WHAT IS NEW IN NEW WHAT IS NEW IN NEW YORK?YORK?

ATHENS, GREECEATHENS, GREECEAPRIL 14, 2005APRIL 14, 2005

William J. HonanWilliam J. HonanHolland & Knight LLPHolland & Knight LLP

1.1. A few years ago, there A few years ago, there were hardly any time charters were hardly any time charters being done. Rates were low and being done. Rates were low and owners were disinclined to offer owners were disinclined to offer vessels for long terms at those vessels for long terms at those low rates.low rates.

2.2. The forms haven't The forms haven't changed very much. For example, changed very much. For example, ASBATANKVOY dates back to 1977 ASBATANKVOY dates back to 1977 and its predecessor Essovoy dates and its predecessor Essovoy dates back to 1969. At some point, back to 1969. At some point, disputed issues have to diminish.disputed issues have to diminish.

3.3. Traders and other Traders and other charterers have adopted special charterers have adopted special provisions which have been provisions which have been refined to reduce the risk of refined to reduce the risk of exposure and dispute. exposure and dispute.

The Panel, in its award, The Panel, in its award, shall grant shall grant anyany remedy or relief remedy or relief which which itit deems just and deems just and equitable. . . .equitable. . . .

. . . under New York law, . . . under New York law, arbitrators are not constrained by arbitrators are not constrained by the strict rules of the courts and the strict rules of the courts and may grant relief that a court may grant relief that a court would not, or could not, grant.would not, or could not, grant.

Because "contracts often lack Because "contracts often lack explicit provisions for specific kinds explicit provisions for specific kinds of remedies, it falls to the arbitrator of remedies, it falls to the arbitrator to devise one." The parties' to devise one." The parties' agreement did not restrict the agreement did not restrict the arbitrators to remedies available to arbitrators to remedies available to a court of law.a court of law.

1.1. Arbitrators, in many Arbitrators, in many ways, have more power than ways, have more power than courts of law.courts of law.

2.2. Arbitrators have the Arbitrators have the power to fashion innovative power to fashion innovative remedies to resolve complex remedies to resolve complex problems.problems.

It is not the role of the courts It is not the role of the courts to undermine the to undermine the comprehensivecomprehensive grant of authority to arbitrators by grant of authority to arbitrators by prohibiting an arbitral security prohibiting an arbitral security award that ensures a meaningful award that ensures a meaningful award. award.

• I am not going to perform.I am not going to perform.

• I shall not perform when it is my I shall not perform when it is my time to do so.time to do so.

• I I maymay not perform when it is my not perform when it is my time to do so. time to do so.

Repair Protocol and ScheduleRepair Protocol and Schedule

1.1. Within 10 days from the date hereof, Owner will furnish the preliminary drydock Within 10 days from the date hereof, Owner will furnish the preliminary drydock and repair specification for submission to qualified repair yards located within and repair specification for submission to qualified repair yards located within US East Coast, Gulf of Mexico or Caribbean, not East of Trinidad.US East Coast, Gulf of Mexico or Caribbean, not East of Trinidad.

2.2. Within 30 days from the date hereof, Owner will furnish the name and location Within 30 days from the date hereof, Owner will furnish the name and location of the drydock and repair yard designated to carry out all repairs and the date of the drydock and repair yard designated to carry out all repairs and the date those repairs are expected to begin. The repairs are those repairs are expected to begin. The repairs are toto be carried out as be carried out as expeditiously as practicable.expeditiously as practicable.

3.3. All repairs shall be subject to inspection and certification by the appropriate All repairs shall be subject to inspection and certification by the appropriate Classification and regulatory authorities.Classification and regulatory authorities.

4.4. Owner shall furnish weekly progress reports together with the shipyard's Owner shall furnish weekly progress reports together with the shipyard's projected completion date.projected completion date.

5.5. Charterer shall have the privilege of appointing a surveyor to monitor all repairs.Charterer shall have the privilege of appointing a surveyor to monitor all repairs.

6.6. Should Owner fail to comply with the provisions hereof, Charterer will be free to Should Owner fail to comply with the provisions hereof, Charterer will be free to renew its application for the panel to terminate the charter party.renew its application for the panel to terminate the charter party.

§6 OF COGSA, §6 OF COGSA, 46 U.S.C. §130346 U.S.C. §1303

In any event the carrier and the In any event the carrier and the ship shall be discharged from all ship shall be discharged from all liability in respect of loss or damage liability in respect of loss or damage unless suit is brought within one unless suit is brought within one year after delivery of the goods or year after delivery of the goods or the date when the goods should the date when the goods should have been delivered . . . .have been delivered . . . .

