Speed and Consumption Claim


Published: 23 August 2005

A recent Arbitration Award (London arbitration 15/05) has decided on a number of issues concerning a speed and consumption claim, including the effect of current and whether the master was in breach of his duty under the C/P obligation to proceed with utmost dispatch.

This award (again) confirmed that owners are entitled to "two times about" (i.e. in respect of speed and consumption) and also confirmed that a speed warranty is for speed through water (and not over ground).

The award is published in (2005) 670 LMLN 1.

The facts:

The vessel was fixed for a time charter trip from Japan via (in ballast) to the US/Canada West Coast and on to (laden) China with a cargo of potash. The fixture terms included an amended NYPE Form with rider clauses and with regard to the vessel’s performance the fixture recap included a description of the vessel (with the heading ”Speed/consumption” as follows:

Laden abt 13,0 kts/33,0 mt IFO 180 cst + 2,0 MT/MDO
Ballast abt 13,5 kts/31,0 mt IFO 180 cst + 2,0 MT/MDO

Speed and consumption based on weather conditions up to and including 4 on Beaufort scale.

The fixture terms also included the standard clause 8 of the NYPE form that the captain shall prosecute his voyages with the utmost dispatch and be under the orders and directions of the charterers as regards employment.

A rider clause provided that charterers were to supply an independent weather routing service to the vessel’s master. The rider clause also stipulated that ”the vessel shall be capable, at all times, during the currency of this C/P, of steaming at about (charter party speed) knots. For the purpose of the C/P, good weather conditions are to be defined as wind speed not exceeding Beaufort force 4/Douglas sea-state 3”. Evidence of weather conditions were to be taken from the vessel’s logs and the weather service reports, and in the event of a consistent discrepancy between the deck logs and weather service reports, the weather service reports were to be taken as ruling. Finally, the rider clause also provided that in the event of a dispute over an apparent breach of the speed and consumption warranty in the C/P, the performance data supplied by an independent weather routing service shall be taken as binding of both parties.

The disputes:

A number of disputes arose between the parties in connection with the charterers’ allegation that there was an underperformance as well as an overconsumption on both (the ballast and laden) legs.

It was common ground that the vessel's speed and consumption performance was to be measured against both Beaufort force 4 and Douglas sea-state 3.

With regard to the ballast leg of the trip (from Japan to the Canada West coast) it was common ground between the parties that the vessel was to perform in ballast conditions at a minimum speed of 13.0 knots (namely 13.5 less 0.5 knots allowance in respect of the word “about”).

Based on the vessel’s logs, the owners argued that the wind force and sea state had at no stage of the ballast leg been so as to constitute good weather under the C/P terms whereas the charterers argued that there were discrepancies between the ship’s logs and the conditions reported by the weather service employed by charterers. According to the weather service there had been good weather conditions on at least 2 out of the 30 days ballast leg.

The panel held that the ship’s log book data consisted of noon reports on a daily basis whereas the weather routing service data were more comprehensive with at least two reports on each day, 12 hours apart. Depending on how the respective data were viewed the data provided by the ship’s logs were – according to the panel – consistently overstated by at least one wind force and frequently more.

Referring to the rider clause of the C/P the panel in any event decided that it was plain that the weather routing data was to be taken as ruling and the vessel’s performance consequently based on the weather routing services’ data.

On this basis the vessel had indeed experienced good weather days and the vessel’s good weather performance could be calculated. This is in accordance with the decision in "The Gas Enterprise" [1993] 2 Lloyd's Rep. 352.

It should be mentioned that the charterers had taken the trouble of also providing evidence from the Japanese Meteorological Association to contest the ship’s report for the good weather days and the Japanese information supported the fact that at least two days had been good weather days, as defined in the C/P.

There was also a dispute relating to current. The charterers argued that the vessel had crossed the Eastern Pacific Ocean with the benefit of “very favourable Kuroshio current” and that the weather routing service had calculated the vessel had received a positive boost equivalent to 0.5 knots as a result of the beneficient current.

The owners, on the other hand, argued that the constancy of the Kuroshio current was rated as between 50 and 75% and that there was consequently a 50% chance of a directional change in the flow of the current.

The owners also took the view that if the parties had wished ocean currents to be taken into consideration when assessing the vessel’s speed they should have referred to them in the C/P in clear terms.

