AWT Weather Routing/Routeing: Applied Weather Technology

Without Guarantee

by Jim Sigafoose

The term ‘Without Guarantee’ (WOG) often has been used in charter party agreements in relation to the duration of the charter period. A previous arbitration award decided that this term meant that the party making that duration description was not offering a promise or a commitment, but was merely presenting a statement made in “good faith.” Good faith is ruled to mean simply that the party had an honest belief in the statement at the time it was made.

However, this WOG term is now also being increasingly seen in charter parties in connection with the vessel’s description. For example, at the end of the list of ship’s particulars there will be a qualifying statement “all details about without guarantee.” While it can be argued that this qualifier would not apply to specific terms such as the number of holds in the vessel, how does it apply to less definite terms such as speed and consumption?

This question was posed to a panel of renowned London arbitrators and maritime legal experts that was assembled in Beijing at the recent AWT-hosted workshop on “Shipping Operational Disputes.”

The panelists’ noted that there has been a High Court case in England that has established the precedent law on this subject. The Court ruled that the words “without guarantee” which appeared at the end of the vessel’s description clause in the relevant charter party had to be given their natural meaning and authority; this meant that they applied to the speed and fuel provisions and therefore, the charter party did not contain a warranty as to the vessel’s rate of fuel consumption.

Thus, in the case of WOG in a vessel charter party, a charterer’s only recourse to claim damages, when there has been an apparent breach of the speed and consumption description, would be to show that the vessel’s description was not given in good faith. In actual practice, this would be difficult to prove; however, it may be possible if a record of the vessel’s performance prior to entering into the current charter party were obtained. This would demonstrate that the owners knew the ship could not achieve the described speed and consumption, and therefore they did not act in good faith. Under English law, an owner could be required to disclose records of prior vessel performance if a case were to come to a formal hearing in court or arbitration.

In summation the panelists expressed the view that the WOG term in a charter party is a definite bonus for an owner and could afford a tremendous amount of protection. The panel emphasized the need to check for this term when engaging in negotiations of charter party details.

Watch this space for future discussions of charter party disputes and the practical advice offered by the expert panel from AWT’s Beijing workshop.