“Speak now or forever hold your peace”

A recent London Arbitration (23/19) in which the charterers’ off-hire claim was defeated, shows the central importance of responding to and submitting evidence on all material points made by opponents.

 

Disponent owners chartered the vessel to charterers on an amended NYPE 1981 charterparty. The vessel was anchored off Sao Luis, Brazil, when the charterers ordered her to go to berth. She was unable to do so because she was temporarily unable to raise her anchor. Charterers claimed that she was off-hire for that period.  Owners disputed this and commenced arbitration to recover unpaid hire.

 

Owners contended that the anchor was caught on an underwater obstruction and that this caused failure of the windlass hydraulic pipe. Although it is not clear from the report, owners presumably argued that the anchorage was unsafe. The burden of proof would clearly be on the owners in such an allegation.

 

Owners’ evidence that the cause of the anchor becoming stuck due to an underwater obstruction was highly problematic. Although the claimant owners were reliant on the head owners for their evidence, they nevertheless had to accept responsibility for the evidence they submitted. The Tribunal were critical of a particular deck log entry that had clearly been inserted after the event. Moreover, owners were able to provide no explanation for the very worrying fact that the signatures in the deck log of both the Master and the Chief Engineer were completely different to the signatures of the same people as they appeared in the maintenance records. The Tribunal also noted with concern that charterers’ surveyor, when he attended on board, was not allowed to view either the relevant pipe or any relevant documents. Owner failed to disclose their own survey report.

 

Charterers made various arguments, including as to the vessel’s seaworthiness and whether due diligence had been exercised.

 

Ultimately, and seemingly with reluctance, the Tribunal found in the owners’ favour. If the owners were right with respect to the cause of the vessel’s inability to raise her anchor, then this would be the true cause of the loss of time and all of charterers’ arguments, even if factually correct, would be irrelevant.

 

Although charterers did not accept the owners’ argument that the vessel’s failure to raise the anchor was due to an underwater obstruction, they nevertheless failed to produce any evidence to contradict this issue at all. Further they made no representations as to the state of the bottom of the anchorage.  They could have submitted evidence as to previous vessels’ use of the anchorage but did not. The Tribunal were therefore compelled to find in favour of owners.

 

Club Commentary

 

The case serves as a reminder of the utmost importance of addressing opponents’ arguments in full. There is the strong suggestion that if charterers had positively addressed owners’ case in respect of underwater obstruction, charterers may have been successful. It is not known if the dispute was subject to the LMAA Small Claims Procedure, meaning that the parties would have been limited in their submissions, but charterers appear, quite simply, to have missed the opportunity to make the necessary arguments. The case is also indicative that, although not fatal to the owners in this case, a Tribunal will usually be very keen to highlight improper conduct on the part of any party and any such conduct is therefore, quite apart from anything else, usually highly counter-productive.

Tomas Ling

Claims Executive, London Office

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