Background

Statement of Facts (SOF) is a very important document upon which charterers’ claims for off-hire and operators’ calculation for demurrage are based. It provides information and keeps track of all activities concerning the ship from the moment it has arrived at port until the completion of cargo operations and the departure. The document should at least include:

• the time NOR was tendered;
• the time hatch cover was opened;
• the time cargo operations commenced and completed;
• weather and other conditions that affected cargo operations…

SOF is so important in practice that any discrepancy or erroneous information could possibly lead to charterers’ claims under the time charter. It’s therefore important for masters to check the document prior to departure and ask for the charterer’s confirmation before signing it if it’s necessary.

Case study

Some recent cases handled by the Club have thrown up a serious of problems relating to claims under the time charter party. There’s one case where the rainy period recorded in the SOF does not tally with the actual time of rain. And there’s another case where STS transfer was not operable due to shortage of barge at the port, not poor weather as recorded in the SOF.

A SOF is normally submitted to the master by the owner’s agent prior to departure. However, it’s likely that the master, preoccupied with getting prepared for the voyage, sign the SOF without carefully reviewing its content.

In the circumstances where the master fails to correct mistaken information in the SOF, the charterer will not be able to collect demurrage from the sub-charterer. Moreover, a dispatch money will be incurred. The charterer will then claim compensation for their loss from the owner on account of breach of contract as WWD may be agreed in most charter party laytime clauses.

Basis for claims

The charterers may set up their claims based on:

• Terms of employment in the time charter party, e.g. clause 8 of NYPE form – the Captain shall be under the orders and directions of the Charterers. In addition, it’s likely that the charterer has requested to review the SOF draft via email to the master or the owner. As a result, the master is not allowed to sign the document without charterers’ confirmation.
• Clause 13, Supply of Goods and Services Act 1982 – in a relevant contract for the supply of a service where the supplier is acting in the course of a business, there’s an implied term that the supplier will carry out the service with reasonable care and skill.

Advice to Members

Although there have been cases where charterers’ claims get denied, the Club would like to draw Members’ attention to the fact that not prudently checking the SOF records may lead to unexpected troubles and it’s advisable that:

• the master should send SOF to the charterer for confirmation before signing it, if the charterer has made such request in his previous orders;
• the master should require a justification immediately after finding any false record that does not agree with the logbook;
• make notes clearly stating the objection or write “Receipt Only” if the justification is not allowed;
• send a Letter of Protest (LOP) to related parties if making notes is not allowed;
• in the event that there are multiple SOFs from different parties (the charterer’s agent, the sub-charterer’s agent, the cargo agent and etc.), the master should be extra careful whether there is any disagreement before sign the document.

For further information, please contact CPI FD&D team.