Ship Bunker Consumption

Apart from qualifying the figures in the description clause with the word ‘about’, owners are also stating more and more frequently that all figures are given ‘without guarantee’. Indeed it is common to see at the beginning or end of the vessel’s description clause in the charter the phrase ‘All details about and without guarantee’ which is sometimes abbreviated to ‘ADAWOG’. In fact, the use of ‘without guarantee’ is not new and there is an old reported Court of Appeal case dealing with its interpretation, Japy Frere v Sutherland (1921). This case concerned the description of a vessel’s deadweight but has general application to all aspects of description including speed and consumption. The court found that the use of the words negatived any contractual promise with the result that the owners would not be liable for any breach of the description. However, one of the judges indicated that the charterers might still be able to bring a successful claim for misrepresentation and terminate the charter on that basis. This remained the position until 1997 when, in ‘The Lendoudis Evangelos II’ [1997] a case concerning the estimated duration of a voyage, the court found that the use of the words also negatived any duty of care, effectively excluding any misrepresentation claim. It was said that the only obligation which existed in these circumstances was one of honesty. Four years later, in ‘The Lipa’ [2001] the court reviewed the phrase again but this time directly in the context of a description of a vessel’s speed and consumption. The court upheld the finding of the arbitrator which was that when the words ‘without guarantee’ were used in relation to speed and consumption figures in the description clause they negatived any contractual obligation. Although the judge did not comment directly on the question of honesty it seems that the same principles would be applied as in ‘The Lendoudis Evangelos’. If one of the contracting parties has only a claim for dishonesty, that is, fraud, to fall back on in such circumstances, then this may have consequences on the arbitration clause as the general position under English law is that only the courts may deal with fraud claims and not arbitrators. It is therefore essential for the parties to be absolutely clear on what figures are or are not qualified in order to avoid the possibility of potentially complex questions of law arising.