A continuous debate has emerged within the shipping industry in recent years concerning alternative methodologies for assessing a vessel’s performance. The necessity for such methods has arisen primarily due to the increasingly restrictive performance warranties imposed by shipowners. However, vessels are often delivered in fouled conditions that significantly impact their performance, or they fail to operate as described, necessitating a fair and objective assessment of the resulting loss.
In a recent case, the ship remained in warm seawaters for nearly 40 days while discharging its previous cargo. No cleaning was conducted before delivery, and the vessel's performance fell significantly below expectations. The Owners' primary defence was that there was no evidence that fouling caused underperformance (even though the diver's report showed 70-80% heavy fouling), and, if so, the presence of bad weather prevents a claim as off-hire.
To deal with these or other similar situations, there have been attempts to introduce new formulas into the market to provide an objective framework for performance assessment, with some relying on generic curves and others utilizing different analytical approaches. The most straightforward and effective method for evaluating a vessel’s performance is to meticulously examine the factual evidence. As noted by the tribunal in LA 12/24, some WRC fail to include the minimum evidentiary standards required for a comprehensive performance assessment. Nevertheless, this information can be found in the deck and engine logs or other relevant documents.
Regarding speed and power curves, this is not a novel issue. A maritime arbitration award from 1975 references power curves and states:
“The curves show the effect on hull speed of various wave heights at different angles to the vessel’s heading. The effect is indicated as slip in terms of nautical miles per time frame.”
The arbitral panel further observed:
“The speed curves currently in use, although significantly improved compared to historical versions, still require additional refinements before they can be deemed sufficiently reliable for measuring vessel performance. The existing curves are limited in number and cover a diverse range of vessel types. It is evident to the panel that additional speed curves are required to properly account for the effects of sea and swell on a broader variety of hull forms operating at differing speeds.”
If the weather, as an element, is being excluded, then it is likely that the drop in performance is due to fouling/ technical issues or intentional slow steaming. Careful consideration of the weather, engine parameters, daily fuel consumption, bunker surveys, etc., will show a potential ship's issue or the causative reason for underperformance. This reasoning aligns with the tribunal’s findings as endorsed in The Pearl C (2012)
Is it a new concept or just a common-sense approach?
Not a new concept: in a 1960 arbitration ( 50 years before The Pearl C), the panel held:
“Since there was prima facie evidence that the speed deficiency in good weather was so significant as to indicate defects in the vessel or a breach of the Owners’ speed warranty, the Charterers were entitled under Clause 15 of the Charter to deduct from the hire the loss of time. If the speed deficiency was not attributable to weather conditions, the only other plausible explanations were defects in or breakdown of any part of the hull, machinery, or equipment, or failure of the Captain under Clause 8 to ‘prosecute his voyages with the utmost dispatch,’ or misrepresentation by the Owners regarding the vessel’s speed in the Charter Party.”
The analysis of propeller pitch and RPM as a means of assessing performance is an established practice. A 1960 arbitration award noted:
*“A careful analysis of the logs revealed the following facts regarding the vessel’s performance during sea voyages between pilot stations. On 29 days of good weather, when wind forces did not exceed Force 3, the vessel covered a total distance of 5,707 nautical miles in 638 hours and 36 minutes—an average speed of 8.937 knots. The average slip was recorded at 10.45%, which is not abnormal for a vessel of this type operating at full load draft.
A noteworthy observation is that the propeller revolutions were abnormally slow, resulting in a developed propeller distance of only 6,373 miles, equating to less than 10 miles per hour. The highest recorded speed for a 24-hour period was 9.42 knots, recorded on June 10, under variable wind conditions at Force ½ and slight sea conditions. According to the logs, approximately 63.4 revolutions per minute were required to achieve a propeller distance of 240 nautical miles per day. Hence, attaining a hull speed of 10 knots would necessitate between 67 and 70 RPM, depending on the slip.”*
The assertion in Divinegate that alternative methods for assessing vessel performance exist but have not been tested refers specifically to the absence of judicial scrutiny in court proceedings. However, alternative methodologies have been the subject of arbitral discussions for decades. Even before the Didymi, when New York and London Arbitrators had reciprocal influences, numerous alternative assessment methods had been documented in past cases and commentaries. Furthermore, many arbitrators, as evidenced by appeal cases before the courts, possessed practical experience as former mariners or engineers. It would, therefore, have been straightforward for them to apply the RPM method or evaluate propeller slip alongside other relevant parameters. Recent London Arbitrations (23/21,15/23, 4/25) reflect that tribunals may consider other methods, depending on the tribunal's experience.
However, referring to a singular “good weather” method is misleading, as multiple methodologies exist under this category. When the foundation of the performance calculation is based on good weather conditions, the performance deficiency—however quantified—remains intrinsic to the good weather methodology. An objective assessment of the loss is required in cases of fouling/ engine damage but lacking good weather.
Ultimately, the resolution of any dispute regarding a vessel’s performance under specific conditions lies within the factual matrix of the case. A thorough examination of the factual evidence is paramount, as the facts will dictate the outcome of the performance assessment.
Note: The above are generic observations.