LNG time charter on Shelltime 4 – meaning of injurious cargo

Article published on July 2014 in Stephenson Harwood Shipping Bulletin and reproduced by courtesy of Stephenson Harwood

In an LNG time charter based on Shelltime 4, a clause provided: "No acids, explosives or cargoes injurious to the vessel shall be shipped".

G (the charterers) loaded a cargo of LNG onto the vessel in the United States. M (the owners) alleged that the cargo was injurious to the vessel because it contained debris, in particular metal particles, which had contaminated the vessel's cargo pumps and tanks, causing abrasion, rust and risk of electrical short and pump failure, and that consequently major repairs to the vessel were required after it was dry-docked.

G disputed that the cargo was injurious. There was no previous authority on the meaning of "injurious" cargoes.


M's claim failed.

1     In order to be "injurious", cargo had to either cause physical damage to the vessel or have a tendency or propensity to cause damage.

2     The evidence about the loading of the cargo justified the inference that some small particles had passed through the mesh filters in the manifolds before they clogged on two occasions, and that some of the particles, maybe as many as one-third of them, were metallic. However, no more could be inferred: the evidence did not establish that larger particles were loaded in any significant number, and it provided no basis for inferring how much particulate debris was loaded. The evidence did not support M's reasoning that the bulk of the debris found in the tanks was from the loading, nor did it establish M's case that debris from the loading created a risk of damage to the vessel. Some of the debris found in the vessel's tanks after it was dry-docked was debris from the loading, but M had not proved that much of it was shipped by G at the loading terminal. It was more likely that the greater part of it was from elsewhere.

3     On the facts, owners had failed to prove that the charterers had shipped a cargo which was injurious to the vessel, or that metallic particles in the cargo had created potential dangers to the vessel.

(American Overseas Marine v Golar Commodities [ 2014 ] EWHC 1347 (COMM))

Authors: Michael Bundock, Senior Associate and professional support lawyer with Stephenson Harwood & Joanne Champkins, Associate specialising in marine insurance with Stephenson Harwood / Publisher: SCMO

Nicolas de Loisy

Advisory specialized in logistics, transportation, and supply chain management.