Ship S&P agreements are usually subject to a vessel being “free of average damage affecting vessel’s class”. Not every kind of damage qualifies. Would damage to bilge keels (which helps in reducing ship's rolling motion) be sufficient to allow buyers to reject the ship?
In London Arbitration 12/21, the deal broke down and buyers were claiming compensation as an underwater inspection had revealed that that bilge keels had been torn, deformed & even missing in several locations. Class surveyor had recommended repairs. Sellers argued that this damage did not affect Class as class’s head office had decided that classification status of the vessel was unaffected and class records won’t reflect the damage.
Tribunal first considered whether it was average damage. To qualify, previous case law required it to be a damage covered by H&M insurance. In this case damage was probably caused by contact with ice & policy would have responded. Next question was whether it affected class. Tribunal found that bilge keels were not a class item and any damage did not mean that class should be qualified. Bilge keels were an item of concern to class only if they endangered the ship in some way, which wasn’t the case here.
Conclusion - it was average damage but did not affect class.
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