Award 1245 – Passenger boat – Breaking of an engine drive shaft five years after delivery by the shipyard – Shared responsibility between the shipyard and the bare-boat charterer.
A few days after the commissioning of the vessel, it was found that 2 screws fastening one propeller shaft were broken and some others were loose. Five years later the breaking of the same shaft occurred during a manoeuvre, The bare-boat charterer and his insurers, relying
upon the expert report implicating an alignment defect of the shaft, claimed to the shipyard to pay the loss amount or at the very least a percentage not lower than 45 %. The shipyard pleaded the claim was inadmissible and time-barred. On the merits, it challenged the expert findings and asked the claim to be rejected for want of maintenance and control of the alignment on the operator part.
The arbitral Tribunal firstly judged that the bare-boat charterer, being deprived of any remedy against the ship owner, could take advantage of the shipbuilding contract terms, including the arbitration clause, and that, the limitation period applying as from the
discovery of the alignment defect identified by the expert as a latent defect, the claim was not time-barred. On the merits, the Tribunal considered that if the damage originated indeed from the alignment defect, the lack of control by the operator could have contributed to it and decided the shipyard was liable only for half the damage amount.