Vigour Shipping SDN. BHD. v. P and S International, Inc. et al

Filing 16

Order Confirming Foreign Arbitral Award. Signed on 09/30/2011 by Judge Anna J. Brown. See attached Order for full text. (bb)

Todd A. Zilbert, OSB No. 89144
Email: [e-mail]
Robert I. Sanders, OSB No. 70125
Email: [e-mail]
Wood Tatum
6915 SW Macadam Avenue, Suite 115
Portland, OR 97219
Telephone: [phone]
Facsimile: [phone]
Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION

VIGOUR SHIPPING SDN. BHD.,
Plaintiff,

v.

)
)
)
)

)

)
P AND S INTERNATIONAL, INC., an Oregon)
corporation, and PAUL E. LEWIS, an Oregon)
resident,
)
)
Defendants.
)

Case No. 3:11-CV-842-BR
IN ADMIRALTY

iPR~)}} ORDER CONFIRMING
FOREIGN ARBITRAL AWARD

THIS MATTER came before the Court on September 28,2011, for a hearing on the
motion of Plaintiff, Vigour Shipping Sdn. Bhd., for an order (1) confirming a foreign arbitral
award issued in its favor against defendant P and S International, Inc., (2) granting judgment on
the confirmed award, and (3) authorizing discovery in aid of execution. Todd Zilbert of Wood
Tatum appeared on behalf of plaintiff. Neither defendant has appeared, but the Court received
two letters submitted by M. Christie Helmer of Miller Nash, LLP, attorneys for defendant P and

Page 1 - ORDER CONFIRMING FOREIGN ARBITRAL AWARD

WOOD TATUM
6915 SWMacadamAve. Suite 115

Portland, Oregon 97219
Telephone: (503) 224·5430

S International, Inc., in the foreign arbitration, advising the court that defendants would not
appear and would not oppose plaintiff s motion.
The Court heard argument and reviewed plaintiffs submissions and the correspondence
of Ms. Helmer. It appears that plaintiff is entitled to an order confirming the foreign arbitral
award, but that the record is insufficiently developed to grant judgment as to fewer than all
patiies pursuant to Rule 54(b), or to authorize discovery pursuant to Rule 69(a)(2), of the Federal
Rules of Civil Procedure. Therefore,
IT IS HEREBY ORDERED that:
1.

Plaintiffs motion for confirmation of foreign arbitral award is GRANTED. A

copy of the confirmed award is attached as Exhibit 1 to this Order.
2.

Plaintiffs motion for an order granting judgment on the confirmed award is

DENIED, with leave to renew.
3.

Plaintiffs motion for an order authorizing discovery in aid of execution is

DENIED, with leave to renew.
4.

Plaintiff shall submit a status repOli on or before November 3, 2011.

').f\ '/;'--/

DATED this _o_v day of September, 2011

a/i11~1'-- 9h!z111

t

)

The Honorable Anna J. Brown
UNITED STATES DISTRICT JUDGE

SUBMITTED BY:

/s/ Todd A. Zilbert
Todd A. Zilbeli, OSB No. 89144
WOOD TATUM
Telephone: [phone]
Attorneys for Plaintiff

Page 2 - ORDER CONFIRMING FOREIGN ARBITRAL AWARD

IVOODTATIJM

6915 SW Macadam Ave. Suite 115
Portland, Oregon 97219
Telephone: [phone]

CERTIFICATE OF SERVICE
I hereby celtify that I served the foregoing PROPOSED ORDER CONFIRMING
FOREIGN ARBITRAL A WARD on the following parties:

M. Christie Helmer
Miller Nash LLP
III SW 5th Ave Ste 3400
Portland, OR 97204
by E-mail a true and correct copy hereof to said parties on the date below:
DATED this 29th day of September 2011.

WOOD TATUM
/s/ Todd A. Zilbert
Todd A. Zilbert, OSB No. 89144
Robelt 1. Sanders, OSB No. 70125
6915 SW Macadam Avenue, Suite 115
Portland, Oregon 97219
Telephone: [phone]
Fax: [phone]
E-mail: [e-mail]
[e-mail]

Page 3 - ORDER CONFIRMING FOREIGN ARBITRAL AWARD

WOOD TATUM
6915 SWMacadamAve. Suite 115
Portland, Oregon 97219
Telephone: (503) 224·5430

_.

