Commercial Admiralty Law for Officers and Masters E-Book

Peter Grunau

• Herausgeber: Books on Demand
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 369

Veröffentlichungsjahr: 2022

Beschreibung

The book describes and covers the most common topics relating to charter parties, bill of lading, claims handling and much more that officers and captains should know about cargo and damage control. It should be a guideline for officers and master with regards to Commercial Admiralty Law and it's application

Leseprobe

About the book

The book describes and covers the most common topics relating to charter parties, bill of lading, claims handling and much more that officers and captains should know about cargo and damage control. It should be a guideline for officers and master with regards to Commercial Admiralty Law

Content

1.0 Charter Parties

1.1 The different Charter Parties

1.1.1 Time Charter

1.1.2 BIMCO Standard Time Charter Party for Container Vessels – Code Name: BOXTIME 2004

1.1.3 The Slothire – Slot Charter Party

1.1.4 On Hire Report

1.1.5 Seaworthiness

1.1.5.1 The Legal Aspects of Seaworthiness

Physical seaworthiness

1.1.5.2 Voyage Planning and Seaworthiness

The facts

The decision

What this means

1.1.6 Off Hire

What is the effect of BIMCO’s ‘epidemics’ clause on owners and charterers?

1.1.7 Certificate of Delivery

1.1.8 Certificate of Redelivery

1.2 Who is the Carrier in a Time Charter

1.3 Common used Clauses in Charter Parties

1.3.1 The Himalaya Clause

1.3.2 New Jason Clause

1.3.3 Both to Blame Collision Clause

1.3.4 Both-to-Blame Collision Clause and Hague-Visby Rules

1.3.5 Good Weather Clause and Weather Routing Clause

1.3.6 Weather Routing Clause for Time Charter Parties

1.3.7 The Force Majeure Clause in Charter Parties

1.4 The New York Produce Exchange Charter Party

1.4.1 The Container Rider Clause

1.4.2 NYPE and Securing of Cargo

1.4.3 Rider Clause for Reefer Container

1.4.4 Other important Rider Clause to be known if working with the NYPE form

2.0 Voyage Charter Party

2.1 Responsibilities & Obligations for Voyage Charter

2.2 Net and Gross form of a voyage charter

2.2.1 NET – FORM

2.2.2 GROSS-FORM

2.2.2.1 The voyage Instruction

2.3 The control function of the Voyage charter

2.4 Demurrage and Dispatch Money

2.4.1 Demurrage Money

2.4.2 Dispatch Money

2.5 Free Pratique, Notice of Readiness

2.5.1 Free Pratique

2.5.2 Notice of Readiness

2.5.2.1 Arrived Ship

Readiness of the Vessel

2.5.3 Port Charter Party

2.5.4 Berth Charter

2.5.4.1 WIBON or WIPON Clause in Charter Parties

3.0 Bareboat Charter

4.0 Mate’s Receipt & Cargo Manifest

4.1 Mate’s Receipt

4.1.1 Contents of a Mate’s Receipt

4.1.2 The control function of a Mate’s receipt

4.1.3 Difference between a Mate’s receipt and a shipping note

4.2 Cargo Manifest

4.2.1 Control function of the Cargo Manifest

4.3 Letter of Indemnity

5.0 The Bill of Lading

5.1 Clausing a Bill of Lading

What Is a Claused Bill of Lading?

5.1.1 Bill of Lading vs. Claused Bill of Lading

5.2 Difference between a clean B/L and a foul B/L

5.3 What Is an Ocean Bill of Lading?

5.3.1 Other forms of a Bill of Lading

5.4 The right to delivery of the goods onboard from the carrier

5.4.1 A contractual right to delivery

5.4.2 No right to delivery by reason of mere possession of the bill of lading

5.4.3 The carrier’s right to deliver

5.4.3.1 Delivery without production of a bill

5.5 Contractual exclusion of liability for mis delivery

5.6 Charter Parties and Bill of Lading

5.6.1 Combined transport and through bills of lading

Main issues

5.6.2 Through Bills of Lading

5.7 Other types and names of bills

5.7.1 Multi-purpose Bills

5.7.2 The Sea Waybill

Source: https://www.icontainers.com/us/2013/08/26/bl-bill-oflading/

5.7.3 Bill of Lading Template for Guidance including Explanation

6.0 The Hague Rule

6.1

Hague Rule in the shipping industry

6.2 The important paragraphs of the Hague Rules in regards to B/L, damages and losses or unseaworthiness

6.3 The responsibility of the shipper in loss or damage sustained by the carrier

6.3.2 The Hague and Hague Visby rule and Article IV Rule (2)

6.3.3 Deck cargo under Bill of lading in the US

7.0 The Hague - Visby Rule

7.1

What the carrier shall be bound for prior the voyage

7.2 Contractual rights and obligations - The Hague Rules

8.0 The COSGA 1971

8.1 Introduction

8.2 Article X

Sub-rule X (a)

