Voyage Charters (Hardcover, 5 ed)

SECTION I: GENERAL PRINCIPLES AND GENCON CHARTER Chapter 1: Formation and Terms of the Charter FORMATION OF THE CHARTER Types of charter CONCLUDING A BINDING AGREEMENT Matters which must be agreed if the contract is not to be unworkable or void for uncertainty The parties’ intention to contract "Subject to contract" "Subject to details" and similar expressions "Subject to logical amendments/alterations" "Subject to survey" "Subject to stem" "Subject to satisfactory completion of two trial voyages" "Fixed in good faith" Other "subjects" LAW GOVERNING THE CHARTER Governing law chosen by the parties 1. Express choice of governing law "Floating governing law clauses" 2. Choice of law "clearly demonstrated by the terms of the contract or the circumstances of the case" (a) Use of a standard form known to be governed by a particular system of law (b) Course of dealing between the same parties (c) Express choice of forum (d) Reference to certain provisions of a system of law, without an express general choice of that law Other indications of a choice of law Where the parties have made no choice of governing law The role of the governing law Procedural law ? limitation of shipowners’ liability ILLEGALITY OF THE CONTRACT OF AFFREIGHTMENT MISTAKE 1. Mistake as to underlying circumstances 2. Mistake as to the parties, subject matter or other terms Parties Subject matter Terms of the contract Rectification MISPREPRESENTATION Revision for misrepresentation Damages for misrepresentation Representation ? a term of the contract OTHER VITIATING FACTORS: DURESS AND BRIBERY Duress and the conflict of laws THE TERMS OF THE CHARTER Express terms Interpretation of charterparty terms The general principle of interpretation Circumstances in which external evidence is admissible as an aid of interpretation Other more specific guidelines for interpretation Implied terms Implied obligations of the owner Implied obligations of the charterer Classification of terms 1. Conditions 2. Warranty 3. Intermediate term Affirmation Bringing the charter to an end Performance Agreement Accepted repudiation Provision in the charter Frustration Chapter 2: Parties to the Charter 1. The basic rule: the identity of the parties depends on construction of the charter as a whole Misnomer Principal and agent Decisions on construction 2. Real principal can sue and be sued When the terms of contract exclude intervention of another person as principal When the agent is the real principal Election to sue agent or principal 3. Authority of agents Actual authority Ostensible authority Ratification Warranty of authority Mortgagees and purchasers The effect of the charter on non-parties "Piercing the corporate veil" 1. Liability as a party to the charter 2. Other cases U.S. Law Parties Identification of owner or charterer "Piercing corporate veils" Piercing the corporate veil in arbitration Piercing corporate veils in tort cases Parties in interest Consolidation in arbitration Participation of non-signatories in arbitration Consolidated class actions in arbitration Chapter 3: Description of the Ship Contractual effect of descriptive statements Condition, warranty or intermediate term When the ship must comply Name of the vessel Vessel "to be nominated" Liberty to substitute Chartered tonnage Owners’ right of transshipment Registered tonnage Deadweight and bale capacity "About" Classification Oil major approvals and RightShip status Flag and nationality Condition of the vessel and her gear Speed Vessel’s description in shipping register "Without guarantee" U.S. Law Description of the ship Vessel’s name Gross and net registered tonnage (GRT/NRT) Cargo carrying capacity Vessel’s flag Classification Society Length Arrival draft "Air draft" "WLTHC" "Under keel clearance" ("UKC") Present condition of tanks/holds Shovel clean Whether description of cranes implies they can work simultaneously Suitable for grab discharge "Self-discharging" Sugar charters: non-compliance clauses Chapter 4: Proceeding to the Loading Port Introduction 1. The position of the vessel at the date of the charter Statements as to the time when the vessel is to sail for the loading port 2. "Expected ready to load" Reasonable grounds "About" 3. The obligation to proceed to the loading port The effect of an "expected ready to load" date or other charter indicia Intermediate engagements Conditions or intermediate term? The effect of excepted perils When and where does the approach voyage begin? 4. Post-fixture notices of expected time of arrival GENCNO 1994 U.S. Law Present position of vessel and expected readiness to load "Expected Ready to Load (abt.)" Proceeding to the loading port Economic and Trade Sanctions The ALKIMOS and US Sanctions Against Venezuela Owner’s Demand for Alternative Voyage Orders The Parties’ Contentions Chapter 5: Loading and Discharging Ports, Places and Berths "Port or place" The identification and nomination of the port, place and berth Delegation of nomination Nomination under a bill of lading The obligation to nominate By whom the nomination may be made When the nomination must be made How the nomination is made Order of call at two or more ports The irrevocable effect of a valid nomination Impossibility Existing impossibility at the time of the nomination Supervening impossibility SAFETY The warranty of safety ? express and implied 1. Named ports or places 2. Choice from a range of named ports/places 3. Choice from a number of unnamed ports within a range 4. Choice of a berth within a port Due diligence Can the warranty of safety be qualified by the context/circumstances? At what time does the charterer’s warranty as to safety operate? Re-nomination after supervening unsafety Definition of safety Types of unsafety Physical safety "Political" or non-seafaring unsafety "Always lie safely afloat" "Always accessible" or "always available" or "reachable on arrival" The particular vessel The duration and ambit of the warranty of safety 1. "reach" Lightening and safety 2. "use" Interruptions in safe conditions for use Tug and shifting costs 3. "return" 4. Port/berth ceasing to be unsafe prior to the vessel’s arrival Temporary obstacles Abnormal occurrences Negligence on the part of the master or navigator "So near thereto as she may safely get" The effect on the implied warranty of safety The effect of the term Notice The effects of the nomination of an unsafe or impossible port or place: the owner’s rights The right to consider the order The right to reject the order Loss of the right to reject and damages Damages for delay Chapter 6: The Cargo Obligations: mutual and prior to loading Meaning of a "full and complete" cargo Only ordinary cargo spaces to be used Ballast Stowage and broken stowage Preparation of the goods for loading "not exceeding what she can reasonable stow and carry" Bunkers, water and stores Draft restrictions, harbours with bars Effect of clauses describing the capacity of the