first 2 discharge ports instead of waiting till two hours before completion of discharge. Owners would then have had plenty of time to grant the Charterers a Letter of Undertaking without the vessel being delayed two days.

Editors’ Note: The opinions of court-appointed surveyors do not bind tribunals ( see, by analogy, cargo damage cases in English Courts). In this case, the finding that the vessel performed at only 75% of the warranted speed was unsupported (a ship sailing with beam/ head winds up to BF 7+ adverse swell may be affected even more than 25% speed reduction). The extension of the weather threshold up to Beaufort 7 was unnecessary, particularly given the vessel’s loaded condition. There was also no evidence of a defect in the ship’s hull or machinery in this case.

This is for information purposes only. Readers should read the published award and form their own view.

SMA 2753