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WHAT IS NEW IN NEW YORK?. ATHENS, GREECE APRIL 14, 2005 William J. Honan Holland & Knight LLP. 1. A few years ago, there were hardly any time charters being done. Rates were low and owners were disinclined to offer vessels for long terms at those low rates.
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WHAT IS NEW IN NEW YORK? ATHENS, GREECE APRIL 14, 2005 William J. Honan Holland & Knight LLP
1. A few years ago, there were hardly any time charters being done. Rates were low and owners were disinclined to offer vessels for long terms at those low rates.
2. The forms haven't changed very much. For example, ASBATANKVOY dates back to 1977 and its predecessor Essovoy dates back to 1969. At some point, disputed issues have to diminish.
3. Traders and other charterers have adopted special provisions which have been refined to reduce the risk of exposure and dispute.
The Panel, in its award, shall grant any remedy or relief which it deems just and equitable. . . .
. . . under New York law, arbitrators are not constrained by the strict rules of the courts and may grant relief that a court would not, or could not, grant.
Because "contracts often lack explicit provisions for specific kinds of remedies, it falls to the arbitrator to devise one." The parties' agreement did not restrict the arbitrators to remedies available to a court of law.
1. Arbitrators, in many ways, have more power than courts of law. 2. Arbitrators have the power to fashion innovative remedies to resolve complex problems.
It is not the role of the courts to undermine the comprehensive grant of authority to arbitrators by prohibiting an arbitral security award that ensures a meaningful award.
I am not going to perform. • I shall not perform when it is my time to do so. • I may not perform when it is my time to do so.
Repair Protocol and Schedule 1.Within 10 days from the date hereof, Owner will furnish the preliminary drydock and repair specification for submission to qualified repair yards located within US East Coast, Gulf of Mexico or Caribbean, not East of Trinidad. • Within 30 days from the date hereof, Owner will furnish the name and location of the drydock and repair yard designated to carry out all repairs and the date those repairs are expected to begin. The repairs are to be carried out as expeditiously as practicable. • All repairs shall be subject to inspection and certification by the appropriate Classification and regulatory authorities. • Owner shall furnish weekly progress reports together with the shipyard's projected completion date. • Charterer shall have the privilege of appointing a surveyor to monitor all repairs. • Should Owner fail to comply with the provisions hereof, Charterer will be free to renew its application for the panel to terminate the charter party.
§6 OF COGSA, 46 U.S.C. §1303 In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered . . . .
SCANPORTS 1990 20. Demurrage Claims. Charterer shall be discharged and released from all liability in respect of any claim for demurrage owner may have under this charter party unless a written invoice for the claimed demurrage and copies of ETA notices sent in compliance with voyage orders, notices of readiness at each port, pumping logs, and port logs/statements of fact for each port as well as all other supporting documents have been received by charterer within ninety (90) days after completion of discharge of the cargo covered buy this charter party or after other termination of the voyage, whichever first occurs. . . .
KOCH SHIPPING INC. 20.2. Owner to present to Charterer, in writing, any claim for demurrage within 58 days of completion of discharge together with the following signed documents, otherwise Owner waives any such claim. In the event suppliers/receivers signatures are not obtainable, Owner must provide a signed notice of protest noting same. . . .
BPVOY 4 20.2 Any other claim against charterers for any and all other amounts which are alleged to be for charterers' account under this charter shall be extinguished, and charterers shall be discharged from all liability whatsoever in respect thereof, unless such claim is presented to charterers, together with full supporting documentation substantiating each and every constituent part of the claim, within one hundred and eighty (180) days of the completion of discharge of the cargo carried hereunder.
WESTPORT PETROLEUM INC 21. DEMURRAGE/EXPENSE CLAIMS CLAUSE: In order to be honored, any demurrage claim must be received in writing with full supporting documents including but not limited to Notice of Readiness, authorized statements of facts signed by Master, Suppliers/Receivers/Agents, letters of protest, crude oil washing statement and vessel's pumping log, within 90 days of completion of discharge failing which the claim shall be deemed to be waived and absolutely barred. Master is to issue Letter of Protest should documents or signatures not be available. All other claims (but not including freight, dead freight) shall be deemed waived, extinguished and absolutely barred if such claim is not received, in writing with supporting documentation, within 180 days from completion of discharge.
CHEMBULK NEW YORKS.M.A. 3868 (2004) VOYAGE CHARTER Demurrage which charterer does not contest except for Owner's non-compliance with Rider Clause 6. DEMURRAGE TIME BAR CLAUSE Charterers shall not be obliged to pay any claim for demurrage, unless the claim, along with supporting documents (including, but not limited to vessel time sheets signed by ship's agent and terminal time log) is received by Charterers within ninety (90) days from date of completion of discharge of cargo.
CASCO LMLN 622(March 20, 2005) • Time Charter (Shelltime 4) • 60 to 90 days • Charterer subcharters vessel • Vessel fails Subcharterer's inspection • Subcharterer rejects the vessel • Charterer claims against the Owner • Cargo would have been delivered in early May 2003 • Charterer commences arbitration against Owner in July 2004 • Owner claims contractual time bar • Owner relies on the incorporation of the Hague Visby Rules • Article III rule 6 of the Hague Visby Rules: "Subject to paragraph 6 bis the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods unless suit is brought within one year of their delivery or of the date when they should have been delivered."
SUN ADMIRALS.M.A. 3831 (2004) • Voyage Charter • NOLA/Vera Cruz • rice cargo • vessel failed charterer's inspector's survey • vessel rejected on July 11, 2001 • Owner demands arbitration on February 26, 2003 • Charterer claims time bar based on Rider Clause 44 • Rider Clause 44: . . . any claims under this contract must be notified in writing to the other party and claimants' arbitrator appointed within twelve (12) months of final discharge of the cargo and where this provision is not complied with, the claim shall be waived and absolutely barred.
