We will have a strong panel at the demurrage conference to debate the question of the fair interpretation of pumping clauses. We propose to start from the basis of Petrofina’s flow chart for determining whether a vessel will have any liability for excess pumping. If we can agree that this is the correct approach, we can proceed to debate the more complicated question of how to assess a vessel’s pumping performance, particularly in relation to crude oil washing, stripping and multiple grade discharges.
According to English law there is nothing to prevent you from making a profit from a legitimate demurrage claim, see Houlder Brothers & Co. Ltd. v. Commissioner of Public Works [1908] AC 276. There is an absolute obligation to pay demurrage in accordance with the terms of a sales contract or a charter party. However, there is a trend in sales contracts towards converting demurrage to no more than an indemnity. This can be achieved by the addition of a clause which states clearly that no more demurrage will be paid than the correct amount due to the ship owner for the whole voyage. Unfortunately, it is only too easy to be ambiguous when drafting such clauses. We have seen phrases such as “buyer shall not be liable for demurrage unless it is claimed by the ship owner” or “...than the amount paid to the ship owner”. Such clauses have led to disputes because they did not make it clear that they referred to the demurrage for the entire voyage or that demurrage was to be limited to no more than the correct amount to which the owner was entitled. In principle, we would oppose turning demurrage into an indemnity. It prevents the claimant from making a profit, but not a loss. Inefficiencies at one port can be subsidised by savings made elsewhere. By berthing a ship prior to her laycan you may gain extra laytime, only to be obliged to pass it all on to the receiver who delays her at the disport. Every claim requires additional paperwork including a copy of the owner’s claim and perhaps even proof of payment. As a result, settlement is frequently delayed.
There have been two recent arbitration cases concerning the application of the Conoco weather clause as added to the Asbatankvoy c/p. One case was heard in London under the LMAA small claims procedure and the other was an SMA case in New York. The outcome in both cases was the same.
The Conoco clause refers to delays in berthing and after berthing. It was held that it does not apply to delays caused by periods of bad weather which occurred while the vessel waited its turn to berth in a queue. Although bad weather may have prevented any movements in the port, the primary cause of the delay always remained berth congestion. Time lost in this way remained the responsibility of the charterer. The vessel could only be directly delayed in berthing by bad weather after it had reached the head of the queue.
A recent Asdem arbitration involved a dispute for delay and reberthing costs. The c/p was Asbatankvoy with the Conoco weather clause with additional provisions for seabuoys etc. whereby all weather delays and unberthing/reberthing costs would be for the charterer’s account. The vessel was moored for loading at a seabuoy. As a result of unforeseen high winds, tugs were unable to come to the vessel’s assistance. The Master made every effort to avoid fouling the loading lines and mooring buoys, but in the process three of the mooring lines parted. As he had been effectively blown off the berth, he attempted to sail clear but discovered that two of the stern ropes had tangled round the propeller. The master then managed to secure his ship and rode out the storm. At first light, divers arrived and cleared the propeller. The vessel had to be unmoored and reberthed with the aid of tugs. We concluded, after much consultation, that when the bad weather had ended, the time lost as a result of fouling the propeller was inevitably the owner’s responsibility. However, the cost of unberthing and reberthing was for the charterer’s account. Although the berth was not unsafe when the ship berthed, it quickly became unsafe due to high winds and the unavailability of tugs. The charterers could have a claim against the loading terminal. The Master, at the time of berthing, had requested that the tugs be kept on stand-by as he was not happy with the loading terminal’s assurance about the weather. There was also a problem with the terminal’s refusal to discontinue loading until the weather became so bad that the tugs could not reach the berth.
After the decision in The Fjordaas [1988], there should be no doubt under Asbatankvoy that awaiting daylight is for the charterer’s account. Other c/p’s such as BEEPEEVOY3 and EXXONVOY90 state that on an inward passage time awaiting daylight is excluded from laytime or demurrage. However, is this still correct if the ship has been delayed by jetty congestion and when the berth becomes free it is too late to berth until daylight on the next morning? Although Exxon and BP seem to have differing interpretations of very similar clauses in their charter parties, we have had to reach a conclusion on this point. We would much appreciate your views and will comment further in our next news letter.