vessel Effect of clauses describing the stowage factor of cargo Clauses fixing the amount of cargo to be shipped Maximum and minimum quantities fixed by the charter Options as to quantity to be loaded Charterparty for "a cargo" Port Cargo De minimis DECK CARGO When carriage of deck cargo is permissible 1. Where the contract of carriage provides for carriage on deck 2. Custom of the trade 3. Where the ship is specially designed for carriage on deck 4. Containers Rights and responsibilities where goods are carried on deck Unauthorised deck carriage Authorised deck carriage 1. Standard of stowage and seaworthiness appropriate to deck cargo 2. Where goods are carried "at charterer’s risk" or "at shipper’s risk" 3. Application of the Hague and Hague-Visby Rules 4. General average Owner’s right to freight where goods are carried on deck THE TYPE OF CARGO Cargo described specifically Cargo not described specifically ? "lawful merchandise" DANGEROUS CARGO Express prohibition Implied term relating to dangerous cargo The meaning of "dangerous goods" The nature of the notice required Dangerous goods and inherent vice Legal obstacles ? risk of non-physical damage Is the carrier obliged to carry dangerous goods? The effect of a clause paramount BIMCO cargo clause RIGHTS OF THE OWNER WHEN CARGO LOADED IN BREACH OF THE TERMS OF THE CHARTER U.S. Law "Full and complete cargo" Cargo to be loaded "Lawful general cargo" Dangerous cargoes Chapter 7: Charterer’s Obligation to Provide Cargo Nature of the charterer’s obligation The time at which the cargo must be available Loading in turn Consequences of a breach of the obligation to provide cargo EXCEPTIONS TO THE CHARTERERS’ OBLIGATION TO PROVIDE CARGO 1. Frustration of the charterparty Illegality 2. Express exceptions clauses (a) General principle of interpretation (b) Customary place of storage outside the port (c) Exceptions clauses extending to the providing of cargo (d) Prevention by excepted perils of intended method of providing cargo (e) "Cargo or intended cargo" CARGO OPTIONS ? SELECTION OR ELECTION? The effect of a true option 1. Mode of exercise 2. Failure to exercise the option punctually 3. Nomination of cargo already affected by delay 4. Revocation of the exercise of the option U.S. Law Charterer’s duty to supply a cargo Waiting at the altar: When is there an anticipatory repudiation of the charter? Charterer’s breach Damages Duty to avoid or minimize damages Contracts of affreightment "Fairly evenly spread" Chapter 8: Dunnage Meaning of dunnage "Separations" Removal of dunnage at end of voyage "Required" and unnecessary dunnage and the Hague Rules Chapter 9: Proceeding on the Cargo Voyage Abandonment and transshipment Chapter 10: Delivery What constitutes delivery? Delivery under f.i.o terms Where, how and to whom delivery is to be made Notification of readiness to deliver Delivery of mixed or unidentifiable goods 1. Undifferentiated goods shipped as one parcel 2. Where goods become unidentifiable during the voyage as a result of an excepted peril 3. Where goods are shipped with inadequate or inaccurate marks When mixing of goods is due to the fault of the shipowner The method of apportioning unidentifiable goods Cargo mixed with goods belonging to the shipowner Failure of the consignee to take delivery Special contractual provisions Provisions which entitle the carrier to land and warehouse the goods (usually at the merchant’s risk and expense) if the consignee does not take delivery. Provisions which stipulate that delivery to a person who would not, on ordinary principles, be the agent of the consignee shall be deemed to amount to good delivery Chapter 11: Owners’ Responsibility Clause 2. Owners’ Responsibility Clause The incorporation of the Hague Rules The layout of the clause THE FIRST PARAGRAPH ? LIABILITIES ACCEPTED "Owners to be responsible…" "…for loss of or damage to goods or for delay in the delivery of goods…" 1. Improper or negligent stowage "Unless stowage performed by shippers/Charterers or their stevedores or servants" The effect of the third paragraph of the clause 2. Unseaworthiness caused by personal want of due diligence on the part of the owners or their manager The role of absolute warranty at common law Seaworthiness in general The ISM Code Ship-vetting institutions Structure and hull Machinery Hold preparation Stowage Manning Equipment and supplies Compliance with legal and documentary requirements When must the ship be seaworthy? The doctrine of stages The period before the beginning of loading The loading stage The intermediate stage after the end of loading and before the open sea voyage Bunkering and the doctrine of stages Personal want of due diligence of the owners or their manager The effect of "personal" The relevant persons ? "the Owners or their Manager" "…the Owners or their Manager…" The position of the disponent owners Personal obligations of owners or their manager 3. "…or by the personal act or default of the Owners or their Manager" THE SECOND PARAGRAPH ? LIABILITIES EXCLUDED "…loss, damage or delay…" ? financial loss To what matters, acts or omissions do the exceptions apply? When the exceptions apply The relationship of clause 2 with other clauses Descriptive clauses and clause 2 The burden of proof GENCON 1994 U.S. Law General principles The duty to make the vessel seaworthy Clause paramount COGSA defenses Financial unseaworthiness Improper or negligent stowage Condition and stowage Personal want of due diligence, or act of default of owners or their manager The burden of proof Contribution and indemnity?tender of defense Chapter 12: Deviation and Delay 3. Deviation Clause Basic obligation of the carrier Usual and customary route Departure from direct route for navigational reasons Bunkering Departure from direct route for loading or discharging cargo Deviation by delay Deviation in case of necessity To effect repairs to the ship To avoid capture or confiscation To save life To obtain fill-up cargo Deviation must not exceed what is reasonably necessary Clauses granting liberty to depart from the direct or usual route The Gencon deviation clause "To call at any ports in any order" "For any purpose" "To tow and assist vessels in all situations" "To deviate for the purpose of saving life and/or property" The BIMCO Liberty and Deviation Clause Other liberties to deviate EFFECT OF UNJUSTIFIABLE DEVIATION 1. Rights and liabilities after deviation when contract is rescinded (a) Terms of bailment (b) Effect of rescission on owner’s accrued rights 2. Rights and liabilities after deviation where contract is affirmed (a) Carrier remains liable for loss caused by deviation (b) Exclusion clauses may not apply to a devious voyage Deviation on the voyage to the loading port U.S. Law Deviation and delay Usual and customary route Departure from direct route for navigational reasons Bunkering Departure from direct route for loading and discharging cargo Inadvertent failure to discharge cargo