__ ._--_.__ ..•. - -

m.v. "ECO VANGUARD"

Charter Party dated Auckland 14th July 2010

FINAL ARBITRATION AWARD

Exhibit 1

1 of 17

IN THE MATTER OF THE ARBITRATION ACT 1996

ANQ
IN THE MATTER OF AN ARBITRAtiON
BETWEEN
Vigour Shipping Sdn Bhd
of Malaysia
Claimants
(Owners)

P and S Internationallne.
of Dallas, Oregon, USA
Respondents
(Charterers)

m.v. "Eco Vanguard"
Charter Party dated Auckland 14th July 2010
FINAL ARBITRATION AWARD
WHEREAS:
1. By the terms of a voyage fixture dated 14th July 2010 on a BEIZAI (AMERICAN

LOGSILUMBER) 1991 Charter Party form (Amended March 11995), with amendments
and additions (hereinafter refened to as "the Charter ParIy"), the Claimants (hereinafter
refened to as "the Owners") chartered the Malaysian flag motor vessel "Eco Vanguard"
(hereinafter refemd to as "the vessel") to the Respondents (hereinafter referred to as "the
Charterers") for a voyage from Eureka, USA to Changshu PRC to carry "Afitll and
complete cargo oflogs (debarked)" with lay.d.ys and cancelling ;251h Julynth August 2010.
The .greedrate ofneight was "U8$1,330,000 lumpsum FIOSI' basis 1:1 for China
Discharge".

Exhibit 1

2 of 17

2. In the event,the vessel loaded the cargo in Eureka between 28'" July and 17'" September 2010
and discharged in Changshu between 8th October and 23rd October 2010.
3. Disputes arose between the parties regarding the Owners' claim for demurrage aoorued at
Eureka ofUS$471,787.98 and demurrage accrued at Changshu, alternatively damages, in the
amount ofUS$289,400.11.
4. The BEIZAI Charter Party provided for arbitration in London with the following c1auses:" 17. Place o.fArbitratio.n (optional) (Cl. 31) LONDON"
"31. Arbltratlo.n (See also. Clause 55)"

"CLAUSE SS

ARBITRATION

Any dispute arisingfrom this Charter shall be submitted to. arbitratlo.n held in Lo.ndo.n in
acco.rdance wJth IhepJ:o.visions ofth~.MarltlmeArhitratJ()}J l!ules_ofJbe_UI11~dXilJg<lo.w,_al1<1~_ _ __
the mvard given by Ihe arbitrators shall be final and binding on bo.th parties. Each party shall
nomlnale an arbitrator. If two. arbitrators properly appointed shall not agree they shall appoint
an umpire whose decision is final. The arbitralors shall be commercial men conversant wilh
shipping and atto.rneys,' barrlslers. solicitors and legal men shall be excluded. Any claim must
be made In writing and claimant's arblh'alor appointed within Ihree months ofco.mpletlo.n of
discharge o.lherwise all claims shall be deemed 10 be waived. "
"CLAUSE56

LAW

This Charlel' Party to. (sic) governed by English Law. ..
5. As recorded in Clauses 17, 31, 55 and 56 of the Charter Party, as above, London was chosen.s
the place of arbitration .nd the Arbitration Act 1996 and lhe relevant statute apply to this
dispute. In accordance with Section 3 of the Act, tho seat ofthe arbitration is in England and the
arbitration proceedings are govemed by English law.

2

Exhibit 1

3 of 17

6. The Owners were represented in these arbitration proceedings by solicitors in Hong Kong
(hereinafter referred to as "the Owners' solicitors"). The Charterers were represented by
solicitOillin Portland, Oregon, (hereinafter referred to as "the Charter=' solicitors').
7. Disputes having arisen, the Owneill appointed me, the undeilligned Colin Peerless of Bywater
House, Littley Green, Chelmsford; Essex CM3 lBU on 17th Novomber 2010 as the arbitrator
nominated by them in respect of any and all disputes arising from the Charter Party. The
Owneill notified the Chartereill of my appointment by fax on 19th November 2010 and
confinned that I had accepted that appointment on curren! LMAA Terms. The Owners invited
the Charterers to agree tbat r act as sale arbitrator in the reference "foiling which they should

appoint their own arbitrator within 14 days oftoday's date pursuant to Clause SS and Section
16 ofthe ArbltrallonAct 1996. "

