| Archives: February 2010

Award N°1169 – Second degree – NYPE c/p – Grounding – Nautical fault in navigating the vessel -“Paramount” and “Exceptions” clauses – Claim for costs resulting from the grounding rejected. A time chartered vessel grounds following the fainting of the officer of the watch. Owner exempted from liability in application of the « Exceptions » clause because of the nautical fault of the OOW. The « Paramount » clause does not apply in the case. Charterers’ claim rejected.

Award N° 1170 – Ship building contract – Guarantee claim – Judicial survey – Respect of contractual procedures – Workmanship. No reserve taken by the shipowner, responsible for tuna fishing vessel’s concept, in spite of damages ascertained on delivery, for which a reduction on selling price had been given. Other damages having been discovered during first voyage, shipowner made repairs after claiming for guarantee and a judicial survey. The shipyard was held liable for about 2/3 of repairing costs directly linked to initial damages and within the scope of the guarantee.

Award N°1172 – Contract of affreightment – Hardship clause – Claim for lack of jurisdiction rejected. A COA for 5 years, incorporating a protective clause known as « hardship clause », imposes to parties to meet and renegotiate in the case where one of them bears an unpredictable prejudice not foreseen at the inception of the contract. But, in the absence of clear provisions to that effect the arbitration Tribunal is not allowed to modify the substance of any contractual clauses. Arbitrators decided that any increase of freight rates on the market, as extensive as it might have been, cannot justify the reference to an hardship situation, freight rates having been freely negotiated and agreed. Equally, extensive increase of owner expenses (port costs and overheads) cannot be considered as an hardship situation because they were predictable at the time of entering into the contract. Lastly, the owner could have used financial tools on the futures market to hedge its risk of bunker costs increase. The defendant who raised the point of the nullity of the claim for frivolous reasons and took this opportunity to fail to pay the deposit as required by the Rules of the CAMP made a breach of those Rules. The Tribunal held them liable to bear half of the arbitration costs and did not award them any amount for costs.

Award N° 1173 – Sale contract and arbitration clause – Competence on the merits (no) – Plaintiff withdrawal – Defendant’s accessory costs. On the ground that arbitration clause did not expressly designate the Chambre Arbitrale Maritime de Paris with no reference to its rules, the Arbitral Tribunal lacked jurisdiction on the merits but despite plaintiff withdrawn his claim, defendant maintained his counter-claim for uncovered costs. The Arbitration Tribunal accepted competence on accessory costs and shared proceeding costs between the parties.