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Wednesday, January 17, 2018

CARGO RETENTION

INTERTANKO has long cautioned against the inclusion of so-called ROB clauses, as they provide charterers with a pre-emptive right to make a deduction from freight (which may be impossible or difficult to challenge subsequently) for cargo loss or retention on board, without requiring proof of any breach by owners. Nevertheless, commercial circumstances are that such a clause will form part of a charterparty.

INTERTANKO’s Documentary Committee has prepared a model clause, which is an attempt at striking a balance between charterers’ and owners’ needs. If nothing else the clause can be used as a benchmark with which other clauses proffered by charterers may be compared.

Model ROB clause

If by reason of the owner's breach of any terms of this charterparty, any liquid cargo, which is reachable and pumpable by the vessel's own pumps (or which would be reachable and pumpable but for the owner's breach of charterparty) remains on board upon completion of discharge, the charterers shall have the right to deduct from freight an amount corresponding to the loss actually suffered by them as a direct result (not in any event to exceed an amount equal to the FOB loading port value of liquid hydrocarbons remaining on board, freight and cargo insurance thereon) provided always that

(i)    the presence and quantity of ROB shall be determined (by the application of the wedge formula in respect of any tank where the contents do not reach the forward bulkhead) by an independent surveyor jointly appointed and paid for by owners and charterers equally or, if they cannot agree on his identity, by two surveyors one to be appointed and paid for by each party. The two appointed surveyors shall use their best endeavours to make a joint determination, and shall in any event each report to both owners and charterers. If they cannot make a joint determination, an average of their respective determinations shall apply. The survey shall be carried out in accordance with API guidelines, and 

(ii)    the quantity of ROB in respect of which the aforesaid deduction from freight is made shall be determined after deducting whichever is the lesser of 

(a)  the quantity of liquid hydrocarbons present in the nominated cargo tanks immediately before the commencement of loading under this charter, or 

(b)  the quantity of liquid hydrocarbons remaining on board in the nominated cargo tanks on completion of the vessel's previous discharge,

and 

(iii)   any deduction from freight pursuant to this clause shall be subject to the rights of and defences available to the owners under the Hague or Hague-Visby Rules, and/ any other provisions governing the rights and responsibilities of the parties hereto in respect of the carriage of cargo hereunder, as incorporated in this charterparty.”

Any members who have any ROB disputes or wish to discuss this model clause should contact john.fawcett-ellis@intertanko.com .