Deviation by delay Deviation in case of necessity Gencon form Deviation by unseaworthiness Burden of proving casual connection Effect of deviation on limitation of liability Effect of deviation on time bar Deviation by the carriage of cargo on deck Chapter 13: Freight 4. Payment of Freight The meaning of freight The quantity of cargo on which freight is payable "Freight on intaken quantity" "Freight on delivered quantity" Other stipulations: conclusive evidence The rate of freight Overage freight Lumpsum freight Lumpsum freight where no cargo is shipped or delivered Lumpsum freight when cargo is short-shipped or when some cargo is lost Freight on transhipment Fault of the charterer preventing the earning of freight Pro rata freight for delivery short of destination The amount of pro rata freight Rate of freight where the parties agree to a discharge port outside the agreed range The persons from whom freight may be due "Freight payable as per charterparty" Where freight is payable to a third party Deadfreight Method of payment Currency of account and currency of payment Place of payment Time of payment Payment "in cash" Payment by cheque or bill of exchange Payment "without discount" Deductions from freight ? the rule against set-off Claims for damages: equitable set-off Liquidated claims: legal set-off Procedural rules Special clauses permitting deduction from freight of cargo claim Payment of freight "on delivery" "Right and true delivery" Freight on delivery of damaged cargo Freight payable in advance Advances under clause 4 "Cash for vessel’s ordinary disbursements at port of loading to be advanced by Charterers if required…" "Ordinary disbursements at port of loading" "If required" "At highest current rate of exchange" "Subject to two per cent to cover insurance and other expenses" "Partial loss of cargo after part of freight advanced" Other provisions for the payment of advance freight Advance freight payable on loading Advance freight payable on sailing Advance freight payable on signing bills of lading Calculating the amount of advance freight payable Provisions which advance the date at which freight is earned Freight "earned" on shipment and similar provisions Freight payable "lost or not lost" "Freight prepaid" GENCON 1994 4. Payment of Freight Clause 4(b) Clause 4(c) Calculation of freight U.S. Law "Freight" defined; contrasted with "hire"; usual modifications to the printed clause Amount: lumpsum or per measurement unit Amount based on trading range/ports "Without discount" When earned: "Non-returnable, vessel and/or cargo lost or not lost" Cases in which the owner was entitled to retain prepaid freight Cases in which the owner was not entitled to retain prepaid freight The double recovery problem Recovery of trans- or on- shipment costs Another line of cases: the owner’s decision to abandon the voyage must be "reasonable" in order to retain prepaid freight Freight pro rata Time freight earned vs. time freight payable Time for payment: "prepaid" freight within so many days "after" signing/releasing bills of lading Interest on late payment Chapter 14: Loading and Discharging 5. Loading Discharging Costs General background Customs of the port Clause 5 of the Gencon charter GROSS TERMS Receipt and delivery "alongside" the vessel Effects of customs of the port when cargo to be received or delivered "alongside" Responsibility for handling goods "alongside" Operating the cargo gear Large pieces or packages Loading by elevator or discharging by spout Stowage Ensuring proper stowage and trim between discharging ports Shipowner’s right to land and reload "Seaworthy trim" clauses F.I.O.S.T. TERMS Effect of f.i.o.s.t. alternative Incorporation of f.i.o.s.t. alternative into bill of lading Effects of provisions retaining "supervision" or "responsibility" of captain Residual responsibility of owners for bad stowage Use of ship’s cargo gear and winchmen Opening and closing hatches Loading spaces with difficult access Responsibility for stevedores under other forms of clause Bagging bulk cargo Liner terms Lighterage Exceptions clauses and optional methods of discharge GENCON 1994 5. Loading/Discharging (a) Costs/Risks (b) Cargo Handling Gear (c) Stevedore Damage Clause 5(a) Clause 5(b) Clause 5(c) Chapter 15: Laytime 6. Laytime (a) Separate laytime for loading and discharging (b) Total laytime for loading and discharging (c) Commencement of laytime (loading and discharging) General Loading/discharging within the agreed laytime Fault of the owner Defining the period of laytime Charterer’s obligation where no laytime is agreed Interruptions and exceptions to laytime Interruptions to laytime "Weather permitting" "Sunday and holidays excepted" "Unless used, in which case time actually used to count" Laytime exceptions Construction of laytime exceptions 1. Strict construction 2. Applicability of general exceptions to laytime and demurrage 3. Failure to have cargo available 4. The period covered by the exception 5. Reasonable efforts to overcome the hindrance 6. Charterer causing the hindrance The commencement of laytime Notice of readiness 1. The place 2. The ability to load or discharge Delay by the charterer "Laytime for loading and discharging shall commence at 1 p.m. if notice of readiness is given before noon and at 6 a.m. next working day if given during office hours after noon" "Next working day" Special cases of time counting "Time actually used before commencement of laytime shall count" "Time lost in waiting for berth to count as loading or discharging time" Other periods deemed to be laytime Other provisions which place the risk of berthing delays on the charterers Shifting Shifting from anchorage to berth Shifting out of berth U.S. Law Introduction: basic concepts Where no time period is fixed for loading and/or discharging, or where it is left to custom Time waiting for a berth under a charter with no fixed laytime Charters in which a period of time is fixed for loading and/or discharging; notice of readiness Content of notice of readiness Importance of notice of readiness From where may NOR be given? Herein of berth charters and port charters and "arrived ships" "Whether in berth or not" Meaning of "port" Free pratique and customs clearance Physical readiness To whom must the NOR be given? How NOR is given Tender of NOR prior to laydays When may NOR be given? "Office hours" Time actually used before notice time expires Tender of NOR before first day of canceling period Meaning and effect of "time lost waiting for berth provision" Calculation of laytime "Running days" "Working days" "Sundays and holidays" "Weather permitting" and "weather working day" "Weather working day of 24 hours" "Weather working days of 24 consecutive [or running] hours" "Days" based on an amount of cargo loaded or unloaded per day "Days" based on amount of cargo per workable hatch "Days" based on amount of cargo "per hatch" "Separate" or "total" laytime for loading and discharging