Time Charterparty
Oil Major’s Approval
Effective cause of major’s rejection
The third issue was related to the tanker vetting system and to the Ship Inspection Report (SIRE) system in the vetting review. The Owners’ position was that there could only be a Qualifying Rejection following a vetting review where the latest SIRE inspection report was the (or an) effective cause of the rejection. The Owners supported this view on the basis that in none of the 3 Qualifying Rejections found by the Arbitrator (as being relevant to the issue) was there a reference to the review of the SIRE Inspection Report being the (or an) effective cause of the rejection. The Charterers, in their turn, argued that it was sufficient to found a Qualifying Rejection if the latest SIRE Inspection report had been considered by the oil major as part of the process. The judge at paras 49 and 50 found that:
49. I do not accept the Owners’ argument that Charterers must prove that the latest SIRE Report was either the effective cause or an effective cause: neither the language of the clause nor the factual background found by the Arbitrator justify such a construction.
50. It is clear from §§21-22 of the Reasons that oil majors have recourse to the latest SIRE report as part of the information used to vet the vessel. This point was re-emphasised later in the Reasons. 45. …it is recognised that oil majors will have access to, and will always consider, a range of information when vetting (including earlier SIRE reports in order to assess whether the latest report shows an improvement or decline in standards); and, 104. …It is common ground on the expert evidence that oil majors look at the history of SIRE inspection reports as part of the vetting process in order to identify positive and negative trends.
Clause 50(3.2) directly attributes off-hire and cancellation measures to the failure due to Owners/Vessel’s reasons:
3.2 HOWEVER, SHOULD BE VESSEL BE FAILED ON THREE (3) CONSECUTIVE OIL MAJOR VETTING REVIEWS/INSPECTIONS DUE TO OWNERS’/VESSEL’S REASON
On the one hand the Arbitrator found at paras 45, 104 that ‘oil major will always consider’ and ‘look at the history’ and on the other hand he found at para 17 that, ‘negative vetting decisions are normally communicated to the party proposing the business without reasons and without the vetting company separately informing the operator. Thus a vessel operator will usually not know why the vessel has not been accepted.’ In short, an oil major just considers and checks the history of SIRE inspection reports but no finding was made that negative decision was based on these considerations and checks.
Therefore it is not completely clear on what particular ground any failure attributable to the Owners’/Vessel’s side has been established. All the Arbitrator’s findings were based on the balance of probabilities, that three last rejections were made because an oil major ‘probably referred to the latest SIRE report,’ or ‘probably did review the SIRE report,’ and ‘would have considered the latest report…’ There is quite a number of ‘probable causes’ which any major takes (or may take) into consideration during screening process, some of them, naturally, shall influence major’s decision whether tocharter the tanker vessel or not, but in case of rejection these ‘probable causes’ may not necessarily fall under ‘OWNERs’/VESSEL’S REASON’ requirements. Especially so, that if in case of physical inspection, at least the inspector’s findings are available for evaluation to both, the owners and the charterers, but in case of REVIEW no actual ground for rejection is ever known.
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