第十一章 有关解释合约的香港仲裁案件

正如在本书的序中所讲，邓宁勋爵就在其自传《The Discipline of the Law》中写道：

“In the daily practice of the law, the most important subject is the construction of
documents.”。这也是笔者作为仲裁员的深刻体会。为了让读者更好地了解合约解释规则
的活学活用，同时避免篇幅过长，笔者会在本章节录4个比较近期作出的仲裁裁决书。
这只是在笔者众多涉及合约解释规则的裁决书的冰山一角。读者可以从中看到本书所介
绍的解释合约的规则的方方面面，例如是背景/语境，如何协调解释合约条文/文字，私
人字典，合约合并其他标准格式，默示条文等等。也希望读者能够从这些实例中看到，
只要掌握了解释合约的全面知识，就可以在从草拟合约的第一步直到作为仲裁员或是
法官都可以做到游刃有余。

1 香港仲裁案件之一

以下是一个笔者在香港近期的裁决书，它是有关期租合约的纠纷，涉及了租约期的计
算，这是一种经常会出现的争议，尤其是航运市场高涨。在本案件，如果承租人的计算
被接受，就可以多跑一两个航次才还船给船东，这会涉及了可去多赚取两百万美元以
上的差价。这一个裁决书涉及了本书好几个部分的内容，如第六章所介绍的背景/语境
以及第三章第13段的私人字典。另也涉及了一条重要规则就是去整体解释合约条文，去
协调与给与每一个字都有一定意思，这在本书第三章第1与第2段。

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IN THE MATTER OF THE ARBITRATION ORDINANCE (CAP.341)

AND

IN THE MATTER, OF AN ARBITRATION

BETWEEN

承租人. (The Charterers)

AND
甲轮船东 (The Owners of "甲轮")

乙轮船东 (The Owners of "乙轮")

DECLARATORY AWARD

WHEREAS:

I) By two identical time charterparties dated 28th July 2000 for the "甲轮" and 1st August
2000 for the "乙轮", the Owners agreed to charter the two vessels to the Charterers upon
the terms and conditions set out therein.

2) The two charterparties provided for, in Clause 17, for any disputes to submit to Hong
Kong arbitration with English law to govern.

3) A dispute having arisen between the Charterers and the Owners and on 21st September
2005, the parties entered into an agreement to appoint me, the undersigned Philip Yang of
18A, Casey Building, 38, Lok Ku Road, Sheung Wan, Hong Kong, as the sole arbitrator.

4) The dispute referred to me concerned the precise durations of the two charterparties.

5) The parties provided me with extensive written submissions and submissions in

response, together with the relevant documentary evidence they rely on.

6) Neither party requested an oral hearing.

7) Under the Hong Kong Arbitration Ordinance, I am obliged to issue a Reasoned Award
and my reasons are accordingly attached hereto and form part of this my
DECLARATORY AWARD.

NOW I, the said Philip Yang, having taken upon myself the burden of this my reference
and having carefully and conscientiously read and considered the submissions made by
the Owners and the Charterers, and the documentary evidence they put before me, DO
HEREBY MAKE, ISSUE AND PUBUSH this my DECLARATORY AWARD as
follows:
A) I AWARD, ADJUDGE AND DECLARE that the two charterparties' precise
durations should be 36 months + 12 months (first optional period) + 11 to 13 months
(second optional period) + at Charterers' option any off-hire time as per Clause 83
+ /- 15 days for “about” in Charterers' option.

B) I tax and settle the costs of this my DECLARATORY AWARD at the sum of
HK$…

C) I RESERVE for later determination all questions as to liability on costs (both the
parties' costs and the costs of this my Award).

GIVEN under my hand this 3rd November, 2005.

Philip Yang
Sole Arbitrator Witness

================================================================

"甲轮" / "乙轮"

REASONS

For and forming part of DECLARATORY AWARD

1) In this reference, the parties have agreed to jointly appoint me as the sole arbitrator
with a view to come to a "quick" decision on the precise redelivery dates of the two (2)
vessels, "甲轮" and "乙轮" under their governing Time Charter-parties (T-C/Ps). It has to
be quick or instant because the Owners' position is that the redelivery dates ought to be as
early as 21/11/2005 for "乙轮" and 1/12/2005 for "甲轮". If the Owners prevail in this
arbitration, they need to start looking for next employments for the vessels. Likewise, if
the Charterers prevail, they also need time to look for next employments. In that sense,
21/11/2005 is not far off.

2) The precise redelivery dates must necessarily depend on the durations of the two
T-C/Ps. Briefly put, the Owners position is: the durations in both T-C/Ps should be
"36 months + 12 months (first optional period) + 11 to 13 months (Second optional
period) + at Charterers' option any off-hire time as per Clause 83+/-15 days for
"about" in Charterers' option". But the Charterers' position is that they are entitled to
use the vessel for a maximum period of: "maximum 38 months +13 months 15 days
+ 13 months 15 days + (off-hire time as per Clause 83". This kind of dispute is
common when the freight market rises substantially and the Charterers logically
wish to use the vessel having chartered-in at lower rate for as long as possible. Whether
the Charterers are entitled to do so must depend on the construction of the governing
T-C/P.

3) I must therefore first set out the material provisions in the two governing T-C/Ps
(which are the same) as follows:

"Lines 13-15 - "That the said Owners agree to let, and the said Charterers agree
to hire the said vessel, from the time of delivery, for about minimum 34 and maximum
38 months Time Charter exact period in Charterers option. Charterers option further
about 11 / about 13 months Time Charter: Charterers option additional further about
11/about 13 months time Charters. About means15 days more or less in Charterers
option. Optional period to be declared latest 3 months prior to the expiry of the
previous period (I.E. latest the last date of the 33rd month and last date of 45th month
respectively). Hire for optional period to count from expiry of the 36th month and the
48th month respectively….

Clause 4 - "That the Charterers shall pay for the use and hire of the said Vessel
at the rate of USD10,600. - daily including overtime payable15 days in advance for
the first 3 years period and USD11,400.- daily including overtime for the optional
period(s)·

Clause 83 - "Charterers' option to add any off hire time to Charter Party"

Addendum No.6 - "Notwithstanding the terms and conditions of above Charter

Party ... Charterers hereby exercise their first option for further about 11 months/13
months time charter for M/V "甲轮" as per subject Charter Party dated 28th
July 2000. Hire for the optional period start to count from 37th month (1st November;
2003) and the hire rate to be USD11,400. - daily including overtime."

Addendum No.10 - "Notwithstanding the terms and conditions of above Charter

Party ... Charterers hereby exercise their second option for further about 11
months/13 months time charter for M/V ''甲轮" as per subject Charter Party
dated 28th July 2000. Hire for the optional period start to count from 49th month (1st
November, 2004) and hire rate to be USD11,400. - daily including overtime."

For the "乙轮", the Charterers had also exercised their two options in
similar wording, recorded in Addendums Nos. 6 & 9, which I shall not repeat.

4) Both parties exchanged initial written submissions concurrently (no doubt with a
view to expedite the process) and had a second round of exchanging submissions in
response. The submissions are very lengthy or wordy which make it very difficult for
me to decide quickly or instantly. As an illustration, the submissions in response
have 9 pages and 14 pages from the Charterers and the Owners respectively.

5) Essentially, the dispute boils down to the following issues:

(i) Factual Matrix/private dictionary or mutual understanding during negotiation.

(ii) Construction of the material provisions as set out in Paragraph 3.

I will deal with these issues and the main arguments of the parties in paragraphs
to follow.

Factual Matrix

6) I shall first deal with this issue. The Owners' solicitors had initially applied for the
specific disclosure of two other fixtures relating to a vessel called "ABC轮" and an
unnamed vessel in what is called "XYZ轮". They were mentioned by the Charterers
during negotiations and there was suggestion of private dictionary in that the parties
reached mutual understanding with regard to the charter duration. The Charterers strongly
resisted.

7) I sent a fax to the parties on 6/10/2005, stating, inter alia:

" … 1 am happy to express my initial impression to the arguments with regard to

specific disclosure and factual matrix.

3) If 1am to consider factual matrix in my construction (if the executed C/Ps, I

must consider what transpired between the parties during the earlier negotiations. No
doubt I will receive the fixture files in due course, ....

4) But my rough understanding of factual matrix or "relevant circumstances"

which then exist ought to be limited to those within the common knowledge of the
parties at the time when they made their C/Ps. Thus, I am not altogether persuaded
that further disclosure should be ordered, which are the documents the Owners did
not see during negotiations... "

8) The Owners pursued no further on specific disclosure. But in subsequent written

submissions and submissions in response, factual matrix remains a main issue in
dispute. The parties argued extensively which had taken up a lot of time.

9) I have looked at the fixtures negotiations submitted by the Owners. It started

with the Owners' offering the "甲轮" (then a Panamax newbuilding under
construction) for a period of "minimum 58/ maximum 62 months time charter; exact
period in Charterers' option". It was back on 26/4/2000.

10) But the Charterers countered on 3/5/2000 with "minimum 331maximum 39

months time charter exact period in Charterers' option, Charterers ' further 10/14
months time charter and Charterers ' further10/14 months time charter."

11) On 10/5/2000, the Owners had also used the words of "minimum" and "maximum"
to describe the initial or basic period by counter-offering:

"minimum 47 maximum 49 months time charter exact period in Charterers'

option. Charterers' option further minimum 11/maximum 13 months time charter; such
option to be declared latest on the 1st day of the 44th month after delivery, if option
period be declared by Charterers, optional period and rate of hire for optional period
to count from the starting of the 49th month after delivery."

12) The Owners further conceded on 12/6/2000 at 11 :58H to a shorter initial or basic
period and granted to the Charterers two (2) further optional periods. It reads as follows:

"minimum 35/maximum 37 months time charter exact period in Charterers'

option. Charterers' option further minimum 11/maximum 13 months time charter.
Charterers' option further minimum 11/maximum 13 months time charter. Optional
period to be declared latest 3 months prior to the expiry of the previous period (I.E.
latest the last date of the 3.3th (sic) month and the last date of the 45th month
respectively). Hire for optional period to count from the expiry of the 36th month and
the 48th month respectively. "

13) On 13/6/2000, the Charterers attempted to further increase the span or spread
between "minimum/maximum" charter duration to "minimum 34/maximum 38 months
time charter exact period in Charterers' option" At the same time, the Charterers
accepted the declaration and hire commencement.

14) In the morning of 14/6/2000, the Owners maintained position in the time charter
period to be "minimum 35/maximum 37 months time charter exact period in Charterers'
option. ".

15) The parties' respective positions kept changing and by 14/6/2000, in late afternoon,
the Owners conceded to and settled at "about 35/about 37 months time charter exact
period in Charterers' option, Charterers' option further about 11/about 13 months time
charter, Charterers' option further about 11/about 13 months time charter. "A bout"
means 10 days more or less Charterers' option (MOLCO) ".
16) By 15/612000, the Owners' further conceded to "about" being "15 days MOLCO"
instead of "10 days MOLCO".

17) It was finally agreed and recorded in the fixture recap and in the executed T-C/Ps
that the durations should be "minimum 34 maximum 38 months time charter exact
period in Charterers' option, Charterers' option further about 11/about 13 months
time charter, Charterers' option further about 11/about 13 months time charter,
"about" means 15 days MOLCO".

18) In my view and my general experience in chartering, I find it to be a perfectly

normal negotiations process, with some signs of the Owners yielding to the Charterers'
demand insofar as the duration is concerned. Clearly, it must be to the Charterers'
advantage in having two (2) periods of options than a flat period initially proposed by the
Owners, even with a tolerance of "min/max".

19) The parties referred me to several authorities and the leading text in Chitty on
Contracts. I shall only repeat one citation here of what Lord Wilberforce said in Prenn
v. Simmonds (1971) 1WLR 1381, of:

"In my opinion, then, evidence of negotiations, or of the parties' intentions, and a

fortiori of[the plaintiff’s] intentions, ought not to be received, and evidence should be
restricted to evidence of the factual background known to the parties at or before the
date of the contract, including evidence of the 'genesis' and objectively the 'aim' of
the transaction." (bold words are my emphasis)

20) I see it as a warning not to be influenced by what is in truth a finding of the

subjective intention of the parties at the relevant time (which was, in this, more than 5
years ago), instead of carrying out what I believe should be the correct exercise of
determining objectively the mutual intention of the parties from the words of the
documents in the fixture file in the light of the circumstances surrounding the transaction.

