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: In the Matter of the Arbitration Between
: COMPANIES SUD-AMERICANA DE VAPORES :
: as Disponent Owners of the
: "GRACE BOEING" :
: --- and ---
: COMPANIA MINERA CORDILLERA S.A. :
: as Charterers
: Charter Party Dated July 31, 1980 :
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No. 2598
September 19, 1989
PANEL: Mr. Hammond L. Cederholm;
Captain Evangelos Rigos;
Mr. Chas. F. Nisi,
Chairman
COUNSEL: Representing Charterers: Bingham, Dana & Gould
Michael J. Rauworth, Esq.
Of Counsel
Representing Owners: Kirlin, Campbell & Keating
J. Scot Provan, Esq.
Kevin L. Barren, Esq.
Thomas H. Walsh, Jr., Esq.
Of Counsel
DECISION: FINAL AWARD
FACTS:
On July 31, 1980, COMPANIA SUD-AMERICANA DE VAPORES, Valparaiso, as
Disponent Owner of the M/V GRACE BOEING ( hereinafter "Owner" ) chartered the
vessel to COMPANIA MINERA CORDILLERA S.A. of Panama (hereinafter "Charterer")
on a MEDITERRANEAN IRON ORE form of Charter Party, for the transportation of
35,000 long tons of road salt, (10% more or less owner's option) for loading
in Chile and discharge at Portsmouth, New Hampshire.
The vessel loaded and performed it's voyage to discharge port without
dispute, however, delays were encountered in discharging the cargo, which
resulted in Owner presenting it's demurrage claim in the amount of
$ 32,456.25, ( which was later adjusted by Owner to $ 31,675.35 ) which was
disputed by Charterer, thus the subject of this Arbitration.
ARGUMENTS :
The vessel arrived Portsmouth at 0304 hours of September 20, 1980. The
Master tendered Notice of Readiness, which was accepted at 1305 hours without
reservation and laytime commenced 0800 hours on Monday, September 22, 1980,
unchallenged by Charterer.
The vessel commenced discharge at 1500 hours on September 20th and was not
completed until 1000 hours September 29th.
As per Clause 5 of the Charter,the allowed time for discharge was six days
and twenty hours (undisputed).
Since the time allowed to discharge was exceeded by two days, twelve hours
and fortynine minutes, and the rate of demurrage was $ 12,500 per day, in
accordance with Clause 8 of the Charter, Owner submitted it's claim in the
amount of $ 31,675.35.
CHARTERER'S CONTENTIONS:
Charterer claims that an ILA strike condition existed throughout the
discharge operation, specifically affecting the Crane operators, who they
claim, were " key " to the discharge operation and since Charterer could not
hire their " regular " experienced crane operators, they had to employ
" management level and irregular laborers ", which resulted in crippled
efficiency. Consequently, Charterer relies on Clause 5 asserting that even if
only 13 1/2 hours of discharge time could have been saved with " efficient "
labor,the vessel would have finished over the week-end and no demurrage would
have been incurred.
OWNER'S CONTENTIONS:
Statements of Facts and Port Logs, signed by the Master and also agents
for both Owner and Charterer, make no mention of a Strike, or time lost as a
result of lack of labor.
The discharge terminal was non-union,hence it would have been against the
Law if ILA pickets prevented, or interfered with, employees attempting to
cross the picket line, therefor the Terminal Operator ( Granite State ) could
have gotten an immediate injunction vacating the Pickets, which was not done.
Owner contends that " informational picketting ", where a Union informs
me Public about a non-union shop,or illegal labor practices,is not a "strike"
within the meaning of Clause 5 of the Charter,and Charterer was remiss in not
taking more agressive methods to obtain suitable labor.
Owner further observes that if there was a noticable slow down in the
discharge operation caused by a " strike ", there would have been appropriate
notations added to the Pod Log by Owners and Charterer's agents.
Owner also provided an affidavit by the local Union President, that
" informational pickets " were never more than 4 men and that there was never
any interference with workers or vehicles ... and that there was "no strike".
