Lorentzen v White Shipping

The description in the charter party of the vessel’s speed and fuel consumption would in the vast majority of cases only entitle the charterer to obtain damages or compensation, i.e. it would not be regarded as a breach of contract so fundamental as to entitle the charterer to throw up the contract altogether. What has occupied the minds of the courts of lawyers acting for disputing parties, is the question as to when the charter party description of speed and consumption is intended to apply. Should it apply at the time of signing of the charter or at the time the vessel is delivered under the charter, and furthermore should it be a warranty which continues throughout the period of the charter? In Lorentzen v White Shipping (1943) it was held the warranty applied at the date of the charter and was not a continuing one. In the Apollonius (1978) the court disagreed with the above view and said that the warranty applied to the time of delivery and that there were “overwhelming commercial considerations” supporting this view. Nevertheless, the Lorentzen view has, in general, over the years prevailed and if the charterers wanted to use a basis for claiming that the speed and/or consumption was at the time of delivery not what they were entitled to, they should accuse the owners of a breach of the obligation to deliver the ship “in every way fitted for service” (see line 22 NPYE form). It is not the purpose of this Lesson to go into the way speed and performance claims are assessed because arbitration is an uncertain thing, and individual arbitrators in London or other arbitration centres have different methods of assessment.