Can charterers force an owner to install a scrubber?

The answer to this question will depend in each case on the provisions of the charter party. However, in general, it seems unlikely that charterers would be able to compel an owner to install a scrubber in order to comply with the new global sulphur limit. This is because the new sulphur limit can be met either by using low sulphur fuel oil or by installing a scrubber. 

One possible scenario where charterers could try to force an owner to install a scrubber would be under a long-term time charter (concluded before 1 January 2020 and ending after that date) in which owners warrant that the ship can trade worldwide and charterers are to supply a specified grade of fuel oil with a sulphur content of max 3.50% m/m. Charterers may seek to argue (following the rationale of the English Court in The Elli and The Frixos dealing with the requirement that tankers be double-hulled) that owners are obliged to fit a scrubber in order for the ship to meet the worldwide trading warranty whilst charterers are supplying fuel oil with a sulphur content of max 3.50% m/m. 

However, the probable legal outcome is that charterers (or owners) would be obliged to supply low sulphur fuel oil and charterers would be compensated for (or owners will need to bear) the difference between the cost of the low sulphur fuel oil actually supplied and the notional cost of the charter party grade of high sulphur fuel oil.

This issue is unlikely to arise under charter parties concluded after 1 January 2020 when the full impact of the new global sulphur limit is known and no doubt owners and charterers will expressly deal with the issues of compliance, the fitting of scrubbers and cost-sharing.

 

 

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