8. The Chartereill failed and/or refused to appoint their own arbitrator within 14 days and
therefore, on 16th Decemb~r 201 0, the Ownem' solicitOill sent the Charterers a further notice by
fax pursuant to Section 17 of the Arbitration Act in which they stated "Therefore, please take

notice, pursuant fa Sect/on 17 ofthe Arbltrat/on Act, thai:
(a) Unless [the Charterers] appoint their own arbitrator, and notify us ofthat appointment,
within 7 clear days aftoday's date, our clienls will appoint their own arbitrator, Mr
Peerless, as sale arbitrator in the reference.
(b) In Ihe event that Mr Peerless Is appointed sale arbitrator, his award will be binding on

[the Charterers] as ifhis appointment had been made by agreement. ".
9. On 1Oth January 2011, the Owners advised me that "Despite this notice, 7 clear days, and a

./urther short period have elapsed without [the Charterers] having appointed their own
arbitrator. In the Circumstances, we hereby appoint you as sale arbitrator in the reference
pursuant to our clients' rights under secl/on 17(2) a/the Arbltrat/on Act 1996. ".
10. On the same day, 10tli January 2011, I accepted the appoillbnent as sole arbitrator ill the

reference under section 17(2) of the Arbitration Act 1996 and the current LMAA Tenn •.
11. On 301h April 2011, bye-mail, the Owners' solicitors served their clients' Claim Submissions,
with supporting documents, and these were copied to the Charterem.
3

Exhibit 1

4 of 17

----->.---

12. Also on 30th April 2011, by .-mail, I acknowledged the Claim Submissions and, by a copy of
the same message, notified the Charterers, inter alia, as follows:-

"In accordance with the LMiJA terms, which govern this reftrenee, you should serve your
Deftnee and Counterclaim, if any, within 28 days oflhe service of the Claim Submissions. I
therefore set the date for such service as close ofbusiness in London on Monday 3tf> May
2011. Should you require any additional time for such service, you should ask me for an
extension BEFORE 30th May 2011. Jfyou need any assistance with the LMAA procedure
governing this arbitration, please do not hesitate to ask me. ". I also assured the Respondents
that, although I was the sole arbitrator, that did not prevent them for taking part in the refercnce
and I urged them to do so. I also confinned that LMAA arbitrators always act impartially,
in-cspcctive of who appoints them, and that any eventual Award will be based entirely on the
merits of the submissions served before me.
13. On 24th May 2011, I received an e-mail from solioitors in Portland, Oregon, [hereinafter
referred to as "the Charterers' solicitors"], copied to the Owners' solicitors, explaining that tbey
were now representing the Charterers in this reference and that although they had received
some of the materials in advance, they had only been able to meet their clients on 20th May.
They asked for an extension of time to serve the Chartei-ers' Defence until 30th June 2011.
14. In response to this message, the Owners' solicitors sent'an e-mail on the same day, copied to
the Cbarterers' solicitors, objecting to the length of the extension requested and complaining
that the Charterers had known about the claim for several months but only just appointed their
solicitors. Nevertheless, they were willing to grant an extension of ".lay 10 days".
15. I replied to these messages on the same day expressing my concern at the need for an extension
in view of the length oftime since the elaim bad arisen. Howevel', I made an ORDER for
service of the Charterers' Defence and Counterclaim, ifany, to be served by close of business
in London on Friday 17 th June. I further warned the Charterers' solicitors that any failure to
comply with tbe date of this extension was likely to be followed by a Final and Peremptory
Order of shOlt dm.tion.
16. On 31" May, the Owners' solicitors sent an e-mail totheCharterers.solicitol.S in which they
pointed out that the C~arterers had only referred to a portion of the demulTage at the
4

Exhibit 1

5 of 17

.-----..- - - -

discharging port and suggested that it was apparent that the Charterers did not dispute the
demurrage incurred at the loading port. They further asked if there was any reason why the
Tribunal should not make an interim final award in relation to the demurrage at the loading port
stating that "In the absence 0/an compelling explanationfrom P & S [the Charterers] as to why

this should not be the case, I ask that the Tribunal move to an interim final award In our clients
(sic) favour wilh respect to the loadport demUlmge which Is due and owing. ".
17. In response, also on 31" May, I asked the Charterers' solicitor for their comments on the above
application for an interim final award and they replied on 3nl June 2011 that they had been
unable to obtain all the information they required from their clients and could not therefore
confirm that the loading port demurrage was undisputed. They also added that "We do not

disagree that, to the extent appropriate under the Rules, an Interim Final Awal'd may be
entered on Claimant's evidence separately submitted or on Respondent's admission when It is
In a pos/tlon to do that. ".

