By consecutive time charters, each on the NYPE 1946 form, the vessel was chartered by its owners to the head charterers, who under a sub-charterparty, the terms of which were effectively back-to-back with the head charterparties, chartered the vessel to the sub-charterparty. The charterparties contained a speed warranty, limited to passages under fair weather conditions. In the course of trading in accordance with the sub-charterers’ instructions, the vessel waited in berth in tropical waters for about four weeks. Thereafter, the vessel’s performance fell off significantly. The sub-charterers made deductions from hire, asserting their right to set off damages for breach of the continuing speed warranty. The head charterers took the same stance against the owners. As a consequence, the owners claimed a balance on final hire accounts. The arbitrators held that: the vessel had not maintained the warranted speed, the cause of which was underwater fouling by marine growth which developed during the vessel’s lengthy stay in tropical waters; the marine growth could not be regarded as unusual or unexpected, but constituted fair wear and tear incurred in the ordinary course of trading; on a true construction of the charterparties, the speed warranty applied to all sea voyages, including those after a prolonged wait in tropical waters, and that it was the owners/head charterers who had assumed the risk of a fall-off in performance as a result of bottom fouling consequential upon compliance with the head charterers/sub charterers' lawful orders. The owners appealed on the ground that the arbitrators’ reasoning was contrary to the principle, stated in the leading textbook, that it was a defence to a claim on a continuing performance warranty for the owners to prove that the under performance resulted from compliance with the time charterers' orders.

On the owner’s appeal—