IMPLIED & EXPRESS TERMS UNDER CHARTERPARTY

IMPLIED DUTIES UNDER CHARTERPARTY

ON THE PART OF SHIPOWNER• To provide a seaworthy ship.• Obligation of reasonable despatch.• Obligation not to deviate from the

agreed routeON THE PART OF CHARTERER• Obligation to nominate a safe port• Obligation not to ship dangerous

goods

1. Shipowner’s duty to provide a seaworthy ship.

• In every contract of affreightment (charterparty bill of lading), there is an implied obligation to provide a seaworthy vessel.

Even if the duty to provide a seaworthy ship is not express stated, the duty to provide such a ship is, nevertheless, implied at law.“The shipowner is, by nature of the contract, impliedly and necessarily held to warrant that the ship is good, and is in a condition to perform the voyage then about to be undertaken, or, in ordinary language, is seaworthy, that is, fit to meet and undergo the perils of the sea and other incidental risks to which she must necessarily be exposed in the course of the voyage.”Kopitoff v Wilson (1876) 1 QBD at 602-3

• Most charterparty reinforced this impled obligation by an express terms.

e.g. clause 1 of ASBATANKVOY“…and being seaworthy and having all pipes, pumps and heater coils in good working order, and being in every respect fitted for the voyage…”

However, the clause may not refer specifically to seaworthiness.e.g. clause 2.1 of BPTIME“Upon delivery the vessel shall be tight, staunch and strong and in every way fit for service…”

However, such words have the same effect.

DEFINITION OF SEAWORTHY SHIPMcFadden v Blue Star Line (1905) 1 KB 697

“A vessel must have that degree of fitness which an ordinary careful and prudent owner would require his vessel to have at the commencement of her voyage having regard to all the probable circumstances of it…Would a prudent owner have required that it (i.e. the defect) should be made good before sending his ship to sea, had he known of it? If he would, the ship was not seaworthy…”

• A ship is seaworthy if she is fit to meet and undergo the perils of the sea and other incidental risks to which of necessity she must be exposed in the course of voyage.

• It is not just physical defects which amount to unseaworthiness.

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Examples of “unseaworthiness”

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An incompetent crew A crew which is insufficiently instructed or insufficient

in numbers Out of date charts Insufficient bunkers for the voyage. Stowage which affects the safety of the ship Deficient systems ashore or on board The absence of documents required by law (including

local law) for the satisfactory prosecution of the contemplated voyage e.g. a Ship Sanitation Control Certificate (SSCC)

***NB! Safety Management Systems (SMS) or International Ship and Port

Security (ISPS) certificates are likely to be treated in the same way.

However, documents which are not required by law (e.g. ITF Blue Cards) may not render the ship unseaworthy.

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Cargoworthiness is a category of seaworthiness.

It means that the ship must be reasonably fit to receive and carry the contemplated cargo.

The ship can be uncargoworthy due to the presence on board of other cargoes.

• Unseaworthiness gives rise to commercial liability only if it actually causes loss or damage.

• In the absence of express terms to the contrary it is the implied duty of the carrier is to provide a ship which must be seaworthy at the commencement of the cargo loading (cargoworthy) and at the commencement of the voyage (seaworthy).

However, where (as is usually the case under a time charter) there are express terms, the carrier’s duty will depend upon the construction of the particular term.

There may be a duty to provide a seaworthy ship at the date of the charter (e.g. line 5 of NYPE) or the date of delivery into the charter (e.g. clause 2.1 of BPTIME) or, possibly, throughout the charter (e.g. clause 1 of SHELLTIME 4).

…at the commencement of the voyage?

• VC – at the time of sailing.

• TC – at the time of delivery of the vessel under the charterparty.

• Where a voyage is to be performed in stages the carrier’s duty is to ensure that the ship is seaworthy for each stage before the commencement of that stage.

e.g. a ship is seaworthy for the purpose of stage 2 of a voyage even if she does not have enough bunkers when leaving stage 1 to complete stage 2 provided that the carrier is able to obtain further bunkers at the end of stage 1.

NATURE OF THE DUTY UNDER COMMON LAW

In the absence of: (a) the Hague or Hague-Visby Rules; or (b)

express terms to the contrary, the carrier’s duty is to provide a ship which is seaworthy in fact (i.e. strict liability).

Therefore, if the ship is not seaworthy in fact, the carrier is liable if the unseaworthiness caused the loss/damage even if the defect was latent and not discoverable by due diligence.

ONUS OF PROOF UNDER COMMON LAW

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The onus is on the cargo claimant that alleges that the ship is unseaworthy.

The cargo claimant has to prove:i. That the vessel is unseaworthy at the

beginning of the voyage ANDii. The loss or damage has been caused by

such unseaworthiness

NATURE OF THE DUTY UNDER THE HAGUE/HAGUE-VISBY RULES

• The Hague or Hague-Visby Rules replaced the strict duty to duty to exercise due diligence to ensure that the vessel is seaworthy before and at the commencement of the voyage.

