In London Arbitration 7/25, a key issue before the tribunal was the vessel’s performance under an amended NYPE 1993 charterparty. The dispute centred on whether the vessel had breached the speed and consumption warranty, how performance should be assessed in relation to weather conditions, and whose evidence—master or weather routing company—should prevail. The arbitrator’s analysis provides valuable guidance on the interpretation of performance warranties and the allocation of evidentiary burdens in time charter disputes.

The Performance Clause and Its Key Terms

The charterparty included a detailed additional clause on performance, stating that the vessel was warranted to achieve:

• Laden: Approximately 13.0 knots on about 23.5 mt VLSFO + 0.2 mt LSMGO
• Ballast: Approximately 13.0 knots on about 21 mt VLSFO + 0.2 mt LSMGO

Performance was expressly stated to apply “in good weather conditions (abt to mean +/- 5%) and up to Beaufort Force 4 (BF4) and Douglas Sea State 3, with no adverse current.” Calculations were to be based only on such “good weather” days, and “all details” were given “about/in good faith and without guarantee.”

This clause raised several interpretive issues:

• What did “abt” mean in terms of acceptable deviation?
• Did “up to BF4” include Force 4, or exclude it?
• How should “no adverse current” be treated?
• Did “in good faith” qualify the nature of the warranty?

Interpretation and Legal Clarifications

The arbitrator approached the clause by referencing industry standards and previous case law:

• “Abt” as a Speed Tolerance: In line with standard maritime practice, “abt 13.0 knots” was interpreted to allow a deviation of ±0.5 knots, not 0.5%. For a vessel of this size, a 0.5% deviation would have been commercially insignificant and inconsistent with accepted chartering conventions.
• “Up to BF4” Includes BF4: Drawing a practical analogy, the arbitrator ruled that “up to BF4” meant “up to and including” Beaufort Force 4—similar to a medication that can be taken “up to six times a day” meaning six, not five. Thus, performance during BF4 conditions remained within the scope of the warranty.
• “No Adverse Current”: The clause permitted the exclusion of performance data from days affected by adverse current. However, the arbitrator confirmed that favourable currents must be ignored when assessing compliance. This interpretation followed The Divinegate [2023] 1 Lloyd’s Rep 442, which emphasized that performance warranties are to be measured without the benefit of favourable environmental factors.
• “In Good Faith and Without Guarantee”: This phrase was found to have no bearing on whether a binding warranty existed. The arbitrator held that “in good faith” referred only to the accuracy of the information supplied—not to the enforceability of the performance warranty.

Competing Evidence: Master vs. Weather Routing Company

The charterers alleged that the vessel underperformed, relying heavily on a report from a weather routing company (WRC). They argued the report showed the vessel had failed to achieve the warranted speeds during good weather conditions and claimed the master had sailed at “eco speed” without justification. Additionally, they hinted that hull fouling may have impacted performance.

The owners challenged these assertions, stating:

• The WRC’s method for determining “good weather days” was flawed and overly rigid.
• The master’s contemporaneous reports and logs provided a more accurate reflection of prevailing weather and sea conditions.
• There was no evidence to support claims of intentional eco-speed sailing or excessive hull fouling.

Tribunal’s Findings on Performance

The arbitrator ruled decisively in favour of the owners:

• Master’s Evidence Preferred: The arbitrator found no reason to doubt the accuracy or integrity of the master’s logbooks and daily reports. In the absence of a separate arbitration over weather reporting discrepancies (as required under the charter), the arbitrator was entitled to assess the evidence himself and found the master’s on-the-spot observations more reliable than post-voyage reconstructions by the WRC.
• Hull Fouling Argument Dismissed: Divers’ reports did show minor barnacle growth, but the arbitrator found this to be negligible and inevitable after even short periods in the water. There was no indication that this level of fouling had any measurable effect on vessel speed.
• No Breach of Warranty: On the basis of the logbook data, weather analysis, and fuel records, the arbitrator concluded that the vessel had, in fact, performed within the warranted speed and consumption figures under the defined “good weather” conditions. The charterers’ deductions from hire were, therefore, unjustified.
• Burden of Proof Unmet: The charterers, as the party asserting breach of warranty, failed to discharge the burden of proof. Unsupported allegations of eco-speed sailing or deliberate underperformance were rejected.

Implications for Charterers and Owners

This case underscores several important points for both shipowners and charterers:

1. Precise Language Matters: The tribunal’s strict and reasoned interpretation of performance terms reinforces the importance of drafting clarity in charterparty clauses.
2. Evidence Hierarchy: Unless there is clear evidence of fabrication or unreliability, contemporaneous records from the vessel will generally prevail over reconstructed reports from third-party weather services.
3. Understanding the Performance Window: Charterers must apply performance calculations only to properly defined “good weather” days and must respect the exclusions agreed in the contract.
4. “No Adverse Current” = Neutral Environment: The decision in this case, consistent with The Divinegate, confirms that only neutral conditions are to be used when assessing compliance—performance aided by favourable current is not counted in favour of the vessel.

Conclusion

The performance analysis in London Arbitration 7/25 serves as a practical guide for interpreting and applying speed and consumption warranties in time charter disputes. The case confirms that where clear definitions exist in a charterparty, tribunals will apply them strictly, and unsupported claims of underperformance will not suffice. Parties must, therefore, ensure they have accurate, consistent records and a proper understanding of the contractual terms if they are to assert—or defend against—claims of non-performance.

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