18. I replied on 411> June, with a copy to the Owners' solicitors, by pointing out that the reference
was commenced in November 2010 and that I would have hoped that the Charterers had found
tbe time to check the Owners' demurrage calculations. However, r accepted that as service of .
the Charterers' Defence was due by 17 th June 2011, then I was prepared to await that service
before making • decision about the Owners' application for an Interim Final Award.
19. On 17'" June 2011, by e,mall, the Charterers' solicitors stated that "While P and S [the
Chat1ererslftrmly believes that a port/on o/the demurrage is not in/act owing (in part/cula/; a

portion o/the demurrage at the discharge port), It has determinedfor business reasons not to
present a De/ence. Accordingly, one will not be presented ".
20. The Owners' solicitors responded by ...mail on the same day pointing out that the delays at the
discharging port were incurred by reason of their clients having to exercise their rights of lien
under the Charter Party in order to obtain payment of freight owing to them. They asked that
the Tribuna! should proceed to its award for the full amounts claimed, plus interest and costs.
21. I am satisfied that the Charterers were given every opportunity to submit a Defence to the
Owners' claim but, for the reasons given above, chose not to do so,

s

Exhibit 1

6 of 17

22. I replied to the parties bye-mail on the same day, stating that "In the absence ofany Defence, I

shall now proceed to my Award in this reference on the basis ofthe submissions and documents
now before me, 10 Ihe exclusion ofall others... ".

lREASONS FOR THE FINAL ARBITRATION AWARDl
23. The Owners' claim arose out ofa Charter Party for a voyage from Eureka, USA to Chang"hu in

the Peoples' Republic of China in July to October 2010. The vessel loaded a cargo of logs
(debarked) but the Owners alleged that the Charterers exceeded the Iaythne allowed to them,
both at the loading port and the discharging pOli. Tho Owners' claim was for demurrage at both
ports in tile following amounts:At Eureka, demurrage amounted to US$471,787.98 and, at Changshu, the Owners claimed for
demurrage, alternatively damages in the sum ofUS$289,400.11.1n addition, the Owners
claimed interest On all the sums awarded, together with further or alternate relief and costs.
24. The Charter Party contained, inter alia, the following clauses:Box 11

"Freight rate and melhod ofpayment, currency, elc., (CI. 3)
US$1,330, 000 lumpsum FIOST basis 1: 1for China Discharge"

Box 12.1 "Total laytime for load And dlsch. (CI. 4)

16 days all purposes pel' wealher working day Sundays and holidays excluded unless
used"

Box 13

"Demurrage rate (CI. 8)
US$18,000"

Box 18

"Sh;pbroirel' and broirerage (CI. 28)
1.25% Addcom......... Charlel'ers have privilege to deduct their address commission
from their freighl payment. "

(Clause) "3. Freight (also see clause 67)

Freight shall he prepaid by the Charlerers as specf/led tn Box 11 in cash, without
discount alld non-returnable. Freight shall be deemed earned upon completion of
loading, Ihe vessel and/or cargo lost or nollosl. ".
6

Exhibit 1

7 of 17

(Clause) "4. Laytime (See also Clause 35)

(a) TOlallaytimefor loading and discharging
The cargo shall be loaded, slowed, lashed, ,mlaehed, trimmed and dischargedwilhln
weather working days of24 consecul/ve hours as staled In Box 12.1 Sundays and
Holidays excluded e'XBeJ9Ied, unless used at the loading port(s), and at the
discharging port(s) Sundays and Holidays excluded "*6ep1ed unless used. If used,
actual working time shall count as layl/me. Setting up amid8WIl slanchlons and
catwalk, and putting dunnage shall counl as layl/me. "
(Clause) "5. Commencement oflaytime (See also Clause 35)

1) Notice afReadiness at the loading or dlschargingport shall be given to the·
Charterers or their nominees stated In Box 9.1 or Box 9.2 respectively. [Boxes
9.1. and 9.2 referred to Clause 35)
2) Laytime shall commence at 1 p.m. /fnotice ofreadiness to load or discharge is

given at or before noon and at B.a.m. nexlworklng day /fnol/ce given alar
before 5 p.m. whether in berth or nOI. "
(Clause) "B. Demurrage, Despatch Money

Demun·age shall be paid 10 the Owners at Ihe rare as agreed In Box 13 per day of24
running hours 01" pro rala jar any part thereof, payable day by day, jar all lime used
In excess ojlayllme at loading or dischargingport(s) .... "
(Clause) "23. Lien