DELIBERATIONS :
The record showed that on September 19th,the day before vessel's arrival,
NLRB had certified ILA as exclusive bargaining representative for the workers
at the discharge terminal whose operator (Granite State) failed to recognize,
or bargain with ILA, contending election irregularities, therefor, Granite
State was subject to unfair labor practice actions at the time the vessel was
in port, despite the fact that Granite State was vindicated and all charges
dropped 18 months later (Granite Stat's operation never has become Unionized).
After review of all evidence, correspondance and affidavits, the Panel
Majority (Mr. Cederholm dissenting) concludes as follows:
1. There was a " strike/labor resistance " condition existing at the
terminal during vessel's discharge.
2. ILA Picket activity deprived Granite State of part of it's regular work
force. At least two of the pickets were "Regular" Crane Operators critical to
efficient operations in this small two crane discharge work force.
3. Charterer's were forced to hire " management level and irregular
laborers", as a consequence resulting in crippled efficiency.
4. The Panel Majority is satisfied that efficiency suffered, at least to
the extent of 13 1/2 hours, therefor, were it not for the " strike/labor "
condition, vessel could have completed over the week-end in "excepted" time,
in accordance with Clause 5, and no demurrage would have been incurred.
AWARD:
It is therefor the Majority Opinion, and is so ordered that:
A. Owner's demurrage claim is rejected.
B. Each Party is to absorb it's own Legal and all other expenses.
The Panel assesses it's total fees at $ 3,600.00, and while in the first
instance, the fees shall be payable by each Party immediately mailing a check
to each Arbitrator in the amount of $ 600.00, full liability for the total
fees is joint and several. Should either Party fail to make full payment of
his portion within 15 days from receipt of this Award, upon demand by the
Chairman the other Party will make the defaulting Party's payment and will
have a claim-over against the non-payer, plus 10 1/2% per annum pro rata
interest until full payment is recovered.
This Award is fully binding on all Parties and can be reduced to judgement
in any Court of competent jourisdiction.
Dated at New York, N.Y.
DISSENTBY:
CEDERHOLM
DISSENT: APPENDIX A
M/V GRACE BOEING
Dissent re Alleged Strike Affecting Discharge
Clause 5 provides that " time lost " by reason of a strike can be an
exception to the running of laytime. However, most of us experienced in the
shipping industry know that such words are conditioned by some important
factors.The most obvious condition, to even a casual observer,is that someone
claiming the benefit of this exception must prove that time actually was lost.
The other requirement is that before a Charterer can seek credit for an
exception, he must prove he made efforts to overcome or avoid or ameliorate
the effects of the exception,it is elementary that he cannot sit on his hands
and do nothing and say he is automatically entitled to credit just because one
of numerous laytime exceptions appears to have arisen. That mandatory
requirement by Charterer implies certain consequences he must bear when
meeting this obligation.
The Majority is granting this award without any customary evidence being
produced by Charterer that any time was actually lost in this discharge
operation. Furthermore, they are rewarding Charterer and penalizing Owner
unfairly when Charterer merely complied with its legal and contractual duty
of minimizing the results of an exception, if indeed , one arose in this
situation. Holman's 16th Edition says:
"In all cases, it is up to the Charterer to prove that an excepted
contingency occurred during the ... discharge operation. He must also prove
that its occurrence actually delayed the operation...
The unloading of this vessel by Charterer's pier operator was not a
labor-intensive operation,because the total labor force only consisted of six
or seven personnel, four of whom operate two cranes in two shifts. Evidently,
100 previous ships have all been handled the same way. Charterer's whole case
is their undocumented allegation that during this supposed strike,two or more
of their crane operators went on strike and the substitutes they hired and
their management personnel who carried on the uninterrupted operation were
slower in performance by at least 13 1/2 hours than 104 previous vessels where
they had never exceeded laytime.
No proof whatsoever was presented of who are their regular employees, or
who, if any, of same were actually on strike. The Court of Appeals overturned
the union's attempt to represent these few people when irregularities in
balloting showed there was not a majority of the six or seven interested in
being unionized. To this date, the pier is non-union.
No evidence whatsoever was presented to prove that 104 previous discharge
were so efficient that they never exceeded allowed laytime. No credible
indication was given to the panel of what a normal discharge could be or
should be with this type of vessel, so that a comparison could be made to see
if alleged strike conditions made this a slower operation vis-a-vis all past
ones.
