CM P-MAX III LIMITED v PETROLEOS DEL NORTE SA [2022] EWHC 2147 (Comm)
Although “fault” on the part of the vessel need not be actionable in order to stop the running of laytime or demurrage, this case reminds us that such fault is not necessarily easy for a charterer to demonstrate. Where safety is potentially at stake, the owners are likely to have considerable leeway.
The Facts
The vessel, a tanker, was chartered on an amended Shellvoy 6 form and the owners claimed demurrage. The charterers disputed the claim primarily (for the purposes of this article) on the basis of the alleged fault on the part of the Master in deciding to leave the berth prior to completion of loading and the part of the owners in refusing to allow the vessel to berth thereafter. Lightering expenses as well as demurrage were in dispute. The decisions made by the Master and the owners were for safety reasons, the owners argued.
The Judgment
There was common ground between the parties’ experts that the Master’s decision to leave the berth prior to completion of discharge was entirely reasonable as he faced a real danger of the vessel touching bottom. While the vessel was at anchorage the Master requested a second waiver to the Owners’ Under Keel Clearance (UKC) policy to allow the vessel to berth and discharge (the vessel’s draft requiring such a waiver). The UKC calculations were not simple as they changed depending on the tide and the quantity of cargo onboard. There were also inconsistencies in the terminal’s discharge rate which would also affect the vessel’s draft over time, but the Master nevertheless believed they “could do the discharge”. However, the owners refused to grant the waiver on the grounds that there would be “very little margin for safety…” and unexpected delays would bring considerable risk of the vessel touching bottom.
It was noted that the charterparty obligation on the owners to “proceed with utmost despatch” was not absolute and was tempered by obligations on the charterers to order the vessel only to safe ports and berths where the vessel would remain “always afloat”. The owners’ refusal to grant a waiver was permitted by terms of the charterparty and it would therefore be “difficult to see that the owner will be at fault”. The UKC policy was “integral” to the charter and the charter did not (and did not need to) specify the circumstances for a waiver. A “capricious” refusal to grant a waiver could constitute fault on the part of the owners but there was no suggestion of that here.
It is noteworthy that the Master actually requested a waiver to enable him to berth but the owners’ refusal to grant such a waiver was nevertheless found not to constitute “fault”.
Commentary
It might appear odd that charterers ever thought they had a chance of success. However, the outcome would presumably have been less clear before the case was heard. In this context, the case serves as a reminder that the courts will very often side with a Master or owner when faced with an operational decision that involves the risk of danger to the vessel. The Court was in little doubt that the owners were in the right in exercising their discretion to refuse to grant a waiver to the UKC policy and to allow the vessel to berth even though the Master requested the waiver (and, it seems, it might well have turned out to have been safe in retrospect to do so). The case is also another example of the courts refusing to question the actions of a reasonable Master who makes a decision “on the horns of a dilemma” (an often-heard term in this context and one repeated in the judgement).