The Hague and Hague-Visby Rules: Art IV Rule 1

“Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly manned, equipped and supplied, and to make the holds, refrigerating and cool chambers and all other parts of the ship in which goods are carried fit and safe for their reception, carriage and preservation in accordance with the provisions of paragraph 1 of Article III.”

• The duty of the carrier under the Rules is not a continuing duty throughout the voyage.

• However, the duty does not arise merely “at the commencement of the voyage”; it also exists “before the commencement of the voyage”.

• The result is that the carrier must exercise due diligence at all times up to the commencement of the voyage.

The Onus of Proof under the Hague/Hague-Visby Rules

1. If the cargo claimant alleges that the loss or damage has been caused by unseaworthiness, then the onus is on the cargo claimant to prove:

i. that the vessel was unseaworthy at the beginning of the voyage; and that

ii. the loss or damage has been caused by such unseaworthiness.

2. If the cargo claimants prove (i) and (ii) then there is a presumption that the carrier has not exercised due diligence to make the ship seaworthy

3. The onus is then on the carrier to prove that he has in fact exercised due diligence.

3) If they fail to do so, the carriers are not entitled to rely upon the exceptions in Article IV, rule 2.

4) However, if the carriers succeed in doing so, they can rely upon the exceptions in Art. IV Rule 2 as a defence.

UNDER COMMON LAW (implied undertaking)

UNDER THE HAGUE/HAGUE-VISBY RULES

Nature of Duty

Absolute duty to provide a seaworthy ship.

Duty to exercise due diligence to ensure that the vessel is seaworthy.

Period of duty

at the commencement of her voyage.

before and at the commencement of the voyage.

Onus of Proof

i. claimant has to prove that :the vessel was

unseaworthy at the beginning of the voyage.

the loss or damage has been caused by such unseaworthiness .

Once (i) and (ii) are proven, the carrier will be strictly liable, irrespective of fault.

i. claimant has to prove that :the vessel was unseaworthy

before and at the beginning of the voyage.

the loss or damage has been caused by such unseaworthiness .

ii. Carrier/owner has to prove that he has in fact exercised due diligence.

iii. Carrier is entitled to rely upon the exceptions given in Article IV, rule 2 of the Hague/Hague Visby IF he succeed in proving that he has exercised due diligence.

2) Obligation of reasonable dispatch.

• Whenever no time is specified for a dispatch, there is an implied obligation to complete the performance within a reasonable time.

• In a voyage charter, there is an implied undertaking that the ship will proceed on the voyage, load and discharge at the time agreed or within a reasonable time.

• In TC, the master is expected to prosecute each voyae with the utmost dispatch.

3. Obligation not to deviate from the agreed route

• There is an implied obligation that the shipowner will not deviate from the contract voyage.

• Deviation is an intentional and unreasonable change in the geographic route of the voyage as contracted.

• The deviation must be a deliberate act on the part of the owner or the ship’s officer.

• A few standard charter forms make express provisions for the route to be followed. But, in the absence of such provision, the proper route are:i. The direct geographical route between the ports

of loading and discharge.ii. The customary routeiii. The route previously followed by the particular

shipping line.

Justifiable deviation under common law1. to save human life or to communicate with a vessel in distress

in case lives may be in danger.

2. To avoid danger to the ship or cargo (due to storms, ice , fog or war.)

3. Where the deviation is made necessary by some default on the part of the charterer. Put into port of discharge dangerous goods which has been

loaded by charterer without the knowledge of the shipowner.

A deviation to obtain more cargo in a situation where the charterer has breached his contractual obligation to load a full cargo.

Duty not to deviate under the Hague/hague Visby Rules

• Art IV rule 4

• "any deviation in saving or attempting to save life or property at sea, or any reasonable deviation shall not be deemed to be an infringement or breach of these Rules or of a contract of carriage and the carrier shall not be liable for any loss or damage resulting therefrom".

4. The obligation to nominate a safe port• VC- the loading or discharge port is specified in the

charterparty.

• TC – the c/p will not specify particular ports, but give charterer the right to nominate the loading and discharging ports within a given geographical range of ports. Nomination of a port outside the range will be an illegitimate order. (e.g. Ghana/Nigeria)

• This implied obligation will not be implied if the charterparty gives the charterer right to trade a vessel in a known war zone.

5. The obligation not to ship dangerous goods

• The shipper impliedly undertakes not to ship dangerous goods without first notifying the carrier of the characteristics of the goods.

• This obligation applies in a c/p and b/l

• If goods are shipped without notice of their qualities, the shipper will be liable for any damage resulting either to the vessel or to any cargo on board.

Obligation under The Hague/Hague Visby Rule

• Article IV rule 6;

• Goods of an inflammable, explosive or dangerous nature to the shipment whereof the carrier, master or agent of the carrier has not consented with knowledge of their nature and character, may at any time before discharge be landed at any place, or destroyed or rendered innocuous by the carrier without compensation and the shipper of such goods shall be liable for all damage and expenses directly or indirectly arising out of or resulting from such shipment. If any such goods shipped with such knowledge and consent shall become a danger to the ship or cargo, they may in like manner be landed at any place, or destroyed or rendered innocuous by the carrier without liability on the part of the carrier except to general average, if any.