SCANPORTS 1990SCANPORTS 1990

20. 20. Demurrage ClaimsDemurrage Claims. Charterer shall . Charterer shall be discharged and released from all liability in be discharged and released from all liability in respect of any claim for demurrage owner may respect of any claim for demurrage owner may have under this charter party unless a written have under this charter party unless a written invoice for the claimed demurrage and copies invoice for the claimed demurrage and copies of ETA notices sent in compliance with voyage of ETA notices sent in compliance with voyage orders, notices of readiness at each port, orders, notices of readiness at each port, pumping logs, and port logs/statements of fact pumping logs, and port logs/statements of fact for each port as well as all other supporting for each port as well as all other supporting documents have been received by charterer documents have been received by charterer within ninety (90) days after completion of within ninety (90) days after completion of discharge of the cargo covered buy this charter discharge of the cargo covered buy this charter party or after other termination of the voyage, party or after other termination of the voyage, whichever first occurs. . . . whichever first occurs. . . .

KOCH SHIPPING INC.KOCH SHIPPING INC.

20.2.20.2.Owner to present to Charterer, Owner to present to Charterer, in writing, any claim for demurrage in writing, any claim for demurrage within 58 days of completion of within 58 days of completion of discharge together with the following discharge together with the following signed documents, otherwise Owner signed documents, otherwise Owner waives any such claim. In the event waives any such claim. In the event suppliers/receivers signatures are not suppliers/receivers signatures are not obtainable, Owner must provide a obtainable, Owner must provide a signed notice of protest noting same. . . .signed notice of protest noting same. . . .

BPVOY 4BPVOY 4

20.220.2 Any other claim against charterers Any other claim against charterers for any and all other amounts which are for any and all other amounts which are alleged to be for charterers' account under this alleged to be for charterers' account under this charter shall be extinguished, and charterers charter shall be extinguished, and charterers shall be discharged from all liability shall be discharged from all liability whatsoever in respect thereof, unless such whatsoever in respect thereof, unless such claim is presented to charterers, together with claim is presented to charterers, together with full supporting documentation substantiating full supporting documentation substantiating each and every constituent part of the claim, each and every constituent part of the claim, within one hundred and eighty (180) days of within one hundred and eighty (180) days of the completion of discharge of the cargo the completion of discharge of the cargo carried hereunder. carried hereunder.

WESTPORT PETROLEUM WESTPORT PETROLEUM INCINC

21.21. DEMURRAGE/EXPENSE CLAIMS CLAUSE:DEMURRAGE/EXPENSE CLAIMS CLAUSE:

In order to be honored, any demurrage claim must be In order to be honored, any demurrage claim must be received in writing with full supporting documents including received in writing with full supporting documents including but not limited to Notice of Readiness, authorized statements but not limited to Notice of Readiness, authorized statements of facts signed by Master, Suppliers/Receivers/Agents, letters of facts signed by Master, Suppliers/Receivers/Agents, letters of protest, crude oil washing statement and vessel's pumping of protest, crude oil washing statement and vessel's pumping log, within 90 days of completion of discharge failing which log, within 90 days of completion of discharge failing which the claim shall be deemed to be waived and absolutely the claim shall be deemed to be waived and absolutely barred. Master is to issue Letter of Protest should documents barred. Master is to issue Letter of Protest should documents or signatures not be available. All other claims (but not or signatures not be available. All other claims (but not including freight, dead freight) shall be deemed waived, including freight, dead freight) shall be deemed waived, extinguished and absolutely barred if such claim is not extinguished and absolutely barred if such claim is not received, in writing with supporting documentation, within received, in writing with supporting documentation, within 180 days from completion of discharge.180 days from completion of discharge.

CHEMBULK NEW YORKCHEMBULK NEW YORK S.M.A. 3868 (2004)S.M.A. 3868 (2004)

VOYAGE CHARTERVOYAGE CHARTER

Demurrage which charterer does not contest except for Demurrage which charterer does not contest except for Owner's non-compliance with Rider Clause 6.Owner's non-compliance with Rider Clause 6.

DEMURRAGE TIME BAR CLAUSEDEMURRAGE TIME BAR CLAUSE

Charterers shall not be obliged to pay any claim for Charterers shall not be obliged to pay any claim for demurrage, unless the claim, along with supporting demurrage, unless the claim, along with supporting documents (including, but not limited to vessel time sheets documents (including, but not limited to vessel time sheets signed by ship's agent and terminal time log) is received by signed by ship's agent and terminal time log) is received by Charterers within ninety (90) days from date of completion Charterers within ninety (90) days from date of completion of discharge of cargo.of discharge of cargo.