21) With the above in mind, I must conclude that I have difficulty accepting the
Owners' arguments of factual matrix. To start off, the relevant words used by the
parties such as "minimum/maximum" are exceedingly clear and unambiguous to
people in the chartering business. There is no imperfection of language which I need
to enquire further. Furthermore, there were many rounds of offers and counters, part
of which is being cited by me from Paragraphs 9 to 17 above. I cannot find any factual
background "known to the parties" or "special circumstances" that could lead to the
construction or "manipulation" of "minimum 34/maximum 38 months time charter"
as meaning the same as "3 years" or "36 months". Indeed with several counters
back-and-forth in narrowing or expanding the "minimum//maximum" period (such as,
in Paragraph 14, the Owners countered with "minimum 35/maximum 37 months" against
Charterers' last of "minimum 34/maximum 38 months"), I have difficulty in
accepting all the different descriptions of the precise time charter periods used by the
parties can all be taken to mean "3 years". In any event, I find the Owners (and indeed the
Charterers) are very experienced and knowledgeable in that they know
precisely what was meant by the use of the description of "minimum/maximum" for
the time charter period at the time of negotiations.

22) Therefore, I reject the Owners' argument of factual matrix or mutual understanding
during the negotiation. As mentioned, it has taken up a lot of time in this reference. In
today' s environment of awarding costs based on success and failure of different issues, I
have a feeling that if I am asked to deal with costs later by the parties, I will take this
matter into account. If any authority is needed to support my intended cause of action
with regard to costs, I can cite NLA Group Ltd v. Bowers (1999) 1 Lloyd’s Rep. 109.

Construction of the Time Charter-parties

23) I now turn to the construction of the various material provisions in the two (2)
T-C/Ps, of which I have cited in Paragraph 3 above. In the written submissions, both
parties cited many important rules of construction, such as, the famous canon of
construction by Lord Reid:

"The fact that a particular construction leads to a very unreasonable result must
be a relevant consideration. The more unreasonable the result, the more unlikely it is
that the parties can have intended it, and if they do intend it, the more necessary it is
that they should make that intention abundantly clear".
24) I was also referred by the Owners' solicitors to Chitty, 29th Ed. Paragraph 12-078
of:

"an effort should be made to give effect to every clause in the agreement and not
to reject a clause unless it is manifestly inconsistent with or repugnant to the rest of
the agreement."

25) The Charterers referred me to Glynn v Margetson & Co. (1893) A.C. 351 of:

"Looking at the whole of the document, and seeing what one must regard … as its
main purpose, one must reject words, indeed whole provisions, if they are inconsistent
with what one assumes to be the main purpose of the contract."

The Charterers also referred me to a Canadian case of Sawley Agency v Ginter (1964)
regarding the same principle when it comes to inconsistency.

26) I remember other rules of construction such as: "One should be reluctant to hold
that parts of a contract are inconsistent with each other, and will give effect to any
reasonable construction which harmonises such clauses." (see The Interpretation of
Contracts, 3td Ed.). Lord Goff said in Vien Yieh Commercial Bank Ltd. v. Kwai Chung
Storage Co. Ltd. (1989) 2 HKLR 639, PC:

"Their Lordships wish to stress that to reject one clause in a contract as

inconsistent with another involves a rewriting of the contract which can only be
justified in circumstances where the two clauses are in truth inconsistent… "

27) The parties also referred me to many cases on time charter durations, such as:
The "Peonia" (1991) 1 Lloyd's Rep. 100; The "Gregos" (1995) I Lloyd's Rep. 1
(H.L.), etc. But the parties argued before me mostly on the case of The "Aspa
Maria" (1976) 2 Lloyd's Rep,.643. In that case, the initial time charter period was
agreed for "six months 30 days more or less at charterers' option". Then a further
clause 13 said:
 "the charterers shall have the option of continuing this charter for a further
period of further six months 30 days ... at charterers' option … "

The charterers in that case said to have a total duration of "12 months pins 60
days". But it was rejected by the High Court and the Court of Appeal and held that
the margin of tolerance of 30 days either way applies only once and not twice.

It seems to me that the cases being cited to me have little application to this
dispute, except in The "Aspa Maria", I have a feeling of construing in that case the
charter period option against the charterers. In another word, the rule of contra
proferentem may apply because the option is in favour of the charterers.

28) Having said the above, I understand fully that the rules of construction are not
the law. With every contract differs in the words used by the contractual parties, I
know my duty as the arbitrator of having to consider the contract (in this case, the
T-C/P) as a whole, in support of all the provisions and harmonise any inconsistent
terms (if at all possible), not to rewrite the parties' contract, etc., and come up with a
hopefully reasonable and objective result. Last but not the least, I say that in the
construction of contract, it is in many cases a matter of an overall impression.

29) I must also mention that the Owners had presented to me the reasons for a
Declaratory Award dated 17/9/2004, which on the face appears to be strikingly similar
to the dispute in this reference. The material clause/provision in that time charter
can be cited as follows:

"Lines 13-15 -- That the said Owners agree to let, and the said Charterers agree
to hire the said vessel, from the time of delivery, for about Minimum 11months/maximum
13 months timecharter, Charterers' option further minimum 11months/maximum 13
months timecharter. Optional period to be declared latest within8 months after vessel’s
delivery".

Briefly put, it was decided by a London sole arbitrator (name of which is not
disclosed due to confidentiality) that the charterers prevailed on a true construction of
the charterparty that they were entitled to the use of vessel for an initial or basic
period of 13 months (maximum period) plus a further 13 months (maximum period).
This is notwithstanding a rider clause entitled "Rate of Hire" stated a hire rate of
USD17,500 daily for the optional year and the option year is to be commenced on the
first day of the thirteenth month period. That means the 13th month in the initial or
basic period the charterers must pay an increase of daily hire from the original rate of
USD15,500 to USD17,500. This apparent anomaly was criticized by the disponent
owners in that case as "absurd".

The arbitrator said that there was no doubt that the draughtsmanship of clause 75
in this respect was somewhat unfortunate. He concluded that because clause 75 was
entitled "Rate of Hire" it was dealing simply with the rates of hire and not with the
duration of the basic or extended hire periods.

The above, I hope, is a very brief summary of what my understanding of the

reasoning in the London arbitration award to be.

30) I appreciate that the London arbitration award is only of persuasive value at its
best, especially with no knowledge to other documents of the case. But I have
considered it very carefully and humbly because it will be most unfortunate in differ
with the London arbitrator for no good reason in the construction of identical
contractual wording/provisions and cause the Charterers to be caught in between, whom I
understand to be the disponent owners in that case. Especially, the amount in dispute, as I
was told, is substantial in this case.

31) To facilitate reading, I repeat the most important provisions in the two disputed
T-C/Ps in this reference, which I have already cited earlier in Paragraph 3. I will also
highlight the different wording which I can detect in comparison with the charterparty
wording faced with in the London arbitration award cited in Para.29. It is as
follows:

"Lines 13-15 - "That the said Owners agree to let, and the said Charterers agree
to hire the said vessel, from the time (if delivery, for about minimum 34 and maximum
38 months Time Charter exact period in Charterers option. Charterers option further
about 11/about 13 months Time Charter. Charterers option additional further about
11 / about 13 months 'time Charters. About means 15 days more or less in
Charterers option. Optional period to be declared latest 3 months prior to the expiry of
the previous period (I.E. latest the last date of the 33rd month and last date of 45th
month respectively). Hire for optional period to count from expiry of the 36th month
and the 48th month respectively .... "

It should be a lot clearer now that the words used are not the same. Much more
has been said and agreed in the two T-C/Ps of the "甲轮" and the "乙轮". The words used
and added are a lot more precise and definite.

32) I have carefully considered the arguments of both parties. They proposed various
constructions or interpretations to the highlighted words or provisions. Briefly put, the
Charterers argued, inter alia, that:

(i) The initial or basic period of "maximum" 38 months is exceedingly clear

and unambiguous. There is no "expiry" of this period until it reaches the last day of
the 38th month.

(ii) Having to pay increased or higher hire rate for the optional period per
Addendum No.6 "from 37th month (1st November, 2003)" does not necessarily mean
the commencement of the optional period must start to run on that date. In another
word, the Charterers argued that in the remaining 2 months of the initial period of 37th
& 38th month, the higher optional period hire rate should be paid. No doubt the
Charterers are relying on the reasoning of the London arbitration award referred to in
my Paragraph 29.

(iii) Nowhere in the Addenda says that by agreeing to pay different hires for
different specified periods, the optional periods should commence at the same time
when different hires are to be paid.

(iv) Nowhere in the T-C/Ps says when optional periods are to be commenced
once the options are exercised.

(v) The expiry of the initial or basic period and the first optional period should
be the end of the 38th month and the 51. 5th month respectively instead of the end of
the 36th month and the 48th month, as alleged by the Owners.

(vi) The words used in Lines 13-15 of "latest three months prior to the expiry
of the previous period" should be rejected due to inconsistency. It is in contradiction
with the clear description of the "maximum" initial or basic period.
33) The Owners argued, predominantly and forcefully, on the words used in Line
13-15 (the duration clause) of "the expiry of the previous period” and said the whole
clause makes perfect sense as an agreed mechanism whereby, on exercise of the
Charterers' option for an additional 11-13 months, the previous time charter period(s)
shall expire on the last dates of the preceding calendar years, i.e. as expressly defined
to be "the last date of the 33rd month and last date of the 45th month respectively".

My deliberation and decision

34) On a fine balance, I have some difficulty in accepting the Charterers' arguments.
Whilst I agree that the term of "minimum/maximum" is exceedingly clear to people in
the chartering business (and I am sure to the Owners' knowledge during the
negotiations), it is not the only term or words in the "duration clause" of L 13-15.
As pointed out and highlighted in Paragraph 3l, there are a lot more specific words or
provisions in the same clause, which I must try to give them meaning and read them
as a whole.

35) The Charterers urged me to reject some words in the duration clause of "latest
three months prior to the expiry of previous period' due to inconsistency,
presumably in contradiction with "maximum 38 months" earlier in the same clause.
But based on the rules of construction that I have mentioned earlier, in particular, the
guidance of Lord Goff in Paragraph 26, I should not reject words in an executed contract
lightly or else it amounts to a rewriting of the contract or T-C/Ps.

36) It will also involve the change or manipulation of the clear words used by the
parties, defining in brackets the last dates of "33rd month and 45th month" to "38th
month and 51.5th month". This, in my view, is going too far into rewriting the
T-C/Ps. Obviously if the Charterers are to exercise the option to extend a charter, the
market then must be buoyant. It is logical that the Charterers would like to enjoy the
maximum initial or basic charter period. But in this case, the duration clause in Line
13- 15 specifically says, I repeat: "latest 3 months prior to the expiry of the previous
period (I.E. latest the last date of the 33rd month ant/last date of 45th month
respectively)" .

37) I am also mindful that the first optional period (as against the initial or basic
period) of "about 11/about 13 months" does not use the strong words of
"minimum/maximum".

38) With regards to the Charterers' arguments in Paragraph 32(ii) and (iii), it is true that
it was the same conclusion in the London arbitration award that was brought to my
attention. Although this conclusion is not "unreasonable", it is at least in my view
"unusual". If the Charterers wish to pay higher hire rate to the Owners by reason of
having exercised the option, they can agree on an even higher rate for the optional
period or periods. There is no need to disturb the original rate agreed upon for the
initial or basic period in the last 2 months. If this "unusual" contractual arrangement is
intended, I expect much clearer words should be used by the parties - as stated in the
famous canon of construction by Lord Reid in Paragraph 23. Afterall, adequate and
punctual hire payment is crucial in a time charter, especially when the market is
buoyant, failing which the Owners can use as an excuse to withdraw the vessel.

39) Incidentally, in this case, the parties had also made reference to hire payment in
the duration clause (Line 13-15) of "Hire for optional period to count from expiry of
the 36th month and the 48th month respectively". Therefore, the reasoning in the
London arbitration award of "Rate of Hire" clause was dealing simply with the rate of
hire and not with the duration of charter is inapplicable in this case before me.

40) With all the considerations I have mentioned in Paragraph 28 in the construction, in
particular with an intention to support all the provisions/words and to give meanings to
them, notwithstanding the apparent inconsistency, I accept the proposed construction put
forward by the Owners. That is, to harmonise the whole duration clause as:

(i) If the Charterers do not exercise the option, they can use the vessel for a
period within the span or spread of "minimum 34 months and maximum 38 months".

(ii) If the Charterers exercise the option or options, then the "expiry of the
previous period" (i.e. initial or basic period) will be 36 months and the first option
must be declared latest 3 months prior on the last date of the 33rd month. The first
optional period hire rate must then start from 37th month as stated in Addendum No.6.

By this way of construction, I can give meanings to all the words or provisions
used by the parties in Lines 13-15, the duration clause.