Other exceptions to laytime Vis major Fault of owner Specific contractual exceptions; general principles Any cause [whatsoever] beyond the control of charterer Congestion: "obstructions" Chapter 16: Demurrage 7. Demurrage General Exceptions clauses ? "once on demurrage always on demurrage" Delays caused by the fault of the shipowner Demurrage and mitigation Demurrage and damages for detention When demurrage falls due Who is liable to pay demurrage? Time bar clauses U.S. Law How and when payable Demurrage contrasted with "damages for detention" or "detention" Standing to Claim Demurrage "Liner terms" Does the owner have a duty to "mitigate" demurrage? Despatch Chapter 17: Liens 8. Lien Clause The nature of a lien Lien and cesser clauses The scope of the cessation of the charterer’s liability The Gencon Clause Other clauses "Supersessions" clauses The effect of a failure to exercise a lien The burden of proof The creation of the lien Lien for sums due under the charterparty or the bill od lading The exercise of the lien The demand Retaining possession The cesser clause and the exercise of the lien No lien for sums not payable at the time of discharge The cargo over which the lien is exercisable The costs of exercising the lien What costs are recoverable? The cesser clause and the costs of exercising the lien The charterer as bill of lading holder GENCON 1994 U.S. Law The maritime lien Executory contracts Shipowner’s lien on the cargo for freight, deadfreight, demurrage and damages for detention When the shipowner’s lien can be exercised Deadfreight, despatch and other items Self-help and owner’s right to refuse to deliver the cargo "Freight pre paid" bills of lading Charterer’s liens When a maritime lien for beach of charter arises Scope of charterer’s lien on the ship Liens for necessaries provided by charterer Priority of charterer’s lien Cesser clause Charterer not relieved from liability accrued prior to loading and issuance of bills of lading Charterer relieved from liability incurred subsequent to loading and issuance of bills of lading if and only if the bill of lading adequately incorporates the terms of the charterparty Charterer not relieved from liability incurred subsequent to loading and issuance of bills of lading if the bill of lading does not adequately incorporate the terms of the charterparty If the bill of lading adequately incorporates the charterparty provisions, the consignee/receiver is secondarily liable for demurrage incurred at the load port The cesser clause does not protect the charterer from liability for breaches of duties which it itself agreed to perform subsequent to loading "…but only to such extent as the Owners have been unable to obtain payment thereof by exercising the lien of the cargo" The effect of contradictory typed clauses Maritime Liens For Necessaries Supplies To A Vessel Chapter 18: Bills of Lading 9. Bills of Lading BILLS OF LADING IN GENERAL The bill of lading issued under a charterparty Further variants 1. BILL OF LADING AS A RECEIPT Bailment Representations in the bill of lading 1. Evidence 2. Estoppel 3. Liability in tort 4. Liability in contract Statements as to condition The obligations of the master with regard to clausing the bill of lading Statements as to quantity, weight, etc. Section 4 of the Carriage of Goods by Sea Act 1992 Conclusive evidence clauses Statements as to marks Statements as to quality Statements as to the date of loading 2. BILL OF LADING AS A CONTRACT OF CARRIAGE Charterparty terms and bills of lading Incorporation of charterparty terms into bills of lading Identification of the charterparty Parties to the "bill of lading contract" (a) The identity of "the carrier" (b) The identity of the cargo interest who is party to the contract The Carriage of Goods by Sea Act 1992 The types of documents to which the Act applies Transfer of rights against the carrier under the bill of lading Transfer of rights to a "lawful holder" of a bill of lading What happens to the rights of the original party? Concurrent rights Undivided bulk cargoes Indorsement of a "spent" bill of lading or after lawful delivery or loss of the goods The original party’s liabilities and their imposition on other parties The liabilities imposed The imposition of liabilities on "lawful holders" The continuing liabilities of transferors Sea waybills and ship’s delivery orders Implied contract Cases of no implied contract Third parties: independent contractors and employees Bailment generally The liabilities of bailees The rights of bailees Bailment and sub-bailment The "bailment on terms" The "sub-bailment on terms" Stevedores and owners’ employees The Contracts (Rights and Third Parties) Act 1999 3. THE BILL OF LADING AS A DOCUMENT OF TITLE Classification of bills of lading "Straight", "order" and "bearer" bills of lading "Exhausted", "spent" or "accomplished" bills The effect of a bill of lading being "negotiable" Indorsement Sales Stoppage in transit Delivery and misdelivery by the carrier Special terms Discharge and delivery against a letter of indemnity THE CHARTERPARTY BILL OF LADING CLAUSE "The Captain to sign Bills of Lading" Who may sign Charterers’ authority themselves to sign The description of the goods in the bill of lading Bills of lading to be signed in accordance with mate’s receipts "at such rate of freight as presented without prejudice to this Charterparty" 1. Charterparties which require the bill of lading to be in a specific form 2. Charterparties which require the captain to sign bills of lading "at such rate of freight as presented" but contain no express provisions as to the other terms of the bill of lading Bills of lading differing from the charter Freight terms Terms other than freight 3. Charterparties which allow the charterer to present a bill of lading in such terms as he chooses without express restriction Implied restrictions on charterer’s rights Statements in the bill of lading Further consequences of duty to sign bill of lading "as presented" Effect of signing "without prejudice to this Charterparty" "but should the freight by Bills of Lading amount to less than the total chartered fright the difference to be paid to the Captain in cash on signing Bills of Lading" Differing terms as to earning of freight "Freight prepaid" bills of lading Loss of cargo after payment of advance THE OWNER’S RIGHT OF RECOURSE 1. Basis of the right of recourse (a) Damages for breach of the charter (b) Damages for breach of a collateral warranty (c) Damages in accordance with Article III rule 5 of the Hague rules (d) Express contract to indemnify (e) Implied contract to indemnify 2. Examples of the right of recourse (a) Bill of lading terms different from those of charter (b) Inaccurate statements in the bill of lading (c) "Captain to sign clean bills of lading" (d) Where bill of lading not signed (e) Departure from the bill of lading contract at charterer’s request (f) No indemnity if act manifestly unlawful Difference between damages and contractual indemnity Causation and remoteness Limitations of action Chapter 19: Cancelling Clause 10. Cancelling Clause Nature of the rights derived from the cancelling clause Cancellation of consecutive voyage charters The mode of exercise of the charterer’s option Accrual of the right to cancel Burden of proof Readiness 1. The role of the notice of readiness in cancelling 2. Where need the vessel be ready? 