In Marine Insurance P&I Club News 29/04/2015
Members are advised to ensure that they pay particular attention to vessel readiness issues when calling at Argentina.
Cleaned and ready (Source: Skuld member)
Vessel readiness
It is usually an un-controversial position under charterparties that there may be provision as to the cleanliness of cargo holds and tanks prior to the loading of a first cargo and indeed with respect to the state of the vessel for subsequent cargoes. The parties are free to agree between themselves as to what standard of cleanliness the vessel should have on first delivery, who pays for and arranges any intermediate cleaning, and what should be the consequences if a vessel does not in fact meet the contracted standard.
The controversy usually arises because there is an allegation, typically (although not exclusively) emanating from the shore side that the vessel is not in fact ready because the holds or tanks are unclean, do not meet the necessary standards or otherwise not in a ready condition for loading.
Recently the Association has noted an increase in such disputes when vessels have been seeking to load cargo (general, dry and liquid bulk) in Argentina.
These incidents included a number of similar features such as:
- a rejection of holds and tanks that were independently inspected and passed as clean and for which sound cleaning records exist
- continued rejection of the vessel despite repeated cleaning
- the “finding” of new grounds of rejection after re-cleaning and re-inspection
There have also been further factors which appear to be potentially at play and may explain this otherwise difficult situation.
One issue may have been the possible non-availability of cargo and shipper’s desire to avoid the commencement of laytime at a time when cargo operations could not start due to shore side issues. This has proven hard to investigate and corroborate, in particular as access to information and evidence that could prove the same is not easy to establish. In many cases it was therefore a suspicion, but not one that could be easily proven, and certainly not at the time the dispute was “live”.
There have been other specific concerns, and it would be prudent for masters and members to make urgent contact with the Association’s correspondents if they are approached in any way that would make them concerned about the propriety of a particular situation.
Practical and legal mitigation
At present, members are advised to take extra care in ensuring they clean holds and tanks as thoroughly as possible and keep a very good record (including pictures) that can help to demonstrate the efforts made as well as the result achieved.
When vessels are being subjected to inspection, it may be prudent to have – at least – a vessel officer accompany any third party inspectors and carefully note down, document and photograph any area or issue that may be raised during the inspection process.
Given the present challenges being experienced, it may also be worth considering having the assistance of a surveyor for this process as an additional set of eyes (but not a replacement for) to that of the ship’s officer. The Association’s correspondents would be able to assist in this regard.
In addition to the practical preparation, it may also be prudent to consider the legal / contractual side in advance. In particular it is worth considering:
a. agreed standards as to the vessel’s condition prior to first delivery
b. agreed apportionment of responsibility, cost and risk of intermediate cleaning
c. agreed apportionment of responsibility for cargo and ancillary operations that impact on holds and tanks
d. agreed process / procedure for verifying actual state of holds / tanks
The latter in particular is something that needs to be carefully considered, as it is easy to end up in a stand-off between a ship’s view and those of the shore side shipper surveyor who may end up having very different opinions about the vessel. While the ship is not in a position to know of, or influence, the terms of any underlying sale agreement (or perhaps a sub- or sub-sub charter position), at least the situation between the owner and immediate charterer should be clarified and made certain.
For members acting as charterers, or indeed traders, it is important to check whether or not the obligations and responsibilities in one contract match those of another. It may very well be that at some stage in the contractual chain there will be a difference, and this needs to be recognised and understood or risk the consequence of an unwitting legal gap between two positions. If such a position has to be commercially accepted, then at least it needs to be done with an awareness of the possible impact of such acceptance.
Further reading
The Association has previously advised on issues and challenges when calling at Argentina.
For further information on cargo hold cleaning, members may wish to consult the Skuld’s in-depth guide.
For vessel specific enquiries, members are asked to contact their usual Skuld business unit.
