Know the Ropes – Dealing with a Ropey Charterparty Dispute

Disputes between shipowners and charterers can arise when additional mooring ropes are required by a port. It generally raises the question: “Who bears the cost?”

London Arbitration 19/01 describes a case where the charterer ordered the vessel to the port of Caleta Coloso in northern Chile. It was the port’s requirement that vessels should use 14 mooring lines, each of 220 metres length. However, in accordance with design specification and classification society (“Class”) requirements, the vessel was only equipped with five mooring lines of 197 metres length each.

Accordingly, 14 mooring lines of the requisite length had to be hired to enable the vessel to berth. A dispute then arose as to whether the shipowner or charterer was liable for the cost of hiring the additional mooring lines.

Under the agreed Time Charterparty, the shipowner had agreed that the vessel would on delivery be “… in every way fitted for the service” and to “provide and pay for … all necessary stores … and keep the vessel in a thoroughly efficient state in hull, machinery and equipment … for and during the service”.

Tribunal decision

In deciding the case, the London Arbitration Tribunal held:

The provision of mooring ropes for a vessel was ordinarily a matter that clearly fell within the shipowner’s sphere of responsibility under a Time Charterparty.

The Class requirements were a minimum for trading, and took no account of the practical needs of ports such as Caleta Coloso and many others to which the vessel might legitimately have been ordered, where local wind, current or swell conditions called for securing arrangements of a higher level than the minimum Class requirements.

Owners of commercial vessels plying their trade worldwide should reasonably anticipate such requirements

If the time charterparty had been agreed on New York Produce Exchange (“NYPE”) 15 wording:

“The Vessel on delivery shall be … in every way fit to be employed for the intended service”

or NYPE 93 printed charter party form:

“[at the time of its delivery, the ship is to be] … in every way fitted for ordinary cargo service” …would the London Arbitration Tribunal have decided the case differently?

Almost certainly NO if the vessel had been fixed on a NYPE 15 charterparty form wording for a time charter trip and charterers had as part of the fixture negotiations informed owners as regards the vessel’s “intended service”. And probably NOT if the vessel had been employed on a period time charter for worldwide trading; for exactly the same reasons as given by the Tribunal in London Arbitration 19/01.

Conversely, had the vessel been fixed on terms requiring the vessel to be fitted for “ordinary” cargo service, the answer would be less certain and would require a determination by the Tribunal of what was meant by the parties when they used the term “ordinary service”.

Minimise the risk of disputes

So, how can shipowners minimise the scope for disputes? One possibility is for the shipowner in the charterparty “Descriptions Clause” to declarethe number of mooring ropes available to charterers and their length. Whilst a charterer might still argue that the number of ropes on delivery were not sufficient for “ordinary cargo service” or “the intended service”, a tribunal is likely to be more sympathetic towards a shipowner who has as part of the fixture negotiations declared to the charterer what mooring ropes and of what length would be available. This will particularly be the case if on delivery of the ship into their service the charterer did not issue a protest declaring that the number of mooring ropes carried by the vessel – or their length – were insufficient for “ordinary cargo service” or “the intended service”.

Author: Barry Ayliffe