In time charterparties, disputes may usually arise as to deductions made from charter hire in relation to an alleged underperformance of the vessel. As a matter of law, if a deduction is being made from hire, such deduction must be the result of good faith or be made on reasonable grounds.

As established in the case The Kostas Melas [1981] 1 Lloyd’s Rep 18, in the instance of a deduction for an underperformance of the vessel, the charterer may be required to show that its deductions were made in good faith and its calculations were made on reasonable grounds. In the case that such deductions were not made in good faith or reasonable grounds then the charterer may be liable for breach of contract.

In relation to the phrase “in good faith”, in some cases, the charterers claimed that these words have no effect in the context of a speed and consumption warranty, or, alternatively, as can be seen in The Lipa [2001] 556 LMLN 2,the phrase “in good faith” has not the effect of negating any warranty, as it is the case with the phrase “without guarantee”. Nevertheless, as seen in The Lendoudis Evangelos II [1997] 1 Lloyd’s Rep. 404, the owners may rely on to assert that only significant inconsistencies justify that the description was not given in good faith.

In London Arbitration 1/22, the Tribunal was called to consider whether the charterers made deductions in good faith and on reasonable grounds. The charterers withheld US$ 53,550.40 gross in respect of what they claimed was time loss due to underperformance to the extent of 6.6938 days. The Tribunal requested the charterers to show a prima facie case as to whether the deduction from hire was made in good faith and on reasonable grounds. The charterers then presented a weather routing report.

The Tribunal dismissed the charterers’ reliance on the weather routing report and also found that the charterers did not address the question of good faith, to substantiate their off hire claim and to address the claim made by the owners that there was no speed/consumption warranty in the charterparty as the fixture description of the ship was qualified by the words “all details about/in good faith”.

In the present case, the owners were entitled to payment. The Tribunal’s decision was based on the fact that the charterers had not demonstrated that their deduction was made in good faith or on reasonable grounds and as such, they should not have withheld the deduction from hire.

Since the first discussions of the use of Maritime Autonomous Surface Ships (MASS) there are many debates and concerns on whether the current legal framework, namely the 1982 Law of the Sea Convention (LOSC), is adequate and remains fit for its purpose. The use of MASS implies that a master and the rest of the crew on-board a vessel “disappear”; does this therefore necessitate the fundamental change of the current legal framework?

Besides LOSC, many international legal rules concern MASS, such as the International Convention for the Safety of Life at Sea (SOLAS). The most problematic aspect of the use of MASS as far as the international law of the sea is concerned, is when the MASS is operated from an on-shore remote control center or when such operation is performed by an algorithm on a computer.

There are a variety of viewpoints, ranging from the belief that MASS do not fall under the scope of LOSC since they are not considered to be ships, to the belief that no difficulties would occur since they are ships. Accordingly, certain articles of the LOSC exist which refer to masters, officers or crew, whom the flag State rely upon in order for certain obligations of the latter to be performed. An example of such responsibility/obligation is that a flag State must ensure that its ships have a master and officers who possess appropriate qualifications.

In general, the LOSC does not provide any specific guidelines to the flag State in terms of granting its nationality to the ships for their registration and for the right to fly its flag; the only requirement provided in the LOSC is that there must be a “genuine link” between the State and the ship. It can be assumed that a genuine link exists when the flag State has actual authority over the ship. The issue here is how such control/authority can be established when the operation of the vessel is controlled remotely in another State’s territory?

One possible solution is to consider such onshore controller as a master, nevertheless, this may also be problematic. The LOSC makes reference to a single master and thus, the difficulties will arise notably in terms of labor standards, when there are one or more controllers in such onshore remote-control center.

For the sake of argument, if such controller is considered to be a master pursuant to LOSC, in order for a flag State to satisfy its duties, namely to exercise effective jurisdiction and control, it would require the latter to do more in relation to MASS when comparing it with a manned vessel. For example, an existing argument is that in the event that something unexpected happens, there is the need to have in place extradition arrangements between the concerned States. Another recommendation which was made, was to include an annex in the current LOSC which will regulate the issue of MASS.

There are alternative methods however which may be considered as a way of regulating MASS: the International Maritime Organisation (IMO) recently considered whether its current conventions concerning safety of navigation, i.e. SOLAS, can be amended to safeguard the conformity thereof by the use of MASS.

Undoubtedly, the current legal framework is inadequate in relation to the use of MASS and therefore, any conformity with the existing legal rules is impractical. One can argue that any amendments to the LOSC may be undesirable and/or unfeasible for various reasons. Nevertheless, without any tailored-made regulations for MASS, flag States could potentially hesitate to register MASS and in general fly their flags. It is of vital importance for the IMO and the competent authorities to implement a comprehensive set of guidelines in relation to the use and operation of MASS.