41) The Charterers may think that in Paragraph 40 (i) above, what I have decided is
artificial because if the Charterers do not exercise the option to extend, the freight
market is more likely to be depressed. There is accordingly no way that the
"maximum 38 months" will be utilized. Thus, I am still not giving meaning or weight
to this clear and common description to the charter period or duration. But I believe
even if the freight market is marginally better than the time of fixture, there can still
be scenarios of the Charterers not to exercise the option. Such as, the vessel in hand is
a problematic vessel. Another scenario could be: the Charterers do not exercise the
option on the last date of the 33rd month and is thus considered as waived. But
thereafter, the freight market sharply increases and the Charterers are only left with
the initial or basic period, which they will try to use for as long as possible, upto or
close to the "maximum 38 months".

42) I feel unhappy that I must decide against one party, the Charterers in this instance.
I appreciate it has major financial consequence. But regrettably this is not a
mediation or conciliation. I must come to a decision, sometimes on a fine balance of
probability, against one party who has put trust and confidence in me by accepting me
as the sole arbitrator. I can only hope that my speedy service to the parties in
avoiding uncertainty and further escalation of losses or damages can makeup this
unfortunate result to the Charterers.

43) I must also mention that I did not extensively cover every arguments &/or cases
referred to me. But I can assure the parties that I have read and/or considered all of
them. If have to be comprehensive, the reasons of this Declaratory Award will go on
much longer This is a quick or an instant arbitration and I do not intend to hold back
from the parties my decision.

2 香港仲裁案件之二
以下的仲裁裁决书是有关一个国际货物（丙烷与丁烷）的买卖合约，双方其中
一个争议（Issue 4）是有关一份标准油轮租约格式是否有合并在买卖合约，并
把该标准格式内对船东非常优越的有关滞期费/滞期损失计算的条文也一并合并
进来。有关合并另一份文件的课题请看本书第三章第 8 段。

=============================================================

IN THE MATTER OF THE ARBITRATION ORDINANCE (CAP. 341)

AND

IN THE MATTER OF AN ARBITRATION

BETWEEN

（卖方） Claimants/Sellers

AND

（买方） Respondents/Buyers

“（运载货物的船舶）” Sales Contract dated 8 September 2002

FINAL ARBITRATION AWARD

1) By a Sales Contract dated 8 September 2002, （卖方） (“the Sellers”) agreed to sell and
deliver Delivery Ex Ship/DES （中国某卸港的某泊位） , and （买方） (“the Buyers”)
agreed to purchase, receive and pay for a cargo of 30,000 MT +/- 5% Propane and Butane.

2) The said Sales Contract provides for:

“17. Law and Arbitration

This contract shall be governed by and construed in accordance with the English
law and the arbitration shall be held in Hong Kong in English.”

3) Disputes (hereinafter more particularly defined) did arise between the parties. The Sellers
applied to the Hong Kong International Arbitration Centre (“HKIAC”) for the appointment of
arbitrator pursuant to the Arbitration Ordinance.

4) On 31 January 2003, the HKIAC approached me, the undersigned Philip Yang of 18th
Floor, Casey Building, 38 Lok Ku Road, Sheung Wan, Hong Kong and asked if I was
available to be the sole arbitrator in this reference. I confirmed my availability and the ability
to act independently and impartially between the parties. The parties were formally informed
on 19 March 2003 by the HKIAC of my appointment.

5) The dispute referred to me as the sole arbitrator is the Sellers’ claim for demurrage of a
total sum of US$400,000.00.

6) The parties subsequently exchanged written submissions (including but not limiting to
Claim Submissions, Defence & Counterclaim Submissions, Reply & Defence to
Counterclaim Submissions, Rejoinder Submissions), attached with documentary evidence
they relied on.

7) The parties called for an oral hearing and a hearing was held at the HKIAC on 15-16
June 2006. The Sellers were represented by Counsel and have adduced expert evidence by (X
先生) who was subject to cross-examination. The Buyers were represented by a law firm in
Shanghai and they did not adduce expert evidence. Both parties did not adduce factual
witness.

8) After the oral hearing, the parties exchanged written closing submissions before I was
invited to proceed to my Award.

9) Under the Hong Kong Arbitration Ordinance, I am obliged to issue a Reasoned Award
and my reasons are accordingly attached hereto and form part of this my FINAL AWARD.

NOW I , the said Philip Yang, having taken upon myself the burden of this reference and
having carefully and conscientiously read, heard and considered the submissions and
evidence put before me by the Sellers and the Buyers, and having given due weight thereto,
DO HEREBY MAKE, ISSUE AND PUBLISH this my FINAL AWARD, as follows:

A) I HEREBY FIND AND HOLD that the Sellers’ claim for US$400,000.00 succeeds
only to the extent of US$85,000.00 and no more.

B) I THEREFORE AWARD AND ADJUDGE that the Buyers shall forthwith pay to the
Sellers the sum of US$85,000.00 TOGETHER with interest at the rate of 4.5% p.a. or pro
rata calculated from 24 October 2002 until the date of actual payment.

C) I FURTHER AWARD AND ADJUDGE that the Buyers shall bear and pay their own
legal costs and in addition, the Buyers shall pay 25% of the Sellers’ legal costs in the
reference (to be assessed/determined by me, if they cannot agree) AND in respect of the costs
of this my FINAL AWARD which I hereby assess/determine and settle at the sum of HK$ ,
the Sellers shall pay 40% of such costs while the Buyers shall pay 60% of such costs
PROVIDED ALWAYS that if, in the first instance, the party who has paid in excess of its
share of the costs of this my FINAL AWARD, it shall be entitled to an immediate refund
from the other party of the sum so paid.

GIVEN UNDER MY HAND in Hong Kong this 1st November, 2006.

_________________________ _______________________
Philip Yang Witness
Sole Arbitrator

==================================================================

“（运载货物的船舶）” – Sales Contract dated 8 September 2002

REASONS, for and forming part of FINAL AWARD

THE FACTS:

1) By a Sales Contract (“Sales Contract”) dated 8 September 2002, （ 卖 方 ） (“the

Sellers”) agreed to sell and deliver “DES （中国某卸港的某泊位）”, and,（买方） (“the
Buyers”) agreed to purchase, receive and pay for a cargo of 30,000 MT +/- 5% Propane and
Butane.

2) The cargo was carried and delivered by two (2) vessels, a cargo of 20,000 MT of
Propane onboard the “（运载货物的船舶）” (sometimes referred to as “the Vessel”) and
10,000 MT of Butane onboard the “另一艘船舶”. The movements of “另一艘船舶” were
described in the Sellers’ opening submissions in Paragraph 4 as follows:

“The Vessel carrying the Cargo arrived at （ 中 国 卸 港 ） on 29.9.02 at 1800 and

tendered NOR at the same date and time. At about the same time, the “ 另一艘船舶” also
arrived at ( 中 国 卸 港 ) and was given priority to berth. The “ 另 一 艘 船 舶 ” completed
discharge at 1.10.02 at 12 10 hours. She cleared the berth at 1418 on the same day”
 Whereas the movements of “（运载货物的船舶） ” were, according to the Sellers’
“Time Sheet”, as follows:

“Arrival (end of Sea Passage) 1800 29.09.2002

Pilot onboard 0840 12.10.2002
Completed mooring 1100 12.10.2002
Pratique granted 1315 12.10.2002
Notice of Readiness (tendered) 1800 29.09.2002
Notice of Readiness (accepted) 1500 12.10.2002
Commenced discharging 1620 12.10.2002
Completed discharging 2235 17.10.2002”

3) In the Sales Contract, the following terms and conditions are relevant and/or material to
the dispute:

03. Product

Propane and Butane (Segregated) with C3/C4 50/50 +/- 5% at Seller’s option.

05. Quantity

As per original supplier’s specification (Cargo Origin: Algeria and/or Arabian Gulf
and/or Malaysia).

06. Vessel

“（运载货物的船舶）” or sub.

08. Delivery

DES （中国某卸港的某泊位）
 0.9. Price

USD 265.00/MT Fixed Price DES one safe berth (中国卸港)

10. Laytime for discharge

60 hours SHINC + 6 hours NOR basis 18,000 MTS, extra laytime shall be given on
pro rata basis for quantity over 18,000 MTS.

For demurrage calculation purpose only, Seller shall guarantee vessel is capable to
discharge min. 200 MT/hr for propane and min. 500 MT/hr for butane.

If Seller’s vessel fails to meet the high tide in daytime (0600-1800) on the day of
arrival at ( 中国卸港 ) Pilot Station, then waiting time till next available high tide in daytime
or till vessel is fully alongside, whichever is earliest, shall not be counted as laytime.

11. Demurrage

USD29,000 per day or pro rata

Claims, if any, shall be communicated in written with in 90 days after NOR.

15.Commercial Terms

Incoterms 2000 plus amendments for Ex-Ship sales shall be applied.

16. Maritime Terms

As per Asbatankvoy C/P.

19. Title and Risks

Title, beneficial ownership and risks of loss shall pass from Seller to Buyer as the
product passes vessel’s flange at disport.

THE CLAIM AND THE ISSUES:

4) The Sellers claimed the permissible fixed laytime for discharge in the Sales Contract
was 60 hours but the total time used by the “ （ 运 载 货 物 的 船 舶 ） ” was 392 hours.
Therefore, the Vessel was on demurrage for 330 hours and at the demurrage rate of
US$29,000 per day, the total demurrage due from the Buyers is accordingly US$400,000.00.
The Buyers denied any demurrage is due to the Sellers.

5) The issues in dispute can be broken down as follows:

(A) Whether “（运载货物的船舶）” was an arrived ship on 29 September 2002 at

1800 hours when the Notice of Readiness (“NOR”) was tendered?

(B) Whether the 1st NOR tendered on 29 September 2002 at 1800 hours was to the
correct and/or proper party/parties?

(C) Whether the 1st NOR was a valid NOR in light of the free pratique and expiry of
Deratting Exemption Certificate?

(D) The construction of the Sales Contract and to what extent the Asbatankvoy C/P
was incorporated?

(E) Whether the Sellers were in breach by delivering the cargo by two vessels of “另一
艘船舶” and “（运载货物的船舶）”?

(F) The Buyers’ duty, if any, in ensuring early berthing of “（运载货物的船舶）”

(G) Whether the Vessel was in breach of the discharging capacity and possible
problem of back pressure?
 There are many other sub-issues being raised by the parties, especially by the Buyers,
which I will attempt to cover all of them in the discussions or deliberations that follow.

Issue No.1 - Whether “（运载货物的船舶） ” was an arrived ship on 29 September 2002

at 1800 hours when the Notice of Readiness (“NOR”) was tendered?

Issue No.2 - Whether the 1st NOR tendered on 29 September 2002 at 1800 hours was to the
correct and/or proper party/parties?

Issue No.3 - Whether the 1st NOR was a valid NOR in light of the free pratique and expiry
of Deratting Exemption Certificate?

Issue No.4 - The construction of the Sales Contract and to what extent the
Asbatankvoy C/P was incorporated?

24) This is the primary case for the Sellers and a most difficult issue for me. So much so, I
have invited the parties’ lawyers at the end of the oral hearing for further and better
explanation/clarification in their written closing submissions, particularly with regard to the
extent of incorporation by the qualification of “Maritime Terms”.

A) Sellers’ arguments

25) Briefly put, the arguments or submissions of the Sellers are, inter alia: Clause 16 of the
Sales Contract provided that: “Maritime Terms As per Asbatankvoy C/P”. Laytime and
demurrage are matters which properly fall within the definition of “maritime terms” and
Clauses 10 and 11 of the Sales Contract are to be supplemented with the appropriate
provisions of the Asbatankvoy form of C/P. Accordingly, Clause 6 of Asbatankvoy as cited
in Paragraph 6 was incorporated which was to “advance” the time for the tendering of a valid
NOR (at customary anchorage) when the Vessel arrived at ( 中 国 卸 港 ) on 29 September
2002. It has also triggered the commencement of laytime at 1418 hours on 1 October 2002.

26) In the written closing submissions, the Sellers further referred me, belatedly, to the
House of Lords’ decision in The “Laura Prima” (1982) 1 Lloyd’s Rep.1 which has to do with
an absolute warranty of the charterers to provide “a berth reachable on vessel’s arrival” in
Clause 9 of the Asbatankvoy C/P.

27) The Sellers also argued that all those terms that are “maritime” in nature, which could
supplement the laytime and demurrage clauses in Clauses 10 & 11 and should be
incorporated. That includes Clause 6 of the Asbatankvoy C/P, which effectively “advanced”
the tendering of NOR and triggered the commencement of laytime. In support of similar
situations in practice, the Sellers cited the case in The “Adolf Leonhardt” (1986) 2 Lloyd’s
Rep. 395 which has a clause on laytime and demurrage in the sales contract, reading as
follows:

“special conditions … Time to count as per Centrocon charter party, WIBON, WIPON,
WIFPON. Demurrage/Despatch as per C/P … Other Conditions as per Centro Exportadores
term … (my emphasis).