Sub-rule X (b)

Sub-rule X(c)

8.3 Different versions of the Rules

9.0 The Hamburg Rules

9.1 The Liability of the Carrier

9.2 Important control function of the Hamburg Rules on the safe operation of the ship

The Carriers Duties

9.3 Accuracy of particular dangerous good

9.3 The differences between the Hague/Hague-Visby and Hamburg Rules

10.1 The Obligation and Liabilities of the Carrier for Loss, Damage or delay

10.2 Obligation and Liabilities of the Shipper

10.3 The control function of the Rotterdam Rules

10.4 Comparing the Liability in the Rotterdam Rule against Hague/Hague Visby and Hamburg Rule

11.0 The Incoterms

11.1 What is the purpose of the Incoterms?

11.2 The Single Incoterms

11.3 The INCOTERM 2020 Responsibilities a short Summary

12.0 Claims and Claim Handling

12.1 Introduction

12.2 Claims other than in Contracts

12.3 Suit in Negligence

12.4 Major types of cargo claims

12.5 Handling of Claims

12.5.1 Actions to be taken in case of Cargo claim

12.5.2 Letter of Protest and or Note of Protest

12.5.3 A "note of protest"

12.5.4 Necessary documents to be prepared in case of cargo damage

12.5.5 Notification of an incident which may give rise to a claim

12.6 Claims against Steel cargoes

13.0 General Average

13.1 The Main Objectives of the York Antwerp Rule

13.2 Ordering General Average

13.3 General Average and Salvage

13.4

Guidelines if salvage is required

13.5 Is the Lloyds Open forum still a good solution?

13.5.1 Lloyds Open Form and Side agreements

13.5.2 Summary

14.0 Chartering Terms and Abbreviation

Bibliography

Table of Illustration

1.0 Charter Parties

1.1 The different Charter Parties

The term, Charter Party’’ means a contract between the Owner of a vessel and the Charterer. The Charterer is the one that takes over the vessel for a certain amount of time or for a voyage. The charter party is the traditional contract of carriage for the movement of materials. In some law books the term “contract of Affreightment” is also mentioned. The charter party will avoid confusion – it is a contract of carriage.

1.1.1 Time Charter

On a Time-Charter the vessel is hired by a charterer for a specific named period of time and for a specific amount of money per day, - payable at specific schedules.

The entire vessel, with all her cargo space and all her other capacities is at the Charterers disposal.

The Owner still manages the physical operation of the vessel, he employs the Master and the Crew, he is paying for the stores and provision as well as for the upkeep and repair of the vessel, but is doing so for the benefit of the Charterer.

Important:

Unless it is expressly stated otherwise, the Charterer is acting as Carrier The entire ships capacity is at Charterers disposal Charter hire depends upon the duration of charter, the type and size of the vessel.

For account of the Charterers

Fuel

Port/Pilot Charges

Stevedores Charges

Cleaning of Holds, unless other stated in C/P

Commission and Brokerage on Cargo

Claims (Dependent upon condition in C/P)

For Account of the Owners:

Crews Wages, Crews Insurance

Provision

Maintenance & Repairs

Stores & Supplies

Equipment

Lubrication Oil

Water

Insurance for the vessel

Surveys (Statutory/Classification)

Overhead Charges

Brokerage Depreciation of the vessel.

Time Charter-Party represents a complex commercial bargain between the Ship-Owner and the Charterer of a vessel. See examples of charter parties below

BIMCO1 Uniform General Charter (to be used for trades for which no special approved from is in force) – Code Name: GENCON.

Illustration 1: Example of a Gencon Charter Party

Source: https://studylib.net/doc/8832478/gencon-94

BIMCO – General Time Charter Party – Code Name: GENTIME

Illustration 2: Exapmle of Gentime Charter Party

Source: BIMCO Bulletin, February 2005

1.1.2 BIMCO Standard Time Charter Party for Container Vessels – Code Name: BOXTIME 2004

BOXTIME charter contract was a purpose made document for time chartering container ships. Container shipping is increasing in demand and it represents 13.5% of global fleet, yet industry widely used BALTIME, GENTIME and heavily amended NYPE forms for agreement. Therefore after 15 years of BOXTIME, a revision was made with the view of promoting BOXTIME as a document of choice for this particular business, thus BOXTIME 2004 contract came into existence in 2004. The main purpose of this contract is to avoid rider clauses to minimise confusion and litigation. The contract is divided into three parts. The first part is for stating the details, second for clauses of agreement pertaining to the contract and third one for providing description of the vessel. Analysis of certain important clauses is made in this report, along with comparisons with the original contract developed in 1990. (ref.: https://www.researchgate.net/publication/317080408_DESCRIPTION_AND_ANALYSIS_OF_BOXTIME_2004

Under a time charter, the vessel is at the disposal of a charterer for a time period, who runs it for his own purposes such as commodity trading or transportation and the ship owner is paid the hire for the agreed period, however, this placing of vessel at the charterer’s disposal would be under certain contractual limits, which is described in the contract and agreed upon; these clauses are very important as it defines the liabilities, responsibilities, duties and obligations of each party of the contract (Wilson, 2010).

