Time Charter - Fuel Consumption - "All Details About, Without Guarantee"

December 2001

(Sea Venture Volume 20)

A frequent source of concern to contracting parties is the extent to which the phrase "all details about, without guarantee" qualifies any warranty given in a charterparty as to a vessel's speed and fuel consumption. . The first difficulty is the word 'about' as this word is open to different interpretations. It is usually taken to denote a margin of a very small percentage (3-5%), however, the extent of the margin is a matter of fact rather than law. The term 'without guarantee' makes the statement even weaker. This term effectively reduces the value of the relevant clause of the charterparty from a standard warranty to an ordinary statement. In fact, the attitude of the English courts has been that the term "without guarantee" qualifies the information to which it relates to such an extent that is considered as having been given without any contractual commitment.

In a recent case, "The Lipa"¹ the English Commercial Court provided guidelines as to the meaning of the phrase and the extent to which such phrase may be relied upon. The vessel "Lipa" was chartered on a Baltime Form. The final paragraph of Clause 26 of the charterparty provided:

"All details "about" - all details given in good faith but without guarantee."

The charterers complained that the vessel had consumed excessive quantities of fuel in breach of warranty as to consumption. The owners argued that there was no such warranty.

The dispute was referred to arbitration. The tribunal decided that although the words "without guarantee" prevented the owners from being held to an absolute warranty, they did not remove all obligations from the owners' shoulders. The tribunal was of opinion that the word "about" implied a 5% margin of allowance in fuel consumption, but because of the words "without guarantee" a 10 per cent margin was allowed. The owners appealed.

The Court did not accept the arbitrators' approach to the term "without guarantee". It was clearly held that "if and in so far as a provision in the charter-party is qualified by the words "without guarantee" the provision is not a warranty." As the last paragraph of Clause 26 was held to apply to speed and fuel consumption in this charterparty, the owners' appeal was, therefore, allowed.

In the "Lipa", the Court cited as authority Japy Freres v. Sutherland² and the more recent case Continental Pacific Shipping Ltd. v. Deemand Shipping Co. Ltd.³ . These cases support the view that the ordinary meaning of the words "without guarantee" denotes that a provision to which they apply is not a warranty. The Court also accepted the owners' argument that the implication of the words, coupled with the phrase "all details given in good faith" was that no claim could be based upon them in the absence of bad faith. In other words, if the information provided by the owners is true to the best of their knowledge and there are no reasonable grounds to believe otherwise, the owners' representation is to be regarded as having been made in good faith and no claim can be based on it. The Court concluded, therefore, that the charterparty did not contain a warranty about the vessel's rate of fuel consumption.

¹ Losinjska Plovidba Brodarstovo DD v. Valfracht Maritime Co. Ltd. and Another (The Lipa) [2001] 1 Lloyd’s Rep. 17.
² (1921) 26 Com. Cas. 227.
³ [1997] 1 Lloyd’s Rep. 404.