'41. The Respondents contend that the crankshaft failure occurred because the [vessel] was grounded. The only evidence that the Respondents produced of the alleged grounding were oral statements supposedly made by [Mr A], the former chief engineer of the [vessel], to [Mr B] and by [Mr C] to [Mr D], that the [vessel] had been grounded 30 minutes before the crankshaft failure and that the crew attempted to free the boat by overworking the engines. There was no direct testimony from [Mr A] offered by either party.1 [Mr C] gave evidence that he did not ma[k]e the remarks attributed to him by [Mr D], who gave evidence to the opposite effect.

42. The Claimant, on the other hand, offered direct, credible testimony that the [vessel] was never grounded. For example, [Mr E], Captain of the [vessel], testified that he was on the boat when the crankshaft broke. While he was in his quarters sleeping at the time, he was awoken by the crankshaft failure. [Mr E] testified that if the [vessel] had been grounded shortly before the crankshaft failure he would likewise have awakened. He testified that the [vessel] was never grounded. In addition, [Mr F] provided a videotape of the [vessel] showing the hull and propellers of the [vessel] taken while the starboard engine was being replaced. The bottom of the [vessel] was encrusted with barnacles, which would cover the boat only while in salt water and which would have been brushed off by a grounding. Moreover, the hull showed no signs of damage or fresh paint.

The missing log books

43. One would expect to be able to resolve the question of whether or not the [vessel] had gone aground, as alleged by the Respondents, by reference to the vessel's log books. However, it is an unfortunate fact that both the vessel and engine log books for the [vessel] for 1999 are missing. The Claimant contends that the log books were taken out of the vessel and given to [Mr G], the Operations Manager for the Claimant, for safekeeping. Apparently, whilst in [Mr G]'s custody, the log books were destroyed in a fire. The Respondents contend that the Tribunal should draw an adverse inference against the Claimant to the effect that they had intentionally hidden the log books because either they would not support the Claimant's case on the manifold defects in the engines as alleged and/or they would be found to have recorded the grounding of the [vessel] on or before [date], which led to the failure of the crankshaft.

44. The Tribunal considers that it is unfortunate that the relevant log books are missing since, had they been available, this case would have been considerably easier to determine on the facts. But whether or not an adverse inference should be drawn by the Tribunal must depend on the circumstances of each particular case. The points of particular importance in such an inquiry are e.g. (a) What the missing documents could reasonably be expected to record? (b) What are the alleged circumstances of their disappearance? (c) What credible evidence is there to prove an "innocent" disappearance? [Mr E] gave evidence on this matter. He said that he himself had put entries into the log books concerning excessive vibrations of the engines on "hundreds of occasions". Also he recorded the unexpected shutdowns of the engines. He was also, of course, the captain of the [vessel] when the crankshaft failed and he has testified before us that there was no grounding of the vessel before that occasion. We found [Mr E] to be an impressive witness and we accept his evidence. That being so, it seems clear that the entries in the log books of the [vessel] would have supported the case being advanced by the Claimant at this arbitration. [Mr E] went on to say that he actually gave the log books to [Mr G] so that they could be passed on to the Claimant's lawyers. This was in the year 2000. [Mr E] was not able to say what happened to the log books after he had given them to [Mr G] and no evidence was put before the Tribunal from [Mr G] or anyone else explaining how the log books had been destroyed in a fire as alleged by the Claimant.

45. Although the state of the evidence is far from satisfactory on this point, the Tribunal is not prepared to draw any adverse inference against the Claimant as a result of the missing log books. For the reasons set out above, the Tribunal considers that [Mr E]'s entries in the log books as to the operation of the engines would have assisted the Claimant's case, so that the Claimant would have had no incentive-indeed a positive disincentive-to conceal the log books. We conclude that it is more likely than not that these log books, which [Mr E] did hand to [Mr G], were destroyed accidentally in a fire which was a misfortune which befell the Claimant rather than any more sinister explanation being justified.

46. It follows that the Tribunal concludes that the Respondents have failed to prove their case that there was a grounding of the [vessel] and that this was the effective cause of the fracture of the crankshaft of the starboard engine. It should be added that the Respondents also failed to satisfy the Tribunal that, even if a grounding had occurred, that event or its immediate aftermath caused the crankshaft to fail.'

1
The Respondents offers further circumstantial “proof” for its theory by pointing out that the [vessel’s] ship and engine log books were destroyed by a mysterious fire before they could be produced in the legal proceedings.