The sole "evidence" presented by Charterers are affidavits by their agent,
their counsel and their pier operator and his assistant saying that there were
so-called strike conditions that required substitute crane operators who were
slower than their regulars, and this resulted in demurrage on the vessel.
But none of this is "best evidence" which the law requires all claimants
must produce to prove the validity of their claim. Each of these persons was
in the employ of Charterer so what they say is hardly objective or
disinterested, and is not entitled to any weight in these proceedings.We have
Charterer saying "these are my allegations and these employees of mine all
support me, so I am correct."For all we know,this might have been the fastest
and most efficient discharge that ever took place on this pier. It is
impossible to understand how the Majority can accept such unsubstantiated
testimony.
Charterer and Owner each had their respective port agents for discharge
who jointly signed the Statement of Facts and Port Log along with the Master.
No mention is made of any strike or any slowdowns account of labor problems,
although Charterer's agent did try to gain some laytime credit for its
principal by appending a few theoretical crane hours for loading stores after
all three parties had signed the Port Log without such notations. Although it
was highly improper to alter the report unilaterally in this manner, it shows
that Charterer's agent tried to protect them from the loss of a few hours
laytime, so they certainly would have recorded any major loss of stevedore
efficiency if indeed there had been any.
Costly, sophisticated shore cranes cannot be operated by inexperienced or
casual labor,because great damages could be inflicted on the vessel and shore
installation by unskilled operators.When Owner pointed out the absence of any
damages anywhere and even the relatively few hours in the total discharge lost
by employing alleged irregulars during the so-called strike,Charterer quickly
retorted that, of course,they had hired"qualified"crane drivers replacements.
Well, it is obvious that these "qualified" crane drivers ( denotes skill and
experience)are as good as the other two "qualified" regular crane drivers who
may have been absent during this operation, which deflates the argument that
time was lost when one substituted for the other.
Since Charterer had the obligation to try to overcome or minimize the
strike exception, they did so when their pier operator carried on as usual
with qualified replacement personnel. The duty to make these reasonable
efforts to prevent the operation of the strike exception implies that the
alternate or substitute place of unloading or mode of discharge may not be as
perfect as the original one.But as long as it is reasonably close in time and
cost as it was here, Charterer cannot ask for credits that wipe out Owners
demurrage legitimately earned under terms of the charter party. Stevedores
have exceptions for strikes or causes beyond their control in their contracts
with Charterers whereby they can invoice Charterer for a less efficient
operation than contemplated when they are forced to alternative procedures to
accommodate Charterers. No such extra charges were ever produced here or
mentioned. If the pier operator did not suffer enough from a slow down to get
extra compensation from Charterer, how can the Majority reason that Charterer
was damaged by doing their contractual duty that shows from every aspect,
there were no unreasonable results during this discharge.
The dictionary defines, and Charterers concur, that a strike is a
concerted refusal of labor to go on working to compel an employer to grant
certain demands. There was no concerted refusal here.The whole operation went
on as usual while a couple union pickets were conducting informational
advertising to say they were interested in trying to organize this pier. They
never convinced the pier workers because it remains non-union to this day.The
head of the local union who supposedly carried on this alleged strike had
these remarks to say in his affidavit which contradict most of what
Charterer's pier operator swore to:
" ILA Local 1947 held an information pickett near the entrance of Granite
State Pier. The pickett usually consisted of one or two union members holding
signs. -- There was no interference with any workers or vehicles going in or
out of the pier. -- At the time,the pier gave every appearance of business as
usual. Off loading operations went on every time there was a ship at the
pier.-- There was no strike at the Granite State Pier at any time that I know
of. -- The ILA never interfered with the business of Granite State. -- Again,
the picket held was an information pickett only and created no problems for
the Granite State"
I had to elaborate on this whole scenario to show the overwhelming weight
of the evidence that contravenes the unjust decision of the Majority in this
matter. There is no legal or evidentiary basis to support their award and the
Owner is being wrongfully denied the demurrage he is due under the charter
party.
Hammond L. Cederholm
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