Issue 15


The Working Group on the Fair Interpretation of Pumping Clauses has been strengthened by the addition of several new members and now includes representatives from BP Shipping, Stasco, ExxonMobil, StenaBulk, Andros Maritime, Marc Rich and Braemar Tankers. At the last meeting it was agreed that the Group should attempt to draft a set of pumping clauses that would be acceptable to owners and charterers alike. The objective is to offer clauses that reflect the reality of what ships' pumps are capable of achieving and permit the fair calculation of any time lost if the ship fails to meet the warranted performance. The intention is to unveil the Working Group's proposals at the International Conference on Tanker Demurrage in London in May.


We recently had the opportunity to advise on the scope of Shellvoy5 Cl. 14(c)(iii): "Time shall not count… when lost as a result of… strike, lock-out, stoppage or restraint of labour of… pilot". Both parties accepted that this was an exception to laytime/ demurrage that covered periods of time lost because pilots were refusing to work at night. However, the charterers proposed to deduct all the time that the pilot "strike" was in progress plus time lost as a result of berth congestion after the pilots returned to normal working. The owners considered that only a delay that resulted from the non-availability of a pilot when the vessel in question wanted to berth would be deductible from time to count.

Our view was that the precise time lost when pilots were required but were not actually working at all could easily be determined. The charterer of a waiting vessel that suffered additional delay during these periods could rely on cl.14(c)(iii) to deduct such time from the laytime calculation. All other time would count and all time after the end of the work-to-rule would also count for the charterer.


A recent unpublished arbitration considered the question of whether a vessel that could not proceed directly to the berth on arrival could tender a valid NOR before she had anchored. Asbatankvoy Part II Cl. 6 says that the NOR must be tendered "upon arrival at customary anchorage at each port of loading or discharge". Tendering outside the anchorage area, for example at the pilot station, is therefore not generally going to be acceptable. Tendering while still under way is likely to fall foul of the House of Lords decision in The Johanna Oldendorff [1973]. There Lord Reid said that it had to be clear that the vessel had come to the end of its voyage. Lord Diplock went even further by saying that the vessel had to be anchored, "… the ship owner does not complete the loading or carrying voyage until the vessel has come to a stop at a place within the larger area whence her proceeding further would serve no business purpose." He added "… if no berth is available, the voyage stage ends when she is moored within the larger area at any convenient place from which she can get to a berth as soon as one is vacant."

It is common practice for Masters to tender NOR before they have anchored. Some charterers accept this, others will only agree to counting laytime from 6 hours after anchoring. What this arbitration did not consider was whether an NOR tendered earlier would be valid from the time of anchoring or whether it was invalid because the vessel had technically not reached the end of her voyage. If one follows the logic of the Court of Appeal decision in The Mexico I [1990], an invalid NOR cannot later become valid unless both parties agree that it will. It may be that the courts would assume that so long as the vessel was within the specified area within the port and fully at the charterer's disposal, the NOR would count from the time of anchoring. In The Petr Shmidt [1998], also a Court of Appeal decision, an NOR tendered outside the office hours stipulated in the charter party became valid at the beginning of office hours. This was on the basis that the vessel had arrived within the port and in all other respects was ready to load/discharge the cargo. We are receiving indications that some charterers are now looking hard for opportunities to declare NOR's invalid. Therefore it may not be long before such a case reaches the High Court. Meanwhile, we would suggest that ship owners should be very clear in their instructions to Masters and if in doubt they should be told to retender NOR's after anchoring.


One of the frustrations of arbitrations in London, compared for example with SMA arbitrations in New York, is that so few are openly published. This means that a lot of excellently researched and carefully reasoned awards never get the public airing they deserve. Although arbitration awards do not create precedents that have to be followed, they sometimes offer sensible solutions to problems that are routinely encountered by the oil industry. However, the lack of publicity ensures that they have almost no influence whatsoever. Although this may be satisfactory for one party, usually the losing one, it is normally only a short-term benefit. There may be the occasional inexplicable award where perhaps it is best that they never see the light of day. However, we cannot see any good reason why the basic facts plus the reasoning of awards should not routinely be published, provided the identity of the protagonists is not revealed.


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