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Necochea swell clause dispute

The vessel was fixed on amended GENCON, English law to apply.

Necochea was declared as one of discharge ports.

Port of Necochea is well-known for regular heavy waves preventing

entering or leaving the port. If the height of waves is more than 2.10
meters, a vessel is not authorized to enter or leave the port. It may last
for an uncertain period of time. In order to save shipowners time, and to
protect shipowners interests against such uncertainty, Necochea swell
clause is usually incorporated in the charter party.

The following wording was applied to the fixture:

If the vessel is unable to enter and/or sail due to swell and/or bad
weather, the Master to be permitted to tender notice of readiness at/off
the port, and time to count as per Charter party. Any/all time/cost lost due
to shifting due to swells to be for Charterers account.

Apparently, the first sentence is purely related to tendering NOR. If the

vessel is unable to enter due to swell, the Master tenders NOR at/off the
port limit. It is pretty clear. Next, if the vessel is unable to sail, does it
mean that the Master is permitted to tender NOR at/off the port limit? Is
not it strange and pointless?

The second sentence is even more vague. It says about a kind of

shifting due to swell, but, again, it does not stipulate whether laytime to
count or not if the vessel can not leave the port due to swell.

Strange, as it may seem, the vessel entered the port without any
problem.

The swell problem occurred upon completion of discharge operation.

From the statement of facts, it follows, the vessel completed discharge
operations at Necochea port on Saturday at 14.05. Final draft survey was
carried out by P&I surveyor from 14.30 till 16.30. Only at 17.20, the port
Authorities informed the height of swell was still 3.00 meters, and,
according to port regulations, vessel was not authorized to sail. Vessel
remained alongside waiting for weather conditions to improve till the end
of Saturday. On Sunday morning, at 06.25, port authorities informed the
height of swell was 2.10 meters and the vessel was authorized to sail.
However, clearance was not performed until 08.00. Finally, the vessel
sailed at 09.15 on Sunday.

Shipowners position is that the time from Saturday 14.05 till Sunday
09.15 to count as laytime (with exception of the final draft survey from
14.30 till 16.30).

The Charterers replied: Indeed, there is a certain clause in the c/p

named necochea swell clause, however, same does not work in owners
benefit in this respect. In fact, the clause says: If the vessel is unable to
enter and/or sail due to swell and/or bad weather, the Master to be
permitted to tender notice of readiness at/off the port, and time to count
as per Charter party. Any/all time/cost lost due to shifting due to swells to
be for Charterers account. The first sentence is purely related to
tendering N.O.R. while the second is related to shiftings and etc.

Shipowners became flabbergasted with such interpretation of the clause

and seeked for an expert's advise.

The Expert advised: Unfortunately, the clause is not as clear as one

would wish. The problem is the reference to vessel being unable "to sail
due to swell or bad weather...the master may give notice of readiness...",
1 of 2 which raises the question why should the master give notice if the vessel 09/28/2014 09:19 AM
is prevented from sailing? The context in which the provision appears
makes no sense UNLESS the meaning is that the time lost when the
vessel is unable to leave because of swell/bad weather will count against
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The Expert advised: Unfortunately, the clause is not as clear as one

would wish. The problem is the reference to vessel being unable "to sail
due to swell or bad weather...the master may give notice of readiness...",
which raises the question why should the master give notice if the vessel
is prevented from sailing? The context in which the provision appears
makes no sense UNLESS the meaning is that the time lost when the
vessel is unable to leave because of swell/bad weather will count against
the charterers.

The general position would be that, if the C/P is silent on this issue, the
vessel's inability to leave the berth/port because of inclement weather
after completion of loading or discharge constitutes temporary hindrance
pertaining to the navigation of the vessel, which falls within the owners'
sphere of risk and responsibility. The owners may argue, however, in the
present case that the contract does in fact contain provisions which
govern this situation and, as indicated above, the provision would only
make sense if it is applied to the situation at hand and that the time lost
would, therefore, count against the charteres.

Owners replied to the Charterers asking if the Charterers are trying to

make a profanation of the clause, as the purpose of Necochea clause is
to clearly describe the natural phenomenon effecting this particular port,
when a vessel is unable to enter and/or leave because of the swell.
Owners also wrote: Necochea swell clause governs this situation,
otherwise, it makes no sense to apply/name necochea swell clause as
such, unless the meaning of it is that the time lost due to swell shall count
against the Charterers to save Owners expenses.

The Charterers reverted with disagreement. They wrote: The existence

of this clause in the governing c/p,gives a number of rights and
immunities to both contractual parties, however same must be in line with
the wording of the clause. We do believe that Owners' interpretention is
really an exaggerated one and closer to Owners wishes . Eventhough we
do entirely disagree with Owners' position , as a good gesture could
propose to share half the delay at Necochea.

Owners had to agree with the Charterers proposal.

2 of 2 09/28/2014 09:19 AM