There are three parts in a BOXTIME 2004 contract, the first part is for providing information important for the contract, it consists of boxes, the second part indicates the terms and conditions of the contract and finally the third part is for providing the Vessel’s description. The following sections compares the three parts of the original and amended BOXTIME charter parties.

PART I

Part one of both the BOXTIME contracts is for stating the relevant information pertaining to the charter, and most of them are referenced with the appropriate clauses which are given in part two of the contract. There are a few alterations in the new BOXTIME contract, there are only 34 boxes in this section of the new contract compared to 36 boxes in the old one, box 6 is a combination of data which were separately given from boxes 7 to 13 in the original BOXTIME and also includes “year built” in it, box 7 of the new contract is for providing IMO number which was not prevalent during the development of the old contract in 1990, “Maximum Bunker Capacity” given in box 15 is not present in the new contract, in the new contract box 17 permits to state excluded cargoes other than those mentioned in clause 4, box 22 is an addition to the new contract to state owner’s bank account details, a box for representation expenses as monthly lump sum is given in box 25 of the new contract, boxes 28 and 29 stating daily rates for supercargo and victualing of the old contract is combined in box 24 of the new one but as monthly lump sum, boxes 29 and 30 are also addition in the new contract for stating replacement cost for vessel’s lost or damaged lashings and payment per man hours for reefer repair undertaken by crew respectively

(BIMCO, Brinkmann, 2008).

Furthermore, part one of BOXTIME 2004 also specifies details such as trading limits, period of charter, delivery and redelivery place and time, hire, fuel specifications, quantity of hazardous goods, insured value of vessel, P&I club of both owner and charterer, general average adjustment, place of arbitration, provision for additional clauses etc.

PART II

Part two of the charter-party lays out the clauses governing the contract. There are twenty eight clauses in BOXTIME 2004, with notable amendments of the old clauses as well as some supplements such as, Redelivery (cl.5), Master (cl.13), Bills of Lading, Waybills, and other Contracts of Carriage (cl.17), Refrigerated Goods (cl.20), Exceptions (cl.21), Navigation (cl.22) and BIMCO Ice Clause for Time Charter Parties (cl.24). Charter party agreements follow the principle of freedom of contract based on the supply and demand condition existing in the market, therefore any clause, which either party is unwilling to agree can be cancelled or amended (Wilson, 2010), this poses an ambiguity on the functionality of the interest of any standard charter party forms.

There are some important changes done in the BIMCO Container Charter party - Boxtime Charter.

Here are the most important one:

Clause 5: Redelivery

The importance of this event in a charter party led to the formation of a separate clause, which was otherwise spread out as subclauses 6(m) and 7(f) in the old contract, the clause specifies that the vessel should be redelivered clean and fit to load containers and goods with fair wear and tear at the agreed place at the end of charter period and it also stipulates that the charterer should give out notice of redelivery in the agreed schedule which by default would be within 45, 30, 10, 5 and 2 days prior redelivery.

Most importantly the sub-clause for ‘final voyage’ gives consideration to the charterer’s effort to redeliver the vessel even if it is delayed by unforeseen reasons beyond charterer’s control

At first look this seems to be a balanced clause, which can be put forward by either parties, the owners expect to take back the vessel in the said conditions, and the charterers are protected against any claim due to any unplanned disruptions in the final voyage to redelivery; however, the extent of fair wear and tear is unspecified and the charterers are expected to pay hire for the extended period which was unplanned.

Clause 13: Master

This is a new clause added in the new contract, adopted from GENTIME, and can be considered relevant in a time charter party, as the owner places the vessel in the hands of the

charterer, the Master and the crew is appointed by the owner, thus the Master could be seen as a servant of the owner carrying out charterer’s instructions. This clause states the Master’s obligations and requirements.

Clause 17: Bills of lading, waybills, and other contracts of carriage

This clause is inspired from GENTIME and stated so because of its relevance, which was otherwise a sub clause (14. (b)) under ‘Owner’s Requirement’ in the old contract. Unlike the old contract this clause automatically authorizes the charterers to sign the bills of lading on owner’s behalf, however, the charterer can request the Master to sign contracts of carriage; if a multimodal transport bill of lading is issued, the charterers should indemnify the owner against cargo claims or loss resulted beyond the period in which the cargo is on-board.

