Wednesday, March 22, 2023

Let's discuss charter party disputes.

The word charter-party is clear to commercial people.

What about the word dispute”?

Construed in its context, it has been a source of debate over the years. As said:

Two men have an argument over who won the University Boat Race in a particular year. In ordinary language, they have a dispute over whether it was Oxford or Cambridge. The fact that it can be easily and immediately demonstrated beyond doubt that one is right and the other is wrong does not and cannot mean that that dispute did not in fact exist. Because one man can be said to be indisputably right and the other indisputably wrong does not, in my view, entail that there was therefore never any dispute between them.

-Saville J, 1990

Why do contractual disputes occur and continue to arise?

[t]he parties to a contract sometimes have a positive interest in obscurity, in lack of clarity. Both sides to a negotiation may be content to include an ambiguous provision in it, on the basis that, if they try and spell it out more clearly the deal may fall apart, and they would rather leave it unclear – not least because it will probably never lead to a dispute anyway. So, while judges and other law-makers should try and keep uncertainty in the law to a minimum, what with human fallibility, inability to predict the future and commercial realism, it is unrealistic to believe that the outcome of every dispute could and should be confidently predicted…

– Lord Neuberger, 2016

The other role of substantive commercial law that I want to highlight derives from the fundamental fact that contracts are always incomplete. They are incomplete for two reasons. First, even the most elaborate and comprehensive written contract cannot anticipate in advance every possible event that might arise in relation to a transaction and stipulate what is to happen if the event occurs… Second, attempting to negotiate a contract which anticipates and provides in advance for as many contingencies as possible is time-consuming, costly and can be counterproductive…

-Lord Leggatt, 2021

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PRACTICAL ISSUES

Issue 8: Underperformance- extrapolation is not allowed?

Everyone that has access to the circulated vessel's position list in the market, containing the vessel's description clause, will observe that more or less...

Issue 7: Speed and Consumption figures without guarantee

The words “without guarantee” (WOG) have a comparatively well-settled meaning viz that there is to be no liability in the absence of fraud or bad faith. However,...

Issue 6: Deviation- shorter vs longer route

The vessel followed the longer route, and the master's decision was not justifiable on the evidence. Owners were liable for the added costs and...

London Arbitration- unpaid admitted demurrage amount

The vessel was chartered on an amended NORGRAIN Form to carry soya beans in bulk from Paranagua to Rizhao. Disputes arose between the parties...

London Arbitration- deductions for underperformance and stevedore overtime expenses

Disputes arose under an amended NYPE 1993 form and came before two LMAA arbitrators for determination. The Owners claimed a balance of US$238,077.18 due...

London Arbitration-redelivery bunker quantities and prices to apply

One of the disputes in this reference concerned damages due to charterers' breach of the bunker clause. The disputes came before three arbitrators that...

London Arbitration- deductions for underperformance and stevedore overtime expenses

Disputes arose under an amended NYPE 1993 form and came before two LMAA arbitrators for determination. The Owners claimed a balance of US$238,077.18 due...

London Arbitration- unpaid admitted demurrage amount

The vessel was chartered on an amended NORGRAIN Form to carry soya beans in bulk from Paranagua to Rizhao. Disputes arose between the parties...

LIST OF 890 PUBLISHED LMAA AWARDS, 1979-2022

I am pleased to present the third guidebook published for free as part of a series of “Snapshot Guides” on charter disputes that I...

Partial Final Award- hire deductions without “owners prior approval”

The subject vessel was chartered on an amended NYPE Form 1946 to carry grains from Black Sea to Bangladesh. The owners claimed for hire...

London Arbitration- liability for the cost of escort boat and guards in Nigeria

The costs of escort boat and armed guards for trading in Nigeria were for charterers' account but not the hull cleaning costs. Likely, this...

London Arbitration- whether vessel off hire and liability for cargo shortage fine

Disputes arose concerning off-hire at Chittagong due to the ship's trim and stability issues, a cargo shortage claim, and a customs fine. The disputes...

Owner refused discharging against LOI- Whether off-hire or damages claim

Two LMAA arbitrators held that, under these events, the owner's refusal to discharge against an LOI was justified; the issue of a replacement set...

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