28) As to the case of The “Handy Mariner” (1991) 1 Lloyd’s Repl.378 heavily relied on by
the Buyers (see Paragraph 30), the Sellers pointed out that the material clause in that case
only read as follows:

“Discharge 400 metric tones per hold/weather working day Sundays and Holidays
excepted unless used with maximum 2000 metric tones per day. Demurrage U.S.$3,500 per
day pro rata with half despatch.”.

Although the sales contract in that case has also incorporated GAFTA 100, the Sellers
submitted that it did not incorporate any standard C/P and had no provision (express or by
incorporation) for the tendering of NOR and “notice time”. This is different with the present
case in which Asbatankvoy C/P was specifically incorporated.
B) Buyers’ arguments

29) The first main argument advanced by the Buyers was that the sale is on the basis of
“DES （中国某卸港的某泊位） ” and therefore the Sellers were obligated to deliver the
cargo to the exact spot as agreed. The Buyers also referred me to the Incoterms 2000 which
explain the term “DES (Delivery Ex Ship)” as follows:

“‘Delivered Ex Ship’ means that the seller delivers when the goods are placed at the
disposal of the buyer on board the ship not cleared for import at the named port of
destination. The seller has to bear all the costs and risks involved in bringing the goods to the
named port of destination before discharging. If the parties wish the seller to bear the costs
and risks of discharging the goods, then the DEQ term should be used.

This term can be used only when the goods are to be delivered by sea or inland
waterway or multimodal transport on a vessel in the port of destination. ”

Then the Incoterms 2000 provide for in “A. THE SELLER’S OBLIGATIONS” as
follows:

“A3 Contracts of carriage and insurance

a) Contract of carriage
The seller must contract at his own expense for the carriage of the goods to the named
point, if any, at the named port of destination. If a point is not agreed or is not determined
by practice, the seller may select the point at the named port of destination which best suits
his purpose. (Emphasis added)

b) Contract of insurance
No obligation.

A4 Delivery
The seller must place the goods at the disposal of the buyer on board the vessel at the
unloading point referred to in A3 a), in the named port of destination on the date or within
the agreed period, in such a way as to enable them to be removed from the vessel by
unloading equipment appropriate to the nature of the goods. (Emphasis added)
 A5 Transfer of risks
The seller must, subject to the provisions of B5, bear all risks of loss of or damage to the
goods until time as they have been delivered in accordance with A4.”

30) The second main argument advanced by the Buyers was the reference to the case in The
“Handy Mariner” (1991) 1 Lloyd’s Rep. 382. It was about a “CIF sale, Free Out, Lorient”.
In the sales contract, the material clause with regard to discharge laytime and demurrage has
been cited in Paragraph 28 earlier, which I shall not repeat. But in the clause, there was
nothing concerning when the vessel could be deemed to be an “arrived ship” at Lorient and
could commence laytime counting against the buyers. It so happened that there was delay to
the berthing of the vessel after she arrived the port of Lorient. So, the dispute between the
sellers and the buyers was: Were the buyers liable to pay demurrage to the sellers in respect of
the period between the arrival of the vessel in port of Lorient and the time when the vessel
was berthed?

31) The High Court and the Court of Appeal reversed the arbitration award. In the High
Court, Hobhouse J. held:

“that on the proper construction of the contract the buyers’ obligation to discharge did
not begin until the goods were ready for discharge at the discharge berth; the clause did not
impose on the buyers any risk with regard to waiting time …”

32) In the Court of Appeal, Staughton LJ, said, inter alia, as follows:

“To undertake a liability for demurrage while the vessel is in port but waiting for a
berth would be an open-ended commitment in a contract for the purchase of what must
probably be a part cargo. It would also be open-ended for a full cargo, since the receiver
cannot normally control congestion in the port. In the case of a part cargo the problem is
worse and the result may be capricious; the buyer does not know when he makes the contract
how much other cargo will be carried on the vessel and so share his liability pro rata – unless
some or all of it has been discharged at a previous port. I would require rather clearer words
before holding that the buyers had assumed such a liability in this case.”
33) The Buyers had also referred me in the written closing submissions to the judgment of
Hobhouse J regarding the difference between a charter-party and a CIF sales contract, unless
the latter has put in clear words that would radically transform the scheme of the CIF contract.
His Lordship said as follows:

“… There is no provision in this contract for the tendering of any notice of readiness, or
for any lapse of time between the time when the vessel was an ‘arrived vessel’ and the time at
which an obligation to discharge, or the running of laytime, starts. It is an indication in my
judgment of this confusion, that the appeal board has treated this contract as if it included
some laytime provision which provided for the serving of a notice of readiness, and for the
commencement of laytime at some interval after the notice of readiness had been served. I
accept that before me that was no an essential part of the sellers’ submissions. But it does
indicate and illustrate that it is mistaken to incorporated into a c.i.f contract …
considerations which are not in that contract and would be considerations that would have to
be derived from some express provision of some charter-party or similar contract. If this
contract, or this demurrage provision, was drafted on some basis of indemnity, then there
would be either an implied or express cross-reference to a charter-party which would justify
the introduction of such concepts because there would be need to refer to the charter-party
and therefore to consider what were the terms of the charter-party. But that is not the case
here. It is common ground that there is no cross-reference to a charter party and the
provisions of this contract stand on their own as between seller and buyer. … It would have
been easy to include such a provision, and the most obvious way in which it could have been
done is to include some reference to a charter-party which would radically transform the
scheme of this contract. There are other ways in which it could be to done, which would be to
expand the discharge provision so as to include some words like ‘whether in berth or not’ or
‘time waiting for berth to be treated as discharging time’, or indeed to expand it into a full-
blooded laytime provision together with notice of readiness and so on. None of these things
have been done. … In those circumstances, in my judgments, the buyer’s contentions are right
and ought to have been accepted.”

34) The third argument by the Buyers raises matters or issues such as the meaning in
<Black Law Dictionary> on words such as: “terms”, “as per” and “incorporated” in the
context of whether the disputed clauses in the Asbatankvoy C/P could have been
incorporated. Furthermore, the Buyers argued that there are several versions of Asbatankvoy
C/P, etc. The Buyers also argued that the control of berthing was in the hands of the (中国卸
港) Port Authority and they have no control whatsoever. Finally, the Buyers argued that the
main cause of the delay in berthing had to do with bad weather/gale wind.

C) My Deliberations & Decisions on this issue

35) This is the most difficult issue in this reference as far as I am concerned. I found it
difficult at the hearing on 15-16 June 2006. In fact I have specifically asked the parties to
fully address me in written closing submissions on this issue of “Maritime Terms” in
Asbatankvoy C/P to be incorporated in Clause 16. One of my doubts was: being a C/P pro-
forma, I would regard all terms therein should be classified as “maritime terms”.
Accordingly, would all the terms and every word in Asbatankvoy C/P be incorporated,
subject only to necessary or reasonable “verbal manipulations”? Would there be any
limitation as the title of Clause 16 of “Maritime Terms” seems to suggest or infer, ;or I shall
give little or no weight to the title of a clause?

36) In essence, it boils down to one important question, as the Sellers putting it in Paragraph
28, of whether the incorporation of Asbatankvoy C/P in this Sales Contract, which is lacking
in The “Handy Mariner” (1991) 1 Lloyd’s Rep. 382, would have made the difference or
distinction that leads to a completely opposite result to the trading terms used by the parties
(CIF or DES)? It is very much an exercise of the construction of the Sales Contract. The
fundamental rule is to ascertain, by objective means, the meaning which the Sales Contract
should convey, as a whole, to a reasonable person.

37) As I understand it, to incorporate another contract (actual or standard pro-forma) is to

bring in all its terms, conditions and exceptions that are relevant and/or germane to the main
contract. It is a very common practice in charter-party bills of lading and there have been a
lot of well-known principles of construction dealing with the extent or limitation of a general
incorporation clause. Such as:

- an incorporation clause does not incorporate a clause that would otherwise render a
party in breach of his basic duty;
 - inconsistent and repugnant clauses ought not be incorporated generally;

- unreasonable and unusual terms in the trade ought not to be incorporated generally;

- overall rationality, business sense or commercial commonsense ought to be considered

when it comes construction of incorporation clause;

- ancillary clause (such as arbitration clause or time bar clause) ought not to be
incorporated generally;

- oral agreement ought not to be incorporated generally;

- etc.

38) Therefore, it is general knowledge in shipping that a general incorporation clause in bills
of lading is insufficient to incorporate an arbitration clause in the charter-party. More so, the
demurrage clause and the discharge laytime clause, even though they are clearly germane to
the voyage, may not be incorporated especially if it involves a part cargo and/or verbal
manipulation, because it would be unreasonable and umcommercial to expose the bills of
lading holder to potential liability of such demurrage. It would not make business sense to
say he has intentionally entered into a contract with such potential liability in his mind. As
far as part cargo is concerned, there is the added difficulty of how to operate between
different consignees of different parts of the cargo.

39) Turning to this case, I observe that firstly, the Sales Contract provides for “DES”
(Delivery Ex-Ship) and a named point of “ 中 国 卸 港 某 泊 位 ” at the named port of
destination of “(中国卸港)” has been agreed upon. As I understand it and in the Incoterms
2000 that was also expressly incorporated, the term “DES” itself bears the clear meaning of
the Sellers having to deliver, at their own expense, for the carriage of cargo to the named
point at the named port of destination (see my added emphasis in Paragraph 29). Therefore,
the starting point must clearly be, it should be the Sellers who must bear the consequence of
delay in berthing (or arriving at the agreed point of destination), unless it is the fault of the
Buyers. With freedom of contract, the Sellers can pass the risk of delay in berthing to the
Buyers, thus changing the basic framework or structure of “DES”. But it has to be achieved
by very clear and unambiguous terms or provisions in the Sales Contract. Such as, in The
“Adolf Leonhardt” (1986) 2 Lloyd’s Rep. 395, it has specifically stated in the laytime clause
the well-known and unmistakable acronyms of “WIBON, WIPON”.

40) Secondly, I take note of the case in The “Handy Mariner” (1991) 1 Lloyd’s Rep. 382,
heavily relied on by the Buyers, was a “CIF sale, Free Out, Lorient”. But still, it was decided
that the sellers could not pass on to the buyers the risk of delay from the time of vessel’s
arrival at the port of Lorient until the time of berthing to the buyers. Yet, in this case, it is a
“DES sale, （中国某卸港的某泊位）” which gives a stronger impression that the Sellers
must deliver the cargo closer to the “home” of the Buyers. Accordingly, if the Sellers wished
to pass the risk of delay (in particular, navigational risks such as bad weather/gale wind) from
the time of vessel’s arrival at the “customary anchorage” of (中国卸港) (which can be inside
or outside of port limit) until the time of berthing at the agreed named point, I expect even
clearer, totally unambiguous and unmistakable words have to be used by the Sellers (and
agreed by the Buyers).

41) Thirdly, I shall now examine whether or not the Sellers have achieved this duty in order
to change the basic framework of “DES”. In the written closing submissions, the Sellers
essentially argued that:

(1) Demurrage is plainly a maritime term as opposed to commercial terms within the
framework of the distinction between Clauses 15 & 16 in the Sales Contract.

(2) Questions of laytime and demurrage are matters which properly fall within the
definition of “maritime terms” in Clause 16 of the Sales Contract and Clauses 10 & 11 are to
be “supplemented” with the appropriate provisions of the Asbatankvoy C/P.

(3) The Sales Contract and the Asbatankvoy C/P must be read together.

(4) This case is rather like The “Adolf Leonhardt” (1986) 2 Lloyd’s Rep. 395 which
incorporated the standard form of Centrocon C/P.

42) I accept some of the arguments/submissions of the Sellers, such as the Asbatanvoy C/P
must be read together with the Sales Contract, which has been expressly incorporated. So
would be the Incoterms 2000, expressly incorporated in Clause 15. The question is to what
extent the Asbatankvoy C/P should be incorporated. Would it incorporate Clauses 6 & 9 of
the Asbatankvoy C/P, which as the effect of substantially advancing the commencement of
laytime and passing the risk of delay in berthing (even if it was caused by navigational
hazards) to the Buyers, thus upsets the basic framework of a “DES” sale set out in Incoterms
2000?

