The Tanker Pumping Performance Working Group, referred to in our last newsletter will meet, for the third time, in January. It has already made good progress on many of the technical aspects of pumping, charter party clause interpretation and documentation for cargo discharge. The Working Group’s findings will be presented by Mark Aspinall, a partner in the law firm of Shaw & Croft, at the next Tanker Demurrage Conference in May 1999.
We are also currently waiting for an award from a panel of three arbitrators in London relating to a point of principle in a pumping dispute. We are hopeful that this award will be significant and that the parties will agree to it being published.
The New York arbitration between Chembulk Trading, Inc. (owners) and Vinmar International Ltd (charterers) may help to answer a question that sometimes provokes disputes. The award, SMA No. 3443, is dated 30 April, 1998.
After the vessel was allfast a typhoon warning was issued. Discharge was suspended and the vessel was ordered off the berth. After the typhoon had subsided the vessel reberthed and completed discharge. The Owners argued that the half-demurrage rate in Clause 8 of Asbatankvoy was not applicable prior to the expiration of allowed laytime under clause 6. The entire period of delay at this discharge port, one of several disports for the cargo, had occurred with allowed laytime still remaining. The Owners argued that Clause 8 would only apply once the vessel went on demurrage. The sole arbitrator disagreed relying, in particular, on two earlier SMA awards, No.3112 and No. 3165, and also LMLN 247. The conclusion was that there was no reason to restrict the application of Clause 8 of Asbatankvoy to causes of demurrage that occurred once laytime had expired. The Owner’s demurrage claim was reduced by half the time lost as a result of the typhoon.
A question that has recently generated a considerable amount of discussion is, when does the 6 hour NOR allowance start to run in the following circumstances? A vessel arrives at a port and tenders NOR. Although the berth is unoccupied it is deemed “inaccessible” because the vessel is prevented from reaching it by bad weather, tidal conditions, awaiting daylight or any of the other reasons, listed in Shellvoy5 cl.13(1)(a), (see lines 187-190). As soon as the berth becomes accessible, e.g. at daylight or the abating of bad weather, the vessel weighs anchor and goes directly to the berth. Does the 6 hours run from the time that the berth becomes accessible or only from when the vessel is all fast at the berth? Cl.13(1)(a) says that time commences 6 hours after the vessel is ready, has tendered NOR and is in berth. However, if the vessel does not go directly to the berth, time commences 6 hours after three conditions have been met, i.e. the vessel is waiting to berth, has tendered NOR and the berth is accessible. On the one hand, it is argued that Shellvoy5 is a berth charter (see cl.3) and that the vessel is not an “arrived” ship and the NOR will not count until she has berthed. The special provisions for time to run before berthing only apply when the berth is occupied or the cargo is unavailable. Furthermore, as soon as the berth becomes accessible the vessel must proceed to it, according to cl. 3, with the utmost despatch and the NOR will be treated as if there had been no interruption to the voyage. The original drafters of Shellvoy5 may have intended this interpretation on the basis that all navigational risks would be for the ship owner’s account. On the other hand, it is also argued that the berth is defined as inaccessible “only for so long as the vessel is or would be prevented from proceeding to it by bad weather…”. Therefore the moment of accessibility triggers the running of the 6 hours and the vessel will not move before the berth becomes accessible. Furthermore, the clause says that time will commence 6 hours after the three conditions have been met.
It seems that there is no consistency of interpretation, even among major oil companies that regularly use this charter party. We would therefore appreciate further observations on this problem from readers of this newsletter before reaching a final conclusion. It is clearly important that there should be only one industry interpretation.
We were recently called upon to arbitrate on a dispute concerning an off-hire period in a time charter. This arose from a grounding or, to be technically correct, a stranding that occurred during a period of bad weather while the vessel awaited a berth. Although it is not possible to cover all the details of the arbitration, the main question was whether the charterers were entitled to claim damages or to consider as off-hire the entire period, from the moment of the grounding until the vessel was declared seaworthy by the classification inspector. We considered that in line with the Court of Appeal judgement in The Fina Samco [1995] the charterers did not have a claim for damages under cl.3 of Shelltime 4. However, in accordance with cl.21(a), the charterers were entitled to an off-hire deduction for time and related bunkers lost to them directly as a result of the stranding. Such time was not lost until the charterers were in a position to order the vessel to an available berth. The off-hire period then ran without interruption until the vessel was declared seaworthy.