Bunker Consumption

The standard vessel description clause in most time charterparties contains the word ‘about’ which qualifies the various figures and dimensions that are given. In both the NYPE and Baltime clauses set out above, speed is shown as ‘about … knots’ and consumption ‘about … tons’; what effect does this have under English law? The use of the word ‘about’ qualifies the absolute nature of the figures provided by the owners in describing the characteristics of the vessel and allows them a margin of error. For example the capacity and tonnage of a vessel may be reduced slightly by work that is carried out in one of the holds or tanks but that information is not reflected in the last fixture that has been made; the owners have the benefit of the qualification to cover this small divergence. So the same applies to the speed and consumption figures. A vessel is built and delivered capable of a certain speed on a certain consumption of fuel but use and age can marginally diminish these specifications. An engine may have to be cleaned at sea or revolutions and speed adjusted very slightly for one reason or another with the result that there is a minor divergence from the figure quoted in the charterparty; again the owners have the benefit of the qualification of the figures. A number of short passages may be undertaken which have an effect on the overall speed achieved during a particular period of time. But what is the margin that is allowed? There is no hard and fast rule that lays down the allowance given by the word ‘about’. However, it is generally accepted that an allowance of 0.5 knots is made in respect of a vessel’s speed. If, for example, the vessel is warranted to perform at ‘about 15 knots’, then there will be no breach of the warranty if the vessel is capable of performing at a speed of 14.5 knots. Equally, if the owners are entitled to a bonus for over-performance the vessel will have to attain over 15.5 knots for the owners to recover. This is not a rule of law but a matter of fact. The leading case on the topic is ‘The AI Bida’ [1987] Court of Appeal decision. In the course of the case the issue of the allowance for the use of the word ‘about’ was raised. One side argued that it must always mean half a knot or 5%; the other side responded that it was a matter of fact and that there was no fixed figure to be applied but each case must be looked at on its own facts. The court agreed with the latter. The phrase that is usually quoted from the judgment is that the allowance ‘must be tailored to the ship’s configuration, size draught and trim etc’. However, it is very unusual to find any allowance other than half a knot being given in London arbitrations so it is adopted as the customary figure in making performance calculations. This can be said to cause some unfairness as a vessel that manages only 10 knots has a 5% allowance while another vessel which can attain 20 knots is only given a 2.5% margin. Turning to fuel consumption, the same rule applies. There is no set allowance for the use of the word ‘about’ but a form of convention has grown up that a margin of 5% is generally allowed. There are no reported cases on the subject but in one or two reported London arbitration awards from the 1980s there is some guidance to the effect that this margin is adopted in most cases by arbitrators. It has been argued by charterers that, if a vessel steams at an average speed of half a knot less than the description speed, then the fuel consumption figure should also be reduced by the full margin of 5%. This would mean that, if a vessel consumed 40 tons of fuel per day a deduction of 2 tons per day would automatically be made, if she only performed at half a knot under the described speed. Therefore, if the vessel steamed for 15 days at that speed the charterers would have a claim for 30 tons of over-consumed bunkers. It appears that this argument has not found favor generally with London arbitrators. However if a performance clause was carefully worded the result could be achieved.