Sea Goddess v. Standard Tankers

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Sea Goddess Shipholding Inc. v. Standard Tankers Bahamas Ltd.
New York Arbitration: Society of Maritime Arbitrators: Charles L. Trowbridge, Chairman, Manfred Arnold and Louis G. Juliano, arbitrators: 15 October 2003

The arbitration panel unanimously concluded on the facts of this case that the charterers were protected by the "half-demurrage" provisions in the charterparty in respect of delay encountered in the vessel, which had been loaded to an arrival draft ordered by the charterers, entering the port of discharge by reason of insufficient depth of water in the access canal, caused by winds blowing water out of the canal into the adjacent bay.

DMC Category Rating: Confirmed

Owners of the m/t "Strimon" fixed her to Standard Tankers Bahamas on the EXXONVOY Form 1990 for a voyage with crude oil from Venezuela to Houston, USA. The charterers required the vessel to be laden to a draft of 40 feet fresh water on arrival at Galveston, prior to entering the Houston Ship Canal. On her arrival there, at that draft, on 17 December 1999, the vessel was unable to proceed into the Canal because there was insufficient depth of water in the Canal. Prevailing winds from the North had driven water from the Canal into Galveston Bay. The vessel had therefore to wait at anchorage in Galveston Bay until 3 January 2000, when she was diverted on charterers’ orders to Port Arthur, Texas, for partial discharge. During the whole of the waiting time, the depth of water in the Canal was below 40 feet fresh water.

Owners claimed full demurrage in respect of the waiting time at anchorage, on the grounds that the effective cause of the delay was the charterers’ decision to load the vessel to a 40 feet fresh water arrival draft. Alternatively, the delay was caused not by an excepted event, but by the consequences of an excepted event. Under this argument, the port of Houston was not closed by storm or weather, but by the permissible draft in the approach to the port being reduced below that to which the charterers had ordered the vessel to load.

The charterers, on the other hand, contended that the waiting time should be accounted for at half the demurrage rate, in accordance with cl.14(b) of the charterparty. This provided that "If demurrage is incurred and the vessel has been delayed in berthing, loading and/or discharging ….due to weather and/or sea conditions (be the Delay prior to or after the expiration of laytime) that span of time on demurrage equal to the period of Delay as just described shall be paid at half the demurrage rate". Weather and/or sea conditions were defined as: "Weather and /or sea conditions shall include, but not be limited to, lightning, storm, wind, waves and/or swells."

The safe berth provision in cl.16(b) of the charterparty required the charterers to "exercise due diligence" to order the vessel only to a port of place which was safe for the vessel and at which it could lie always safely afloat. Under this provision the charterers did not warrant the safety of such port or place and were not responsible for loss or damage arising from unsafe conditions unless caused by their failure to exercise such due diligence.

As it turned out, the full 40 feet available depth in the Canal was not restored until mid-March 2000.

The panel held unanimously that the Owners’ claim failed and that only demurrage at the half rate was payable for the delay at Galveston.

It found that the charterers’ action in directing the vessel to load in Venezuela for an arrival draft of 40 feet fresh water, as contemplated by the terms of the fixture, did not constitute any guarantee that such draft would be immediately or at all times available. Since, as the tribunal found, a 40 feet fresh water draft would normally be available in the Houston Ship Canal, but for special conditions of wind direction, the designation of that arrival draft by the charterers did not constitute a failure to exercise due diligence, nor was it actionable under any other "Safe Berth" conditions of the fixture. The tribunal said: "What matters, and what keeps [the charterers’] declaration as to the 40 feet fresh water arrival draft from being an independent intervening cause of the delay, is that 40 feet fresh water is the normal and usual depth available and loading to that depth was expected and anticipated in the fixture. The wind effectively caused the depth to be diminished here and the wind is thus the producing cause of the delay within the meaning of cl.14".

The tribunal did not accept owners’ argument that the absence of sufficient depth in the Canal was the consequence of an excepted cause, namely wind, rather than an excepted cause itself. The tribunal said: "The natural and probable consequence of the northerly winds experienced here was the temporary reduction of water depth in the [Canal] by reason of such winds pushing the waters of the [Canal] out into the bay. Non-availability of sufficient water depth to allow a particular loaded ship drawing 40 feet fresh water [on arrival] to traverse the [Canal] in terms of cause is a single, continuing phenomenon. The insufficient [Canal] depth is caused by the northerly winds. If having insufficient depth due to the wind operates to prevent [Canal] navigation by the "Strimon", then it is a cause of the resulting delay."

No award was made for attorneys’ fees and expenses.


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