43) My problem is – if Clauses 6 & 9 of the Asbatankvoy C/P were intended to be

incorporated and to “supplement” Clause 10 entitled “Laytime for discharge”, why was the
incorporation not expressly stated in Clause 10. The Sellers relied on The “Adolf Leonhardt”.
But the important distinction is that the incorporation of Centrocon C/P in that very case was
in or together with the laytime and demurrage provisions (which was entitled “Special
Conditions” and please see my Paragraph 27). In this case, the Asbatankvoy C/P was
incorporated in a completely separate and different clause (Clause 16) to the “Laytime for
discharge” clause of Clause 10. The two clauses were far removed from each other.
Furthermore, Clause 16 has no express (certainly no implied) link to Clause 10.

44) I also bear in mind that in The “Adolf Leonhardt”, the relevant clause has also expressly
stated “WIBON, WIPON” to make it beyond doubt that the intention was to pass on the
berthing delay to the Buyers. But in this case, there is no such clear, unambiguous and
unmistakable agreement in Clause 10. Yet, I expect even clearer words/clauses must be used
in order to change the basic framework of a “DES” sale, more so than a CIF sale in The
“Adolf Leonhardt”.

45) I am not suggesting in earlier paragraphs that the incorporation of Asbatankvoy C/P has
no meaning. There are still a lot of “Maritime Terms” in the Asbatankvoy C/P that could be
incorporated in Clause 16. Such as, the General Exceptions Clause, the Paramount Clause,
the General Average Clause, the Limitation of Liability Clause, the War Risks Clause, the
Agents Clause, etc. It is just the irrelevant clauses such as the nomination of loading port or
tendering of notice of readiness for loading that should not be included in incorporation. Also
not included are the inconsistent clauses to a “DES” sale unless the incorporation itself is
clearly meant to override the “DES” framework, such as, at the very least, the incorporation
clause is expressly stated in Clause 10 or Clause 16 is linked to Clause 10.
46) Even better and clearer, the Sellers could have inserted (with the Buyers’ agreement) in
Clause 10 of the Sales Contract clauses or provisions like:

“Berth Reachable on arrival”, or

“The Master is entitled to give notice of readiness upon arrival at the customary
anchorage of (中国卸港)”, or
“WIBON, WIPON”,
Etc.

But there is nothing of this sort in this Sales Contract.

47) In support of my construction of this DES Sales Contract which is apparently against the
Sellers, I repeat the words of Hobhouse J in the first instance judgment of The “Handy
Mariner”, which I fully accept and humbly follow, as below:

“It would have been easy to include such a provision, and the most obvious way in
which it could have been done is to include some reference to a charter-party which would
radically transform the scheme of this contract. There are other ways in which it could be to
done, which would be to expand the discharge provision so as to include some words like
‘whether in berth or not’ or ‘time waiting for berth to be treated as discharging time’, or
indeed to expand it into a full-blooded laytime provision together with notice of readiness and
so on. None of these things have been done. … In those circumstances, in my judgments, the
buyer’s contentions are right and ought to have been accepted.”

48) Finally, I must also say that I have reservation as to whether or not laytime and
demurrage clauses are strictly “Maritime Terms”. It is because they can be found in both
charter-parties and sales contracts. Thus, they should be “maritime” as well as “commercial”
terms in nature. Indeed, it is becoming one of the main terms in the negotiation of
international sales contracts. But I need not deal with this matter in light of my earlier
construction of the Sales Contract. Likewise, I need not deal with other arguments raised by
the Buyers such as the meaning of “as per” or “incorporated”, and what version of
Asbatankvoy C/P should be incorporated, if at all. Save to say, I am not persuaded by the
Buyers over these arguments or issues. But this would not affect the result in my
construction.

Issue No.5 - Whether the Sellers were in breach by delivering the cargo by two vessels of “
另一艘船舶” and “（运载货物的船舶）”?

Issue No.6 – The Buyers’ duty, if any, in ensuring early berthing

Issue No.7 - Whether the Vessel was in breach of the discharging capacity and possible
problem of back pressure?

3 香港仲裁案件之三

以下是另一个笔者在香港近期的裁决书，它是有关程租合约的纠纷，涉及了承租人是
否要给运费，因为船舶在装货后起航不久沉没，这造成了租约的受阻。如果租约约定的
运费支付日期是在受阻前欠下，承租人就必须支付。但如果支付的日期是在受阻后才欠
下，承租人就无需支付。有关受阻的课题在笔者的《国际商务游戏规则—英国合约法》
一书第十二章与本书第八章第一段有详及。但主要想去介绍的是这一个裁决书涉及了默
示条文/地位的其中一个争议，这一个重要课题在本书第七章有详论。

==================================================================

IN THE MATTER OF THE ARBITRATION ORDINANCE (CAP. 341)

AND

IN THE MATTER OF AN ARBITRATION

BETWEEN

原告船东 Claimants/Owners

AND
被告承租人 Respondents/Charterers
==================================================================

M.V. “船舶”: C/P dd. 05.04.2005

FINAL ARBITRATION AWARD

=============================

1) By a fixture note or charter-party dated 05th April 2005 (the “F/N”) the Claimant, 原告船
东, entered into a voyage charter in respect of M.V. “船舶” (“the Vessel”) with the
Respondent, 被告承租人 for a voyage from 印度装港 to 中国甲卸港 or 中国乙卸港, upon
the terms and conditions set out therein.

2) The said F/N provided for:

“18. ARBITRATION IN HK WITH ENGLISH LAW TO APPLY.”

3) Disputes (hereinafter more particularly defined) did arise between the parties. The
Arbitration Clause did not provide for the appointment of a sole arbitrator. A three-man
tribunal was required in this arbitration.

4) The Owners and the Charterers subsequently agreed to appoint the undersigned Philip
Yang of Unit A, 18th Floor, Casey Building, 38 Lok Ku Road, Sheung Wan, Hong Kong as
the sole arbitrator to deal with all disputes arising out of or in connection with the above F/N.

5) The Owners’ claims (hereinafter more particularly defined) related to the freight of US$
750,000.00 which has failed to be paid by the Charterers. The Owners also claimed interest
and costs.
6) The parties through their respective lawyers delivered written submissions attaching the
documents and evidence upon which they relied.

7) Under the Hong Kong Arbitration Ordinance, I was obliged to issue a Reasoned Award
and my Reasons are accordingly attached hereto and form part of this FINAL AWARD.

NOW I , the said Philip Yang having taken upon myself the burden of this reference and
having carefully and conscientiously read and considered the submissions and the
documentary evidence put before me by the Owners and the Charterers, and having given due
weight thereto and being in agreement, DO HEREBY MAKE, ISSUE AND PUBLISH this
my FINAL AWARD, as follows:

A) I HEREBY FIND AND HOLD that the Owners’ claim succeeds in full in the total sum
of US$750,000.00.

B) I AWARD AND ADJUDGE that the Charterers shall pay forthwith to the Owners the
sum of US$750,000.00 TOGETHER with interest at 6.5% p.a. from 24th April 2005 until
the actual date of payment.

C) I FURTHER ORDER AND ADJUDGE that the Charterers shall bear their own costs
and the Owners’ costs of this arbitration on party and party basis (to be assessed and
determined by me, if not agreed) AND the Charterers shall also bear and pay the full amount
of the costs of this my FINAL AWARD which I hereby assess, determine and settle at the
sum of HK$_______, PROVIDED ALWAYS that if, in the first instance, the Owners
having paid any part of the costs of this my FINAL AWARD, they shall be entitled to an
immediate refund from the Charterers of the sum so paid.

GIVEN UNDER MY HANDS in Hong Kong this 10 March, 2007.

_________________________ _______________________
Philip Yang Witness

==================================================================

“船舶” C/P dd. 05. 04. 2005

(Reasons, for and forming part of Final Arbitration Award)

THE FACTS:

1) By a fixture note (“F/N”) or charter-party dated 05th April 2005 (the “F/N”) the Claimant,
原告船东, as the Owners, entered into a voyage charter in respect of M.V. “船舶” (“the
Vessel”) with the Respondent, 被告承租人, as the Charterers for a voyage from 印度装港 to
中国甲卸港 or 中国乙卸港 , with a cargo of minimum 20,000 Metric Ton 货物 in Bulk.

2) The Vessel completed loading cargo at 印度装港 on 19th April 2005 and a draft survey
made by 检验公司 on 20th April 2005 showed that a quantity of 20,100 mt 货物 has been
loaded on board. Bill of lading No.01 (“the Bill of Lading”) was issued with the date 19th
April 2005 and marked “Freight payable as per charter-party dated 05/04/2005”. On 20th
April 2005 the Vessel left 印度装港 to sail for 中国乙卸港. On 25th April 2005, the Vessel
sank in the Indian Ocean.

3) The movements of the Vessel in the Statement of Facts (“the SOF”) and Time Sheet were,
inter alia :
“Arrival at Pilot Station: 1600 Hours 15/04/05
…
Notice of Readiness Tendered: 1600 Hours 15/04/05
Notice of Readiness Accepted: 2150 Hours 15/04/05
Commenced Loading: 2150 Hours 15/04/05

Completed Loading Hatch 1: 0530 Hours 18/04/05

…
Completed Loading Hatch 2: 2150 Hours 19/04/05
Completed Loading Hatch 3: 2300 Hours 19/04/05
Time Sailed: 0130 Hours 19/04/05”

4) The material or relevant provisions in the F/N can be cited as follows:

“(2) CGO AND CGO QTY: MIN 20,000 MT TO VSL’S FULL CAPACITY AT
CHARTER’S OPTION 货物 IN BULK, CARGO QUANTITY TO DETERMINED BY DRAFT
SURVEY AT BENDS.

(6) FREIGHT: USD40.00 PMT ON FIOST BSS I/I FOR 中国甲卸港 DISCHARGE
USD44.50 PMT ON FIOST BSS I/I FOR 中国乙卸港 DISCHARGE

(9) FULL FREIGHT LESS ADD COM TO BE PAID IN USD TO OWNER’S NOMINATED
ACCT WITHIN 3 BANKING DAYS AFTER COMPLETION OF LOADING AND SIGNED
B/L MARKED “FREIGHT COLLECT” AS PER SHIPPER’S. FORMAT IN L/PORT BUT
ALWAYS BEFORE BREAKING BULKS.

(21) ADDCOMM: …

(22) OTHER TERMS AND CONDITIONS AS PER GENCON 76”

THE CLAIM AND THE ISSUES:

5) The Owners’ case is that the freight, US$ 750,000.00, became due and payable by the
Charterers to the Owners “within 3 banking days after completion of loading”, namely 3
banking days after 19th or 20th April 2005. It is alleged by the Owners that 19th, 20th April,
21st, 22nd and 23rd April 2005 were all banking days in Hong Kong and thus the freight,
US$ 750,000.00, was due and payable by the Charterers by 22nd or 23rd April 2005. This
was prior to the date of Vessel’s sinking on 25th April 2005, hence its timely payment was
not affected or frustrated by the sinking of the Vessel.

7) The Charterers denied that any amount was due to the Owners.

8) The issues in dispute can be broken down as follows:

(A) Whether the loading was completed on 19th April 2005 or after the Draft Survey on
20th April 2005?

(B) Whether the Bill of lading (“the B/L”) was signed on 19th April or on 20th April
2005? Whether the B/L was back-dated and whether it was a nullity?

(C) Whether the requirement for the B/L to be marked “freight collect” under Clause 9
of the F/N was changed to “freight payable as per C/P dated 05/4/2005”?

(D) Whether there was an implied term that the 3 banking days should start to count after
releasing of B/L?

(E) When was the end of the three banking day period?

(F) Whether the freight accrued due and payable by the Charterers before the vessel sank?

A) The Owners’ Arguments

B) The Charterers’ Arguments

…
DISCUSSIONS & DELIBERATIONS

33) Both the Owners and the Charterers accepted that if the date of advance freight payment
under Clause 9 of the F/N was prior to the date of the Vessel’s sinking on 25th April 2005, it
remained payable despite the Vessel’s loss which should frustrated the C/P. Likewise, if the
date of advance freight payment happened to be later than the date of Vessel’s sinking, no
payment would be due by reason of the frustration of the C/P. Clause 9 did not refer to
“freight earned” or “freight due” upon the completion of loading, thus making advance freight
an accrued debt which would be payable notwithstanding the subsequent sinking of Vessel or
frustration of C/P. It is not disputed that the Frustrated Contracts Act 1943 (the F/N is
governed by English law) does not apply to freight payment under F/N or C/P. Therefore,
there is no subsequent adjustment of loss or return of freight payment, in full or in part, short
of a proven breach of contract by the Owners having caused the Vessel’s sinking. For the
reasons mentioned above, it is understandable why the parties have gone into such extensive
arguments regarding the commencement and the counting of “3 banking days” (within which
period advance freight has to be paid) under Clause 9, in order to arrive at the payment date of
advance freight.