This clause gives a relief to the owner by stating that, unless it is a compulsory application, the charterers or their agents shall not incorporate Hamburg Rules in the contract of carriage, however, the owners are bound by The Hague or Hague-Visby Rules.

The owners are also protected by a ‘Payment and Indemnity’ clause against any loss, damage or expense arising out of the breach of this clause. It also states that the charterer shall warrant to include ‘clause paramount’ applying Hague or Hague Visby rules, ‘New Jason’ clause, ‘General Average’ clause according to York-Antwerp Rules 1994, ‘Himalaya’ clause, and ‘Both to Blame Collision’ clause.

Clause 20: Refrigerated goods

This is not an entirely new clause, but it is based on the sub clause 17(b) of the old contract. The creation of a new specific clause might point out to the increasing usage or importance of containers with atmospheric control systems. The only difference from the old contract is that, the charterers shall provide written instructions on temperature setting of each reefer container and any cooling or carriage instructions if any. This clause states that the owner shall only provide electric power, rest all is done as per charterer’s instruction, whereas, Hague-Visby Rules says the owner is responsible to carefully carry, keep and care for the cargo carried onboard, as does clause 19 in BOXTIME 2004. The mechanisms for the well keeping of the reefer containers are to be provided by charterer; thus, there is an ambiguity, if the charterer fails in his duty to provide accurate instructions, and the reefer is damaged, is the owner liable, as Hague-Visby Rule cannot be overruled by charter party; looking at clause 20 in an ethical perspective, the owner is indemnified by the charterer. Thus, this might suggest a need for more clarity, such as reference of cl.20 in cl.19 as an exclusion.

Clause 21: Exceptions

This is a clause adopted from GENTIME, but by observing closely, it would reveal an inspiration taken from the Hague-Visby Rules. This clause states out the exceptional cases of responsibilities and liabilities for either parties to this charter party, however, as per BIMCO explanatory notes, this clause is not for cargo claims and not to be considered for affecting ‘off-hire’.

Clause 22: Navigation

This clause could be seen as a sub clause cl.15 (a) in the old contract, and not in the GENTIME. The new BOXTIME formulated it as a main clause to ensure that navigational matters including pilotage and towage remains a responsibility of the owner. In a practical sense this contract affirms that it is a time charter party, not a demise.

Clause 24: BIMCO ice clause for time charter parties

The provisions under this clause was limited in a few lines in the old BOXTIME and GENTIME under the clause for trading limits. However, there is no mention of ‘ice’ in the clause for trading limits in the new BOXTIME 2004 but it is mentioned as a whole new detailed clause, it would have been a better representation if a reference to cl.24 is made in cl.3 such that connection between clauses are maintained.

Under this clause, the onus is on the Master to decide if it is unsafe for the safety of the vessel considering ice, this report is of the view that, more explanation is needed at least in the explanatory notes on situation when the owner approves the proceeding but the Master disapproves citing safety concerns.

This clause is also a relief for the owners as it states that additional premiums, delays, deviations due to ice shall be on the charterer’s account and also that the vessel will remain ‘on hire’

ref.:(https://www.researchgate.net/publication/317080408_DESCRIPTION_AND_ANALYSIS_OF_BOXTIME_2004

Owners responsibility and Liability according to the Boxtime Charter

The old BOXTIME starts this clause as “Except elsewhere provided in this charter party…”, but the new BOXTIME 2004 clearly starts out as “The owners shall be liable…” such wordings reduces the ambiguity in the contract. The responsibilities and liabilities in this clause are similar in some respect to that in the Hague-Visby Rules, the owner should exercise due diligence in various matters as pointed out in the clause such as providing a seaworthy vessel, however, it does not state anything about loading and discharging, even though it is stated in cl.7 that the charterer is responsible for stevedoring, cl.6 states that, Master shall supervise it, this along with cl.19 points out a confusion to the situation when bad stevedoring lead the vessel to be unseaworthy (Fung et al., 2006).

Owners have the right to limit their liability under the virtue of limitation convention, the old contract stated that the owner’s liability should be same as that between the charterer and a third party, if no value is declared in the bills of lading and also it is limited to GBP 100 per package if no mandatory laws applies, the new contract limits it to SDR 666.67 per package or SDR 2 per kilo whichever is higher.

The sub clause for time limit for arbitration in the old contract provided a window of 15 months after delivery of goods, but the new clause states that either party having a cargo claim can initiate it within two years from the day the cargo was or should have been delivered and if Hamburg rules apply, it is three years instead.

The new contract has a new sub clause ‘Charterer’s Cargo’, this clause is a mean to incorporate further clarity to the contract, it points out that there is no speciality in such a situation and Hague-Visby Rules are applicable as it was the cargo of a third party. The subclause for refrigerated goods in the old contract is taken out as another main clause in BOXTIME 2004, this can be seen as mean to improve the structure of the charter party. The old contract had a sub clause 17(g) for consequential loss, which is not found in the new contract, the ambiguity regarding this as to whether, the first line in the clause stating that the owners shall be liable for expenses in respect to cargo, or as per clause 18 the owner is indemnified against all third party claims, is to be investigated.

