In Petroleum Oil & Gas Corporation of South Africa (Pty) v Fr8 Singapore Pte Ltd – Butterworths Law Direct 22.10.08 the Commercial Court heard a dispute arising out of the carriage of cargoes of gasoil and mogas under a charter on an amended BPVoy4 form. On discharge the cargoes were found to be damaged, which gave rise to a claim by Charterers under clause 12 of the charter which provided as set out below. Owners counterclaimed for demurrage.

Clause 12.1 provided that the Owners undertook that the vessel was equipped with a fully functional inert gas system (IGS) which was in full working order, and was or was capable of being fully operational on the date thereof and that they should so maintain the IGS for the duration of the charter.

Clause 12.2 provided that the vessel's IGS would comply with the relevant operational procedures.

Clause 20 provided that Charterers would be discharged from all liability in respect of any claim for, inter alia, demurrage unless a claim in writing had been presented to them, together with all supporting documentation.

The Claimant Charterers claimed that the damage to the cargo was caused by contamination of the gasoil cargo with vapour phase low boiling point gasoline components from the mogas cargo which resulted from the Defendant Owner's failure adequately to separate the vapour phases of the two cargoes from the common Inert Gas (IG) line. The Claimant submitted that that resulted from the unsatisfactory state of the vessel's IG isolation valves and/or control mechanisms and/or from the crew's inexperience and/or incompetence in handling two disparate cargoes. Accordingly, the Claimant contended that the Defendant was in breach of its duties as bailee and/or carrier for reward and/or to deliver the cargoes in the same good order and condition as they were in when shipped and/or in breach of the allegedly strict obligations imposed pursuant to cl 12.1 and/or 12.2 (and the provisions of the IMO Guidelines referred to therein) and/or (in so far as the same are relevant) its obligations under art III of the Hague-Visby Rules. The Claimant sought damages in the sum of approximately USD$65m. The Defendant counterclaimed for demurrage.

The Commercial Court held that:

(1) Clause 12 .1 referred to an 'undertaking', which was no more than a promise which might or might not import an absolute obligation. That undertaking set a standard no higher than that of due diligence.

(2) In the instant case, the cause of the damage had indeed been primarily a failure to care for the cargo. There had been a failure to use or maintain the equipment, the primary purpose of which at the relevant time had been the avoidance of damage to cargo.

(3) The proposition that a claim put in on time but in respect of part of which the accompanying documents were non-contractual, in this case in that the cargo pumping log had not been signed by the Terminal Representative, gave rise to a bar to the entire claim was a commercially surprising construction. The provision in question was not intended to apply to situations of STS discharge, but only to discharge at a terminal. The clause stipulating that claims must be accompanied by a pumping log signed by the terminal representative did not defeat the entire composite claim but only the constituent part thereof to which that document related.