The Owners shall have a lien on the cargo jar all freight and all other expenses in
relation to the transpori, aeadfrelght. demurrage, damages]or detention, general
average and salvage. The Charlerers shall remain r..ponsiblejor above items to
such extent only as the Owners have been unable to obtain paymentthereofby
exercising the lien on the cargo. ".
(Clause) " 27. Agency (See also Clause 35)

The Vessel shall be consigned to Ihe Gh"'«JrI}},{J Owners' agents both at loading and
discharging ports. "
7

Exhibit 1

8 of 17

(Clause) "28. Brokerage

A brokerage commiss/oll at the rate stated in Box 18 Oil theftelght and demurrage
earned is due to the brokers mentioned In Box 18, by the Owners. "
"CLAUSE 35

NOTICE OF READINESS AT WAD AND DISCHARGE PORTS

...... Master 10 tender Nolice ofReadiness (NOR), WIBON WCCON WlFPON and
shippers Ireceivers 10 accept NOR upon vsls arrival at all porls. NOR 10 be tendered
within Office hours.
At Load Pori, Office hours are 0900-1700 HRS MON-FRJ, 0900-1200HRS SAT. No
office hours on Sunday and holidays.
AI Discharge Port, Office hours are 0900-1700HRS MON-FRJ, 0900-1200HRS SAT.
No office hotlrs on Sunday and holidays..... "
"CLAUSE36

DEMURRAGE

Demurrage monies /fany to be setlled and paid/OJ' in cash in US cwnncywithin 30
days ofreceipt ofsupporting documentallon.
Should vessel be on demurrage by Ihe time Ihe vessels (sic) arrives at the next port,
then time on demurrage continues on vessels (sic) considered arrival. "
"CLAUSE SO

COMPLETION OF LAYT.lME

Laytimeldemurrage at Laylime/demurrage (sic) at loadingport(s) to end on
completion-oflashlng. "
"CLAUSE 67

FREIGHT PAYMENT alld BILLS OF LADING

Freight to be 100% prepaid Into Owners (sic) bankaccounl within 3 banking days
(free ofbank charge) after complelion ofloading. Bills o/ladingwlll not be released
until the ji'elghl payment is received In the Owners (sic) bank account. Bills to be
marked 'Freight paid as per Charter Party' ".
25. The vessel arrived at lbe Eureka Pilot Station at 12.00 hours on 28th July 201 0 and tendered
Notice of Readiness at lbe same time, bye-mail, Apparently because of a shortage of cargo, lbe
vessel did not commence loading until 09.18 hours on 6th August and, after various delays,
completed loading at 19.00 hours on 17'h September 2010.

8

Exhibit 1
9 of 17

----.----

26. The vessel then proceeded to Changshu where she dropped anchor at the C.J.K. Anchorage at
07.45 hours on 8'h October 2010 and tendered Notice of Readiness at the same time.
Discharging was completed at 14.30 hours on 23rd October 2010 and the vessel sailed from
Changshu at 08.37 hours on 24'h October 2010.

THE LOADING PORT
27. Although the vessel had arrived at the Eureka Pilot Station at 12.00 hours on 28'h July, she did
not shift to the loading berth, Fairhaven Tennlnal, unti113.26 hours on 5'h August. The
Stalement of Facts, drawn up by General Steamship Corporation of Emeryville [who were
apparently the Owners' port agents in accordance with Clause 27 above), showed thatthe
loading was interrupted for a number ofreasons until completion on 17lh September and,
according to the Owners, the allowed laytime of "16 days all purposes" allowed in Box 12.1
was considerably exceeded.
28. The Owners claimed that the Charterers had exceeded the allowed laytime of 16 days all
purposes by 32.1681 days at the loading port, resulting in demurrage at the agreed Charter Party
rate ofUS$18,OOO per day and pro rata, of US$579,025.80. After allowing for the deduction of
1.25% address conunission (as per Box 18 of the Charter Party, as above) and funds of
US$IOO,OOO received on 23rd September 20'10, the amOlmt claimed as outstanding by the
Owners was US$471,787.98.
29. I have calcuIated the laytime and demurrage from the Statement of Facts, drawn up by the port
agents, independently of the Owners' calcuIations and, upon checking the Owners' Laytime
Statement, FIND them to be correct. I have therefore awarded the Owners the amount of their
claim for loading port demurrage ofUS$471,787.98.
30. It appears that problems arose in connection with the payment of freight and the Bills of
Lading. Even though the freight was due "within 3 banking days (free o/bank charge) after

completion a/loading. " (ClalWe 67), the freight was not paid on or before this date of23,d
September 2010. In fact, by 6'" October 2010, only two days before the vessel's arrival at the
discharging port, the Owners claimed that they had still not received either the freight or the
loading port demUl1'8ge. 9