3. How ready need the ship be? 4. Supervening unreadiness 5. Time of day 6. Actions of the charterer Premature cancellation Charterer’s cancellation Owner’s request for cancellation "Such option to be ‘declared, if demanded, at least 48 hours before the vessel’s expected arrival at port of loading" Latest time for the exercise of the right to cancel U.S. Law General principles The Gencon 1976 form When can the charterer recover damages? Chapter 20: General Average Gencon 1976 11. General Average Gencon 1994 12. General Average and New Jason Clause English Law Which law governs the adjustment of general average? The York-Antwerp Rules The scheme of the York-Antwerp Rules Meaning of a general average act under Rule A Extraordinary sacrifice Extraordinary expenditure Intention Reasonableness ? the rule Paramount in the 1994 Rules The peril Common maritime adventure Causation under Rule C Pollution and damage to the environment Non-separation agreements Contributing interests Calculating the amount made good and the amount of contribution Fault of person claiming contribution Fault of other persons Enforcing rights of contribution in general average General average and exclusion clauses General average "forum" clauses Limitation of actions The Gencon general average clauses 1. Gencon 1976 Charterparty "General average to be settled according to York-Antwerp Rules 1974" "Proprietors of cargo to pay the cargo’s share in the general expenses even if some have been necessitated through neglect or default of the Owners’ servants (see clause 2) 2. Gencon 1994 Charterparty General average and the cesser clause Chapter 21: Remedies for Breach of the Charter 12. Indemnity DAMAGES IN GENERAL The object of damages in contract and tort Wasted expenditure The assessment of the claimant’s "expectation" damages and the compensatory principle What would have happened but for the breach? 1. The accepted repudiatory breach 2. Where innocent party unable or unwilling to perform 3. The breach which does not determine the contract Optional methods of contractual performance and "minimum contractual obligations" Remoteness of damage Relevant knowledge of the contract breaker With what degree of probability must the loss be contemplated? Exclusion of liability for remote damages Causation and mitigation (1) Avoided loss Loss increased by mitigation Insurance and hedging (2) Avoidable loss The time at which the duty to mitigate arises Diminution in value, reinstatement and betterment Contributory negligence The Law Reform (Contributory Negligence) Act 1945 The defendant’s fault (a) The clear law (b) The less-clear law The claimant’s fault Limitation and contributory negligence Costs Indemnities in respect of judgements, awards and settlements The court judgement The arbitration award The settlement Costs and expenses DAMAGES FOR PARTICULAR BREACHES OF CHARTER A. Breach by charterers 1. Failure to nominate a loading port or delay in nomination 2. Failure to provide cargo and delay in providing cargo 3. Nomination of an unsafe port 4. Calculation of damages for loss of profit 5. Calculation of damages for detention of the ship 6. Physical damage to the ship B. Breach by owners 1. Failure to provide ship for loading 2. Short loading 3. Non-delivery or short delivery 4. Delay in loading 5. Delay in delivery 6. Damage to cargo 7. Persons entitled to due for cargo loss or damage 8. Sub-charters Currency in which damages awarded Damages fixed by the charter "Indemnity for non-performance of this charter proved damages not exceeding estimated amount of freight" REMEDIES OTHER THAN DAMAGES Injunction Specific performance Account of profits and Negotiating Damages U.S. Law General principles of damages Burden of proof Recovery of expenses Limitations on recovery of damages Optional methods of performance Remoteness of damages Avoidance of loss or mitigation Events hindering or preventing performance "Causation"; "Avoidable consequences" DAMAGES FOR PARTICULAR BREACHES OF CHARTER A. Breach by charterers 1. Failure to provide a cargo 2. Deadfreight or charterer’s failure to load a complete cargo 3. Physical damage to the vessel 4. Detention damages B. Breaches by owner 1. Failure to provide ship for loading 2. Short loading 3. Damage to cargo 4. Non-delivery or short delivery of cargo 5. Delay in delivery of cargo Anticipatory repudiation of charter Interest Currency in which damages awarded Damages fixed by the charter Punitive damages Remedies other than damages Injunctions Specific performance Declaratory relief Interest fees and costs Chapter 22: Frustration of the Charter Frustration in general Self-induced frustration 1. Events resulting from breach of contract 2. Events occurring without breach of contract Events for which the contract makes provision Frustration of the commercial purpose Assessing the delay or interruption Unforeseen expense Fact or law Instances of frustration of charterparties 1. Loss of ship 2. Damage to ship 3. Delay to ship 4. Destruction of or damage to cargo 5. Delay in obtaining or loading cargo 6. Contemplated route impossible 7. Impossibility of loading or discharging cargo at the contractual port Frustration of consecutive voyage charters Effect of frustration Terms of bailment after frustration Chapter 23: Agency 13. Agency Appointment of port agents Duty and authority of port agents Liability of principal for acts of port agent Liability of agent to third parties Receipt of freights by agent ? owner’s "lien" Chapter 24: Brokerage 14. Brokerage The Contracts (Rights of Third Parties) Act 1999 Arbitration clauses Defences Charters to which the Act does not apply When freight is paid net of commission Deduction of commission pursuant to express provision in charter No express provision permitting deduction Enforcing a claim for commission against the charterer The calculation of brokerage commission Commission due on freight earned Where charter varied or rescinded so as to prevent freight from being earned Breach of the charter preventing the earning of freight Payment to broker in case of non-execution Brokerage clause in charter not reflecting the true brokerage agreement U.S. Law Chapter 25: General Strike Clause 15. General Strike Clause General Strike Clause Part 1 ? Lines 149-151 Part 2 ? Lines 152-162 In what circumstances do the owner’s options arise? The exercise of the owner’s rights under Part 2 Where the charterer does not agree to reckon the laydays as if there were no strike Where the charterer does agree Part 3 ? Lines 