Tank Cleaning - Legal issues related to time charter. Last updated 04-Apr-2015

… the evidence shows clearly that considerable efforts were made by the vessel and her crew to clean the tanks … notwithstanding the apparently damning nature of those reports, I have no hesitation whatsoever in holding that the state of the tanks was not sufficient to raise any inference either that the crew had failed to work properly, or that the Butterworth machines were not working efficiently.
The Aditya Vaibhav [1993] 1 Lloyd’s Rep 63 per Evans J.

Continuous Obligation

Time charter contracts impose on the ship owner continuous, often extended for several years, duty to maintain or restore the vessel. This duty embraces tanks cleaning operations and is not absolute, the owner undertakes to exercise due diligence only. On the other hand if delay in tanks cleaning or failure to clean ship’s tanks properly resulted from incompetence of the master and crew, then the owner is in breach of warranty that the master, officers and crew are trained to operate the vessel and her equipment competently.

Whereas under the terms of a voyage charterparty failure to clean tanks to satisfaction of pre-loading inspection usually gives to the charterer right either to cancel the contract or while keeping the contract alive shift all liabilities for delay to the owner’s side, under a time charter contract, unsuccessful tank cleaning has an immediate negative impact on the charterer only, as it often leads to cancellation and loss of sub-fixture. Moreover, in case of a voyage charter the mere fact that the vessel’s tanks are not cleaned and suitable for the intended cargo is sufficient ground for the charterer to trigger punitive measures stipulated in the contract. The time charterer, on the contrary, has no right to make any deduction from his monthly hire payments unless he can bring himself within the exceptions , e.g. provide clear evidence of crew negligence or lack of due diligence in tanks cleaning.

So far as crew negligence is concerned there is no other evidence to support the [Charterers’quo;] case. Indeed, it is contradicted by the ship’s master and chief officer and chief engineer, as well as by the ship’s log and other records. But the [charterers] are entitled to submit that the evidence is inaccurate and self-serving and that the documents are not necessarily correct. What is clear, however, is that the [charterers] cannot make good this part of their counterclaim, and conversely, they cannot resist the claim for hire on this ground, unless the evidence first establishes that the tanks were not properly cleaned ...

To evaluate whether the owner has discharged his duty of due diligence when performing tank cleaning operation the court scrutinises documentary evidence such as ship’s log books, recorded procedures, master’s and chief officer’s reports and experts evidence. Thus, investigation invariably raise complex technical questions as shown in The Aditya Vaibhav [1993] 1 Lloyd’s Rep 63 and especially in The Liepaya [1999] 1 Lloyd’s Rep 649. Competence of the master and crew plays very important role and may be a key factor to influence the judge’s decision:

To pinpoint the particular aspect of failure of due diligence which led to the retention of residues in the heaters and their associated pipework is more difficult and in my view unnecessary. It is easier to say that the masters and chief officer concerned were inexperienced, and that that inexperience, as illustrated above, particularly in the difficult circumstances of the Rotterdam discharge, led to their failure to clean the heaters adequately.

It should be noted here that inexperience alone will not necessarily lead to conclusion that the owner failed to exercise due diligence. In The Liepaya case Rix J gave due regard to arduous job, albeit sometimes overburdened by mistakes, done by inexperienced crew during a number of relatively successful cleaning operations. It follows that inexperience will prove the negligence only when it was a cause of failure.

It may well be that in many respects that inexperience and the negligent errors into which it led them were not directly causative: for instance, other perhaps than in the case of tank 3 wings where RBDPO on the first voyage was succeeded by olein on the second voyage, it is not easy to see that the inadequacies of cleaning on the first palm oil voyage would have survived as being causally relevant after the second palm oil voyage; and, clearly, for all their mistakes and in effect experimentation, after a lot of hard work, the tanks were cleaned for subsequent cargoes and were passed fit for them.

It is also pertinent to remember that tank cleaning is in the ordinary way an activity required by a time charterer. Time charterer is free to choose, within certain limits provided in technical description of the vessel, what cargoes are to be loaded, and consequently when and what cleaning is required. Due to sometimes wide variety of the goods, which may be available for transportation, it is evident, that there is wide variety of cleaning procedures and technologies as well. Because of this, in a particular case, cleaning may take longer than either charterers or owners expect but, provided that it is carried out with due diligence and proper equipment, the time occupied will not fall under off-hire provisions .

If the charterer orders the vessel to load coal on one voyage and sugar in bulk on the next, he can hardly expect the necessary cleaning to be done in the owner’s time.

…Of course there may be cases where the need for such extra cleaning results from a breach of contract on the part of the owner or even from "neglect of duty on the part of the master, officers and crew". In that event the charterer has a remedy. But here the arbitrators rejected the charterers' case that there had been negligence or want of due diligence in cleaning on the ballast voyage. Once they had reached that conclusion, the argument that the vessel was off hire or that the charterers could recover the hire paid was in my opinion doomed to failure.

It also can happen that the master and the owners would disagree with the charterers on their instructions regarding tank cleaning. But if the master and the owners did nevertheless follow such instructions and later sustain certain damages, as a consequence of such obedience, the owners would not probably be able to recover from the charterers, for the reason that such damages would be the result of the deliberate and unnecessary act of those in control of the ship and their failure to discharge a duty to behave with ordinary reasonable prudence so as to minimize damages .

Summarising, it would be proper to suggest, that the owners can significantly strengthen their position in case of any dispute over the tank cleaning if they can provide an evidence that this operation was done in accordance with recognised procedures or under direct charterers’ instructions, that it took reasonable time, that there was no breach or inefficiency of ship’s equipment and that crew was well trained and competent for this task. Lack of such evidence, facts showing negligence and incompetence, especially if confirmed by expert evidence will shift the balance (turn the scale) to the time charterer advantage.

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