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Speed and Consumption Warranty – Applicable in good and bad weather despite the performance being measured in good weather only

The Facts

The charter was on an amended NYPE form with the following clauses:

  1. “The owners stipulate that the vessel is capable in maintaining in good weather conditions and shall maintain throughout the periods of this charter party on all sea passages from seabuoy to seabuoy (speed will be determined by taking the total miles at sea divided by the total hours at sea as shown in the logbooks) a guaranteed average speed of 15.5 knots in good weather conditions (smooth seas, winds less than 3 on the Beaufort scale) on a guaranteed daily consumption of 35 long tons of best grade fuel oil having a maximum viscosity of 1500 secs , provided the vessel will not remain immobilized for lengthy periods in port(s) and / or anchorage(s).”

3 and 4: “The speed and consumption, as guaranteed by the owners in paragraph 2 above, will be reviewed by Charterers at the end of the duration of this charter party, and if it is found that the vessel has failed to maintain as an average during the period of the charter party the speed and or consumption stipulated above, the Charterers shall be indemnified by way of a reduction in hire in accordance with paragraph 1 above.

Similarly if it is found that the vessel has maintained an average during the period of the charter party a better speed and/ or consumption than those stipulated in paragraph 2 above, then owners shall be indemnified by way of increase of hire, such increase to be calculated in the same way as the reduction provided in the preceding sentence.”

Owners made a claim against the Charterers, alleging that the vessel had maintained a better speed and consumption during the charter party than that stipulated in paragraph 2.

Charterers argued that there was no binding obligation on them to compensate the owners for over performance and that the relevant provisions amounted only to an agreement to agree.

They also argued that the only recorded periods of good weather could found a claim.


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Charter Party Casebook