163-177 In what circumstances does Part 3 apply? The charterer’s options 16. General Strike Clause U.S. Law What constitutes a strike? Herein of "48 Hours" After the strike is over, are delays caused by subsequent congestion exception? The option to cancel at load port The right to half-demurrage at the discharge port Chapter 26: War Risks ("Voywar 1950") 16. War Risks ("Voywar 1650") "War Risk" Blockade or action announces as blockade Government, belligerent or organised body Sabotage Piracy Actual or threatened war Hostilities and warlike operations Civil war, civil commotion or revolution The effect of the clause The conditions of the rights and liberties Risks at the date of the charter "The Vessel or her Master and crew or her cargo" "At any stage of the adventure" "Any directions or recommendations" The rights and liberties conferred by the clause "Before the Vessel commences loading" After loading has begun Sub-clause (3) Sub-clause (4) Sub-clause (5) Freight under the sub-clauses All extra expenses The effect of delay in the exercise of the liberties Is there any implied term as to the time within which rights under the clause will be exercised? Waiver, election or estoppel Damage to or detention of the vessel by war risks The relationship of the Voywar clauses with frustration CHANGES TO GENCON 1976 17. War Risks ("Voywar 1993") Sub-clause (1) Sub-clauses (2)?(6) Chapter 27: Law and Arbitration 19. Law and Arbitration U.S. Law SECTION II: ASBATANKVOY CHARTER Chapter 28: Preamble TANKER VOYAGE CHARTER PARTY Origin and layout of the charter Formation of the charter Parties to the charter "Chartered Owner/Owner" Chapter 29: Description and Position of Vessel Items of description generally Deadweight Class Loaded draft Capacity for cargo Coated Heating coils Present position and expected ready Chapter 30: The Voyage Commencement of laydays Cancelling Cargo Chapter 31: Freight, Demurrage, Commission Freight Laytime Demurrage Commission Chapter 32: General Average and Arbitration/Tovalop/Special Provisions General average Arbitration Failure to strike out London or New York Tovalop Chapter 33: Warranty?Voyage?Cargo 1. Condition of the ship Maintenance of class Seaworthiness and cargoworthiness When does the obligation arise? 2. Proceeding to the loading port "with all convenient dispatch" "as ordered to Loading Port(s) bane dub accordance with Clause 4" "or so near thereunto as she may safely get (always afloat)" 3. The cargo to be loaded Quantity of cargo ? "a full and complete cargo" Type of cargo ? "petroleum and/or its products in bulk" The loading operation 4. The cargo voyage Commencing the voyage "as ordered on signing Bills of Lading" "direct to the Discharging Port(s)" "so near thereunto as she may safely get (always afloat" Delivery of the cargo Heating of the cargo Chapter 34: Freight Rate of Freight Computed on intake quantity Payment of freight upon delivery "without discount" "disbursements or advances" No deduction for water or sediment contained in the cargo Cargo retention clauses In-transit loss clauses Charterer to arrange and pay for Petroleum Inspector Chapter 35: Deadfreight Deadfreight in general Deadfreight under clause 3 of the Asbatankvoy charter "fail to supply" "a full cargo" "In that event" "at the rate specified in Part I" "the difference between the intake quantity and the quantity the vessel would have carried if loaded to her minimum permissible freeboard for the voyage" Effect of demurrage or despatch on calculation of deadfreight Where no cargo is loaded Where freight not earned U.S. Law Deadfreight?general Protest of short-loading "full cargo" ?deadweight versus cubic capacity Defenses Damages Chapter 36: Nomination of Loading and Discharging Ports 4. Naming loading and discharging ports Clause 4(a) ?loading port(s) Clause 4(b) ?discharging port(s) Clause 4(c) ?change of loading or discharging port Any extra expense incurred in connection with any change of port U.S. Law Nomination of loading and discharging ports?general Clause 4?general Clause 4(a) ?charterer’s obligation to timely nominate loading port(s) Charterer’s option to nominate discharging ports Extra expenses and time lost for charterer’s account Discharge and reloading clauses Chapter 37: Laydays?Cancelling Narrowing the laydays U.S. Law Commencement of laytime before first layday "except with the Charterer’s sanction" Canceling date Notice of cancellation must be timely, unequivocal and final Vessel readiness Charterer has the option to cancel the charter and charterer may also have a right to damages in the event of an independent breach by the owner Force majeure Chapter 38: Commencement and Calculation of Laytime Time counting before laytime Notice of readiness Delay in getting into berth Laytime?general The exceptions 1. "…delay due to the Vessel’s condition or breakdown or inability of the Vessel’s facilities to load or discharge cargo within the time allowed" 2. "…regulations of the Owner or port authorities [which] prohibit loading or discharging of the cargo at night" 3. "Time consumed by the vessel in moving from loading or discharge port anchorage to her loading or discharge berth, discharging ballast water or slops" Demurrage and the clause 6 and 7 exceptions U.S. Law Introduction Notice of readiness?commencement of laytime "arrival at customary anchorage" Extenuating circumstances "the Master or his agent shall give the Charterer or his agent notice by letter, telegraph, wireless or telephone" "that the Vessel is ready to load or discharge cargo" Free pratique and customs clearance Effect of tender prior to laydays stipulated in Part I(B) "…laytime…shall commence upon the expiration of six (6) hours after receipt of such notice, or upon the Vessel’s arrival in berth (i.e., finished mooring when at a sealoading or discharging terminal and all fast when loading or discharging alongside a wharf), whichever first occurs" The treatment of clause 6’s six hour "free period" once the vessel is on demurrage "However, where delay is caused to Vessel getting into berth after giving notice of readiness for any reason over which Charterer has no control, such delay shall not count as used laytime" Charterer’s burden of proof Congestion/cargo unavailability Pro-rating time Navigational risks Weather and sea conditions Does clause 6 or clause 8 govern? Clause 6 and clause 9 Clause 7: hours for loading and discharging Charterer’s obligation to provide a cargo Proper cargo documentation at loading and discharge ports Charterer’s obligation to issue orders on completion of loading Discharging at night Shifting time Deballasting time Ballasting time Shipside restrictions Chapter 39: Demurrage Demurrage The demurrage exceptions The first group?half-rate demurrage "Fire" "Explosion" "Storm" "Strike, lockout, stoppage or restraint of labor" "Breakdown of machinery or equipment in or about the plant of the Charterer, supplier, sipper or consignee of the cargo" Causation