34) The Owners and the Charterers also accepted that the physical loading was completed at
2300 hours on 19th April 2005 and the Bill of Lading (“B/L”) was released to the Charterers
(who were also the Shippers) on 21st April 2005. Furthermore, both parties did not dispute
that 21st, 22nd & 23rd April (Wednesday – Friday) 2005 were banking days in Hong Kong
and that 24th & 25th April 2005 were not banking days.

35) Accordingly, if the commencement date for the purpose of counting 3 banking days was
on 19th March 2005, the advance freight would become payable at the latest on 22nd April
2005 and if the commencement date was on 20th April 2005, the advance freight would
become payable at the latest on 23rd April 2005, both of which dates were before the sinking
of the Vessel. This, understandably, is the Owners’ position. The Charterers’ position is that
the commencement date should be on 21st April when the B/L was released. Therefore the 3
banking days were 22nd, 23rd & 26th April 2005 which would mean that the last payment
date of advance freight subsequent to the sinking of the Vessel. The Charterers also raised
other issues in support of their position that advance freight was not due or payable. To
facilitate reading, the various issues in dispute are dealt with in sequence, as follows:
A) Effect of draft survey

36) The first argument related to the time to carry out the draft survey. It was raised by the
Charterers in Paragraph 7(a) & (b) of the Re-Amended Points of Defence, served with the
Respondent’s Final Submissions. It has to do with the completion of the draft survey which
was recorded to be on 20th April 2005 in the Provisional Draft Survey Report. The Charterers
argued:

“Until and unless draft survey at the load port had been carried out loading operation of the
Vessel had not been completed. Since draft survey at the load port was conducted by 检验公
司 only on 20th April 2005 the loading of the Vessel could not be said to have completed on
19h April 2005. Unless such loading operation had been completed no shipped bill of lading
could have been issued by the Claimants, the Master of the Vessel and/or their agents ( 船东
代理).”

37) Briefly put, the Tribunal finds difficulty in accepting that the draft survey is to be treated
as part of the loading operation. It is accepted that the purpose of the draft survey is to
ascertain (or sometimes to countercheck) the quantity of cargo being loaded onboard the
vessel. In addition to a draft survey to ascertain the cargo quantity, there may be other surveys
to ascertain the condition of the cargo loaded (as one example) the purpose of which is to
determine whether “clean” or “clause/unclean” bills of lading be issued. It would not make
sense to say that until all surveys are completed, the loading operation would not be
considered as completed. Furthermore, what if the result of the initial survey or surveys are
disputed by the parties, calling for further survey(s) to be held? Would it mean that the
completion of the loading operation has to be put back continuously or indefinitely? Last but
not the least, if cargo was loaded on the last few days of the shipment period permissible
under the sales contract and/or the letters of credit, can the buyers (as an example) by
disputing the draft survey or condition survey findings, cause the “timely” shipment to
become an “untimely” shipment, giving rise to a fresh but lawful excuse to reject the cargo?

38) To conclude, I consider that the phrase “completion of loading” should be given its
ordinary and natural meaning, limited to the physical operation of cargo loading. The phrase
does not include other ancillary matters relating to loading such as the draft survey or
issuance of bills of lading. Although it is irrelevant to this dispute, I go further to say that the
time taken for the draft survey should not even count for the process of loading laytime or
demurrage. A London arbitration award is reported in LMLN No.488 (1998) which appears to
take the same view as mine.

B) The signing and possible back-dating of Bill of Lading

39) This issue was raised by the Charterers in the Re-Amended Points of Defence in
Paragraph 7(d) - (e), which can be cited as follows:

“It is submitted by the Respondents that the Bill of Lading concerned in this case was
not issued and signed by (船东代理) (Owners’ agents) on 19th April 2005. It must have been
issued and signed after the completion of the draft survey by (检验公司) on 20th April 2005
but have been backdated to 19h April 2005 by (船东代理).

Since (船东代理) were authorized by the Claimants and/or the Master of the Vessel to
sign bills of lading on their/his behalf, Claimants are responsible for the
backdating/antedating of the bill of lading by (船东代理).

In the circumstances it is submitted by the Respondents that the Bill of Lading

concerned in this case was not properly issued and signed and was thus a nullity.
Consequently the period of 3 banking days set out in Clause 09 of the Fixture Note never
began to run and count and no freight was ever due and became payable by the Respondents.
When the Vessel sank on 25th April 2005 the charter as evidenced by the Fixture Note was
frustrated and the Respondents were and are under no obligation to pay any freight to the
Claimants.”

C) Construction of Clause 9 and the remark of freight in Bill of Lading

44) This issue was belatedly raised by the Charterers in the Re-Amended Points of Defence
in Paragraph 4(iii) as follows:

“It is further denied that the Bill of Lading No.1 dated 19h April 2005, being marked
“freight payable as per C/P dated 5th April 2005” was a Bill of Lading capable of triggering
any obligation under Clause 9 of the Fixture Note to pay advance freight”.
45) On its face, this appears to be an unreasonable argument on the part of the Charterers. If
the argument is to be accepted, only a B/L marked “Freight Collect” in accordance with
Clause 9 of the F/N could trigger freight payment. If it was a B/L marked “Freight payable
as per C/P dated ….”, then, according to the Charterers, freight would never become due or
payable, even if the B/L was in fact utilized and the voyage performed (up to the time of
Vessel’s sinking in this case). This clearly cannot be correct. After all, I do not see that there
is any important difference between these two remarks about freight payment in the present
context.

46) Bills of lading are invariably prepared by the Shippers with remarks or endorsements
about freight payment which would suit the requirements of sales contracts and/or letters of
credit, knowledge of which is not privy to the Owners or the Master. For example, under a
CIF or a CFR sale, bills of lading are normally required to be marked “freight prepaid”.
However, in this case, the Charterers denied that they were involved in the issuance of the
B/L bearing a remark different to that provided in Clause 9. It was stated in the Re-Amended
Points of Defence in Para.4(iii) as follows:

“The format of bill of lading which was approved by 被告承租人 is attached in

‘Annexure 2’ hereto. It is denied that Bill of Lading No. 01 dated 19h April 2005 marked
‘freight payable as per C/P dated 05/4/2005’(‘the Bill of Lading’) was issued in
accordance with the request by the Shippers and confirmed and/or approved by the
Respondents. It is specifically denied that either 被告承租人 or the Resources ever
requested, gave confirmation or approval to the Claimants, the Master of the Vessel and/or
(船东代理) to issue the Bill of Lading…”.

47) In the witness statement of (船东证人) who is a Manager in the Shipping Department of
the Owners, a fuller account of what had happened at the material time is provided in
Paragraph 7. He stated in Sub-Paragraph (iv) that:

“By an email dated 17th April 2005 (see exhibit “LJ-4”), the Vessel’s agent sent to me
the draft Bill of Lading provided by the shipper for my approval. The draft was marked
‘freight payable as per C/P’”. (My emphasis)

Then in Sub-Paragraph (v), 船东证人 continued as follows:

 “I then added some amendments to the draft Bill of Lading and faxed the revised draft
to the Vessel’s agent (see exhibit “6”),”

The Exhibit showed that two hand-written amendments had been made by 船东证人.
The first was to the cargo quantity which was remarked/amended as “said to weigh” and the
second was to insert the C/P date. 船东证人 did not amend the remark “freight payable as
per C/P”.

船东证人 then followed-on to state in Sub-Paragraph (viii) that:

“The Bill of Lading was signed by (船东代理) as agents for the Master and was dated 19th
April 2005.”.

48) Based on the evidence, I am inclined to accept that the remark of “freight payable as per
C/P” first came from the Shippers (being also the Charterers in this case). This is logical. The
draft B/L submitted for the approval of the Owners included other details such as the
Shipper’s name and address, the Consignee (being “TO ORDER”) and the name of the notify
address. The Owners were not privy to these details. They must have been provided or typed
in by the Charterers. It is difficult to accept that the remark “Freight payable as per C/P” was
inserted by the Owners or their agents in the draft B/L.

49) This being the case, whether one calls it a variation or an estoppel (by convention), it
would not be right for the Charterers to argue that the B/L should have been marked “freight
collect” as per Clause 9 of the F/N and should not have been marked “freight payable as per
C/P”. I cannot accept the Charterers’ bare denial that the remark of “freight payable as per
C/P” did not originate from them (as Shippers) or their agents, and was never approved. I
accordingly decide against the Charterers on this issue.

D) Construction of Clause 9 and Implied term

50) This issue was raised by the Charterers in the Re-Amended Points of Defence in
Paragraph 7(h) and can be cited as follows:
 “Further or alternatively, the Respondents will say that in construing Clause 09 of the
Fixture Note it is necessary, so as to give business efficacy to the provision, to imply a term to
the effect that in any event the 3 banking day period for payment of freight will not start to
run until the Bill of lading is actually released. It is admitted and averred that the Bill of
Lading was released on 21st April 2005. In the premises, if which is denied, freight ever
became due and payable, it did not do so until 26th April 2005 by which date the Vessel had
sunk.”

51) I also find difficulty with this argument of the Charterers. The reasons are:

Firstly, there is a complete and express clause (i.e. Clause 9) dealing with the freight
payment namely, it has to be paid within 3 banking days “after completion of loading” (which
was on 19th April 2005 and being discussed inter alia in Paragraph 38) and “after signed
B/L” (which was on 20th April 2005 and being discussed inter alia in Paragraph 40). These
provisions should override any implied position with regard to freight payment.

Secondly, I am not aware of any implied term that freight is payable upon the release of
the bills of lading. The Charterers did not show me any authority or persuasive material in
support of the term sought to be implied by them.

Thirdly, if the parties intended to pay freight only after the release of bills of lading, they
should have expressed this clearly in Clause 9 of the F/N. It is not uncommon for parties to
state that freight should be paid before or after the release of bills of lading, as explained in
the report by the Owners’ expert, Capt. (船长姓名). This is also the general experience of me.
For instance, it is not uncommon for the owners to insist in the F/N or C/P that freight must
be paid prior to the release of bills of lading marked “freight prepaid”. This is motivated by a
concern that if such bills of lading fall into the hands of innocent holders, they will be binding
on the vessel/owners so far as the freight provision is concerned so the Owners will be unable
to collect the freight. Therefore, if the parties in this F/N agreed expressly that the freight
should be paid only upon the signing of B/L and nothing was said about the release of B/L, I
consider it wrong to imply such a term which would contradict parties’ expressed stated
intention as shown in Clause 9 of the F/N.
52) The Owners referred me to what Lord Simon has said in BP v. Hastings (1977), setting
out the five stringent requirements which needed to be satisfied in order to imply any term
into a contract. They are, it must be reasonable and equitable, it must be necessary to give
business efficacy to the contract, it must be so obvious that it goes without saying, it must be
capable of clear expression and it must not contradict any express term of the contract. I have
to say that in this case, none of the five requirements have been satisfied for implying the
term sought by the Charterers to be implied in Clause 9 of the F/N.

E) The period of 3 banking days

53) The Charterers raised one further argument in the Re-Amended Points of Defence in
Paragraph 7(g) which can be cited as follows:

“Without prejudice to the generality of the foregoing, further or alternatively, the

Respondents will say that, if (which is denied) the Bill of Lading concerned in this case was
valid, it must in any event be treated as if it were signed on and dated 20th April 2005, in
which case freight had not become due and payable by the Respondents by the time of the
sinking of the Vessel. 21st, 22nd and 23rd April 2005 (Wednesday to Friday) were banking
days in Hong Kong, but 24th and 25th April 2005 were not banking days in Hong Kong. In
the premises if (which is denied), freight ever became due and payable, it did not do so until
26th April 2005. The Vessel sank on 25th April 2005 so the Charter as evidenced by the
Fixture Note had became frustrated as at that time before the right to freight crystallized. It
follows that the Claimants have no cause of action against the Respondents and are not
entitled to payment of freight as claimed under the terms of the Fixture Note.”

54) This issue has in fact been responded by the Owners in the Claimants’ Final
Submissions, Paragraph 43, which can be cited as follows:

“43. The Charterers contend, on the basis that the bill of lading was or must have been
signed on 20 April 2005, freight was not due until 26 April: Amended Points of Defence
paragraph 7 (g). This is a simple fallacy: freight was due ‘within 3 banking days’, ie 21-23
April. Freight had to be paid by the end of banking hours, or at least midnight, on 23 April. It
was an accrued right before the ship sank on 25 April….”
55) I accept the argument of the Owners. The word used in Clause 9 of the F/N is “within”
the 3 banking days of 21st, 22nd & 23rd April 2005 so the freight payment must have become
due by midnight on 23rd April 2005. If Clause 9 had used another common word “after” the
3 banking days, then the Charterers’ argument that freight became due only on 26th April
2005 may well be correct. But it is not the case here.

