Monday, July 15, 2024

Grounding- Payment Under General Average Contributions

In this arbitration, the Claimants claimed US$ 192,285.72 for payment under General Average contributions, for which they said the Respondents were liable. The dispute was referred to arbitration in London as agreed under the law and arbitration clause in the contract. Given the Respondent’s failure to participate,  the arbitrator accepted the appointment as sole arbitrator with LMAA Terms 2017 to apply in the reference.

The vessel was chartered under an amended NYPE 1993 and sub-voyage chartered under an amended Gencon 1994 form for a voyage “1sp Fangcheng/lsa at Mississippi River – int Associated Terminals Meraux Buoy (mile 85-87), and, in chopt, and 1-2sb in Houston” (the ‘Voyage Charter’). The intended cargo (as stated in the recap) was various consignments of different grades of barite ores, some bagged and some bulk, plus one single hold of crude talc ores.

Fifteen different Congen 1994 Bills of Lading were issued in respect of the Cargo in draft form at Fangcheng. The ‘draft Bills’ identified between them, three different consignees (‘Cargo interests’). The Respondents were the named Consignees under the Bills numbered xxx(redacted) to yyy (redacted) . The draft Bills incorporated inter alia “ All terms and conditions..of the charterparty..” expressly that “ General average shall be adjusted…according to York-Antwerp Rules 1994, or any subsequent modification thereof, in London unless another place is agreed in the Charter Party. Cargo‘s contribution to General Average shall be paid to the Carrier even when such average is the result of a fault, neglect or error of the Master, Pilot or Crew. The Charterers, Shippers and Consignees expressly renounce the Belgian Commercial Code, Part II, Art. 148

Clause 12 of the Voyage Charter read as follows:

12. General Average and New Jason Clause

General average shall be adjusted in London unless otherwise agreed in Box 22 according to York[1]Antwerp 1974 and any subsequent modification thereof…

The Casualty

Following the completion of loading at Fangcheng, the Vessel’s orders were to sail to Singapore for bunkers and then on to New Orleans (and thereafter Houston) for discharge. The Vessel departed the berth 1st June with a pilot on board and assisted by two tugs. While turning off the berth the Vessel made ground contact. Thereafter, it was found that the helm would only return to 5° to starboard. It was subsequently established that the rudder and steering gear motors (2) had been damaged. The Vessel then returned to the berth. As a consequence of the foregoing the Vessel could not continue the laden voyage. It was therefore necessary to tranship the cargo.

The Declaration of General Average

On about 8 June, the Claimants declared General Average, and xxx( redacted) was appointed as the General Average Adjuster. The expense of the transhipment exercise formed part of the General Average expenditure and/or sacrifice which was the basis of the liability on the part of the Respondents for which the Claimants contend. Following the declaration of the general average, the vessel was towed to xx port for repairs to the rudder and steering gear motors

On about 28 June, the Respondents concluded and provided the Claimants a General Average Bond including among other terms that “this agreement shall be governed by English Law and the London Arbitration shall have exclusive jurisdiction over any dispute arising out of this agreement and each party shall irrevocably submit to the jurisdiction of the Tribunal”

Voyage charterers, Charterers and Cargo interests entered into a Transshipment agreement on 22 June. Among other terms, it was agreed that “this Agreement and all claims between the parties in respect of the Cargo and/or under the Head Charter, Sub-Charter and Draft Bills of Lading, and any claims in relation to General Average, shall all be subject to English law and London arbitration under the latest version of the LMAA terms, with each Party appointing the same arbitrator for all disputes.”

The cargo was duly transshipped, and delivered at the contractual destination. 

The claimants refer to the Adjustment published on about 12 July and contend that the loss or expense claimed was properly allowed on General Average.

Held,

Having considered the relevant documents in this matter with care, the burden of proof was upon the Respondents to allege and to provide any actionable and causative fault in order to resist any liability to make payment of the General Average contributions which were now due. The Claimants were entitled to General Average expenditure and/or sacrifice such that the Respondents remain liable to make payment in respect of contributions due in respect of General Average. Wrongfully, and in breach of contract, the Respondents had failed and/or refused to make payment of the sums due and in respect of which they were liable. Accordingly, the said sums remain due, owing and payable, and the Claimants were entitled to recover the same in debt and/or by way of damages for the above-mentioned breach(es).

By reference to the Adjustment, the sum due in respect of General Average contributions for which the Respondents were liable pursuant to the terms of the draft Bills and/or the Average Bond and/or the Transhipment Agreement was US$ 192,285.72. According to the apportionment of General Average the value relevant to the Consignees (xxx-redacted) the value is US$ 1,312,400. Based on 14.651456586% of the total Contributory Values, this equates to US$ 192,285.72 contribution.

Award accordingly.

Final Arbitration Award, 1 January 2020

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