Issue 11


The Tanker Pumping Performance Working Group's recommendations were presented at our 4th International Conference on Tanker Demurrage at the end of May by Mark Aspinall, a partner in the law firm of Shaw & Croft. The recommendations covered (i) the technical aspects of pumping, including the "pumping performance formula" that provides an accurate correlation between backpressure and flow rates; (ii) charter party clause interpretation, e.g. that most clauses are "indemnity" rather than "penalty" clauses; and (iii) documentation for cargo discharge including improved pumping logs and a letter of intent to be completed jointly by the ship and the receiving terminal.

We have been involved in a number of pumping disputes that have been settled without the need for arbitration by following the Working Group's recommendations, and in particular the "pumping performance formula".

P.S. We would be grateful for as much feedback as possible from companies which continue to be beset by pumping disputes. The Tanker Pumping Performance Working Group will continue to meet from time to time to discuss ways to further encourage a standard international approach to pumping problems.


We have recently encountered two disputes where the demurrage clause in the sales contracts has read "Demurrage, if actually incurred, as per charter party rate, terms and conditions".

The recipient of the demurrage claim considered that the words "if actually incurred" meant that this effectively changed the demurrage clause into an indemnity. We discussed, in News Update No.4, that according to English law there was an absolute obligation to pay demurrage incurred under the terms of a sales contract. If the parties wanted to turn this obligation into an indemnity, it could be achieved by the inclusion of a clearly worded clause to the effect that no more demurrage would be paid than the correct amount due to the ship owner for the whole voyage. Our conclusion has always been that the wording of such clauses has to be very clear and unambiguous if they are to be effective. We consider that the phrase "if actually incurred" does not in any way alter the absolute nature of the obligation to pay demurrage.

If the phrase signifies anything at all, it can only mean that demurrage, if actually incurred under the sales contract, will be calculated according to the charter party rate, terms and conditions.


The time when the NOR is considered valid under Asbatankvoy is another area that continues to give rise to arguments between ship owners and charterers. Clause 6 of Asbatankvoy states that the NOR shall be tendered upon arrival at the "customary anchorage". Although the c/p does not say "NOR to be tendered upon anchoring", there are many instances where we see charterers claiming that the NOR allowance will not start to run until the vessel has anchored, often just 15 -30 minutes later. We cannot find any justification for this. Provided (i) the vessel has arrived within the port, (ii) reached the customary anchorage, (iii) has come to the end of its voyage and (iv) is ready in all respects to load or discharge, the NOR should be valid. If, on the other hand, the NOR is invalid when tendered because, for example, it has been tendered at the wrong place, it cannot subsequently become valid unless there is an agreement between the parties that it will. See the Court of Appeal decision in The Mexico I [1990].


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