F) Conclusion about the payment of advance freight

56) To summarize the above, I find that the advance freight became due for payment prior to
the sinking of the Vessel on 25th April 2005. Accordingly, the Charterers must pay to the
Owners the sum of US$750,000.00 together with interest at 6.5% p.a., from 24th April 2005
until the date of actual payment.

I) Costs of the arbitration

60) Following the principle of costs to follow the event, the Charterers must bear their own
costs and pay the costs of the successful Owners on party-and-party basis. The costs of this
Award shall also be paid by the Charterers. I take notice that the Charterers disputed the
employment of a London QC by the Owners, probably by reason of “excessiveness”. This is
a matter concerning the assessment and determination of the quantum of the recoverable costs
which I shall consider and deal with later should it be called upon to assess and determine the

4 香港仲裁案件之四

以下是另一个笔者在香港近期的裁决书，它涉及的金额并不高，争议是有关经常发生
的滞期费。在国际货物买卖与租约经常会出现的有关固定装卸时间条文有多少天，通常
会去 加 以限制 ，就是 周日 与 假期 不 算在内（ Sundays and Holidays Excluded 或简称
SHEX）。在本案件，双方争议是周六（Saturday）是否也不算在内。显然，周六并没有
特别去加在 SHEX 一词内。承租人以中国的《劳动法》作为支持，内中规定了周六也算
是假期，认为即使不去特别加上也可以假期为由不算在内。笔者判是这一个说法不成立，
因为：（一）是《劳动法》与航运/国际外贸的本质（context）是两码事，这在本书第一
章 5.2.2 段与第四章 2.1 段及其他部分都有讲到。（二）合约条文已经特别针对一件事情
但不提其他同类事情，这是在本书第四章第 6 段有详论。因为如果周末在双方订约的意
图下算是假期，就何必去把周日加在 SHEX 一词内？肯定是周日在感觉上应该比周六
更加接近周末假期。所以只加上周日，看来双方订约意图就是去排除周六。（三）笔者
在航运租船业务有多年的经验，知道市场上有专门针对不计算或只是部分计算周六的
标准条文，例如是 Baltimore Form C Saturday Clause。所以，如果什么都没有写上就去
判周六也包括在假期内，可以不算在装卸时间内，笔者认为这样的解释并不合理与违
反商业的常识（这可看本书第四章第三段）。正如 Diplock 勋爵在 The “Antaios” (No. 2)
(1984) 2 Lloyd’s Rep. 235 所说的：
“… if detailed semantic and syntactical analysis of words in a commercial contract is going
to lead to a conclusion that flouts business common sense, it must be made to yield to
business common sense.”。

==================================================================

IN THE MATTER OF THE ARBITRATION ORDINANCE (CAP. 341)

AND

IN THE MATTER OF AN ARBITRATION

BETWEEN

A 公司 Claimants (Owners)

AND

B 公司 Respondents (Charterers)
 “X 轮” C/P dated 28 APRIL 2007

FINAL ARBITRATION AWARD

1) By a Charter-Party (the “C/P”) evidenced by a Fixture Note (the “F/N”) dated 28 April
2007, it was mutually agreed between A 公司 as the Owners (the “Owners”) and B 公司 as
the Charterers (the “Charterers”) to charter the MV “X 轮” (the “Vessel”) for a voyage from
one safe port/one safe berth Shanghai, China to one safe port/one safe berth Calcutta, India.

2) The said C/P (evidenced by a F/N of 28 April 2007) provides for:

“17. Dispute, differences, controversies, if any, TB settled by arbitration in Hong Kong

and English law to apply with LMAA rule including LMAA small claim procedure up to
USD25,000.”

3) Disputes (hereinafter more particularly defined) did arise between the parties. By
agreement of the parties, I, the undersigned Philip Yang of 18A, Casey Building, 38, Lok
Ku Road, Sheung Wan, Hong Kong, was appointed as the sole arbitrator in respect of all
disputes arising out of or in connection with the C/P on 8 June 2007. I accepted the
appointment on the same day.

4) The dispute referred to me as the sole arbitrator was the Owners’ claim against the
Charterers for demurrage accrued in the loading port of a total sum of US$*****.

5) The parties subsequently exchanged written submissions (including but not limiting to
Claim Submissions, Defence Submissions, Reply Submissions), attached with documentary
evidence they relied on.

6) Neither party asked for an oral hearing and they invited me to proceed to my
Award based on the submissions and documents presented.
 7) Under the Hong Kong Arbitration Ordinance, I am obliged to issue a
Reasoned Award and my reasons are accordingly attached hereto and form part of this
my FINAL AWARD.

N O W I , the said Philip Yang, having taken upon myself the burden of this reference and
having carefully and conscientiously read and considered the submissions made by the
Claimants, and the documentary evidence they put before me, DO HEREBY MAKE,
ISSUE AND PUBLISH this my FINAL AWARD, namely:-

A) I FIND AND HOLD that the Owners’ claim for US$******* succeeds in full.

B) I THEREFORE AWARD AND ADJUDGE that the Charterers shall pay to the
Owners the sum of US$******* within seven days after completion of discharging
at Calcutta which is estimated to be on 15 June 2007.

C) I FURTHER AWARD AND ADJUDGE that the Charterers shall pay the costs
of my FINAL AWARD which I tax and settle at HK$******* PROVIDED ALWAYS
that if, in the first instance, the Owners has paid any part of the costs of this my FINAL
AWARD, they shall be entitled to an immediate refund from the Charterers of the sum
so paid.

GIVEN UNDER MY HAND in Hong Kong this day of June, 2007

__________________________ ________________________
Philip Yang Witness
Sole Arbitrator

==================================================================

“X 轮” C/P dated 28 APRIL 2007

REASONS

For and forming part of FINAL AWARD

THE FACTS:

1) By a Charter-Party (the “C/P”) evidenced by a Fixture Note (the “F/N”) dated 29 April
2007, it was mutually agreed between A 公司 as the Owners (the “Owners”) and B 公司 as
the Charterers (the “Charterers”) to charter the MV “X 轮” (the “Vessel”) for a voyage from
one safe port/one safe berth Shanghai, China to one safe port/one safe berth Calcutta, India.

2) According to the Statement of Facts (the “SOF”), the Vessel arrived at the loading port of
Shanghai and tendered Notice of Readiness (the “NOR”) at 0640 hours on 15 May 2007.

3) The relevant and/or material terms and conditions in the C/P (evidenced by a F/N of 28
April 2007) are as follows:

2. QTY: MIN 10,500MT FERTILIZER IN BAG STOWAGE FACTOR ABT 1.15

 5. LOADING/DISCHARGING RATE: 2,500MT/1,500MT PWWD SHEX UU

7. DEM/DES: USD4,000/DHED PER DAY OR PRO RATE, DEM.DES IF ANY TO BE

SETTLED W/I 07 DAYS AFTER COMPLETION OF DISCHARGE SUPPORT BY
RELEVANT DOCS.

21. HOLIDAYS IN THIS FIXTURE NOTE SHALL DENOTE NATIONAL HOLIDAY

AND HOLIDAYS AS DECLARED BY GOVERNMENT.

4) Whereas the movements of the Vessel were, according to the Owners’ SOF, as follows:

Date Time Description

From To
15-May TUE 0640 ARRIVED AT FANGCHENG P/S N TENDERED NOR
0640 2400 AWAITED FOR BERTHG DUE TO PORT CONGESTION
16-May WED 0000 2400 AWAITED FOR BERTHG DUE TO PORT CONGESTION
17-May THU 0000 2400 AWAITED FOR BERTHG DUE TO PORT CONGESTION
18-May FRI 0000 2400 AWAITED FOR BERTHG DUE TO PORT CONGESTION
19-May SAT 0000 2400 DITTO (0400-0800 RAIN)
20-May SUN 0000 2400 AWAITED FOR BERTHG DUE TO PORT CONGESTION
21-May MON 0000 2400 AWAITED FOR BERTHG DUE TO PORT CONGESTION
22-May TUE 0000 2400 AWAITED FOR BERTHG DUE TO PORT CONGESTION
23-May WED 0000 2400 AWAITED FOR BERTHG DUE TO PORT CONGESTION
24-May THU 0000 2048 AWAITED FOR BERTHG DUE TO PORT CONGESTION
24-May 2048 2345 PILOT ON BOARD N ALL LINES FAST
24-May 2345 2400 JOINT INSPECTION N INMARD FORMALITIES
25-May 0000 0100 JOINT INSPECTION N INMARD FORMALITIES
25-May FRI 0100 0800 AWAITED CGO HOLD INSPECTION DUE TO RAIN
25-May 0800 1050 CGO HOLD INSPECTION N PREPARATION FOR LDG
25-May 1050 2400 LOADING COMMENCE N CONTINUE
26-May SAT 0000 2400 LDG CONTINUE
27-May SUN 0000 2400 LDG CONTINUE
28-May MON 0000 1600 LDG SUSPENDED DUE TO RAIN
28-May 1600 2400 LDG RESUMED N CONTINUE
29-May TUE 0000 0900 LDG CONTINUE
29-May 0900 1300 LDG SUSPENDED DUE TO RAIN
29-May 1300 2400 LDG RESUMED N CONTINUE
30-May WED 1300 2400 LDG CONTINUE N COMPLETED

THE CLAIM AND THE ISSUES:

5) The Owners’ claim against the Charterers for demurrage accrued in the loading port of
****** days amounts to a total sum of US$******. The Charterers denied such demurrage
was due.

6) The issues of the disputes can be broken down as follows:

i) Whether a Saturday is a holiday in Shanghai?

ii) Whether it rained on 16 to 18 May 2007? If it did rain, how it affected the calculation
of laytime and demurrage? This argument may be contingent on which evidence should be
relied on, the SOF of the Vessel, the SOF of another vessel loading at the material time, MV
“Y 轮” or the testimonial of the weather provided by the Shanghai Weather Station?

OWNERS’ ARGUMENTS

7) In the Claim Submission, the Owners argued that the SOF of the Vessel, signed by the
Captain and the local Port Agent, should be relied on to calculate the demurrage of this
dispute. In that SOF, there is no record of the alleged raining periods from 16-18 May 2007.

8) Further, the Owners argued that, pursuant to Cl. 21 of the F/N and the government declared
that the holidays include the New Year’s Day (one day), the Labour Day (three days), the
National Day (three days), the Lunar New Year’s Day (three days), Saturdays were not
holidays. Then, the Owners submitted that the “S” in “SHEX” in Cl. 5 of the F/N should
stand for “Sundays” or “Saturdays”. Then, if Sundays could be excluded, then Saturdays
could not. Similarly, if Saturdays could be excluded, then Sundays could not. As a result, the
Owners alleged that, in order to exclude both Sundays and Saturdays, SSHEX should be
provided in the F/N. Finally, the Owners argued that if Saturdays were holidays, there was no
need to state SHEX in the F/N and merely HEX can exclude both Sundays and Saturdays.
This cannot be right in Owners’ submissions.

9) In the Reply Submissions, the Owners further agued that the “Weekly Holidays” (周休息
日) provided in the “Provisions of the State Council on Working Hours of Workers and Staff”
were not the same thing as “Holidays”.

10) Also in the Reply Submissions, the Owners submitted that the berths for the Vessel and
the MV “Y 轮 ” were not the same place even both vessels were loading fertilizer. As a
result, even if it rained at the berth for the MV “Y 轮 ” , it did not rain where the Vessel
berthed. What was more, the Owners argued, though the testimonial of the weather provided
by the Shanghai Weather Station recorded the raining time/period between 15 May 2007 and
24 May 2007, it did not record where it was raining. Thus, the Owners insisted to use the
SOF of the Vessel to calculate the demurrage they claimed against the Charterers.

CHARTERERS’ ARGUMENTS

11) In the Defense Submissions, the Charterers argued that, pursuant to Article 7 of the
“Provisions of the State Council on Working Hours of Workers and Staff” and the Decision
of the State Council on Revising the “Provisions of the State Council on Working Hours of
Workers and Staff” promulgated on 25 March 2007, both Sundays and Saturdays were
“Holidays”.

The said Article 7 are, inter alia:

“All state organs and institutional organizations shall institute a unified working hour
system under which Saturday and Sunday shall be arranged as weekly holidays.

Enterprises and institutional organizations that cannot institute the unified working
hours prescribed in the preceding paragraph may make flexible arrangements for weekly
holidays in the light of their actual conditions.”
 （《国务院关于职工工作时间的规定》

第七条 国家机关、事业单位实行统一的工作时间，星期六和星期日为周休息日。

企业和不能实行前款规定的统一工作时间的事业单位， 可以根据实际情况灵活安
排周休息日。）

12) Further, the Charterers argued that no matter what the “S” stood for, whether it was
Sunday or Saturday, it would not matter because both days or either one of the two would be
holidays within the meaning of the official document referred to in Para.11.

