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: In the matter of the Arbitration
: --- between --- :
: Alltrans Projects Ltd., Charterers,
: --- and --- :
: Eastern Mediterranean Maritime Ltd.,
: Owners of M/V Eleftheria Niki :
: under Charter Party dated June 23rd, 1977
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No. 1366
October 2, 1979
PANEL: William Sembler;
Evangelos Rigos;
Michael A. van Gelded, Chairman
COUNSEL: For Charterers:
Stanley J. Himmel, Esq., of Counsel
For Owners:
Haight, Gardner, Poor and Havens
Robert A. Hulten, Esq., of Counsel
DECISION: AWARD
Background:
Eastern Mediterranean Maritime Lid., Owners of M/V Eieftileria Niki
(hereafter referred to as Owners) chartered the said vessel on Time Charter
for a trip from Baltimore to West Coast South America not south of Peru to
Alltrans Projects Limited (hereafter referred to as Charterers). The Charter
Party was on a N.Y.P.E. 1946 From dated June 23rd 1977.
Disputes arose between the parties and pursuant to clause 17 of the
Charter Party, Owners appointed Capt. Evangelas Rigos as an Arbitrator,
Charterers appointed Professor William Sembler as an Arbitrator and these two
Arbitrators appointed Michael A. van Gelded as third Arbitrator and Panel
Chairman.
Charterers claimed payment from Owners for excess hire paid, excess fuel
not credited, vessel deficiency and stevedore costs and sundry expenses
totalling in all $8,724.07.
The parties signed a Submission Agreement setting out these disputes and
incorporating the rules of the Society of Maritime Arbitrators, Inc. and
agreeing that the Award of the Panel may be entered for judgement in U.S.D.C.
for Southern District of New York pursuant to the Arbitration Act (9 USC Secs.
1-14).
One hearing was held on July 24th, 1979 and each party thereafter
submitted one brief. These briefs showed that Charterers' claims were reduced
to $6,272.02, whereas Owners conceded a sum of $2,808.60 due to Charterers.
FACTS:
The vessel delivered at Baltimore on June 27, 1977 and after loading cargo
there for Marta and Guayagil, redelivered at that port on July 10, 1977.
Pursuant to the Charter Party, Charterers prepaid 15 days of hire, $15,516.
for fuel oil and diesel oil R.O.B. at time of delivery. The parties agreed
that Charterers had overpaid hire to the extent of $3,401.77, but had been
repaid only $2,549.27 of this sum during October 1977.
From the statements in evidence, the ship was not able to be loaded on
arrival at Baltimore and the longshoremen refused to work on the grounds that
the booms were not properly equipped as required by O.S.H.A. regulations. As
a result, charterers placed the ship off-hire for 4 hours and 40 minutes and
incurred expenses to secure the ship's gear and stevedore stand by time while
the work was being done. There were also a small number of expenses incurred
for Owners' account. The total of all these delays, standby and Owners' items
amounted to $3,302.45 which was the amount of an invoice dated August
23rd, 1977.
The principal matter in dispute, however, concerns Owners' claim for
consumption of 41.5 metric tons of Diesel Oil, of which Charterers had only
credited or paid for 20.5 metric tons.
Charter Party:
The applicable clauses of the Charter Party,pertinent to this dispute are
set out in Appendix "A" to this Award.
Argument:
Charterers allege that Owners have failed to repay excess hire and fuel
overpaid by Charterers as well as expenses disbursed by Charterers on Owners'
behalf. In submitting accounts for the voyage Charterers net claim is for
$6,272.02.
Off-hire amounts to 4 hours 40 minutes equivalent $495.84 Diesel Oil
consumed in excess of Charter Party warranty equivalent $2,167.50
Charterers allege that the vessel was properly placed off-hire at
Baltimore on June 27, 1977 for 1 hour 20 minutes for failure to comply with
O.S.H.A. regulations and for 3 hours 20 minutes on account of defective
winches. Attendant charges for repair to a broken "Frisco Rig", and longshore
stand by time are claimed on the same grounds.
