In the context of an LNG timecharter, the Commercial Court considered in American Overseas Marine Corporation v Golar Commodities Limited “LNG GEMINI” [2014] the interpretation of  an Injurious Cargoes clause commonly found in the standard Shelltime form.

The clause in question reads as follows:

On the facts, AOM were not able to prove to the Court’s

Clause 30 
“No acids, explosives or cargoes injurious to the Vessel shall be shipped and without prejudice to  the foregoing any damage to the Vessel caused by the shipment of any such cargo, and the time taken  to repair such damage, shall be for Charterers’ account.”

The claimants, American Overseas Marine Corporation (AOM) were the managing owners of the vessel  “LNG GEMINI”. Golar Commodities Limited (Golar) had the vessel on timecharter for 60 days (15 days  more or less, with two charterers’ options to extend the hire for further such periods).

Golar ordered the vessel to proceed to and load a full cargo at the Cameron Terminal in Louisiana,  USA, intended for carriage to Senboko, Japan. Difficulties were experienced during loading in the  form of over-pressurisation suspected to arise from sediment in the cargo. Debris was found  clogging filters in the terminal’s loading arms. However, discharge in Japan proceeded without  incident and no debris was found. The vessel performed several other voyages over the course of the  timecharter, subsequent to the operations at Cameron, during which at various times debris was  found in the vessel’s spray pump strainers.

AOM subsequently took the vessel to a repair yard to undertake pre-planned works, where debris was  found in all of the vessel’s tanks. AOM claimed that this was sediment from the “Cameron cargo” and that it had damaged the vessel’s tanks and pumps. They  claimed from Golar the cost of expenses associated with and time spent on undertaking repairs and cleaning tanks at  the repair yard on the basis that the Cameron cargo had been an “injurious cargo” for the purposes  of clause 30.

In spite of the fact that clause 30 was in the same terms as clause 28 of the standard Shelltime  form, there did not appear to be authority on the meaning of “injurious to the vessel”.

satisfaction that any of the damage observed at the repair yard had been caused by the Cameron  cargo, or that the repairs and tank cleaning were necessary as a result of the carriage of that cargo. AOM  therefore sought to argue that a cargo could be “injurious to the Vessel” without actually causing  damage on the basis that if such cargo necessitated cleaning of the vessel’s tanks, it would be  “injurious” to the purpose of the vessel as an instrument of trade. In the alternative, a cargo  could be “injurious” even if it didn’t actually cause damage if it was of a kind that had a  tendency or propensity to cause damage.

The judge rejected the first argument and said that Clause 30 was directed solely to physical  damage. The clause expressly covered two types of cargo which might cause physical damage to the  vessel, acid and explosives, and the inference was that it also covered other cargoes that also  might cause physical damage. The clause was then concerned with repairs, which connoted physical  damage, and only provided an indemnity for time spent to carry out repairs, not for time lost by  other reasons, such as cleaning of tanks.

The judge accepted the alternative argument, but in this case AOM had failed to demonstrate that  the debris found in the tanks at the repair yard were from the Cameron cargo, or that it had  created a risk of damage to the vessel. The judge further noted that the industry did not appear to  share the view that particles in LNG cargo create potential dangers for LNG carriers. When SIGTTO1 recommended  that strainers be fitted in the manifolds of those ships, they did this for the purpose of  protecting receiving terminals, not the LNG carriers themselves. Accordingly, the Judge held that  Golar had not shipped an injurious cargo and they were not in breach of the charterparty. Further, AOM had failed to prove much of its damages claim. AOM’s claim was accordingly dismissed.