Exhibit 1
10 of 17

- - ... ----_ .. - -

31. Pursuant to their rights under Clause 67, as above, the Owners had retained the original Bills of
Lading numbered BV 10081 000 I, BV! 008! 0002 and BV! 00810003 pending payment and
receipt of the freight.
32. In addition, the Owners became aware that, whilst they held the original Bills of Lading, a
further unauthorised andlor fraudulent set of Bills of Lading was being circulated. It was
noticeable that whilst the Original Bills of Lading were marked "FREIGHT PAID AS PBR

CIP", the unauthorised set were marked "FREIGHT PREPAID".
33. By fax and e-mail on 6th October 2010, the Owners notified the Chatterers that the vessel would
shortly be arriving at the dib'Charglng port, Cbangshu, and that they were concerned that neither
the freight nor the loading polt demurrage had been paid. They warned the Charterers that

"Should Owners not have received payment ofthe freight and demurrage before the vessel
reaches Changshu, Owners hereby give notice that they Intend to exercise their rights ofUet!
over the cargo. ". They also notified the Charterers that they were aware that celtain Bills of
Lading that purpolted to be the original Bills of Lading were circulating and confirmed that

"Owners have l!!!!. authorised the release or issue ofany Bills ofLading pursuant to the terms
ofthe Voyage Charier, or In respect ofthe cargo currenlly onboa/'d ". Th. Owners stated in the
message that "It is ill the interests ofall concerned that prompt payment ofthe freighl and

demurrage be made. We Iherefore lookforwal'd to receiving your confirmation in Ihis respect
as a matter ofurgency.

II.

34. The Charterers responded on the same day, bye-mail, in wldeh they confirmed that "The b/I in

question ofcourse was only for the pUlpose ofbanking and as Ihe agenlsibrokers/end
users/buyers were aware of, owners bit's would replace any and all before discharge began.
This sort ofsyslem had been done many times for many million "sd and Is accepte.d by
negotiating banks.... To summarize, I askfol' owners to please abide with the above, send Ihe
"Formal Nole" as requested by Ihe buyer and waillhrough tomorrow. ". It would appear that
the "Formal Note" requested from the Owners would state that "once oceanfrelghl is paid on

the Eco Vanguard, discharge may begin. ". The Charterers furth.rwent on to state that "Of
course, everything at this minute depends on buyer paying so payment is forwarded 10 owners
for the oceanfrelght Ifthai Is nol done, then Ihere is not much use in talking about demurrage
payment or foture business ofwhich the shipmenl was set up to accomplish and even under
Ihese crazy problems, is still available for the fottlre. ".
10

Exhibit 1
11 of 17

------------------------------------------

35. On 8th October 2010, the Owners sent a further e-mail to the Charterers in which they stated
that "Owners conjlrm thaI they intend acting in accordance with their rights and obligations

under the Voyage Charter and in respect ofthe cargo. In particular, Owners conjlml:
(I)

That they have issued Bills ofLading as requested; and that

(II)

They will release these Bills ofLading, and will deliver the cargo, as soon as they

receive payment ofthe outstanding sums due to them. ".
In conclusion, they reserved all of Owners' rights under the Charter party and in respect of the

cargo.
36. As noted above, when the vessel arrived at Changshu at 07.45 hours on 8th October 2010,
neither the freight nor the loading port demurrage had been pald. In consequence, the Owners
gave notice and exercised a lien over the cargo on board "pursuant to their rights under Clause

23 ofthe Charterpal'/y. ". The Owners submitted a copy of that Notice of Lien, sent to the
Charterers on 10th October 2010, and further stated that "Owners require that payment ofthe

above mentioned amountsfor freight and demurrage [freight in the sum ofUS$I,313,375.00
and demurrage'in the sum ofUS$479,02S.80) be made Immediately to their bank account.