CASCOCASCO LMLN 622 LMLN 622(March 20, 2005)(March 20, 2005)

• Time Charter (Shelltime 4)Time Charter (Shelltime 4)• 60 to 90 days60 to 90 days• Charterer subcharters vesselCharterer subcharters vessel• Vessel fails Subcharterer's inspectionVessel fails Subcharterer's inspection• Subcharterer rejects the vesselSubcharterer rejects the vessel• Charterer claims against the OwnerCharterer claims against the Owner• Cargo would have been delivered in early May 2003Cargo would have been delivered in early May 2003• Charterer commences arbitration against Owner in July 2004Charterer commences arbitration against Owner in July 2004• Owner claims contractual time barOwner claims contractual time bar• Owner relies on the incorporation of the Hague Visby RulesOwner relies on the incorporation of the Hague Visby Rules• Article III rule 6 of the Hague Visby Rules:Article III rule 6 of the Hague Visby Rules:

"Subject to paragraph 6 bis the carrier and the ship shall in any "Subject to paragraph 6 bis the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods event be discharged from all liability whatsoever in respect of the goods unless suit is brought within one year of their delivery or of the date when unless suit is brought within one year of their delivery or of the date when they should have been delivered."they should have been delivered."

SUN ADMIRALSUN ADMIRALS.M.A. 3831 (2004)S.M.A. 3831 (2004)

• Voyage CharterVoyage Charter• NOLA/Vera CruzNOLA/Vera Cruz• rice cargorice cargo• vessel failed charterer's inspector's surveyvessel failed charterer's inspector's survey• vessel rejected on July 11, 2001vessel rejected on July 11, 2001• Owner demands arbitration on February 26, 2003Owner demands arbitration on February 26, 2003• Charterer claims time bar based on Rider Clause 44Charterer claims time bar based on Rider Clause 44• Rider Clause 44:Rider Clause 44:

. . . any claims under this contract must be notified in . . . any claims under this contract must be notified in writing to the other party and claimants' arbitrator writing to the other party and claimants' arbitrator appointed within twelve (12) months of final discharge of appointed within twelve (12) months of final discharge of the cargo and where this provision is not complied with, the the cargo and where this provision is not complied with, the claim shall be waived and absolutely barred.claim shall be waived and absolutely barred.

BOW CEDARBOW CEDAR[2005] 1 Ll. L. Rep. 275[2005] 1 Ll. L. Rep. 275

• Voyage Charter Party (BPVOY 4)Voyage Charter Party (BPVOY 4)• Bahrain to BeninBahrain to Benin• jet fuel, gas oil, gasolinejet fuel, gas oil, gasoline• charterer had difficulty arranging for the purchase of the cargoescharterer had difficulty arranging for the purchase of the cargoes• charterer cancels charter party on August 27, 2002charterer cancels charter party on August 27, 2002• Club, on behalf of Owner, submits claim documents on Club, on behalf of Owner, submits claim documents on

July 15, 2003July 15, 2003• charterer claims contractual time bar based on Clause 20.2 of BPVOY 4:charterer claims contractual time bar based on Clause 20.2 of BPVOY 4:

20.220.2 Any other claim against charterers for any and all other amounts Any other claim against charterers for any and all other amounts which are alleged to be for charterers' account under this charter shall be which are alleged to be for charterers' account under this charter shall be extinguished, and charterers shall be discharged from all liability whatsoever extinguished, and charterers shall be discharged from all liability whatsoever in respect thereof, unless such claim is presented to charterers, together with in respect thereof, unless such claim is presented to charterers, together with full supporting documentation substantiating each and every constituent part full supporting documentation substantiating each and every constituent part of the claim, within one hundred and eighty (180) days of the completion of of the claim, within one hundred and eighty (180) days of the completion of discharge of the cargo carried hereunder.discharge of the cargo carried hereunder.

GENERAL RULESGENERAL RULES

1.1. Contractual time bars are enforced.Contractual time bars are enforced.

2.2. Arbitrators require strict compliance (substantial Arbitrators require strict compliance (substantial compliance compliance probably insufficient) to satisfy contractual time bars.probably insufficient) to satisfy contractual time bars.

3.3. Contractual time bars are probably enforced even if there Contractual time bars are probably enforced even if there is is no dispute concerning the claim in question.no dispute concerning the claim in question.

4.4. Contractual time bars are construed strictly against the Contractual time bars are construed strictly against the drafter.drafter.

