Jurists and chartering professionals often rely on the highly acclaimed ‘Time Charters’ and ‘Voyage Charters’ publications for guidance when facing charterparty disputes especially where legal precedents may not be there, or there have been conflicting decisions in the past. Seldom is there any judicial correction made to the text of these publications. One such case, where the commercial court went for this rare and unexpected departure from the norm was in The Coral Seas [2016].
Vessel waited in Brazil for a month for loading which resulted in a performance drop due to fouling. Charterers made deductions from hire and owners commenced proceedings. The question was that ‘where owners warrant vessel shall maintain a particular level of performance during charter but is unable to, is it a defence for owner to prove that the underperformance resulted from compliance with the time charterer's orders?’
Speed warranty clause was quite wide and not qualified (such as by excluding risks due to fouling). Only exception was that it was limited to fair weather conditions. There was therefore no implied indemnity owners could seek as they had agreed to bear the risk of under-performance due to fouling. Charters were within their rights to deduct hire and para 3.75 of Time Charters stands corrected.
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