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Friday, September 21, 2018

SHIFTING OFF A BERTH DUE TO WEATHER/SEA CONDITIONS - CHARTERPARTY PROVISIONS COMPARED

The Conoco weather clause is well known and often forms part of charterparties, it states:

“Delays in berthing for loading or discharging and any delays after berthing which are due to weather conditions shall count as one half laytime or as time on demurrage at one half demurrage rate”

However, this provision is probably unintentionally less favourable to owners than say the equivalent provision in ExxonMobil VOY2000, clause 14 (b) of which provides 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 or periods of delay…shall be paid at half of the demurrage rate…”

Where a vessel is fixed on the ExxonMobil form of charter an owner will get demurrage at half rate once the laytime of 72 hours has expired. However, with the Conoco weather clause, in case of delay which started on the vessel’s arrival, it would take 144 hours before demurrage at the half rate would be payable.

Once laytime has expired it makes no difference whether full time is paid at half rate or half time is paid at full rate, but while there is laytime left to run owners bear the burden of delay for twice as long, which is perhaps not what was intended when the risk was to be shared equally.

Additional shifting costs?

The issue here is which party should bear the extra shifting costs where a vessel is forced to move off a berth due to bad weather or sea conditions. Most vessels are fixed to a range of ports and it is charterers that provide the voyage orders. Therefore, if the vessel is ordered to an exposed berth and subsequently has to shift off the berth due to weather then it follows that charterers should bear the additional shifting expenses incurred. Whilst some charterparty forms recognise this others do not.

Clause 9 in Shellvoy 5 provides:

“…If at any time before cargo operations are completed it becomes dangerous for the vessel to remain at the specified berth as a result of wind or water conditions, charterers shall pay all additional expenses of shifting from any such berth and back to that or any other berth within port limits (except to the extent that any fault of the vessel contributed to such danger).”

However, ExxonMobil VOY2000 provides in clause 16 (c) that charterers have the right to shift the vessel between berths and if they wish to do so then they will bear the extra time and cost. In clause 16 (d) there is the provision that the charterer shall have the right to shift the vessel off the berth if the vessel fails to meet the pumping and/or heating warranties of the charter, and time and expenses incurred are for owners’ account. What then is the situation when the vessel is forced to shift off the berth due to bad weather or sea conditions? Traditionally charterers accepted such risks. Whilst the charterparty is silent on this point, owners should bear in mind that the shifting was not due to the fault of owners therefore why should they be automatically liable to pay the additional costs? The issue is best clarified by an appropriate amendment to the charterparty.