Mediating ship-conversion disputes

Disputes tend to arise because of: 
·       Limited detailed design information about the condition of the vessel available prior to delivery. 
·       Limited opportunity to thoroughly identify the existence and condition of structures within the hull and the condition of the vessel during pre-contract inspections of the vessel, and, unseen:  
–      obstructions; and
–      deterioration e.g. pipework or steelwork requiring renewal and modification which at the time of inspection was hidden from view behind sheet metal cladding. 
·       Undefined ancillary work obligations implicit in broad work scope obligations. 
·       Fast track re-delivery programmes which compel Yards to develop design in parallel with construction, and the problem of continuously monitoring the overall impact of the implementation of designs on the meta-centric height, tonnage, and the stability of the vessel. 
·       The often unprecedented work required to convert a vessel. 
·       Inevitable integration of old and new designs, material and equipment to form an integrated working system, and the problem of new materials affecting the balance of stresses and forces in non-renewed sections of the vessel, resulting in damage to non-renewed structures inside the vessel [‘V’]. 
·       The performance of unspecified design work to implement the requirements of the vessel’s Classification Society, and of regulatory authorities, which were not published or notified prior to contracting in respect of both the existing vessel design and the conversion.   
In principle there is a design element in the whole spectrum of ship-conversion activities ranging from concept design to appearance, functional criteria, detailed design, choice of materials and methods of work. Unspecified design work inevitably results in consequences which are only realised following construction. The combined impact of unspecified design work in aggregate can result in radical changes in the:  
·      Planned and priced volume of steelwork incorporated in V. 
·      Specified deadweight tonnage of V. 
·      Specified speed and fuel consumption of V.
·      Specified meta-centric height of V.
·      Stability and trim of V. 
Consequently the vessel presented to Owners at re-delivery may be materially non-compliant with the Contract. The performance of unspecified design work inevitably results in the incurrence by the Yard of extra man-hours and materials in carrying out the unspecified work, and subject to critical path impact and programmed float, in delay and disruption. For a commercial overview, see my International Conference Paper presented to the Royal Institute of Naval Architects in London about the ‘Legal and Commercial Consequences of Performing Unspecified Design Work in Ship-Conversion Projects’. You can download this on the ‘Publications’ page at www.carlislam.co.uk . I may update the legal analysis and case law in 2023.