London Arbitration 1/07 (2007) 710 LMLN 4
An interesting decision from the LMAA on the subject of performance claims and under-consumed bunkers and something for charterers to bear in mind.
The charter performance warranty read as follows:
“In good weather and smooth sea,… about 14.0 knots (ballast) 13.5 knots (laden) on about 32.5mt IFO at sea…”
The charterers sought damages for breach of the speed warranty but accepted that owners must conversely be credited for bunkers under-consumed due to the slow steaming. Both parties worked on the assumption that a margin of 5% had to be applied to the warranted bunker consumption as a result of its qualification by the word “about”. The question was how to calculate that credit. The charterers contending for 32.5 mts less 5% and the owners arguing for 32.5 mts plus 5%.
The Tribunal held that whilst performance warranties usually involve a charterer complaining about underperformance in terms of speed and over-consumption in terms of bunkers, the only way in which to give proper effect to a performance warranty and “about” was to apply it in both directions, in other words as plus/minus.
As the claim by charterers was one for damages, they were only entitled to be put in the same position as if owners had performed their minimum obligations. The vessel had consumed 629.6 mts. If one applied a consumption of 32.5 mts plus 5% over the entire voyage of 519.7 hours, the vessel could have consumed 738.95 mts and still been within warranty. The vessel only consumed 629.6 mts and so owners were entitled to a credit in respect of 109.35 mts.