The second group?complete demurrage exemption "strike, lockout, stoppage or restraint of labor of Master, officers and crew of the vessel or tugboat or pilots" Period of excused delay U.S. Law Burden of proof for half demurrage "storm" "strike…in or about the plant" "breakdown of machinery or equipment in or about the plant" "delay caused by…tugboat" Laches Demurrage time bar clauses Calculation of demurrage rates Interest on unpaid demurrage and late payment of undisputed claims Clause 6, 7 and 8 Chapter 40: Safe Berthing?Shifting "Reachable on her arrival" Shifting U.S. Law Safe berthing?shifting in general Adverse weather and tidal conditions Vessel deficiencies Bridge obstructions Unavailability of tugs Recovery for extra tug assistance "Reachable on her arrival" Shifting from berth to berth Chapter 41: Pumping In and Out Pumping In Pumping Out Short-delivery claims Flushing of shore lines Admixture? "load on top" Ship-to-Ship Transfers U.S. Law Slow loading Slow discharging (pumping) Burden of proof/Shore conditions permitting Lightering/More than one discharge port/Berth The 100 psi requirement Remedies Chapter 42: Hoses?Mooring at Sea Terminals Hoses Mooring at sea terminals Chapter 43: Dues?Taxes?Wharfage Generally Taxes on freight Charges for the use of any wharf, dock, place or mooring facility arranged by the charterer for the purpose of loading or discharging cargo U.S. Law General Chapter 44: Excluded Cargoes?Vapour Pressure "Vapor pressure" Flash point Chapter 45: Ice Sub-clause (a) Sub-clause (b) U.S. Law General Chapter 46: Two or More Ports Counting as One "Freight rate standard of reference" Groupings or combinations of ports or terminals "For purposes of calculating freight and demurrage only" Sub-clause (a)?rate of freight Sub-clause (b)?expenses of using more than one berth Sub-clauses (c) and (d)?time spent in shifting U.S Law Shifting time Chapter 47: General cargo Chapter 48: Quarantine and Fumigation Quarantine "Should the Charterer send the Vessel" Fumigation Chapter 49: Cleaning Cleaning to charterer’s inspector’s satisfaction Responsibility of owners for admixture, leakage, contamination and deterioration "admixture" "leakage" "contamination" U.S. Law "The Owner shall clean the tanks, pipes and pumps of the Vessel…" "to the satisfaction of the Charterer’s Inspector" The consequences of tank rejection Tank cleanliness and the doctrine of "frustration" Consequences of tank acceptance Liability for "admixture," "leakage, contamination or deterioration"; relationship between clauses 18 and 20 Nitrogen purging of tanks Chapter 50: General Exceptions Clause Chapter 51: Issuance of Bills of Lading 20. ISSUANCE AND TERMS OF BILLS OF LADING "The Master shall…sign Bills of Lading" "in the form appearing below" "without prejudice to the rights of the Owner and Charterer under the terms of this Charter" Unsafe ports, blockaded ports U.S. Law Chapter 52: Terms of Bills of Lading "The carriage of cargo" "such terms shall be incorporated verbatim or be deemed incorporated by the reference in any such Bill of Lading" "carrier" includes owner and chartered owner Discharge and delivery against letters of indemnity Chapter 53: Clause Paramount and Cargo Claims Clause Paramount and the Hague Rules U.S. Carriage of Goods by Sea Act Incorporation of other Hague Rules legislation U.S. Law Standing to make claim Incorporation of the U.S. Carriage of Goods by Sea Act ("COGSA") Notice of claim; Commencement of proceedings; Timeliness Notice of claim Commencement of proceedings; Timeliness Recoupment/set-off Burdens of proof COGSA burdens of proof Claimant’s burden Owner’s burden Inherent vice?trade allowance Courts Arbitration Cargo retention clauses Burdens of proof "…pumpable…" "…as determined by an independent surveyor" Time bar Withholding demurrage as "extended freight" "Any action or lack of action in accordance with this provision shall be without prejudice to any rights or obligations of the parties" Cargo conversion Arbitral fees and costs, and legal fees Punitive damages RICO treble damages Chapter 54: Jason Clause General average Salvage Deposit U.S. Law Chapter 55: General Average General Average "adjusted, stated and settled" "York/Antwerp Rules 1950" "as to matters not provided for by those rules, according to the laws and usages at the port of New York or at the port of London, whichever place is specified in Part I" "General Average statement" "an Adjuster appointed by the Owner and approved by the Charterer" "General Average agreements and/or security" Cash deposits Chapter 56: Collision Clause U.S. Law Chapter 57: Limitation of Liability Any statute or rule of law for the time being in force" U.S. Law Chapter 58: War Risks Chapter 59: Deviation Deviation in general Reconciling the deviation clause and clause 1 "to call at any ports in any order" "to go to the assistance of vessels in distress" "to deviate for the purpose of saving life or property" "to call for fuel at any port or ports in or out of the regular course of voyage" Salvage Chapter 60: Lien U.S. Law Chapter 61: Agents U.S. Law Chapter 62: Breach Damages generally "all provable damages" "costs of suit and attorney fees" U.S. Law Chapter 63: Arbitration "all differences and disputes of whatsoever nature arising out of this Charter" "the City of New York or in the City of London, whichever place is specified in Part I" Appointment of arbitrators The right to submit further disputes Costs and attorneys’ fees Entering judgement upon the award U.S. Law Chapter 64: Sublet Generally Assigning the charter Chapter 65: Oil Pollution Limitation of liability Section III: The Hague and Hague-Visby Rules Chapter 66: The Hague and Hague-Visby Rules THE ROLE OF THE RULES IN RELATION TO CHARTERPARTIES The Paramount Clause The approach to the interpretation of the Hague Rules When the Rules are incorporated into a charterparty The relevance of the Rules to charterparties THE SPECIFIC STATUTORY ROLE OF THE HAGUE-VISBY RULES The application of the Rules by the "force of law" and by contract Exclusive jurisdiction clauses The compulsory application of the Hague-Visby Rules with the "force of law" International carriage Shipment in the United Kingdom and non-international carriage Compulsory application of the Rules by virtue of a contractual term Transhipment THE HAGUE RULES Article I. Definitions (a) "Carrier" includes the owner or the charterer who enters into a contract of carriage with the shipper (b) "Contract of carriage" applies only to contracts covered by a bill of lading or any similar document of title, in so far as such document relates to the carriage of goods by sea, including any bill of lading or any similar document as aforesaid issued under or pursuant to a charterparty from the moment at which such bill of lading or similar document of title regulates the relations between the carrier and a holder of the same (c) "Goods" includes goods, wares, merchandises and articles of every