PRACTICE TIPSPRACTICE TIPS

1.1. If the Owner:If the Owner:

a)a) seek to eliminate altogetherseek to eliminate altogetherb)b) make the clauses mutually applicablemake the clauses mutually applicablec)c) provide as long a period as possibleprovide as long a period as possibled)d) provide training to the persons handling claimsprovide training to the persons handling claims

2.2. If the Charter:If the Charter:

a)a) include all claims not just demurrage and detentioninclude all claims not just demurrage and detentionb)b) draft the clause so as to avoid obvious loopholesdraft the clause so as to avoid obvious loopholes

EXXON MOBILVOY 2000EXXON MOBILVOY 2000

19. BACK LOADING. Charterer shall 19. BACK LOADING. Charterer shall have the option of loading Vessel with a have the option of loading Vessel with a part cargo at any discharging port or place part cargo at any discharging port or place to which Vessel may have been ordered,. . . to which Vessel may have been ordered,. . . . Owner shall discharge such part cargo at . Owner shall discharge such part cargo at any other discharging port(s) or place(s) any other discharging port(s) or place(s) previously nominated, provided such port(s) previously nominated, provided such port(s) or place(s) lie within the rotation of the or place(s) lie within the rotation of the discharging ports or places previously discharging ports or places previously nominated. If this option is exercised, nominated. If this option is exercised, additional time consumed awaiting berth additional time consumed awaiting berth and/or cargo and/or tank preparation and/or and/or cargo and/or tank preparation and/or loading and discharging such part cargo loading and discharging such part cargo shall count as laytime or, if Vessel is on shall count as laytime or, if Vessel is on demurrage, as time on demurrage. . . . demurrage, as time on demurrage. . . .

SHELLVOY 5SHELLVOY 5

Back LoadingBack Loading

38.38. Charterers may order the vessel to load a Charterers may order the vessel to load a part cargo at any nominated discharging port, and to part cargo at any nominated discharging port, and to discharge such part cargo at a port(s) to be nominated by discharge such part cargo at a port(s) to be nominated by Charterers within the range specified in Part I(E) and within Charterers within the range specified in Part I(E) and within the rotation of the discharging ports previously nominated, the rotation of the discharging ports previously nominated, provided that such part cargo is of the description specified provided that such part cargo is of the description specified in Part I(F) and that the master in his absolute discretion in Part I(F) and that the master in his absolute discretion determines that this cargo can be loaded, segregated and determines that this cargo can be loaded, segregated and discharged without risk of contamination by, or of, any discharged without risk of contamination by, or of, any other cargo remaining on board.other cargo remaining on board.

Charterers shall pay a lump sum freight in respect of Charterers shall pay a lump sum freight in respect of such part cargo calculated at the demurrage rate specified such part cargo calculated at the demurrage rate specified in Part I(J) on any additional time used by the vessel as a in Part I(J) on any additional time used by the vessel as a result of loading, carrying or discharging such part cargo.result of loading, carrying or discharging such part cargo.

ASBA IIASBA II

22.22. Charterer shall have the option Charterer shall have the option of reloading the Vessel with a part cargo of reloading the Vessel with a part cargo as described in Part I(E) at any port of as described in Part I(E) at any port of discharge nominated by the Charterer discharge nominated by the Charterer within the discharge options contained in within the discharge options contained in Part I(D) and Owner agrees to discharge Part I(D) and Owner agrees to discharge such reloaded cargo at any other such reloaded cargo at any other discharge port or ports, previously discharge port or ports, previously nominated provided such port or ports, lie nominated provided such port or ports, lie within the rotation of discharge ports within the rotation of discharge ports previously nominated.previously nominated.

27.27.KOCH KOCH DISCHARGE/RELOADDISCHARGE/RELOAD

27.127.1 Charterer has the option to Charterer has the option to discharge all or part cargo at one safe discharge all or part cargo at one safe port or lighterage location and reload port or lighterage location and reload same or different cargo in same or same or different cargo in same or different port or place for final discharge different port or place for final discharge on the same voyage within agreed on the same voyage within agreed ranges as specified in Part I of this ranges as specified in Part I of this Charter Party.Charter Party.

27.2 Provided the charter 27.2 Provided the charter freight under the terms of this freight under the terms of this Charter Party are based on Charter Party are based on Worldscale, the port of Worldscale, the port of discharge/reload to be considered as discharge/reload to be considered as an additional Loadport for freight an additional Loadport for freight calculation purposes . . . .calculation purposes . . . .

