Issue 14


The next meeting of the Working Group on the Fair Interpretation of Pumping Clauses is scheduled for October. One item on the agenda will be the question of whether it is possible to draft a realistic pumping clause that will be acceptable to most owners and charterers for general use. The Group would welcome more input from interested parties. Considerable progress has been made towards meeting the objective of reducing the number of pumping disputes. It would be a great pity if the impetus of the Working Group could not be maintained. As you can see from our note below on ExxonMobil's new charter party, the oil industry still awaits the first standard form to incorporate a pumping clause that reflects accurately the reality of what a ship's pumps are capable of achieving and calculates fairly any time lost when the ship does not meet the warranted performance.


This new charter party was launched on 1 June, 2000. It is clearly written and well set out and should not lead to many disputes over interpretation. There are significant changes from Exxonvoy90, many of which, understandably, favour the charterer. For example, there is now an early loading clause, similar to Mobilvoy96, whereby any time saved by loading before the commencement of laydays counts as additional laytime. The half-rate exceptions to laytime/ demurrage have been increased and now include fire, explosion, breakdown of machinery, strike, picketing, lock-out, slowdown, stoppage or restraint of labour. Bad weather also includes "restricted visibility" which is defined in detail. The two hour allowance for putting documents on board is now available to the charterer in any event. The timebar for claims has been reduced from 180 days to 90 days. The "lightening" clause has been changed to "lightering" in order to cover both loadings and discharges. There are no obvious advantages for the ship owner in respect to laytime and demurrage, although the Notice of Readiness and other advices and notifications can now be made by e-mail or facsimile. The minimum pumping pressure is now 100 psi for all sizes of vessels. One disappointment is that the pumping clause has not been amended in any other respect. It still says that the owner warrants that the vessel will discharge the entire cargo within 24 hours pumping time or maintain 100 psi pressure during the entire period of discharge provided shore facilities permit. Having examined the pumping logs of many thousands of discharges over the last 12 years we have yet to find a single vessel that could maintain 100 psi at all times during discharge.


Most oil companies' charter parties now make it clear that laytime will not begin before 0600 hrs on the first day of laydays unless agreed by the charterer. However, the basic Asbatankvoy form, clause 5, states only that "Laytime shall not commence before the date stipulated in Part I, except with the charterer's sanction". If a vessel tenders notice of readiness before the start of laydays, laytime will commence six hours later or at 0000hrs on the first day of laydays, whichever is later. This conclusion has been supported by a number of LMAA arbitration decisions (see LMLN 103, Oct 1983). However, owners should also note the case of Nelson & Sons v. Nelson Line (Liverpool) Ltd. (No 3) [1908] 13 cc 235 (HL). Here the House of Lords said that starting work in advance of laydays did not automatically trigger the start of laytime unless the charterers had agreed to vary the terms of the charter party.


This Act of Parliament came into force on 13th November 1998 and applies to contracts governed by English law and entered into after that date. It entitles "small" companies, those with less than 50 full-time employees, to claim interest for late payment of invoices from "large" companies, companies with more than 50 full-time employees. The interest rate is set at 8% over the "UK clearing bank base lending rate" which is currently 6%. Where no specific payment date has been agreed, interest will be payable after 30 days from the date that the debt was created or from the date that the purchaser received notification of the amount due, whichever is the later. We understand that it is the government's intention to extend the scope of this Act to enable "small" companies to claim this interest rate from other "small" companies and, within the next two years to all companies. As a small company, we have already found it to be an effective tool for the recovery of long-outstanding debts. We look forward to the time when it can be used to speed up the recovery of non-contentious demurrage claims.


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