It is common for a charterer to be identified as the contracting cargo carrier. For example the Boxtime charter party form used in container trades provides for charterers to issue their own bills of lading, Summary of cover available The new Members to the Club were primarily attracted by the Club’s reputation for the quality of its service. Charterers Liability Cover and requires charterers to be responsible for, and handle, any cargo claims (with some rights of recourse against the ship owners). (Example: a cargo owner presents a claim to a container line for damage to cargo that has been carried onboard a chartered ship.

The P&I Club can assist in assessing the nature and extent of any damage, and its cause, and in covering the cargo claim, while assisting with any recourse action against the shipowner). In some jurisdictions, a claimant is entitled by local law to commence proceedings against both the shipowner and charterer, regardless of who is identified as the carrier of the cargo, and in some cases a charterer might be seen as a “deep pocket”, being easier to claim against, or having assets in the jurisdiction that can easily be threatened.

Liability to persons

If any accidents happen to stevedores during cargo operations, then claims might be made directly against the charterer, or against the shipowner, or both. Even if a claim is made against the shipowner, the terms of the charter party might entitle the shipowner to claim an indemnity from the charterer, for example under the terms of the NYPE time charter, which holds that cargo is loaded, stowed, and discharged at the risk and responsibility of the charterer.

(Example: A shipowner advises the charterer that his crew report a stevedore has suffered a fall inside the ship’s cargo hold, but the charterer is given no further information. Much later, the same ship is arrested at the same port, by lawyers representing the stevedore, who are making a large claim for serious injury to the stevedore. The shipowner now advises that, under the terms of the charter party, the charterers are responsible for cargo loading operations, and the shipowner will hold the charterer fully liable for all losses and damages arising from the accident.

While the ship’s crew are employed by the shipowner, it is possible that the shipowner might claim against the charterer, in the case of any accident resulting from stevedore operations, or from a dangerous cargo which is the charterer’s responsibility

Now a days it is common that shipping companies will support the masters with a Recap of the charter party, which includes the most important paragraphs to be known. The Recap is mostly 1-2 pages compared to the charter part which might have 30 pages and more

The Recap does not free the master to have the charter party on board. It presents only a summary of the important paragraphs. Therefore the master should also read the charter party.

1.1.3 The Slothire – Slot Charter Party

“Slot charter parties”, or “space charter agreements”, were first introduced in the very late 60’s of the 20th century by major container operators associated in large consortia. The idea of the first agreements was exchanging slots (a “slot” means the space on board a vessel necessary to accommodate one 20-ft container)on one another’s vessel.

The essence of the arrangement was an exchange of free tonnage rather than the sale of slots on board a vessel. Therefore, terms and conditions of the first slot charter parties, reflecting this form of slot chartering, were often provided in what could be referred to as Cross Charter Party.

The rapid increase of containerization during the 70’s and 80’s triggered the increase of slot charter parties meaning. However, whilst the initial practice of slot exchange was predominant in the early days of slot chartering, the other form of slot chartering developed whereby the non-vessel owners or individual shipowners enter into an agreement with the container vessel operators to hire slots on their vessels in a given trade. This form of slot chartering could be referred to as Slot Sale Charter Party.

From the legal perspective the slot charter party agreement along with a time charter party and a bareboat charter party can be bracketed together as agreements on making use of someone else’s vessel. These agreements from both, their commercial goal perspective and their legal context, have some common characteristics.

These are the agreements on the basis of which the party who has a vessel other loading space at its disposal (mostly the ship operator) allows the other party(the charterer, in case of a slot charter party named the “slot charterer”) to make use of this vessel (or of any part thereof) for running the shipping business which is governed by maritime law. In most cases it’s about the cargo carriage.

The hallmark of privities arising from these agreements is using a vessel for the specific business goals simultaneously by both parties to such an agreement but in a different way.

A slot charter agreement in its legal nature, and according to the law of obligations theory, is a bilateral, binding, payable and mutual contract having a consensual nature. It is a hire contract. A slot hire agreement include: an obligation of the shipowner (or the ship operator) to place at the disposal of the slot charterer a pre-specified number of slots on board of the named vessel for use, the obligation of The legal aspects of a slot charter agreement BIMCO “Slothire” standard slot charter party form 37the slot charterer to remunerate the shipowner (to pay “hire”) for using the agreed space on board the vessel (for his own or third parties cargoes), as well as duration of the agreement and the manner of use of the vessel, showing maximum weight of goods carried out and a trade on which the goods have to be carried.