Should Owners not receive payment ofthe abovementioned amountsfor ji'elght and demurrage,
as well as demurrage that has subsequently accrued, Ihey will be entitled to apply to the
Chinese Courts for the sale ofthe cargo. Irrespective of/heir rlghls offlen 10 obtain payment,
Owners are nol obliged to release the cargo fa any receivers in Ihe absence ofIhe original
authorised Bills ofLading. ".
37. It was obvious to the Tribunal that any delay that occurred during discharge at Changshu was
entirely due to the Charterers' failure to pay the freight In accordance with the terms of the
Charter party and thus the Charterers were liable for any such delay.
THE DISCffARGING PORT

38. The vessel arrived at CJI( anchorage Changshu at 07.45 hours on 8th October 2011 and
tendered Notice ofReadlness at the same time. Although the Statemenl of Facis submitted by
the Owners was not entirely clear, it appears that the vessel shifted anchorages agaln On 18"
October. She then shifted from the anchorage to the berth on 20tb October, commenced
discharge at 18.36 hours on the same day and completed discharga at 14.30 hours on Saturday
11

Exhibit 1
12 of 17

23"' October. As the vessel was already on demurrage on arrival at the discharging port, in
accordance with Clause 36, as above, the lime counts from arrival.
39. As with the loading port, I have calculated the demurrage from the Statement of Facts, dmwn
up by the port agents, independently of the Owners' calculations. However, upon checking the

Ownere' Laytime Statement, I disagreed with their calculations on two points.
a) Whilst the sWfting between anchorages continues to count as demurrage, the time spent
shifting from the anchorage to the berth does not count. Clause 52 below covers this point.
"CLAUSE 52

VESSEL'S SHIFTING

Shiftlngfrom quarantine/place ofwaiting or pilot anchorage area to loading or discharging
berth to be for Owners' account and lime not to count. However, costs and lime used for
unusual shifting, hauling alongside dock and or re-shiftlng requested by Charterers after the
Vessel has berthed to befor Charterers (sic) account. ".
There was no indication in that clause that "lime not to count" only applied to laytime and it
must therefore also s\lspend time on demurrage. However, I consider that the shifting time
between anchorages was "unusual" shifting and should cOlmt as time on demun·age.
b) The Owners' laytime stalement gives lhe time for completion of discharge as 14.30 hours on
Sunday 24th October whereas the Laytime Statement of Facts prepared by the port agents shows
that disc\1arging was actually completed at 14. 30 houre on Saturday 23'; October 2010. In fact,
the vessel sailed from Changshu at 08.37 hours on 24'b October 2010.
40. Consequently, I have reduced the Owners' claim for demurrage at the discharging port by these
two items and FIND that the Owners are entitled to gross demurrage at Changshu of
US$274,100AO which, less the 1.25% address commission allowed for in the Cbarter Party,
amounts to US$270,674.14. I have so awarded.
41. Appendix' A', which is attached to and forms part of this Award, shows my demurrage
calculations for the discharging port.

12

Exhibit 1

13 of 17

- - - - - - - - - - - - - _ ....

__

..._ - - - - _ ..

_-

---------

42. My findings result in demurrage being due to the Owners in the amount ofUS$742,462.12 and
namore.
43. In addition to their claim above, the Owners claimed:-

"(c) Interest on all sums awarded;
(d). Further or alternallve relief; and
(0) Costs."

They also asked "that the Tribunal exercise its dlscrellon to award interest at a rate of USD

Prime rate, plus 1% per annum, compounded with quarterly rests. "
44. The Arbitration Act 1996 Section 49 gives the Tribunal the power to award simple or
compound interest from such dates, at such rates and with such rests as it considers meets the
justice ofthe case. Tho Tribunal found tlmt the rate of interest appropriate in this dispute was
3.00% per annwn and pro rat., compounded on a quarterly basis, from 22'" November 2010
(being 30 days after completion of discharge) until the date ofpaymeut.

45. There being no reason to depart from the general rule that costs should follow the event, I have
also awarded the Owners their costs on the standard basis.
NOW I, the undersigned Colin Peerless, having taken upon myselfthe burden ofthls reference

as sole arbitrator and having considered the written evidence and submissions made to me DO
HEREBY MAKE, ISSUE AND PUBLISH this my FINAL ARBITRATION AWARD as

follows:Al I FIND AND HOLD that the Owners' claim succeeds in the sum ofUS$742,462.12 and no

more.
B) I AWARD AND DIRECT that the Charterers shall forthwith pay to the Owners the sum of

US$742,462.12 (Seven Hlwdred and Forty Two Thousand Four Hundl~d and Sixty Two United
States Dollars and Twelve Cents), together with interest thereon at the rate of3.00% per annum
and pro rata, compounded on a three monthly basis from 22'd November 2010 (being 30 days
after completion of discharge) until eventual payment by the Charterers.

