The Conoco Weather Clause - When is Bad Weather an Exception

April 2018

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Stormywaters

The Conoco Weather Clause (“CWC”) is frequently incorporated into charterparties but disputes as to its application often arise. There is no clear line of authority on its application and, as with all laytime and demurrage disputes, a careful analysis of the factual matrix including whether laytime has started and the demurrage provisions in the charterparty, will be required. Assuming time has started, the cause of delay will also be a factor. This article discusses some practical examples of its application in the context of various standard form charterparties.

The Clause

The CWC provides that:

“Delays in berthing for loading or discharging and any delays after berthing which are due to weather conditions shall count as one half laytime or as time on demurrage at one half demurrage rate”

Commencement of Laytime

As with all laytime disputes the starting point is whether laytime has commenced, as until the clock has started the CWC will not be applicable. Whilst this will depend on the provisions agreed and the particular circumstances, the broad position under two of the standard form charterparties is as below:

Asbatankvoy – Laytime

Under clause 9 of the Asbatankvoy form, charterers are required to procure a berth that is ‘reachable on arrival’ (‘ROA’). This absolute warranty applies equally to physical and non-physical obstructions1 - the cause of the unreachability is immaterial and a berth is equally deemed to be not ROA in instances where there is unavailability of tugs2, where there is congestion, or in instances of bad weather.

While the Asbatankvoy form includes an exception to laytime at clause 6 which provides that:
where delay is caused to vessel getting into berth after giving notice of readiness for any reason over which charterers have no control, such delay shall not count as used laytime”, this can only be relied on if a berth is ROA and a valid NOR has been issued with the result that laytime has commenced3.

Shellvoy 5 – Laytime

Unlike the Asbatankvoy form, Shellvoy 5 does not require a berth to be ROA. Clause 13(1)(a) of Shellvoy 5 specifies that laytime can commence in two scenarios:

1) If the vessel proceeds straight to berth then time shall commence to run 6 hours after the vessel is in all respects ready to load or discharge, written notice thereof has been tendered;

2) If the vessel does not proceed immediately to berth, time shall commence 6 hours after (i) the vessel is lying in the area where she was ordered to wait or, in the absence of any such specific order, in a usual waiting area and (ii) written notice of readiness has been tendered and (iii) the specified berth is accessible. A berth will be deemed inaccessible where there is bad weather, tidal conditions, ice, awaiting daylight pilot or tugs, or port traffic control requirements.

The fact that the vessel cannot proceed directly to the berth does not preclude laytime from commencing and therefore it follows that the CWC could apply in situations where the vessel is not yet in the berth as long as that berth is ‘accessible’. Accessibility under clause 13(1)(a) is a defined term and a berth will only be deemed to be inaccessible in one of the prescribed circumstances.

Establishing the CWC applies

Once it has been established that laytime has commenced, charterers are permitted to rely on the CWC in circumstances where they can prove that they delays are “due to weather conditions”. If the vessel is in berth and bad weather causes delays, it is clear that the CWC would apply. However, even if the vessel does not proceed immediately to berth, for example as a result of congestion, providing that laytime has commenced the CWC should apply to any period of delay due to bad weather.

In order to rely on this clause, charterers would need to provide contemporaneous evidence that during the period of delay there was bad weather. This requirement could be satisfied by provision of a notice from the port or local agents that the reason for the closure of the port or stoppages in operations was bad weather and not some other cause.

However, this may not be the end of the matter. If there was more than one cause of delay or owners can demonstrate that there was a break in the chain of causation there is scope for rejecting the application of the CWC. Whether owners can prove a break in the chain of causation will require a careful consideration of the factual matrix and will be heavily dependent on the particular circumstances.

Pre-existing congestion does not restrict the application of the CWC, as even if there is another vessel in the berth the bad weather may still be the effective cause of the delay. While there is an unreported 1997 arbitration which suggests that the vessel must be at the head of the queue to rely on the CWC, it could be argued that this is not the correct position. Notwithstanding that a vessel is not first in line to berth, it would still be open to charterers to provide evidence that bad weather was the effective cause of the additional delay suffered.

It is foreseeable that where there is bad weather but the port closes for reasons entirely unconnected with the weather, such as breakdown of some of the cargo equipment, owners may have a valid argument that the CWC does not apply. It is also foreseeable that where a vessel is removed from the berth due to bad weather but is then ‘queue-jumped’ once the bad weather ceases, there would likely be a break in the chain of causation. While the vessel would not have been removed from the berth had the bad weather not occurred, it would be the port’s decision to place another vessel ahead of it in the queue and therefore it is this decision that is the effective cause.

The CWC will only apply up to the point where the bad weather ceases. Subsequent to this the effective cause of the delay is no longer bad weather, the cause of the delay once again being some other cause, for example congestion. Subject to the application of any other exceptions, once the bad weather ceases time should run in full.

Conclusion

The CWC will only apply where laytime has commenced under the charterparty. When laytime commences depends solely on the agreed terms and it is often a source of debate when demurrage calculations arise. Assuming time has started to run, whether the CWC then applies will be a question of fact and will require careful consideration of the circumstances. If charterers can demonstrate that there was bad weather which caused a delay, the burden will then lie with owners to show there has been a break in the chain of causation such that the bad weather was not the effective cause of the delays.

  

Rebecca Penn-Chambers

Syndicate Executive, Eastern Syndicate

rebecca.penn-chambers@simsl.com 


1 The Laura Prima [1982] 1 Lloyd’s Rep. 1. and The Sea Queen [1988] 1 Lloyd’s Rep. 500

The Fjordaas [1988] 1 Lloyd’s Rep. 336

The Laura Prima [1982] 1 Lloyd’s Rep. 1.