The slot hire agreement include:

a place and date (term) when the owner is bound to place a vessel (her loading space) at the disposal of the charterer and the conditions regarding the payment of hire.

The other provisions such as a range of obligations, duties and responsibilities are not necessary for a contract conclusion, but nevertheless the parties usually try to regulate them, sometimes in a very detailed manner, in order to avoid any unnecessary disputes and responsibility under the signed agreement.

The parties to such an agreement may prepare their own, original charter party, where they describe conditions under which they want to use a part of the ship’s loading space. Such agreements (so called private charter parties) are nowadays less and less used due to a wide cooperation of the shipowners and the charterers.

Their application is limited to those shipping regions where the number of business transactions is minor. The predominant parts of these agreements are concluded on so called standard forms, developed and updated from time to time by the maritime organizations, societies and unions of shipowners, charterers and cargo owners as well as brokers and maritime agents.

RECAPS

It is nowadays very common that RECA's will be send onboard instead of the charter party. When a fixture is completed, a message confirming the agreed terms is prepared by the brokers and sent to both parties. The message includes all the details and the wording of the contract and is termed the RECAP. The preparation of the charter party itself will follow, again prepared by the brokers and usually signed by the principals or the brokers acting as agents.

The charterer's broker draws up the charter party after th4 fixture has been confirmed. The terms of negotiation, known as Final/Clean RECAP - refers to a previous charter party (The proforma charter party), which is the one to be used to prepare a charter party new fixture/charter.

It will be of particular interest to the shipping community because the issue of concluding an agreement by way of RECAP was examined. As Beatson J2 points out (at paragraph 27): “it is common for charter parties to be concluded by an exchange of emails or faxes, with the terms being recapitulated in a “fixture RECAP”, and they can be concluded orally and recapitulated”.

Are there risk if using RECAPS?

The case TTMI against Statoil represents such risks.

The underlying dispute involved a claim by disponent owners, TTMI, against charterers, Statoil, for unpaid demurrage following a voyage from Norway to Texas on the basis of a fixture RECAP email dated 17 October. Arbitration was commenced. Statoil rejected the claim, stating that there was no contract in existence with TTMI because on drawing up the RECAP, the brokers had mistakenly identified the parent company as the vessel’s time chartering owner, rather than the tanker chartering arm of the company who were actually the disponent owners with whom the charterers would do business.

As a golden Rule for the ship command:

If there are any questions regarding the charter party or the RECAP call immediately the ship owner to verify what is not or only superficially understood. Be reminded that the terms and condition in a charter party are based on admiralty law vocabulary and wording which is quite different to the normal English pronunciation and wording. Here the shipping company can and must assist.

See below and example of a charter party Recap

Source: P.Grunau

Illustration 3: Example of a RECAP

Attached to the above RECAP are mostly additional information, like consumption at certain speeds etc.

Eco Speed

ECO Speed and consumption bsstcd conditions:

about 19kn at about 45,0mt

about 18kn at about 40,0 mt

about 17kn at about 35,0 mt

about 16kn at about 32,0 mt

about 15kn at about 30,0 mt

about 14kn at about 27,0 mt

Vessel is currently not under ITF cover

Owners confirm that owners P&I club is a member of the International Group of P&I Clubs

Owners confirm all cargo holds and spaces are clean and free of dunnage/cargo/cargo residues and/or any obstructions. Any cost for clearing same such as but not limited to disposal of dunnage, cleaning, welding or cutting always to be in owners time and at owners expense.

Charterers are entitled to make use of owners spreaders (subject to availability) & lashing/lifting material as on board. VESSEL HAS NO SPREADER ON BOARD

Owners confirm that vessel has enough lashing / securing material on board to load at least 482 x 40' containers

Trading always within IWL, always safely afloat, always via safe anchorage(s), safe port(s), safe berth(s), always accessible, with lawful harmless IMO containers or flatracks only.

1.1.4 On Hire Report

When the vessel is delivered by the owner to the charterer, good management requires that the contracting partners jointly survey the vessel in order to disclose any deficiencies not made known to all concerned.

Making inventories of such items as furnishings, spare parts, stores, lashing materials, lube - and fuel-oil (if any) should be a joint exercise.

At the end of the charter period the vessel is to be redelivered in the same condition,- , reasonable or ordinary wear and tear excepted’’ in which she was originally received by the charterer.

If the vessel is returned in a damaged condition, it is the charterer’s responsibility to prove lack of culpability.

If the charterer is held to blame, the measure of damage must include the costs of the required repairs. Unless it is otherwise agreed, the vessel is to be redelivered by the charterer in the place or range where the charter commenced.

Throughout the period of the Bareboat Charter the ship-owner provides and pays for the hull- and machinery insurance only.

The charterer is to obtain marine protection and indemnity insurances, as well as third party coverage in order to protect the ship-owner from claims.

