Monday, July 15, 2024

Redelivery bunker quantities remain a topic of heated debate

It is common ground that the charterers should redeliver the vessel with certain bunker quantities, and this necessitates the cooperation of both parties. But frequently in practice the charterers will not be able to fulfil their standing obligation for various reasons, which will act as either a “sword” or a “shield” for the charterers or for the owners.This article combines practical experience with an analysis of about twenty London Maritime Arbitration Awards (including some unpublished) on this topic.

It summarizes the parties’ usual points of a dispute regarding the redelivery bunker quantities, namely:

  1. The meaning of ‘about’ – issues of interpretation, i.e., whether to put a gloss on the word ‘about’ basis the parties’ conduct; the parties’ arguments on the purpose of the words ‘min/max’ in the bunker clause; analysis of sophisticated bargains, using some examples, etc.
  2. The applicable prices for a damages claim or compensation claim, using some examples.
  3. The parties’ main arguments to defend or pursue a claim, as the case may be.
  4. The bunker survey findings, i.e., whether the masters’ or the surveyors’ conflicting figures, should prevail by adopting a ‘back calculation,’ including some of the complexities of using this method to resolve the case (consideration of an unpublished award).

The recent London Arbitration 19/21 discusses some of the above issues.

Aside from the parties’ submissions in arbitration, the article includes some of the common arguments presented by the parties when the matter arises (operationally- wise) to defend their position prior the case escalates. Some of these arguments found favor in the arbitration decisions, while others did not.

The full article was published in Maritime Risk International (MRI) on 26.10.2021

Thanks to Dr. Arun Kasi ( Barrister & Arbitrator) for reviewing a previous draft.

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