News: Scrubber installation delays in China due to novel coronavirus (nCoV) outbreak

News & Insights 3 February 2020


The club has received some queries from the members concerned to check whether such situation would fall within ‘force majeure’.

The race to get scrubbers retrofitted on ships ahead of the second part of IMO2020 regulations (ban on the carriage of non-compliant fuels which comes into effect on 1 March 2020) may result in a significant extension of the budgeted downtime for many vessels.
 
As ship queues for scrubber installation grow at Chinese repair yards, some members are now faced with delivery delays due to the impact of the novel coronavirus (nCoV) outbreak. The Chinese government has already extended the lunar new year holiday, but there are concerns that the workers may not return any time soon.
 
The club has received some queries from the members concerned to check whether such situation would fall within ‘force majeure’.
 
With the understanding the charterparty is still on-going and the vessel is temporarily in a yard to install the scrubber, the fact that the ship is in every way fit to perform the charterparty obligations, the member should have some grounds to argue that this falls within ‘force majeure’ depending on the terms of the governing charterparty. However, under the common law there is no general definition of 'force majeure' - it has the meaning given to it by the contract which governs the relationship between the parties.
 
In determining whether the delays caused due to the ‘quarantine restrictions’ and ‘restraints of labour’ can classify as a ‘force majeure’, and whether this will become an ‘off-hire’ event or not is not so straightforward. There could be a risk for the member in breaching contractual obligations. As such, the club recommends its members to review their charterparty terms, and put the relevant parties on notice of the fact that there could be delays due to the prevailing circumstances and conditions.
 
Members are also recommended to refer to the club's article on 'Novel Coronavirus outbreak in China' for further guidance on this topic. Standard Club is always on hand to assist and advise its members on these topics.

Categories: COVID-19, IMO 2020, Loss Prevention

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