Fisher Maritime's Fairleads

'Lessons Learned' Strategies & Ideas for the Marine Industry

Asserting & Defending Contractual Rights

#1 –– A Shipyard

A shipyard called in Fisher Maritime when a client ship owner become unreasonable. The yard had employed a specialist subcontractor to undertake a complete lead-abatement of the entire interior of the hull of a large service vessel. The vessel was being completely re-engined, with every item of mechanical and electrical equipment in the hull being replaced with modern outfit. The interior hull lead-abatement program was just about complete with all new coatings applied to the interior hull, and the shipyard was starting to install the new propulsion, electrical and ancillary equipment, when the ship owner changed its mind.

Namely, the owner wanted a comparable, complete lead-abatement program undertaken in all spaces above the main deck. With the specialist subcontractor no longer available to accomplish the additional lead-abatement, the shipyard came to the owner’s rescue and undertook the additional lead-abatement project itself. Not wishing to unnecessarily delay the project, the shipyard commenced the extra work based on the owner’s commitment to negotiate a change order.

This effort by the shipyard disrupted all of its planned work, its drydocking schedules, as well as significantly impaired the efficiency of the work which was continuing during the extra abatement program. When the shipyard proposed a price and schedule impact for the already- started work, the owner simply rejected it and refused negotiations.

Despite the on-going dispute, the project was completed in such a manner that the owner wrote praiseworthy letters to the shipyard — but still didn’t want to pay full price or recognize the entitlement of delay. Fisher Maritime prepared the shipyard’s formal claim. With our participation in a mediated settlement, the shipyard received nearly all the funds for shipyard expenses and delays that were set forth in the claim developed by Fisher Maritime.

#2 –– A Vendor

A major propulsion system manufacturer supplied a considerable amount of owner-furnished equipment for inclusion in a large vessel. The shipyard encountered significant delays and cost overruns, alleging that about half of those extra costs and delays were due to problems created by the ship owner’s propulsion system vendor.

Fisher Maritime was retained by the vendor to defend its actions, the quality of its equipment, and the completeness of the services provided in association with the equipment. Fisher Maritime rebutted those portions of the shipyard’s claim that the ship owner was attempting to pass through to the vendor. Fisher Maritime also developed the vendor’s limited counter-claim.

The failure of the ship owner’s staff to ensure complete compatibility between its shipyard contract (including changes), on one hand, and its purchase contract with the vendor, on the other, was found to be a major factor which was beyond the control of the vendor. The ship owner’s inability to effect consistent and complete communications between all three parties also contributed to the portion of the shipyard’s claim that focused on the propulsion system vendor. By its active participation in a mediated settlement, Fisher Maritime was able to convince all parties to let the propulsion system vendor depart from the fracas without making any payments to the owner or the shipyard.

#3 –– A Ship Owner

A vessel owner undertook a conversion project involving three shipyards, five engineering organizations, and a number of vendors and subcontractors. When the project fell behind schedule due to a breakdown in communication between the various parties, the owner called Fisher Maritime to assist in regaining control over the project.

Fisher Maritime was required to immediately assess the status of the project from an overall perspective. It was readily apparent to Fisher Maritime that focusing solely on the primary shipyard’s effort was precluding a complete assessment of the status of the overall project. To realistically assess the state of the project, each contributor’s efforts, including the owner’s, had to be scrutinized. A realistic assessment of the project was the first step in formulating a plan to bring the project under control.

Through a comprehensive understanding of where the weaknesses were with respect to satisfactory project performance, a plan was formulated to mitigate the damages being inflicted by those parties providing less-than-satisfactory project performance. The project ultimately was moved to a new primary shipyard in order to obtain better performance by removing uncompleted work from a host of nonperforming parties.

#4 –– A Supplier

A shipyard encountered significant problems applying coatings to a series of several new ships. The need to remove or repair and recoat a significant percentage of the coatings on the hulls, decks and bulkheads led the shipyard to assert a claim against the coating supplier, alleging the coating materials were defective products. The shipyard had a fully-protected blast-and-coat facility in which much of the coating work was accomplished.

Fisher Maritime’s review of records led to the observation that nearly all of the alleged product failures occurred, however, to the coatings which were applied outside of the protected facility. Fisher Maritime also observed from a review of the supervisors’ logs, the labor reports and other documents that the incidence of coating failures was clearly of greatest frequency during cold weather, and second-most frequent during hot, humid weather. Fisher Maritime’s report identified the application of coatings onto steel that was colder than the air as a major cause of repeated occurrences of amine blush. Other sources of failures, in addition to temperature-related ones, were insufficient curing time between successive applications, and too much application to overcome shadowed areas. The matter was resolved by a negotiated settlement reflecting the shipyard’s almost-complete withdrawal of its claim.

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