top of page

OOS in C/P - 'owners option substitute' or 'or other substitute'?

What does the term OOS mean in C/P? Is it ‘owners option substitute’ giving owners a unilateral right to replace the first vessel; or ‘or other substitute’ whereby charterers’ acceptance is also required? Singapore Arbitration 1/21 provides the answer.

The recap set out the laycan for the fixture as 8–14 Feb and at the beginning of laycan window, owners substituted the vessel which too would have missed the laycan window. Spring festival holiday season in China was approaching meaning charterers could not afford any delays commercially. Charterers argued that the substitution was invalid for various reasons, principally three (i) their consent was not taken; (ii) the substitute vessel had characteristics less favourable to them, for eg. loading rate, age, and oil company inspections; and (iii) vessel would not have arrived within laycan.


The Tribunal decided that ‘OOS’ referred to 'owners option substitute' and that absent wording to the contrary, the option is unfettered except for the fact that the substitute vessel should comply with the C/P. In this case it did and her characteristics were found to be not less favorable to charterers. The next question was did the owners have a right to substitute a vessel that would not arrive within the stipulated laycan? The answer was yes, for both the original and substitute vessel. Reason being, if the vessel did not arrive within the laycan, certain rights would accrue to the charterers under the C/P which they could exercise. So charterers were found to be in repudiatory breach of the charterparty in refusing to load the substitute ship.



332 views0 comments

Comments


Recent posts

bottom of page