13) At the end, the Charterers challenged the SOF which was calculated based on the Log
Book provided by the Owners. In accordance with the SOF of MV “Y 轮”, prepared by the
same Port Agent, there were raining periods recorded on 16 to 18 May 2007. The relevant
descriptions of MV “Y 轮” in the SOF are cited as follows:

Date Time Description

From To
16-May WED 2200 2400 LDG SUSPENDED DUE TO RAIN
17-May THU 0000 0330 LDG SUSPENDED DUE TO RAIN
18-May FRI 0330 2400 LDG RESUMED N CONTINUED

14) Then, the Charterers further argued that due to the refusal of the SOF of MV “Y 轮” by
the Owners, the testimonial of the weather provided by the Shanghai Weather Station should
be used to calculate the demurrage, recording clearly the raining time/period between 15 May
2007 and 24 May 2007.

MY DECISIONS

A) Whether a Saturday is a Holiday at Shanghai?

15) I shall first deal with the question of whether a “Saturday” should be a “Holiday” in this
F/N. In chartering, “Holidays” can be described in many ways such as: “general or local
holidays”, “legal holidays”, “official and local holidays”, “charterparty holidays”, “legal and
local holidays”, “non-working holidays”, etc. These terms have precedent cases with slightly
varying meanings. But I need not be bothered because the term used in this F/N to denote
“Holidays” is in Cl.21 of: “HOLIDAYS IN THIS FIXTURE NOTE SHALL DENOTE
NATIONAL HOLIDAY AND HOLIDAYS AS DECLARED BY GOVERNMENT.”

16) Without this Cl.21, I have little or no hesitation that in normal chartering practice, week-
ends or weekly breaks (i.e. Saturdays and/or Sundays) are not “Holidays”. This can be
supported at least by two reasonings. One is the well-known definition of “Holidays” in all of
commonly used chartering rules or codes, namely, The Charterparty Laytime Definitions
1980, Voyrules 1993 and Baltic Code 2003 as:

“HOLIDAY – a day other than the normal weekly day(s) of rest or part thereof, when by
local law or practice the relevant work during what would otherwise by ordinary working
hours is not normally carried out.”

Although the above rules or codes were not incorporated in this F/N, they nevertheless
illustrate the common understanding in chartering.

17) Another reasoning in supporting my belief is the common chartering practice of using the
acronyms SHEX (which stands for “Sundays & Holidays Excluded”) and/or SHINC (which
stands for “Sundays and Holidays Included”). Indeed it is the case in this F/N. If Sundays
(and/or Saturdays) can be considered as “Holidays”, then as the Owners argued in Para.8,
people in chartering needs only the acronym of HEX, which is all-inclusive, rather than to
negotiate for SHEX/SHINC or even further for SatSHEX. I agree and further add it is
common in chartering to use clear words or provisions to exclude Saturdays by a so-called
“Weekend Clause” which typically reads: “Time shall not count between noon on Saturday
and 8 am on Monday” or an even more elaborated “Baltimore Form C Saturday Clause”.

18) But in this case, there is the very difficult problem created by Cl.21, which I
have never seem before in my many years of chartering experience. The said clause
has stated that as long as holidays declared by the Government (and in this case the
PRC Government), they should be holidays within the meaning of this F/N for the
calculation of laytime. Then in Para.11, the Charterers produced the “Provisions
of the State Council on Working Hours of Workers and Staff” issued by the PRC
Government which defines “Saturdays” as “Weekly Holidays” in the English text.

19) It is appreciated that due to the small amount in dispute, parties did not adduce
experts (legal experts) in the relevant PRC law to better explain to me what is the
meaning of by “Weekly Holidays” in that piece of official document and the
difference, if any, with other public holidays. The Owners’ argument was
essentially that it would be ridiculous and wholly unreasonable to have so many
holidays (over 100 in a year) in the PRC.

20) I have to say that I am not being able to tell the difference, if any, by reading the
document in English, between the terms “Weekly Holidays” and “Holidays”. Thus, if it has
only the English text, I probably will decide that Saturdays should be “Holidays” within the
meaning of this F/N because the parties have chosen to incorporate Cl.21. However, if I go
on to read the Chinese text, the corresponding term of “Weekly Holidays” is “周休息日”,
which I understand to mean “Weekly Resting Days”. In the Chinese text, I do not find a
reference to “Holidays” which in my view should more commonly read as “ 假 日 ” . Of
importance, I am confident that the Chinese text should prevail over the English text.

21) I should also point out that in the Chinese text (人事部贯彻《国务院关于职工工作时间
的规定》的实施办法) presented to me by the Charterers, in page 3, Article 3, there is another
term of “节假日” following the term of “周休息日”. The literal translation of the former
term appears to be “Festival Holidays”. I understand that there is other official document
issued by the PRC Government defining what those days are, such as the National Day, the
Lunar New Year’s day, etc. I am therefore persuade that the word “Holidays” in this F/N is
more appropriate to equate to “Festival Holidays” declared by PRC Government.

22) To therefore conclude on this issue, I have decided in favour of the Owners in that
Saturdays at Shanghai are not “Holidays” within the meaning of the F/N and even within the
meaning of the “Provisions of the State Council on Working Hours of Workers and Staff”
issued by the PRC Government. As a matter of fact, the dispute between the parties has only
to do with the 1st Saturday on 19 May 2007, as the subsequent Saturday fell on demurrage
period and hence the well-known maxim of “Once on demurrage, always on demurrage”
applies.

23) Last but not the least, under English law which governs the F/N, there is nothing to stop
the parties from agreeing to something which is “ridiculous” or simply unusual (in chartering
practice). The agreement will be given effect provided the words used are clear, unambiguous
and can have no other meaning. In this case, I say that the Charterers have narrowly failed to
persuade me.

B) Raining periods from 16-18 May 2007

24) I shall now turn to the second issue in dispute. To start off, I shall touch on some of the
basic principles under English law, as I see them, before I shall apply the facts of this case to
the principles.

25) Firstly, in Cl.5 of the F/N, the laytime allowed is based on “WWD” or “Weather
Working Days”. It should not be in dispute by the parties that raining periods affecting the
loading of fertilizer ought to interrupt laytime running for reason that they are “non-WWD”.

26) Secondly, it was the weather at the loading place which matters. Namely, the raining
would have to be there to interrupt laytime running, even if the Vessel happened to be waiting
elsewhere, say at the anchorage, where fine weather was encountered. There is clear
precedent case on this point. In The “Danita” (1976) 2 Lloyd’s Repl.377, it was said:

“It was held that the words ‘weather working day’ applied to days when weather
permitted working in the dock. If the weather did not permit working in the dock, then that
day was not a weather working day.”

27) Thirdly, under English law, there is a difference between the terms of “WWD”
and “WWD of 24 consecutive hours”. In WWD, it appears if raining was outside the
relevant working hours of the port, it is itself irrelevant and a full working day should
be counted. In Charterparty Laytime Definitions 1980, it has explained under
“WWD” that:
 “If such interference (raining) occurs (or would have occurred if work had been
in progress) there shall be excluded from the laytime a period calculated by reference
to the ratio which the duration of the interference bears to the time which would have
or could have been worked but for the interference.”

But the term “WWD of 24 consecutive hours” is different and it is defined as:

“If such interference (raining) occurs (or would have occurred if work had been
in progress) there shall be excluded from the laytime the period during which the
weather interfered or would have interfered with the work.”

In this F/N, it was agreed to be “WWD” instead of “WWD of 24 consecutive

hours”. But even the disputed raining periods were at midnight or at very early hours
from 16 to 18 May 2007, I would not think this principle matters because Shanghai
appeared to work 24 hours.

28) Fourthly, it is the evidential value of the SOF, in this case jointly signed by the
Master and the Port Agent, without any reservation. It so happened in the latest
Lloyd’s Maritime Law Newsletter No.717 (9 May 2007), which has reported a case in
the English Court of The “Newforest” 30 January 2007 and the judgment by Judge
Mackie QC with regard to SOF is as follows:

“The statement of facts was not binding because it did not say so and because the
words ‘on the basis of’ did not point clearly enough to finality. The word ‘mutually’
meant, at the least, around the same time. However, the evidential value of the
statement of facts was unquestionably strong whether or not the requisite mutuality
was achieved, and regardless of its contractual status. The statement of facts had been
prepared on the spot by the agent confirmed at the time by the master and, albeit
much later, by the port authority. That was powerful evidence to set against the
potentially self serving recollection and reconstruction of unremarkable and detailed
facts, albeit assisted by weather records and other contemporaneous documents two
years later. In general that evidence was likely to discharge the charterers’ burden of
proof unless the owners showed it to be wrong, an exercise which required more
than speculation and needed convincing live evidence and/or persuasive
contemporaneous documents.” (my emphasis)
 I wish to say that it is my view all along with regard to the evidential value of a
SOF.

29) Now, turning to the facts in this case and in applying the above principles mainly
the Second and he Fourth ones under English law, I start off by saying that the SOF
signed by the Master of the Vessel and the Port Agent is unquestionably strong
evidence. To suggest some of its contents were wrong or missing, the Charterers have
to adduce convincing evidence (even if it is not live evidence) and/or persuasive
contemporaneous documents. It cannot be a speculation, no matter how persuasive it
sounds.

30) After some serious consideration, I am not convinced that the burden has been
discharged by the Charterers. Primarily, it has to do with the weather at the loading
place that really matters – see Para.26. In the SOF of the other vessel, MV “Y 轮”,
although raining periods were recorded, as stated in Para.13 above, but it is unclear as
to the place of loading of MV “Y 轮” was precisely the same spot or of close
proximity as the MV “X 轮” which was loaded a while later. But in the Owners’
Reply Submissions, they have stated that both vessels were not at the same place of
loading or similar loading berth. The Charterers did not retort to this allegation of
fact. Therefore, I am left in doubt as to the proximity of the two places of loading and
whether or not it could be a case of raining at the berth occupied by MV “Y 轮” but
the weather remained fine at the would-be berth of MV “X 轮”.

31) As to the testimonial of the weather provided by the Shanghai Weather Station
adduced by the Charterers to contradict the SOF of the Vessel, I have even greater
suspicion or reservation. It is because the testimonial is much more likely to cover a
vast area of the port of Shanghai. If the testimonial has specially targeted at the place
of loading of the Vessel, it would have much higher persuasive value. But it did not.

32) If the Charterers wanted to contradict the SOF, they should, as indicated in
Para.28, adduce much better evidence (live or otherwise). For example, a witness
statement by the Port Agent who was said to have signed both SOFs of MV “Y 轮”
and MV “X 轮”, explaining the alleged contradiction. It is especially necessary in
light of the SOF of MV “Y 轮” and the testimonial provided by the Shanghai
Weather Station are defective for reasons I have mentioned earlier.

33) I am conscious of the fact that the alleged raining periods recorded in the SOF of
MV “Y 轮” were late in the night. Therefore, what was the weather at the would-be
place of loading of MV “X 轮” could be unnoticed even by the same Port Agent.
But I am not going to speculate on probability. I have to decide on the documentary
evidence before me and I am not convinced that the burden to contradict the SOF of
the Vessel has been discharged by the Charterers.

34) I should also mention that the SOF of the Vessel had in fact recorded one period
of rain on 19 May 2007, from 0400 hours to 0800 hours. A much longer raining
period was recorded in the SOF of MV “X 轮”. On 19 May 2007, the Vessel was
still waiting for berth at the anchorage due to congestion. So it was not exactly a case
of all possible raining periods were being brushed aside or ignored because the Vessel
was at anchorage.

35) To therefore summarise, I have to decide also against the Charterers on this
issue.

C) Conclusion

36) To conclude, I decide that the Owners’ claim of US$****** must prevail. In
view of the demurrage had been agreed to be paid within seven days after completion
of discharging at Calcutta and the Vessel at the date of the Award is still discharging at
Calcutta, estimated to be completed on 13 June 2007, therefore no interest is awarded
in this arbitration.

37) As to costs, the parties are not represented and therefore no recoverable costs
should be involved. Neither party (in particular, the Owners who are the winning
party) asked for costs in any event. Therefore I award no costs. As to costs of this
Award, i.e. my fees, I have spent considerably more time in this case but in order to
encourage and support the way this case is handled (which is efficient, cooperative
and economical by both parties), I have decided only to charge a lumpsum of
HK$******. On top，I have to add a further sum of HK$****** as my standard
appointment fee which I did not charge in the outset due to the speedy handling of this
case. This total amount of HK$****** should be borne by the Charterers, who are the
losing party in this reference.