| Award 1172

Award N°1172 – Contract of affreightment – Hardship clause – Claim for lack of jurisdiction rejected. A COA for 5 years, incorporating a protective clause known as « hardship clause », imposes to parties to meet and renegotiate in the case where one of them bears an unpredictable prejudice not foreseen at the inception of the contract. But, in the absence of clear provisions to that effect the arbitration Tribunal is not allowed to modify the substance of any contractual clauses. Arbitrators decided that any increase of freight rates on the market, as extensive as it might have been, cannot justify the reference to an hardship situation, freight rates having been freely negotiated and agreed. Equally, extensive increase of owner expenses (port costs and overheads) cannot be considered as an hardship situation because they were predictable at the time of entering into the contract. Lastly, the owner could have used financial tools on the futures market to hedge its risk of bunker costs increase. The defendant who raised the point of the nullity of the claim for frivolous reasons and took this opportunity to fail to pay the deposit as required by the Rules of the CAMP made a breach of those Rules. The Tribunal held them liable to bear half of the arbitration costs and did not award them any amount for costs.