The Charter Party, contend the Charterers, contains a warranty that the
vessel will consume 1.5 tons Mdo per day and therefore for the period of
hire i.e. 13 days 16 hours, the consumption of Diesel Oil may not exceed 20.5
metric tons. This figure formed the basis for Charterers' statement of final
hire to the Owners.
Owners do not specifically dispute the off-hire periods,but alleg that the
Charterers' accounts are inaccurate and in toto, they are only due $2,808.60
Owners dispute the claim for excess consumption of marine diesel oil,
contending that the Charter Party requires Charterers to pay for all fuel
consumed and that the undisputed consumption was 41.5 tons of marine diesel
oil. Owners allege that Charterers in their calculations have failed to take
into account the periods entering and leaving port when the ship is required
to switch the main engines to diesel for maneuvering in restricted waters.
Owners furnished a statement, albeit without documents in support, to show
quantities of Mdo allegedly consumed entering and leaving the three ports of
call and navigating the Panama Canal.
DETERMINATION AND AWARD:
The Panel, having separately and collectively reviewed the evidence,
testimony and briefs, have decided unanimously as follows: A, Even though the
charter party does not specifically contain a warranty or stipulation of
diesel oil to be used while maneuvering or in port(the only warranty is while
steaming fully laden), the Charterers have not argued about port consumption
which is not in dispute. The requirement for a diesel powered motor burring
heavy fuel oil on the open seas, to be switched to burring diesel oil for
safety of navigation and speedier response to orders from the bridge in
restricted waters is well known in the industry. In any case it is a safety
factor which is in the mutual interest both of ship and cargo, and is covered
by Clause 26,wherein the Owner is to remain responsible for the navigation of
the vessel.
The Panel therefore agreed that the actual amount of diesel oil consumed
is to be paid for by Charterers.
B. On examining the deficiencies and break downs of the winches, the Panel
determined that the correct deduction for off-hire in Baltimore is $194.80.
C. The amount of Owners' disbursements due to Charterers is $2,824.33.
AWARD:
It is the unanimous AWARD of this Panel that Owners shall pay to Charterers
the sum of $3,019.13, together with interest on that sum at the rate of
9 1/2% p.a. to be calculated from September 30th, 1977 to date of this Award.
Principal Sum $3,019.13
Interest: 9 1/2% p.a.
from Sept. 30, 1977 to
October 2nd, 1979, 2 years,
2 days (2.00548 years) $575.21
Total sum payable by Owners $3,594.34
The Panel has also determined that the cost of transcript is to be evenly
divided between the parties and that each is to pay its own legal costs.
As part of this Award, the Panel has set its fees as set out in Appendix
"B" to this Award, and payable accordingly. In any event both parties are
jointly and severally responsible for the entire fee and should either party
fail to pay its proper share, the other shall pay the amount in default upon
simple demand of the Arbitrators.Any amounts so paid may be recovered against
the defaulting party.
As provided in the Submission Agreement this Award may be entered for
judgement at the U.S. District Court for the Southern District of New York.
In witness to this our UNANTMOUS AWARD, we herebelow set our signatures.
New York, N.Y.
Appendix "A"to Award dated September 12th, 1979 M/V Eleftheria Niki
The following extracts from the Charter Party dated June 23rd, 1977 are
considered relevant to this Award.
Preamble: "...., and capable of steaming, fully laden under good weather
conditions about 13 knots on a consumption of about 16 tons of ifo 1000 + 1.5
Mdo..."
"Vessel on her delivery to be ready to receive cargo with clean swept and
washed holds and tight,staunch,strong and in every way fitted for the service,
having water ballast, winches and donkey boiler with sufficient steam power,
or if not equipped with donkey boiler, then other power sufficient to run all
the winches at one and the same time....
Clause 2: " That the Charterers shall provide and pay for all the fuel
except as otherwise agreed...."
