WHAT IS NEW IN NEW YORK

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WHAT IS NEW IN NEW YORK?

• ATHENS, GREECE
• APRIL 14, 2005
• William J. Honan
• Holland Knight LLP

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• 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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• 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.

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• 3. Traders and other charterers have adopted
  special provisions which have been refined to
  reduce the risk of exposure and dispute.

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• The Panel, in its award, shall grant any
  remedy or relief which it deems just and
  equitable. . . .

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• . . . 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.

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• 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.

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• 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.

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• 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.

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• 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.

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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.

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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 . . . .

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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. . . .

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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. . . .

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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.

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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.

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CHEMBULK NEW YORK S.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.

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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."

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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
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• 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.

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BOW CEDAR2005 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.

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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.

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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

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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. . . .

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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.

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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.

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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.

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• 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 . . . .

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• 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.

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PRACTICE TIPS

• 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

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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

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• 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.

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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
  ships side
• No drugs, hole patched, loading completed
• Delay of 6.75 days

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• 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.

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WHAT IS NEW IN NEW YORK?

• ATHENS, GREECE
• APRIL 14, 2005
• William J. Honan
• Holland Knight LLP