No escaping Charterers’ express obligation to clean the vessel’s hull
Where hull cleaning was “always” at charterers’ time and expense, charterers’ obligation to clean survived redelivery and owners were entitled to compensation at the hire rate.
Background
The vessel had been idle at Brazilian discharge port for 42 days following receivers’ rejection of cargo. The cargo was eventually discharged. Owners requested charterers to arrange underwater cleaning, but the charterers redelivered without doing so. Owners subsequently had the vessel cleaned themselves before delivery into the next fixture.
The relevant rider clause to the NYPE charter provided:
“Owners not to be responsible for any decrease in speed/increase in consumption of the Vessel whether permanent or temporary cause [sic] by Charterers staying in ports exceeding 25 days trading in tropical and 30 days if in non-tropical waters. In such a case, underwater cleaning of hull including propeller etc. to be done at first workable opportunity and always at Charterers’ time and expense. After hull cleaning vessel’s performance warranties to be reinstated.”
The Arbitration Tribunal
The Tribunal found that the obligation on charterers gave rise to a claim in debt. The owners did not need to prove a loss of time (as they would following a breach) because the clause allocated liability for the time taken to carry out the cleaning to charterers. It did not matter that the vessel had been redelivered. Charterers argument that once the charterparty had come to an end, owners only had a claim in damages and not for hire was rejected.
Their reasoning was based on the purpose and wording of the of the clause. The purpose was to assign the risk of hull fouling during idle periods resulting from following charterers’ orders. The wording imposed upon charterers an obligation to clean the hull “always” at their time and expense at the first workable opportunity.
The Commercial Court
The question for the Court, on charterers’ appeal was whether such provision can give rise to a claim in debt (such that owners can claim for the cleaning time even if they have not suffered a loss of time)?
Charterers argued that it was only during the charterparty that hire was payable whilst the vessel underwent hull cleaning. The obligation to pay hire should not survive the charterparty ending. They would not know when the “first workable opportunity” occurred thereafter, and this supported their contention that owners’ claim should be in damages for any time lost whilst the vessel underwent cleaning.
The Court held that if charterers were to compensate owners for any loss of time, then the clause could have said that. What the clause said was that cleaning was “always at Charterers’ time” and the word “always” had to be given effect. Owners then did not need to prove a loss of time.
Their reasoning also took account of the commercial purpose of the clause. This was to ensure that if the vessel was fouled as a result of charterers’ orders charterers must compensate owners at the rate of hire for the time taken to clean the vessel. If charterers’ interpretation was correct, then they might have an incentive to redeliver without cleaning because, if they didn’t clean the vessel, then owners would have to prove a loss of time and charterers might escape liability.
The charterers appeal was dismissed.
Commentary
Generally, when owners obey charterers’ orders and suffer a loss as a result of those orders, owners are entitled to be compensated by charterers, unless on a true construction of the charterparty it was a loss the owners had agreed to bear. However, absent a rider clause to the contrary, this implied indemnity does not apply to the costs of underwater cleaning which generally fall on owners as these costs are regarded as part of the ordinary expenses of the ship trading on time charter. In the case discussed above, the rider clause, whilst not perfectly phrased, allocated responsibility for underwater cleaning following idle time in port to the charterers. Where such a clause allocates responsibility in terms of something “always” being for charterers’ account, then they will be responsible for paying in accordance with the clause even if the vessel has been redelivered and owners are under no obligation to prove they suffered a loss of time.