The Tribunal held that current was to be taken into consideration even if clear terms to this effect was not included in the C/P terms. The Tribunal took the view that current was a fact of life and should be taken into consideration in the normal course of events and when current was adverse a vessel’s performance should be credited whereas (as in this case) the current was positive, the vessel’s speed should be debited so as to arrive at an accurate assessment of the vessel’s performance.

Having said this, the Tribunal also said that owners should get the benefit of the doubt of the margin involved and consequently allowed only a “fair” allowance of 0.25 knots in respect of the beneficial effects of the current in this case.

It was in connection with the subsequent laden leg that the question of the master’s possible breach of this duty under clause 8 of the NYPE form arose.

The vessel loaded at Vancouver and proceeded to off China where she arrived approximately 1 month later. The vessel set of from Vancouver in gale conditions that quickly deteriorated. According to the vessel a violent storm of force 11 damaged the vessel’s foremast and some weather deck fittings, including stanchions and an accommodation ladder. The master considered weather conditions dangerous and 6 days after leaving Vancouver he decided to deviate from the northerly Trans-Pacific route (which was recommended by the weather routing service) and instead adopted the – longer – southerly route for the rest of the vessel’s voyage to China.

Charterers argued that in doing so the master added approximately 10 days to the vessel’s passage time.

The owners argued that the master had acted according to the prevailing (and anticipated) weather conditions and had acted in the best interest of both the vessel, the cargo and the crew.

The charterers relied inter alia on the judgment in the "Hill Harmony" case ([2001] Lloyd's Rep. 147) and whereas the charterers accepted that the master remained responsible for the safety of the vessel they said that it was for the owners to bring themselves within the exception, having in mind that the owners had warranted that the vessel was fit and capable of performing a laden voyage in the Pacific Ocean at that time of year.

Again the issue of the vessel’s weather reports became an issue and the charterers argued that the vessel’s weather reports were inaccurate and did not entitle the master to refuse the advice or instructions of the weather routing service. The charterers also referred to the fact that two other vessel’s in the vicinity both followed the northern route without damage.

Finally, the charterers also argued that the southerly route chosen by the master in fact exposed the vessel to continuing bad weather and adverse seas in contrast to the more sheltered northerly route.

The Tribunal also refers to the Hill Harmony as being directly relevant. In the Hill Harmony case the House of Lords had decided that the route selected for a time chartered vessel was a matter of employment and that charterers were entitled to order the vessel to follow a particular route, and the master was obliged to follow this route in the absence of overriding factors. The master would remain responsible for matters of navigation and safety of the vessel, crew and cargo and the master would be entitled to refuse an order if this would expose the vessel to danger or a risk which the owners had not agreed to bear. At the same time, the master remained responsible to perform the voyage with the utmost dispatch and otherwise to comply with the orders and directions of the charterers as to the employment of the vessel.

The master had served a statement of Sea Protest on arrival in China to the effect that on a great number of the days during the passage from Vancouver to China the vessel had encountered heavy stormy weather with wind forces reaching force 8 to 11 with heavy seas and swell, but these Sea Protests did not tally completely with the vessel’s own records.

On the evidence available to it, the Tribunal accepted that on a number of days (at least 3 days) the vessel had encountered some particularly bad weather although the Tribunal was not convinced it was as bad as Beaufort force 11, but the Tribunal accepted that heavy seas and strong winds must have been uncomfortable for those on board and that the master, in the interest of safe navigation was right to investigate the possibility of lessening the effects of the weather.

The Tribunal did therefore not criticise the master and did not find his decision to turn south unreasonable to seek calmer conditions.

This was not the end of the matter because from the evidence available the weather routing service had immediately afterwards informed the vessel that the worst of the storm was over and that the vessel should therefore return to her original northerly course with a good chance of the weather holding for the remainder of the voyage.

The weather service also warned the master in very plain language on the probability of storms on his preferred southerly route.

The Tribunal was therefore satisfied that at the time the master had been given all the relevant facts for his decision making and by disregarding strong recommendations and having no regard to the warnings of storms on the southerly route ran the risk of being found to have acted unreasonably.

It was acknowledged that there is a fine distinction between a master’s navigational responsibilities and his obligation to follow employment instructions, but in this case the Tribunal found that the master was in breach of his obligation to act with utmost dispatch and that by heading south, despite evidence to the contrary, he had acted unreasonably.