kind whatsoever, except live animals and cargo which by the contract of carriage is stated as being carried on deck and is so carried (d) "Ship" means any vessel used in the carriage of goods by sea (e) "Carriage of goods" covers the period from the time when the goods are loaded on to the time when they are discharged from the ship Article II. Risks Contractual allocation of functions and the scope of Article II Article III. Responsibilities and Liabilities The overriding effect of Article III rule 1 Seawothiness, etc. "Due diligence" The duty is not delegable "Before and at the beginning of the voyage" Want of due diligence before the ship comes into the carrier’s "orbit" Where a charterer is the "carrier" The termination of the obligation Multiple loadings The burden of proof in relation to claims arising from unseaworthiness Article III rule 2 Discharge and delivery "Properly and carefully" The burden of proof in relation to claims not arising from unseaworthiness Article III rule 3 "Marks" "Quantity" "Apparent order and condition" Article III rule 4 The amendment in the Hague-Visby Rules Article III rule 5 Article III rule 6 The time bar in the third paragraph "the carrier and the ship shall be discharged from all liability" "…in respect of loss or damage…" "Unless suit is brought" The commencement of arbitrations "Within one year of their delivery or of the date when they should have been delivered" The effect of Article III rule 6 of the Hague-Visby Rules Deviation Article III rule 6bis Article III rule 7 The effect of the Hague-Visby Rules Article III rule 8 "A contract of carriage" The Contracts (Rights of Third Parties) Act 1999 "Any clause, covenant or agreement" The extent of the nullifying effect of the rule 1. Only parts of the term offend Article III rule 8 2. Periods and activities beyond those covered by the Rules 3. Matters on which the Rules are silent "Liability for loss or damage to or in connection with goods" "A benefit of insurance" Article IV Rights and Immunities Article IV rule 2 General principles "(a) Act, neglect or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship" The relevant persons Navigation of the ship Management of the ship "(b) Fire, unless caused by the actual fault or privity of the carrier" "(c) Perils, dangers and accidents of the sea or other navigable waters" "(d) Act of God" "(e) Act of War" "(f) Act of public enemies" "(g) Arrest or restraint of princes, rulers or people, or seizure under legal process" "(h) Quarantine restrictions" "(i) Act or omission of the shipper or owner of the goods, his agent or representative" "(j) Strikes, lock-outs or stoppage or restraint of labour from whatever cause, whether partial or general" "(k) Riots and civil commotions" "(l) Saving or attempting to save life or property at sea" "(m) Wastage in bulk or weight or other loss or damage arising from inherent defect, quality or vice of the goods" "(n) Insufficiency of packing" "(o) Insufficiency or inadequacy of marks" "(p) Latent defects not discoverable by due diligence" "(q) Any other cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier…" Article IV rule 3 The shipper The liability excluded Article IV rule 4 "Reasonable deviation" The effect on other contract terms The effect of reasonable deviation The effect of an unreasonable deviation Article IV rule 5 Tonnage limitation "In any event" Limitation by reference to "￡100 per package or unit" The meaning of "package or unit" Package Unit The exclusion of the carrier’s liability The version of the rule in the Hague-Visby Rules The calculation of damages "The total amount recoverable" "The value of the goods" Lost and damaged goods Late delivery The relevant "price" Commodity exchange price Current market price Normal value Subsidy loss The time of "discharge" as the date for the ascertainment of value Currency of loss and recovery The limitation of the carrier’s liability "In any event" and the nature of the carrier’s breach The higher of 666.67 units of account per package or unit or 2 units of account per kilogramme of gross weight of the goods lost or damaged "Package or unit" in the Hague-Visby Rules and containerisation Hybrid cases The conversion into the appropriate national currency Exceeding the limit Declaration of nature and value Agreement for higher figure Intentional or reckless act or omission of the carrier done with knowledge The identification of "the carrier" whose misconduct is relevant The mental element Damage and loss The exclusion of the carrier’s liability Article IV rule 6 The relationship of the common law and the Hague Rules code "Goods of an inflammable, explosive or dangerous nature" Knowledge of the nature and character of the goods and consent to their shipment Consent Knowledge of the nature and character of the goods The separation of knowledge from consent The shipper’s "fault" The carrier’s rights Immunity Causes of action "directly or indirectly" The exercise of the right of landing, destroying or rendering the goods innocuous General average The effect of a breach of duty by the carrier Where there is a breach of Article III rule 1 Where there is a breach of Article III rule 2 Immunity as against the shipper Apportionment Article IVbis of the Hague-Visby Rules The position of the carrier "in respect of loss of or damage to goods covered by a contract of carriage" The position of the carrier’s servants and agents The limit on recovery against the carrier, his servants and agents Article V Article VI Bill of lading or non-negotiable receipt Factors justifying a special agreement Article VII Article VIII Article IX of the Hague Rules Article IX of the Hague-Visby Rules Article X of the Hague-Visby Rules U.S. Law The U.S. COGSA enacting clause US. COGSA § 1(a)?the "carrier" definition Multiple carriers Himalaya clauses US. COGSA § 1(c)?the "goods" definition U.S. COGSA § 3(2) and the burden of proof in relation to claims not arising from unseaworthiness U.S. COGSA § 3(3)(c)?the carrier’s obligation to show "apparent order and condition" U.S. COGSA § 3(4)?the prima facie evidence of a bill of lading U.S. COGSA § 3(6) and the notice-of-loss provision U.S. COGSA § 3(6) and the one-year time-for-suit provision Arbitration Deviation U.S. COGSA § 3(7)?converting "received for shipment" bills of lading U.S. COGSA § 4(2)(a)?the nautical fault exception U.S. COGSA § 4(2)(c)?the "perils of the sea" exception U.S. COGSA § 4(2)(j)?the labor unrest exception U.S. COGSA § 4(2)(q)?the "catch all" exception U.S. COGSA § 4(4)?deviation U.S. COGSA § 4(5)?the package limitation The Limitation Amount The Customary Freight Unit Breaking Limitation Deviation The Fair Opportunity Doctrine False Bills of Lading Actual damages Knowing and fraudulent misstatements The Hague-Visby Rules U.S. COGSA § 4(6)?dangerous goods U.S. COGSA § 7?freedom of contract before loading and after discharge U.S. COGSA § 8?global limitation of liability Title II of the U.S. COGSA