Hold Cleaning Under Time Charters - Recent London Arbitration Award

When a time-chartered vessel's holds fail their inspection at an intended loadport and need further cleaning, a question arises as to who is liable for the shore cleaning time and costs – owners or charterers? The answer will depend on the applicable charterparty terms. This issue was recently considered in London Arbitration 7/10, where the arbitrators held that the owners had complied with their hold cleaning obligations under the charterparty in question.

Background facts

The vessel was chartered on the NYPE form for 110/170 days. She was delivered to the charterers DLOSP (dropping last outward sea pilot) at Haldia, India – just after discharging her last (coal) cargo under her previous charter. She then sailed in ballast to Bangshapan, Thailand to load her first cargo (steel) under the charter. Her holds were cleaned by the crew during the ballast voyage. The cleaning included scraping and sweeping. On arrival at the loadport, the on-hire surveyor found the holds to be in a sound condition, but noted dark staining on the bulkheads and sides. The staining was from the pre-charter coal cargo.

The vessel then sailed to discharge in the U.S. (Long Beach, California and Kalama, Washington). During the voyage, she was fixed to load grain at Vancouver, Washington after Kalama. At Kalama, the NCB (National Cargo Bureau) surveyor inspected the holds and required the removal of the staining. The charterers expressed their concern that, in view of this, the holds would fail their Vancouver inspection. The Master advised that the holds were being cleaned further with chemicals to remove the staining, and that they would be clean and ready for loading as soon as discharge was completed (which, in the event, happened two days later).

The vessel arrived at Vancouver seven hours after completion of discharge at Kalama. The USDA (U.S. Department of Agriculture) and NCB inspectors rejected her holds – apparently due to the staining. This led to five days of further cleaning by the crew and a shore team before the holds were passed at a re-inspection.

The charterers claimed for the delay, the bunkers consumed during it and the shore team expense.

The relevant charterparty clauses were (among others):

Lines 21-22. "Vessel to be at the disposal of the Charterers on dropping last outward sea pilot Haldia ... Vessel on her delivery to be ready to receive cargo with clean-swept holds...". Clause 54. "Vessel's holds condition on arrival at first loading port to...