As the charterer of a bareboat chartered vessel acts as the Carrier of the cargo, the Bill of Ladings will be issued by the charterer. The shipowner is not responsible for any loss or damage to the cargo. The charter hire may be stipulated as a fixed charge, or a sum per deadweight, usually payable 1 month in advance.

Illustration 4: Example of an On-Hire Joint Survey Report

Source: Capt. Sievert Wolters† – Admiralty Law

The complexity of a Time Charter-Party derives from the fact that ownership and possession of the vessel, which remains with the Owner, are separated from the use of the vessel which is granted to the Charterer.

When the Charterer is acting as the vessels Carrier, the question often arises, whether the Bill of Lading is a contract between the Charterer (nominated as Carrier) and the Shipper or between the Ship-Owner and the Shipper.

In most cases it is correct to say:

A Bill of Lading represents a contract between the Ship-Owner and the Holder of the Bill of Lading, because the Master, who has made, with his signature, the Bill of Lading effective, is employed by the Ship-Owner.

It is in the obligation of the shipper to provide a seaworthy vessel.

1.1.5 Seaworthiness

A seaworthy ship is one that takes cargo to sea and comes safely through the kind of sea and weather that she should expect to meet during her voyage.

A seaworthy ship is one:

with a staunch, sea- and watertight hull

with effective working machinery and steering gear

that is properly manned in accordance to the Safe-Manning Certificate with a competent crew

that is properly equipped with stores, spares with navigation equipment and up-dated maps and charts

that is properly supplied with provisions, bunkers and water

that is properly loaded

that has all statutory Certificates and Licenses, long valid, onboard.

For the avoidance of misunderstandings:

that is, the suitability of the vessel to carry the contemplated cargo on the voyage in question.

But:

The unseaworthiness of a vessel must be proved by the person or the company who pleads for it.

Can the ship be cargo worthy but not seaworthy?

This question often arises. The answer is YES. A ship can be cargoworthy at the time the cargo has to be loaded. This means the ship is ready in all aspects to load the said cargo, Cargo gears ready, cooling equipment ready. hatches ready to load.

The ship must be in a seaworthy condition prior beginning of the voyage or prior departure. This might be not the case if for example the auxiliary engines were not properly working, or the minimum requirements of the manning certificate is not fulfilled.

Normally the master must ensure that if his vessel is seaworthy the vessel is also cargoworthy.

Time of Seaworthiness

Should it be at the beginning of the voyage or should it last during the voyage or to the end of the voyage. The common law taking into consideration the knowledge that upon leaving the port and commencement of the sailing, opportunities to inspect the ship would not exist anymore and as a result, the warranty of seaworthiness in relation to cargo need only be satisfied at commencement of loading. So also, is the issue of physical safety of the ship. This only is necessary before the commencement of the sail.

1.1.5.1 The Legal Aspects of Seaworthiness

Physical seaworthiness

The physical seaworthiness of the vessel deals with the state of the vessel itself, i.e. its readiness to encounter the ordinary perils of the sea that it might face during its voyage, taking into consideration the type of the vessel, its age, the type of navigational water, the route it is going to take, and the time of the year at which it is going to embark on the journey. Consequently, this kind of seaworthiness takes into consideration the engine of the vessel, its holds, pipes, bunkers, tackles, engine…. etc. It requires that the carrier, before his vessel sails, must make sure that it is fit or, where his obligation is to exercise due diligence, must prove, if the vessel was not seaworthy, that he exercised due diligence to make it so, in order to be able to protect himself from responsibility for any loss or damage. Seaworthiness depends to a large extent on the different circumstances surrounding the voyage. Therefore, seaworthiness depends on the time of the voyage, the route the ship is going to take, the kind of water she is going to sail in (ocean, sea, river, lake… etc), the type of vessel, the available knowledge at the time of voyage, the type of cargo she is going to carry and where she is going to carry it.

Seaworthiness and the time of the voyage

The time at which the voyage is going to be performed is very important because if the ship is seaworthy for a trip to be made in summer she might not be seaworthy for a winter voyage, therefore the shipowner has to make sure that the vessel is fit .The warranty of seaworthiness varies in different places: a vessel considered seaworthy for a voyage in one place may not be so considered in another: the standard of seaworthiness also varies from time to time in the same place The Legal Aspects of Seaworthiness appropriate, exercise due diligence to make his vessel seaworthy for the particular time of the year at which she is going to sail.

Seaworthiness and different types of navigational water

It has been mentioned earlier that Seaworthiness is affected by the type of waters the vessel is going to navigate: whether fresh water or salt water, ocean, rivers…etc. As a result, a vessel that is seaworthy to sail in inland waters might not be so for ocean or sea voyages, and the shipowner who is sending his vessel on a voyage that contains different legs in different types of waters must make his vessel seaworthy for each leg, either from the initial start of the voyage or by allowing for intermediate stops to make the required adjustment to make the vessel fit for the next part of the journey .