6. DISCHARGE/RELOADING CLAUSE:6. DISCHARGE/RELOADING CLAUSE:

Charterer's shall have the option to Charterer's shall have the option to discharge and reload all or part cargo at discharge and reload all or part cargo at any port within the trading range. If any port within the trading range. If exercised, any additional costs in exercised, any additional costs in connection with the reload to be for connection with the reload to be for Charterer's account and additional time Charterer's account and additional time consumed to count as used laytime. For consumed to count as used laytime. For Worldscale purposes, said discharge/reload Worldscale purposes, said discharge/reload port to count as a load port under port to count as a load port under Worldscale.Worldscale.

PRACTICEPRACTICE TIPSTIPS

• If OwnerIf Owner– Exclude if possibleExclude if possible– Make sure the new discharge port is in the same Make sure the new discharge port is in the same

rotationrotation– Make sure WS is the applicable freightMake sure WS is the applicable freight

• If ChartererIf Charterer– Include if possibleInclude if possible– Draft as widely as possible (see Koch clause)Draft as widely as possible (see Koch clause)– Use demurrage rate as the measure of Use demurrage rate as the measure of

compensationcompensation

MARTHA AMARTHA A, , S.M.A. 3861 (2004)S.M.A. 3861 (2004)

• Voyage Charter (ASBATANKVOY)Voyage Charter (ASBATANKVOY)• Mineral oil parcelsMineral oil parcels• Antwerp – Tampa - HoustonAntwerp – Tampa - Houston• Vessel delayed en route due to bad weatherVessel delayed en route due to bad weather• Arrival at Tampa, temporary closure of Arrival at Tampa, temporary closure of

berth due to scheduled maintenance by the berth due to scheduled maintenance by the port authorityport authority

• Temporary closure prevented previous Temporary closure prevented previous vessel from completing cargo operationsvessel from completing cargo operations

• Martha A was delayedMartha A was delayed

• Clause 6 (last sentence)Clause 6 (last sentence)

However, where delay is caused to vessel However, where delay is caused to vessel getting into berth after giving notice of getting into berth after giving notice of readiness for any reason over which Charterer readiness for any reason over which Charterer has no control, such delay shall not count as has no control, such delay shall not count as used laytime.used laytime.

• Owner said Clause 6 does not apply because the Owner said Clause 6 does not apply because the berth closure was not due to unforeseen berth closure was not due to unforeseen circumstances such as casualty, emergency repairs, circumstances such as casualty, emergency repairs, bad weather or other force majeure events.bad weather or other force majeure events.

ENERGY RANGERENERGY RANGER, , S.M.A. 3817 (2003)S.M.A. 3817 (2003)• Time Charter (NYPE)Time Charter (NYPE)• ConcentratesConcentrates• Punta Patache, Chile to MontrealPunta Patache, Chile to Montreal• Berthed commenced loading on Jan. 29, 2002Berthed commenced loading on Jan. 29, 2002• Loading commenced and continued until 0750 on Jan. 31Loading commenced and continued until 0750 on Jan. 31• Served with Order of Detention at request of USDEAServed with Order of Detention at request of USDEA• Accused of having large quantity of drugs in no. 3 ballast Accused of having large quantity of drugs in no. 3 ballast

tanks (2 m/ts cocaine)tanks (2 m/ts cocaine)• No. 3 hold 15,700 m/ts cargoNo. 3 hold 15,700 m/ts cargo• Rather than discharge; cut an access hole in the ship’s sideRather than discharge; cut an access hole in the ship’s side• No drugs, hole patched, loading completedNo drugs, hole patched, loading completed• Delay of 6.75 daysDelay of 6.75 days

• Who is responsible?Who is responsible?

• Off-hire clause: Clause 15Off-hire clause: Clause 15

That is the event of a loss of time from deficiency That is the event of a loss of time from deficiency and/or default of men including strike, stoppages and/or default of men including strike, stoppages of Master, Officers and crew or deficiency of stores, of Master, Officers and crew or deficiency of stores, fire, breakdown or damages to hull, machinery or fire, breakdown or damages to hull, machinery or equipment . . . Or any other cause or restriction equipment . . . Or any other cause or restriction preventing the full working of the vessel, the preventing the full working of the vessel, the payment of hire shall cease for the time thereby payment of hire shall cease for the time thereby lost.lost.

WHAT IS NEW IN NEW WHAT IS NEW IN NEW YORK?YORK?

ATHENS, GREECEATHENS, GREECE

APRIL 14, 2005APRIL 14, 2005

William J. HonanWilliam J. Honan

Holland & Knight LLPHolland & Knight LLP