Is there an impact on the performance warranties?

The use of a scrubber might have an impact on the fuel consumption of the ship because additional fuel is required to power the scrubber. The impact on the engine could result in the ship not being able to sail at the full speed warranted by owners. If a ship cannot sail at the warranted full speed, owners might be in breach of the performance warranties under the charter party and/or any ‘utmost dispatch’ provision under the bill of lading contract. This in turn could expose owners to a claim for damages from charterers and/or third-party bill of lading holders.

As a consequence, owners should therefore not only state the maximum sulphur content of the fuel oil required but also amend the performance warranties so that they will not apply if charterers supply fuel oil with a sulphur content that exceeds the limit specified in the charter party.

If the ship needs to switch to low sulphur fuel oil to comply with local regulations e.g. where use of open-loop scrubbers is restricted or prohibited, the parties might want to consider whether the time required to changeover fuels should be excluded from the speed and performance evaluation. However, it should be noted that the procedure for changeover is in principle the same as has been applied for many years when entering and leaving an ECA. Under the INTERTANKO Bunker Compliance Clause for Time Charterparties (subclause 3), fuel changeover periods are excluded from speed and performance evaluations.

 

 

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