Does Owner or Charterer Pay for Cleaning a Fouled Hull?

MaritimeProfessional.com
Friday, November 29, 2013
Foul Hull: Photo in public domain

When awaiting a berth for prolonged periods hull fouling is unavoidable. The owners of such a vessel may well expect the charterers to pay for the hull cleaning and to bear the risk of the vessel's resulting under-performance, writes Evangelos Catsambas, as sourced through Ince & Co. by the UK P&I Club.

In London Arbitration 24/05, the Owners recovered the cleaning costs under the NYPE clause 8 implied indemnity through fouling caused by a 14-day stay at three Brazilian ports. This is not, however, a straightforward area, points out Evangelos Catsambas (source Ince & Co.) via the UK P&I Club) due to two English Court decisions as follows:

The Kitsa [2005]
The Kitsa was on a seven to nine month NYPE charter and was allowed to trade worldwide, within IWL. She sat for 22 days at Visak, India while waiting to discharge coal. Her hull was fouled, causing her to underperform. The Owners claimed the cleaning costs under the clause 8 implied indemnity.

In arbitration proceedings, the Tribunal rejected the Owners' claim. In accordance with The Island Archon [1993], whilst an expense to the Owners might in a broad sense be a consequence of the Charterers' lawful order, there was no implied indemnity if the expense arose from a risk which the Owners had agreed to bear.

The Pamphilos [2002]
The Pamphilos was chartered under the NYPE form for a trip carrying iron ore from Sepetiba, Brazil to Bourgas, Bulgaria. Her hull had been painted four months previously. Her underwater parts were fouled while waiting for berthing instructions at the Sepetiba anchorage for 21 days and while at the berth for a further three days.

The Owners claimed: (1) reimbursement of the Charterers' hire deduction for the underperformance during the charter voyage (on the ground that there was no basis for it given Owners had complied with their charterparty description/maintenance/seaworthiness/fittedness obligations); and (2) the cost of the hull cleaning (on the basis that Charterers had failed to redeliver the vessel “in like good order and condition” under clause 4).

In arbitration proceedings, the Tribunal allowed the Owners' claim in (1) on the basis that the underperformance was the consequence of the fouling, but it rejected the Owners' claim in (2).

On appeal, the Court upheld the Tribunal's decision with regard to the Owners' claim in (2) on the basis that the fouling was an occupational hazard for the Owners that qualified as “ordinary wear and tear” under clause 4 (for which the Owners had to pay) unless it resulted from an extraordinary event such as serious fouling resulting from compliance with the Charterers' order immediately or shortly after drydocking.
 
BIMCO 2013 Hull Fouling Clause for Time Charter Parties
In light of this, time charterparties often contain clauses requiring the charterers to clean the hull at their time and expense following a prolonged stay in port. In consultation with representatives from the industry and paint manufacturers, BIMCO has produced its own clause providing that:
1. If the vessel “remains at or shifts within a place, anchorage and/or berth for an aggregated period” exceeding 15 days in tropical or non-tropical waters (or such other period as may be agreed), her performance warranties are discontinued pending an underwater inspection.
2. The underwater inspection can be required by either party and will be arranged jointly – but at charterers' risk, cost and time.
3. After the inspection, if either party requires underwater cleaning, this must be done by charterers at their risk, cost and time – in consultation with owners, under the master's supervision and in accordance with the hull paint manufacturers' guidelines.
4. If the cleaning is not permitted or is not possible where the inspection took place, or if charterers postpone the cleaning, the vessel's performance warranties will remain suspended until the cleaning takes place. If owners refuse to allow the cleaning despite the availability of suitable facilities and equipment, the vessel's performance warranties will be reinstated.
5. The cleaning must take place before redelivery. If, however, charterers are prevented from doing so, the parties will agree a lump sum in respect of the cost to owners of doing so.
6. If charterers show that the vessel is performing as warranted despite the prolonged stay referred to in 1 above, her performance warranties will be reinstated and charterers' inspection/cleaning obligations will no longer apply.

Comment
Overall, the BIMCO clause is clear and seems to strike the right balance. Owners will welcome the 15-day default period where it is shorter than the period in their current charterparty clauses, though BIMCO's Circular accompanying the clause urges the parties to agree the period(s) by reference to: (1) the trading areas/climates; (2) the quality/type of the vessel's hull paint and when its manufacturers say that its effectiveness becomes compromised; and (3) the fact that frequent/excessive cleaning reduces the paint's effectiveness.

However, it does not say that it applies to a stay of more than 15 days at two or more different ports. It refers to a stay at “a place” (singular tense) for more than 15 days, and its reference to an “aggregated period” presumably adds time spent at an anchorage in a port to the time spent at the berth and whilst shifting. So if a vessel is at port A for 10 days and at neighbouring port B for six days, the clause apparently does not apply.
Further, if fouling results from a stay of less than 15 days so that the clause does not apply, it should follow that the owner's maintenance obligation then operates – requiring himto clean the hull at the earliest reasonable opportunity (rather than him being liable for underperformance simply because the clause is not triggered). It would, however, have been preferable for the clause to say so.

Finally, similarly to its “Slow Steaming Clause for Time Charter Parties”, BIMCO's clause does not address the issue of fouling caused by slow steaming. This may be a problem if the hull paint requires a minimum speed to remain effective.

Author: Evangelos Catsambas
Source: Ince & Co/UK P&I Club

 

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