Monday, July 15, 2024

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 to them, and the Charterers claimed a balance in Charterers’ favor of US$245.99. In their Defence submissions, the Charterers attached a hire invoice for US$39,008.29 due to Owners and paid that amount.

This decision supports some of the observations made in another post here: Speed & Consumption- in good faith- deductions from hire – Charter Party Disputes

Deductions

The Charterers’ deductions from hire related to alleged underperformance and overconsumption of bunkers together with an alleged stevedore overtime claim in the sum of US$34,852.83.

Underperformance claim

The Charterers’ hire statement served with their Defence Submissions included deductions from hire as a result of alleged underperformance evidenced by a [X] Performance Report Damietta to Becancour for a period of 6.06208333 days (6.0621 days). The IFO overconsumption figure for Damietta to Escoumains was 25.52mt, and the MGO consumption figure for the same period was 0.77mt.

The Owners’ RFI served on 16 September 2021 asked, inter alia, for the Charterers to state precisely the basis on which the Charterers assessed the loss of 6.0620833 days, whether any account had been taken of agreed off-hire or deliberate slow steaming in determining periods of “good weather” as defined in the Charterparty and whether it was the Charterers’ case that AIS alone was capable of assessing and quantifying the alleged underperformance of the vessel. In particular, the Owners asked whether four specific periods of time between 9 and 28 October had been assessed as “good weather“.

The Owners also asked whether any deduction in relation to the calculation of 6.0620833 days differed from the same amount included in “Off-hire” in the Charterers’ hire statements and/or the “Off-hire Schedule AIS” and, if so, to explain in what respect and on what basis such sums for hire for 6.0620833 days remained separately deductible or for the Owners’ account.

The Owners requested similar clarification in relation to the calculation of consumption of IFO and MGO and whether account had been taken of any agreed off-hire or deliberate slow steaming in determining the periods of “good weather”.

Despite an extension of time for the Charterers to respond, followed by the tribunal’s order for a response failing which a final and peremptory order would follow, the Charterers did not reply.

The Disponent Owners sent the following message to the Owners, Charterers and the Tribunal:

“Dear Sirs

The purpose of the RFIs was to require Charterers (and Sub-Charterers by service down the chain) to properly evidence and quantify the indemnity claim (and defence of sub-charterers) that Vessel underperformed and overconsumed during the period of the sub-charterparty. The RFIs also required proof of loss of the stevedore overtime expenses claimed at Becancour.

Alleged Underperformance/overconsumption

The Sub-Charterers relied upon weather routing reports prepared by [X], but as Owners pointed out in their submissions, the reports used periods when the Vessel was off-hire to count as “good weather”. As these cannot be used as evidence to support any contention that the Vessel underperformed or overconsumed, the Charterers and Sub-Charterers were requested to provide further information on the basis of which they were entitled to claim the damages sought. Any claim for damages must relate to the warranted capabilities of the Vessel and so can only be assessed according the contractual yardstick agreed by the parties.

If the Sub-Charterers are not prepared to, or cannot, provide proper evidence of any loss suffered as a result of any alleged underperformance or overconsumption then the appropriate sanction is that the defence of Sub-Charterers in relation to underperformance/overconsumption (and by extension the indemnity claim against Owners by Charterers) must be struck out.

Stevedore Overtime Expenses

Sub-Charterers were requested to provide information regarding timings of the Vessel at Becancour in relation to other vessels and discharge at Becancour in order to evidence the losses allegedly sustained. They were also requested to provide further information on the alleged breach by Charterers/Owners that would entitle to claim any damages at all.

If Sub-Charterers (and by extension Charterers) are unable to provide information to support or evidence any alleged loss, then again the appropriate sanction would be that that part of the defence by Sub-Charterers (and by extension the indemnity claim against Owners by Charterers) be struck out.

……..

Kind regards

Held,

Liability

In the absence of any response from the Charterers and in their breach of the tribunal’s final and peremptory order resulting in the striking out of those parts of the Charterers’ claims identified in the Disponent Owners’ email, the Owners’ claim for unpaid hire in the sum of US$150,354.23 succeeds in full.

Costs

Since the Owners have succeeded with the most part of the claim, the tribunal found no reason to depart from the normal rule that costs should follow the event. The hourly rates ranging from £185 to £285 were reasonable and lower than those charged by many solicitors’ firms in the maritime field.

Award accordingly.

Issued 4th of May 2022.

Note: This website removes the names of the parties involved in this or other awards. The reader can find more details on Jus Mundihttps://jusmundi.com/en/.These awards mostly come into the public domain through enforcement under the NYC 1958.

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