In London Arbitration 12/08 752 LMLN 3(2) the vessel was chartered on the NYPE form as amended for one time charter trip between ports in the Far East via South Africa to the east coast of South America and then back again on a similar route via Durban. On the return leg of the trip the vessel loaded a consignment of steel pipes in South America for carriage to China via Durban. The charterparty contained an additional clause which provided:

Clause 32 – Put back

If, during the currency of this Charter Party, the vessel puts back whilst on voyage or any loss of time caused by accident, breakdown accident … hire shall not be paid for the time so lost and the cost of extra fuel consumed and other proven and directly related extra expenses incurred shall be for Owners’ account until vessel is in same or equivalent position where deviation took place and voyage resumed therefrom.

On completion of loading of the pipe cargo, the master signed two certificates presented to him by the shippers, which certified that the cargo had been loaded and secured in accordance with a stowage plan under the master’s approval and supervision, and that no damage to the cargo or vessel had been caused. The shippers’ surveyor produced a report stating that the cargo had been adequately secured, in a seamanlike manner, and according to the prevailing custom of the trade. He presented the master with a “Loss Prevention Letter” which recommended daily inspections of the cargo, “adjusting as necessary to take up any slack which may occur as the cargo settles”.

After loading further cargo at three other South American ports, the vessel sailed for Durban. The pipes in tweendeck No 1 started shifting from side to side. The vessel returned to the last load port and re-stowed the pipes. The vessel then resumed her voyage to Durban.

The charterers withheld hire, relying on the off-hire clause.

The owners commenced arbitration proceedings, contending that the charterers had failed properly and carefully to load, stow, lash, secure and dunnage the cargo pursuant to their obligations under clause 8 of the charterparty. They denied that the vessel was off-hire because the failure of the stow was caused by the charterers’ breach of charter.

The charterers denied liability and advanced a counterclaim. They said that the master’s signature on the two certificates constituted an estoppel which precluded the owners from contending that the cargo had not been properly stowed. In any event, the stow was entirely suitable for the voyage. Even if that was wrong, the owners were in breach of Article III Rule 2 of the Hague Rules because they failed to prevent the failure of the stow.

It was held that the charterers’ estoppel argument would be rejected. The certificates contained no relevant representation. The mere approval by a master of a charterer’s proposed stowage arrangement (as opposed to positive intervention or the giving of positive advice) was not capable of giving rise to any estoppel so as, in effect, to transfer contractual responsibility for stowage from the charterer to the owner.

On the evidence, the charterers were in breach of their obligation under clause 8, which still applied at intermediate ports in circumstances such as arose in the present case. The stow was inherently incapable of surviving to its destination with the hatches closed all the way. That was sufficient to establish that the stow was unsatisfactory. Any stow bound for a distant discharge port with the likelihood of meeting adverse weather had to be made capable of surviving an ocean voyage without the hatches needing to be opened. The stow failed because of its own inherent unsatisfactory qualities. The owners were not in breach of Article III Rule 2.

The off-hire provisions did not apply because the failure of the stow and the need to return to the final load port for restowage was caused by the charterers’ breach of the charterparty. There was no “accident” within the meaning of clause 32. What happened was inevitable because of the negligent stow. The argument on clause 15 also failed. There was no off-hire event under either clause and no relevant loss of time.

Accordingly, the owners were entitled to the balance of hire claimed.