Lloyd's Maritime and Commercial Law Quarterly
OILVOY DEMURRAGE CLAUSES—WHAT IS A STORM?
James M. Textor.*
INTRODUCTION
The interpretation of the standard clauses of the time honored voyage charter-party forms seldom presents unique controversies. However, on occasion, interpretation of the terms and conditions contained within the clauses of the modern petroleum voyage charter-parties (“oilvoys”), which the well-known maritime commentators have yet to discuss and the courts have not been given an opportunity to interpret, present interesting commercial issues. One such well-known charter-party form is the Asbatankvoy1 which provides a one-half demurrage rate for the time associated with delays caused by specified circumstances while the vessel is on demurrage. The oilvoy provision in question is the well-known cl. 8, which in part states:
“If, however, demurrage shall be incurred at ports of loading and/or discharge by reason of fire, explosion, storm or by a strike, lockout, stoppage or restraint of labor or by breakdown of machinery or equipment in or about the plant of the Charterer, supplier, shipper or consignee of the cargo, the rate of demurrage shall be reduced one-half of the amount stated in Part I per running hour or pro rata for part of an hour for demurrage so incurred”2.
Most commercial persons and attorneys would probably agree upon common interpretations for the terms fire, explosion, strike and equipment breakdown. However, the term “storm” is so vague that commercial persons have disagreed and continue to do so with respect to a definite commercial or legal interpretation of this charter-party term for demurrage reduction purposes. Consequently, the subject of this article is an examination of the cl. 8 storm term, with a view towards the practical realities of shipboard tanker operations.
For petroleum voyage charter-party usage in the spot tanker trade, the word “storm” essentially has no definite commercial or legal significance. The term probably has more of a poetic connotation than a commercial or meteorological meaning, which would explain one arbitrator’s reference to the dictionary for guidance. In addition, since most charter-party disputes are now resolved by arbitration in either London or New York, judicial interpretations of modern oilvoy “boilerplate” terms and conditions are infrequent. To date, the courts have not had an opportunity to review the one-half demurrage storm term. Nevertheless, in the United States, the judicial view of demurrage responsibility and the legal analysis used to interpret difficult charter-party terms is quite certain.
Although the U.S. courts are not necessarily in agreement when referring to
* B.S. United States Merchant Marine Academy, 1974; J.D.: Franklin Pierce Law Center, 1979. The author acknowledges with thanks the meteorological review in Physical Oceanography, by Austin L. Dooley, General Manager, Oceanroutes Inc.
1 Tanker Voyage Charter-Party, Association of Ship Brokers & Agents (U.S.A.), Inc., October 1977.
2 Ibid., Part II, cl. 8 (emphasis added).
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