Mark Aspinall of Shaw & Croft, representing The Working Group on the Fair Interpretation of Pumping Clauses, presented an entirely new pumping clause for tanker charter parties at our 5th International Conference on Tanker Demurrage in May. Details of the clause and the recommended pumping performance formula are enclosed with this newsletter. We look forward to seeing how many owners and charterers are prepared to adopt this approach which, we believe, offers the clearest and fairest pumping warranty we have seen. The Working Group has now gone as far as it can to eliminate the subjective approach to claims for excess pumping and is not planning to hold further meetings. Its success can already be judged by a noticeable reduction in the number of pumping disputes over the last two years. Our thanks go to all the members of this committee for their time and hard work.
In our last newsletter we discussed the case of The Minerva [2001] in relation to incorrectly documented claims. There is a further point that arose in this judgment. We referred in newsletter No.8 to the legal uncertainty over the practice of owners sending demurrage claims via ship brokers unless it is very clear that the charterers’ broker is acting as the charterers’ agent for the receipt of invoices/ claims. In The Minerva there was a problem caused by a delay by the agents. The judge, agreeing that the owners’ claim for shifting expenses was time-barred, said “I reject the owners’ argument that charterers’ agents’ possession of the invoice satisfied cl. L.13 [the c/p time bar clause]. Clearly it does not, as it is the owners’ responsibility to submit the invoice to charterers. While MIS [the charterer’s agent] was tardy in supplying the invoice the onus was on the owners to obtain and submit it in time, and I am not satisfied that this could not have been done. Nor is there any warrant for saying that charterers’ agents were the charterers’ agents for receiving a claim/invoice.”
A recent unreported arbitration under LMAA terms concluded that the half-rate exceptions in clause 8 of Asbatankvoy applied specifically to demurrage. Therefore the charterer could not have the advantage of the half rate while the vessel was still on laytime. This is the contrary view to the one expressed by the arbitrator in the New York arbitration between Chembulk Trading, Inc. (owners) and Vinmar International Ltd (charterers), SMA No. 3443, dated 30 April, 1998 (referred to in Asdem’s News Update no.9).
The arbitrators also accepted that so long as the exception covered by clause 8, for strike, breakdown of machinery etc., was the primary cause of delay, it was a protecting exemption, as referred to in The “Laura Prima” [1982], which applied whether or not the nominated berth was reachable on arrival as stipulated in clause 9 of Asbatankvoy. For example, the half-rate demurrage would apply if there was a strike in progress when the vessel arrived at the port, but only after the laytime allowance had been used up.
Yvonne Baatz, senior lecturer at The Institute of Maritime Law, Southampton University, delivered a paper at our last Tanker Demurrage Conference on the thorny question of what constitutes “readiness” and whether a vessel can tender a valid NOR prior to anchoring when awaiting a berth. Her conclusion was that it may not be strictly necessary for a vessel to have dropped her anchor unless the charter party stipulates it. However, we have recently seen several occasions where charterers have disputed the time when the NOR should take effect. Unfortunately, there have been some English court decisions on Notices of Readiness, notably the House of Lords decision in The Johanna Oldendorff [1973], that have given rise to differing interpretations. We now propose to form an industry working group in an attempt to (a) establish clear guidelines on the interpretation of NOR clauses in frequently used tanker charter parties and (b) draft an alternative clause that will eliminate as much uncertainty as possible. As with the industry working party on Pumping Clauses, the group will include representatives from tanker owners, oil companies and traders. It would seem sensible that the industry should establish some principles before the courts impose solutions that perhaps neither charterers nor owners will consider reasonable. We have already encountered charterers who have suggested that NOR’s tendered outside the “customary anchorage” (Asbatankvoy cl.6) or, in some instances, prior to anchoring are invalid. They therefore do not believe that laytime will run at all unless there is a subsequent valid NOR or some other provision in the charter party for triggering its commencement, such as “or upon arrival in berth” in cl.6 of Asbatankvoy.