Seaworthiness and the type of vessel

Another factor that should be considered in deciding the seaworthiness of the vessel is the type of vessel involved in the voyage. This is important in two respects: the first is the ability of the vessel to navigate through certain types of water, i.e. sea, ocean, river or lakes. The other is the suitability of the vessel to carry the agreed cargo14 . Regarding the first issue, the ability of the vessel to navigate through certain types of water plays an important role in deciding whether she is seaworthy or not, because a vessel which is built for inland navigation, in rivers or lakes, may not be seaworthy to navigate in the sea, or vice versa, unless some modification has been done to make her so

Seaworthiness and existing state of knowledge

Seaworthiness of the vessel depends to a large extent on the prevailing practice of the shipping industry at the time of the voyage. A ship does not need to be fitted with the latest technology as long as the practice at the time of the voyage was not to adopt or approve it. Thus, a ship does not need to be fitted with the latest technology unless such technology has been adopted by the industry and has become necessary for safe sailing. For example, satellite navigation equipment , ECDIS etc

For instance, a cargo of potatoes was shipped on board of vessel . On arrival part of the cargo was damaged due to a lack of ventilation, as the vessel met with expected bad weather for the time of year and the shipowner had to close the hatches to prevent the incursion of water into the holds. The cargo owner claimed that the vessel was unseaworthy to carry the cargo, because the vessel was not fitted with ventilators.

The judge, in order to find whether the ship was seaworthy or not, directed the following test “Would a prudent shipowner, if he had known of the defect, have sent the ship to sea in that condition?” the owner said that if a prudent shipowner knew that his ship might meet with bad weather at that time of the year, and that such bad weather would lead to the closing of the hatches, and he decided to send the vessel on such a trip, then the vessel is seaworthy, but if he would not send it in such circumstances, the vessel would be unseaworthy. In this case the learned judge arrived at the decision that the vessel was seaworthy and the damage suffered was not beyond what should be expected in such voyage.

Seaworthiness of the vessel and its equipment

The main obligation on the carrier is to ensure that the vessel and its equipment are in good order and condition before and at the beginning of the voyage. This would include the carrier making sure that the vessel’s engine and equipment are in full working order before and at the beginning of the voyage. Therefore, he should carry out an inspection to make sure that everything is in working order, and furthermore, if a surveyor recommends certain repair work to be done then he must insure that these repairs are carried out.

The carrier should also ensure that his vessel is supplied with the necessary equipment to ensure the safe navigation of the vessel; e.g. radar, satellite navigation. In addition, he should ensure that the vessel is provided with the equipment necessary for the safe delivery of the cargo; e.g. refrigeration, ventilation … etc.

The carrier is not required to provide his vessel with the latest technology as long as it has not become widely used or it is proved to be essential for the increasing of safety of navigation. Therefore, it is the carrier's responsibility to ensure that the vessel and its equipment are in good and full working condition and that he, his servant, agent, or an independent contractor exercised due diligence to make the vessel seaworthy. Further he must prove that which causes the damage were not discoverable even with the help of competent prudent experts.

However, the latter situation with regard to the exercise of diligence will not apply where the carrier’s obligation to provide a seaworthy vessel is an absolute one, because in this case the vessel must be seaworthy and if she was not then the carrier will automatically be in breach of his obligation.

Seaworthiness and Competence of the crew

In order for the shipowner to satisfy the requirement of seaworthiness he must employ a competent crew; special attention should be given to the recruiting of the master and the engineers, as the management of the vessel is their responsibility. A competent crew means that the staff are familiar with the vessel and its equipment and able to deal with any problem that may arise during the voyage33 . Furthermore, it is important to know how a candidate for employment as crew might behave in a particular situation and how he would manage emergencies which the vessel might face during the course of its voyage. That is because “competence includes the ability to deal with an emergency situation: such a situation might only occur many years after qualification” Furthermore, the carrier has to take notice of the captain’s or engineers’ behaviour onboard the vessel because a master would not be competent to control the ship .The competence of the crew would also include their ability to handle the vessel on board which they are employed to work, therefore, if a new member of the crew was not familiar with the vessel this could affect his/her competence especially if there was not sufficient means, e.g. ship manuals, for them familiarise themselves with the ship within reasonable time. This would mean that, even if the crew had long experience and training, their lack of specific information could mean that they are incompetent to navigate a particular ship.

Example:

The MV CRIPET Sunrise, a 6200 TEU Container ship is in a time charter for Clarkson Ltd. Bermuda’s and is in the South-East Asia – WCUS. The charterer is also carrier.

Port rotation: Hong Kong- Singapore - Port Klang - Singapore – Koa Hsiung – Dutch Harbor - Los Angeles – Seattle.