Clause 5 " Payment of said hire to be made in New York in cash in United
States Currency, semi-monthly in advance, and for the last half month on part
of same the approximate amount of hire, and should same not cover the actual
time, hire is to be paid for the balance day by day, as it becomes due, if so
required by Owners,unless bank guarantee or deposit is made by the Charterers,
otherwise failing the punctual and regular payment of the hire, or bank
guarantee, or on any breach of this Charter Party, the Owners shall be at
liberty to withdraw the vessel from the service of the Charterers, without
prejudice to any claim they (the Owners) may otherwise have on the Charterers.
"Cash for Vessel's ordinary disbursements at any port may he advar as
required by the Captain, by the Charterers on their Agents, subject to 2 1/2%
commission and such advances shall be deducted from the hire. The Charterers,
however, shall in no way be responsible for the application of such advances."
Clause 15 "That in the event of the loss of time from deficiency of men,
including strike of Master, officers and crew, or stores, fire, breakdown. or
damages tn hull, machinery or equipment, grounding, detention by average
accidents to ship or cargo, drydocking for the purpose of examination or
painting bottom or by any other cause preventing the full working of the
vessel, the payment of hire shall cease for the time thereby lost until the
vessel has returned to the same position or equidistant position; and if upon
the voyage the speed be reduced by defect in or breakdown of any part of her
hull, machinery or equipment,the time so lost, and the cost of any extra fuel
consumed in consequence thereof,and all extra expenses shall be deducted from
the hire.
Clause 32 "Owners guarantee that the vessel possesses and carries on board
the following certificates valid throughout the duration of this chart party:
a) valid fumigation or deratization certificates; b) cargo gear register and
certificate in compliance with requirements of International Labour
Organizations Conventions; c) tonnage certificate - if the vessel's tonnage
certificate is not acceptable to or subject to a surcharge by the authorities
of the countries to which the trades under this charter, owners will obtain a
valid British tonnage certificate; d) U.S. Federal Maritime Commission's
Certificate of evidence of financial responsibility as required under the U.S.
Water Quality Improvement Act 1970. It is understood that the vessel will
comply with all safety regulations And/or requirements in effect at ports (s)
of loading and/or discharge, in particular with the U.S. Safety and Health
Regulations for longshoring and the dock regulations of the U.K. Factory and
Workshops Act.
In the event of any delay to the vessel caused by reason of the vessel's
failure to possess and/or carry on broad such valid certificates respectively
meet any such safety regulations, vessel shall be off-hire for all time lost
and the owners shall be responsible for any and all extra expenses including
costs of shore crones and stevedoring stand-by time resulting from such
failure."
Clause 36 " Charterers to have the right to deduct owners' disbursements
from hire payment against presentation of vouchers or to deduct estimated
disbursements pending vouchers.
Clause 37 " Owners to estimate fuel consumption of entire venture and
Charterers will deposit with owners on delivery amount equal to estimated fuel
to be consumed at U.S. dollars $91.50 per metric ton for I.F.O. (1000') and
U.S. dollars $120.00 per metric ton for M.O.O.The final settlement will be in
the port of redelivery upon confirmation of a total consumption chargeable to
charterers' account. Owners to be allowed in loading port to bunker vessel in
full capacity.
Clause 38 "If during the currency of this charter party, vessel puts back
whilst on voyage or any loss of time caused by accident, breakdown, accident
or sickness to crew ( including Master ) or any person on board the vessel
(other than supercargo or passengers travelling under Charterers' auspices)
hire shall not be paid for the time so lost and the cost of extra fuel
consumed and other extra expenses incurred shall be for owners' account until
vessel is in same position where deviation took place and voyage is resumed
therefrom.
Clause 40 "Hire is payable (15) days in advance and balance on settlement
of account upon redelivery.
If owing to the exchange formalities, any hire is not paid to owners
account on the due date, owners are to give Charterers 48 hours grace before
having the power to exercise their rights thereunder.Owners also undertake to
give Charterers 48 hours warring that it is their intention to exercise such
rights.It is also agreed that usual transfer expenses from Charterers bank to
the Owners' bank are for Charterers' account but Charterers not to bear
cashing expenses eventually charged by Owners' bank."
Clause 57 " Charterers have the option to redeliver the vessel without
cleaning by paying Owners a bonus of U.S. $500 on redelivery but always for
regular cleaning/washing. "
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