London Arbitration 1/17 pumping warranties
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A recent London arbitration has examined the pumping warranty in an amended London Molasses form, version 2 – for the carriage of a cargo of molasses. Disputes arose between the owners and charterers relating to the events at the discharge port. The owners claimed for demurrage; damages for detention and shifting expenses. The charterers denied liability and counterclaimed for the surveyors expenses incurred due to the owners’ alleged breach of the pumping warranty in the contract.
Clause 11 of the contract stated that loading and discharge rates should be 150mt p/h.
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Clause 34 provided that the “owners warrant that vessel is capable of discharging a full homogenous cargo at its maximum permissible cargo temperature at the minimum average rate specified in Part 1… or of maintaining a pressure of minimum of 100 psi at the ship’s manifold, provided port facilities permit.”
Should the vessel fail to maintain pumping rates….time taken in excess of the time allowed shall not count as laytime nor, if the vessel is on demurrage, as demurrage.
Any overtime, surveyors’ expenses… incurred because of the vessel failing to comply with the minimum rate…. to be paid by owners…”
Some substantial problems had occurred during discharge with pumping. The master had issued a letter of protest stating that discharge had been affected by a shore cargo line which the vessel claimed had been blocked by frozen previous cargo. This issue was not recorded in the Statement of Facts for the port though and the arbitrators were not persuaded that there was a blockage preventing the vessel from meeting its discharge obligations.
The arbitration tribunal decided that the warranty at clause 34 of the charterparty was a warranty that the vessel had agreed to perform. It was not like a speed and performance warranty in a time charter, which unless expressed to be ongoing throughout the charterparty period, only related to the vessels capability at the start of the charterparty.
Even if the vessel had at points met the specified discharge rate or the alternative warranty of meeting a back pressure of 100 psi, it did not prove that the full cargo could be discharged continually at those rates. The owners failed to prove that the vessel could meet the warranty at Clause 34.
At periods when the discharging rate was significantly less than what was warranted, the Tribunal adjusted the allowable laytime accordingly.
The owners also claimed that the time spent shifting from berth to the anchorage were enforced by the local authorities and were therefore involuntary and the charterers should pay for them. The charterers produced evidence showing that the port authorities gave priority to vessels discharging at 500 mt p/h. Those vessels discharging at a lower rate had to vacate the berth when required.
The arbitration Tribunal accepted by a majority that the port authorities’ requirement was the effective cause of the shift, making it “involuntary”. They held the enforced period of absence was not “attributable to the vessel or owners”, as even if the vessel met the charter discharge requirements it would have to move off the berth. Owners claimed for costs of the two involuntary shiftings but the Tribunal held that expenses fell where they lay.
The owners also claimed damages for detention for the delay at the port of 4 hrs 5 mins between disconnecting the hoses and the cargo documentation being completed. The Tribunal did not allow this claim. The charterparty had made an express provision as to how that risk should be borne at the load port but none for the discharge port.
20th January 2017
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