BOW CEDAR[2005] 1 Ll. L. Rep. 275 • Voyage Charter Party (BPVOY 4) • Bahrain to Benin • jet fuel, gas oil, gasoline • charterer had difficulty arranging for the purchase of the cargoes • charterer cancels charter party on August 27, 2002 • Club, on behalf of Owner, submits claim documents on July 15, 2003 • charterer claims contractual time bar based on Clause 20.2 of BPVOY 4: 20.2 Any other claim against charterers for any and all other amounts which are alleged to be for charterers' account under this charter shall be extinguished, and charterers shall be discharged from all liability whatsoever in respect thereof, unless such claim is presented to charterers, together with full supporting documentation substantiating each and every constituent part of the claim, within one hundred and eighty (180) days of the completion of discharge of the cargo carried hereunder.
GENERAL RULES • Contractual time bars are enforced. • Arbitrators require strict compliance (substantial compliance probably insufficient) to satisfy contractual time bars. • Contractual time bars are probably enforced even if there is no dispute concerning the claim in question. • Contractual time bars are construed strictly against the drafter.
PRACTICE TIPS • If the Owner: • seek to eliminate altogether • make the clauses mutually applicable • provide as long a period as possible • provide training to the persons handling claims • If the Charter: • include all claims not just demurrage and detention • draft the clause so as to avoid obvious loopholes
EXXON MOBILVOY 2000 19. BACK LOADING. Charterer shall have the option of loading Vessel with a part cargo at any discharging port or place to which Vessel may have been ordered,. . . . Owner shall discharge such part cargo at any other discharging port(s) or place(s) previously nominated, provided such port(s) or place(s) lie within the rotation of the discharging ports or places previously nominated. If this option is exercised, additional time consumed awaiting berth and/or cargo and/or tank preparation and/or loading and discharging such part cargo shall count as laytime or, if Vessel is on demurrage, as time on demurrage. . . .
SHELLVOY 5 Back Loading 38. Charterers may order the vessel to load a part cargo at any nominated discharging port, and to discharge such part cargo at a port(s) to be nominated by Charterers within the range specified in Part I(E) and within the rotation of the discharging ports previously nominated, provided that such part cargo is of the description specified in Part I(F) and that the master in his absolute discretion determines that this cargo can be loaded, segregated and discharged without risk of contamination by, or of, any other cargo remaining on board. Charterers shall pay a lump sum freight in respect of such part cargo calculated at the demurrage rate specified in Part I(J) on any additional time used by the vessel as a result of loading, carrying or discharging such part cargo.
ASBA II 22. Charterer shall have the option of reloading the Vessel with a part cargo as described in Part I(E) at any port of discharge nominated by the Charterer within the discharge options contained in Part I(D) and Owner agrees to discharge such reloaded cargo at any other discharge port or ports, previously nominated provided such port or ports, lie within the rotation of discharge ports previously nominated.
27. KOCH DISCHARGE/RELOAD 27.1 Charterer has the option to discharge all or part cargo at one safe port or lighterage location and reload same or different cargo in same or different port or place for final discharge on the same voyage within agreed ranges as specified in Part I of this Charter Party.
27.2 Provided the charter freight under the terms of this Charter Party are based on Worldscale, the port of discharge/reload to be considered as an additional Loadport for freight calculation purposes . . . .
6. DISCHARGE/RELOADING CLAUSE: Charterer's shall have the option to discharge and reload all or part cargo at any port within the trading range. If exercised, any additional costs in connection with the reload to be for Charterer's account and additional time consumed to count as used laytime. For Worldscale purposes, said discharge/reload port to count as a load port under Worldscale.
PRACTICETIPS • If Owner • Exclude if possible • Make sure the new discharge port is in the same rotation • Make sure WS is the applicable freight • If Charterer • Include if possible • Draft as widely as possible (see Koch clause) • Use demurrage rate as the measure of compensation
MARTHA A, S.M.A. 3861 (2004) • Voyage Charter (ASBATANKVOY) • Mineral oil parcels • Antwerp – Tampa - Houston • Vessel delayed en route due to bad weather • Arrival at Tampa, temporary closure of berth due to scheduled maintenance by the port authority • Temporary closure prevented previous vessel from completing cargo operations • Martha A was delayed
Clause 6 (last sentence) However, where delay is caused to vessel getting into berth after giving notice of readiness for any reason over which Charterer has no control, such delay shall not count as used laytime. • Owner said Clause 6 does not apply because the berth closure was not due to unforeseen circumstances such as casualty, emergency repairs, bad weather or other force majeure events.
ENERGY RANGER, S.M.A. 3817 (2003) • Time Charter (NYPE) • Concentrates • Punta Patache, Chile to Montreal • Berthed commenced loading on Jan. 29, 2002 • Loading commenced and continued until 0750 on Jan. 31 • Served with Order of Detention at request of USDEA • Accused of having large quantity of drugs in no. 3 ballast tanks (2 m/ts cocaine) • No. 3 hold 15,700 m/ts cargo • Rather than discharge; cut an access hole in the ship’s side • No drugs, hole patched, loading completed • Delay of 6.75 days
Who is responsible? • Off-hire clause: Clause 15 That is the event of a loss of time from deficiency and/or default of men including strike, stoppages of Master, Officers and crew or deficiency of stores, fire, breakdown or damages to hull, machinery or equipment . . . Or any other cause or restriction preventing the full working of the vessel, the payment of hire shall cease for the time thereby lost.
WHAT IS NEW IN NEW YORK? ATHENS, GREECE APRIL 14, 2005 William J. Honan Holland & Knight LLP