13

Exhibit 1
14 of 17

-.•.----.---....

-

..

----.---.--~-----.-----,

C) I FURTHER AWARD AND DIRECT that the Charterers shan bear and pay their own and the
Owners' costs of the reference (the Owners' costs of the reference to be determined by me if
not ageeed, for which determination I hereby reserve my jurisdiction) and that the Charterers
shall bear and pay the costs ofthis my Final Award in the sum of£3,650.00 (Three Thousand
Six Hundred and Fifty Pounds Sterling), inolusive of my fees, interlocutory charges aud
disbursements PROVIDED, however, that if, in the first i1llltance, the Owners shall have paid
all or any part ofthe costs ofthis my Final Award, they shall be entitled to au innnediate
reimbursement by the Charterers of the sum so paid, together with interest thereon, calculated
at the rate of 3.25% per annum and pro rata, compounded on a three monthly basis, calculated
from the date of payment lmtil the date of reimbursement.

GIVEN lUlder my hands this ..

;':4?!~day Of~...2011.

14

Exhibit 1
15 of 17

..-.--------.-.- .. -.-.-•....

---.---~.-----.-

.....-

----

APPENDIX 'A'
m.v. "Eeo Vanguard" - C/P 14.7.2010 -

Laytime Statement - CHANGSHU

Discharging laytime allowed - Vessel arrived already on demurrage
Demurrage US$18.000 per day and pro rata
CHANGSHU
Arrived Pilot Station
NOR tendered
Pilot on board
All fast alongside
Commenced discharging
Completed discharging
Date.

07.45 hours Friday 8th October 2010
07.45 hours Friday 8th October 2010
16.03 hours Wednesday 20th October 2010
17.20 hours Wednesday 20th October 2010
18.36 hours Wednesday 20th October 2010
14.30 hours Saturday 23rd October 2010

Time.
07.45 - 24.00
00.00 - 24.00
00.00 - 24.00
00.00 - 24.00
00.00 - 24.00
00.00 - 24.00
00.00 - 24.00
00.00 - 24.00
00.00 - 24.00
00.00 - 24.00
00.00 - 24.00
00.00 - 24.00
00.00 - 16.03
16.03 - 17.20
17.20 - 24.00
00.00 - 24.00
00.00 - 24.00
00.00 -14.30

Demurrage

00-16-15
01 - 00 - 00
01 - 00 - 00
01 - 00 - 00
01-00-00
01 - 00 - 00
01 - 00 - 00
01- 00 - 00
01 - 00 - 00
01 - 00 - 00
01 - 00 - 00
01 - 00 - 00
00 -16 - 03
00-00-00
00-06·40
01 - 00 - 00
01- 00 - 00
00 -14 - 30

00-16-15
01 - 00 - 00
01-00-00
01 - 00 - 00
01-00-00
01 - 00 - 00
01 - 00 - 00
01-00-00
01 - 00 - 00
01 - 00 - 00
01 - 00 - 00
01 - 00 - 00
00 - 16 - 03
00 - 00 - 00 Shifting
00-06-40
01 - 00 - 00
01 - 00 - 00
00 - 14 - 30 Camp. disch.

15-05-28

8th Oct Fri
9th Oct Sat
10th Oct Sun
11th Oct Mon
12th OctTue
13th Oct Wed
14th Oct Thur
15th Oct Fri
16th Oct Sat
17th Oct Sun
18th Oct Man
19th Oct Tue
20lh Oct Wed
20th Oct Wed
20th OclWed
21,1 OctThur
2200 Oct Fri
23rd Oct Sat

Time Used

Remarks

15-05-28 Demurrage

Total Demurrage 15 days 5 hours and 28 minutes

=
=
=

@ US$18,OOO.00 per day and pro rata
Less 1.25% address commission
Due to the Owners

US$274.100.40
US$

3,426.26

US$270,674.14

15

Exhibit 1
16 of 17

-------------

IN THE MATTER OF THE ARBITRATION ACT 1996
AND
IN THE MATTER OF AN ARBITRATION
BETWEEN

Vigour Shipping Sdn Bhd
of Malaysia
Claimants
(Owners)

P and S Internationallne.

ot Dallas. Oregon, USA
Respondents
(Charterers)

m.v. "ECO VANGUARD"
Charter Partv dated Auckland 14TH July 2010

FINAL ARBITRATION AWARD

Exhibit 1
17 of 17