Nicholas Woo, a partner with Richards Butlers, one of the largest law firms in London, in his exclusive contribution this week, advises cargo owners to know the characteristics of their cargo when shipping them.

Owners when fixing cargo for their vessels are sometimes more concerned with the freight they hope to earn from the fixtures than they are with the cargo that they have contracted to carry. 

Failure to properly understand the cargo that the vessel is carrying can have disastrous consequences, not only obviously for the safety of the vessel but can also have grave financial impact on the vessel’s earnings.

Richards Butler recently acted for the charterers of a vessel chartered on the IMOL 78 form. 

The cargo that was to be carried was molasses.  The vessel was delayed and the owners claimed a large sum in demurrage.  The charterers denied liability and an arbitration commenced in accordance with the terms of the charter-party.

The owners argued that the cargo’s unusually high viscosity was responsible for the slow discharge. 

The charterers, however, said that the problems had arisen from improper heating of the cargo and/or inadequacy or improper operation of the ship’s pumps.

The arbitrators accepted the charterers evidence that there was nothing unusual about the cargo. 

They held that, having regard to the terms of the charter and the obligations it imposed on them, then whether or not the owners actually knew the characteristics of the molasses, they must be taken to have accepted the risk of carrying such cargo. 

On the evidence, the arbitrators could not find anything to criticise about the capability of the pump but did conclude that it had been run at too high a speed at the outset which could lead to an increase in the viscosity of the molasses. 

They also concluded that the cargo was thought incorrectly, by those on board to be at the right temperature with the result that minimal heating was applied.

The arbitrators therefore concluded (by a majority) that on the balance of probabilities, the delay had not been caused by any characteristics of the cargo but by improper heating and/or improper operation of the ship’s pumps. 

The owners had failed to prove that the delay was not due to their fault.