As Steamship Mutual informs, according to a recent reported arbitration, a Tribunal considered a good weather description which referred to both Douglas sea state and significant wave height in a charterparty performance warranty.
Namely, under a time charter trip from South Africa to China, Owners warranted the ship’s performance in good weather conditions. The charterparty description of good weather was;
Good weather conditions are understood to mean wind speeds of maximum beaufort force 4 (11-16 knots) and total- combined (sea and swell) significant wave height confined to limits of douglas sea state 3 (0.5-1.25 metres) with no adverse currents and no influence of swell
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Charterers were based on the reports of a weather routing company to claim breach of performance warranties during good weather and claimed damages of US$128,388.86. For their side, owners argued there had been no good weather periods and so any underperformance claim was bound to fail. The arbitration tribunal considered whether the conditions fell within the charterparty good weather definition.
The parties agreed that it was difficult to reconcile ‘significant wave height’ and ‘douglas sea state’. However, they disagreed on how the two phrases could be read together.
Charterers claimed that ‘significant wave height confined to limits of douglas sea state 3’ included conditions with a swell height of up to two metres. They noted that the word ‘significant’ was evidently not intended to have its technical meaning. Charterers explained to a reported London arbitration, in which the tribunal referred to swell heights of up to 2m as being within Douglas sea state 3.
The Owner said that good weather was limited to conditions where the ‘total-combined’ sea and swell height did not surpass 1.25m. Their expert report analysed the meaning of ‘significant wave’ and concluded that it included two components: a wind wave and a swell wave. The report also described wind waves as those generated by local winds while swell waves were produced by distant occurrences. The report concluded that Douglas sea states only considered wind waves.
Moreover, the Owner’s expert found the solution to the ambiguity of ‘significant wave height confined to limits of douglas sea state 3’ to be in the charterparty reference to wind. Good weather was also limited to ‘maximum Beaufort force 4’ which, Owners noted, usually generates Douglas sea state 3 wind waves.
As Steamship Mutual mentions, there would be no need for the words ‘significant wave height’ if the aim had only been to limit wind waves to Douglas sea state 3 since this was clear already from Beaufort force 4. Thus, in order to give meaning to ‘significant wave height’, Owners said that it was the combined wind wave and swell that should be limited to 1.25m. The reference to Douglas sea state 3 was simply to provide rationale to the range of 0.5 – 1.25m.
The Tribunal decided there had been no periods of good weather. It agreed that there was no established method of reconciling significant wave height with Douglas sea state and explained they had looked for an interpretation that would avoid ignoring any words agreed by the parties while still giving practical value to the performance warranties.
The Tribunal rejected Charterers’ claims that swell heights of up to 2m were within the definition of Douglas sea state 3. It could see no obvious correlation between these two things and were not privy to the considerations of the tribunal in the earlier reported arbitration to be able to justify such a finding.
The Tribunal agreed with Owners that the words ‘total combined’ meant both sea and swell waves. They also agreed that relevant wave height was 1.25m.
However, the Tribunal was not been persuaded by Owner’s expert opinion that was based on the reference to Beaufort force 4 to explain the ambiguity in the wave description. The Tribunal said that it was common for charterparties to include reference to both Beaufort wind strength and a Douglas sea state and this was not duplication.
The Tribunal accepted their interpretation might make the words ‘douglas sea state 3’ unnecessary, but it felt it was the most appropriate reading in order to give effect to the parties intention that sea and swell be combined to form the significant wave height.
Moreover, the charterer’s weather routing report not only tried to exclude periods of adverse current from their performance calculations, but also deducted 0.04 knots from the ship’s speed on account of an average 0.04 knot boost from following currents.
The Tribunal decided that this approach was inappropriate. The reference to ‘no adverse current’ in the good weather description aspired to make sure the vessel was not obstructed by current when calculating its performance. To deduct positive current as the weather routing report had sought to do, went beyond the recap’s remit.
What is more, the vessel’s log books reported worse weather conditions than those reported in Charterer’s weather reports. Commenting on this, the charterparty provided that:
Should there be a discrepancy between the vessel’s deck logs and Oceanroutes, both parties shall discuss in good faith to assess nature of such discrepancies for a mutual agreement
In light of this, the Tribunal could decide how much evidential weight to attribute to the logs and the reports. After what they considered was an established view, the Tribunal decided that the vessel’s logs were generally the best evidence of the conditions experienced.
Steamship Mutual said that this case is a useful reminder of the evidential weight given to a vessel’s logs. It may also provide useful guidance when considering adverse and positive current. Namely, it seems parties should make express provision in the charterparty if they want for either or both of these things to be considered into performance calculations.
The Tribunal could not escape the ambiguity in the performance warranty which derived from the different and irreconcilable measures of sea conditions. Nonetheless, they provided useful insight when explaining their interpretation objectives, of giving purpose to the warranties while trying not to ignore any agreed words, which might be drawn upon in other cases of unclear warranty descriptions.
