Saturday, June 22, 2024

SOF recorded delay due to strike- whether Gencon General Strike Clause applies

A balance freight and demurrage dispute arose under an amended GENCON 1994 voyage charter party for the carriage of bulk rice to two ports in West Africa. Each party appointed an arbitrator to determine the dispute with LMAA rules to apply. Of interest (as I rarely see this in other similar clauses), the “law and arbitration clause” included a particular arbitrator that the parties agreed not to be involved as an arbitrator in any dispute under the charter party.

Proceedings commenced, but the charterers did not participate despite being given every opportunity to do so.[Authors’ comment: therefore, the tribunal determined the owners’ claim based on their pleadings alone and the documentary evidence they have adduced to prove their case. However, the tribunal had to carefully review the laytime calculations and establish whether the owners’ case had been proved].

The tribunal accepted that reversible laytime applies between the two discharging ports, given the precise wording in the charter party. Then it remained to consider the main difference between the parties’ respective laytime calculations due to a long period of strike that commenced after the vessel arrived at the second discharging port, and owners made no allowance in their laytime calculations for the discharging operations being affected by strikes, i.e. all time counted as laytime or time on demurrage.

As stated, this event triggered the General Strike Clause 16 (b) and the force majeure clause.

The owners submitted that the force majeure clause did not apply because it concerned the provision of the cargo, which means loading. Consequently, as the dispute arose at the discharging port, this clause had no effect. The tribunal accepted the owners’ position, and thus it left to consider the impact of the General Strike Clause.

Before considering this point, the tribunal noted that both parties omitted to exclude some adverse weather periods from their respective laytime calculations. That seriously affected when the vessel entered on demurrage. In particular, the owners believed that the ship was on demurrage when the strike occurred, but this was no longer the position by excluding the adverse weather periods[Authors’ comment: surprisingly, the parties and their legal representatives ignored this apparent mistake, which would have likely resulted in settlement before or during the proceedings].

The owners raised various points to challenge the charterers’ case, alleging that a strike occurred and affected the operation at the port: first, the Receiver’s emails did not mention any strike; second, if that was known to the charterers, why did they not inform/ notify owners timely; and third, owners relied on SOF’s from other ships to support that discharging operations were not affected [Authors’ comment: sometimes the SOF from other ships may be helpful, but this is not always the case. The Owners could have appointed a local protective agent and instructed local P&I Correspondents to gather more evidence, but they did not].

Therefore, the tribunal had to consider the evidence put before it. As the tribunal found, the SOF from other ships did not advance the owners’ case. Instead, it could only be inferred that the vessel was delayed to get into berth as the other ships arrived ahead of it, as evidenced by the Receivers’ line-up. Thus, the tribunal considered the SOF prepared by the agents as the only hard evidence that records the vessel’s activities, and the SOF clearly recorded a strike period. In addition, the SOF carried the master’s signature and the ship’s stamp without any comment, thus being accepted by the master.

The tribunal held that neither party properly prepared their laytime calculations based on the facts recorded in the SOF and the General Strike Clause 16 (b). Therefore, the tribunal drew up a laytime and demurrage calculation attached to this award and awarded the owners circa 190k demurrage.

Award accordingly.

Note: no further information can be provided for this Award.

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