Practice and Law of Charter Party
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Practice and Law of Charter Party Law School Dalian Maritime University Spring Term 2011-2012 Prof. GUO Ping. Reference Books ( I ). 1, JOHN WILSON ,<CARRIAGE OF GOODS BY SEA>,(6th edition) , 2008,Pearson Longman Publishing

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Reference books i

Practice and Law of Charter PartyLaw SchoolDalian Maritime UniversitySpring Term 2011-2012Prof. GUO Ping


Reference books i

Reference Books(I)

  • 1, JOHN WILSON ,<CARRIAGE OF GOODS BY SEA>,(6th edition) ,2008,Pearson Longman Publishing

  • 2, MICHAEL WILFORD, TERENCE COGHLIN, JOHN D. KIMBALL,<Time Charter Party>, LLP

  • 3,<Voyage Charter Party>,LLP

  • 4, JOHN SCHOFIELD , <Laytime and Demurrage>, latest editon LLP

  • 5,SCRUTTON ON CHARTERPARTIES AND BILLS OF LADING (22th ed.) 2011,Sweet& Maxwell Thomson Reuters

  • 6,LARS GORTON etc. SHIPBROKING AND CHARTERING PRACTICE (6th ed.) 2004 LLP


Reference books ii

Reference Books(II)

  • 1, 郭萍编著 《租船实务与法律》(第二版)大连海事大学出版社,2002年9月

  • 2, 司玉琢主编 《海商法》(第二版)法律出版社

  • 3,《程租合约》杨良宜 大连海事大学出版社 最新版

  • 4,《期租合约》杨良宜 大连海事大学出版社 最新版

  • 5,郭萍主编 《租船缩略语与常用条款》大连海事大学出版社 2010年

  • 6,郭萍等 《国际海上货物运输实务与法律》大连海事大学出版社 2010年


Part one general introduction

PART ONE GENERAL INTRODUCTION

  • Chapter one: General introduction of tramp shipping

  • Chapter two: Introduction of charter party

  • Chapter three: Entering into c/p & standard form

  • Chapter four: Law and International shipping practice of charter party

  • Chapter five: Tramp Shipping Market


Chapter one general introduction of tramp shipping

Chapter one -General introduction of tramp shipping

Key words and terms:

  • Liner shipping:班轮运输

  • Tramp shipping:租船运输

  • Bulk cargo:散杂货

  • General cargo---container cargo:件杂货

  • COA-contract of affreightment:运输合同

  • C/P:charter party:租船合同

  • Charter:租赁


Chapter one general introduction of tramp shipping1

Chapter one -General introduction of tramp shipping

  • I Concept of tramp shipping

  • ---A contract by charter party differs from a contract by b/l, although both are normally contracts of carriage, in that in the tramp shipping a vessel is used for the carriage of full cargoes or less frequently of part cargoes while b/l are used as the document of a contract of carriage in the liner trade, where ships carry general cargoes and call at ports which are previously advertised. On the contrary, in the tramp shipping the vessel loads and delivers the cargo at the port or place indicated by the charterer.


Reference books i

  • The calculation of the freight or hire differs profoundly:

  • in the liner shipping the freight is calculated on the basis of the weight or volume of the goods delivered for shipment by a shipper;

  • in the tramp shipping freight (or hire) is calculated on the basis of the carrying capacity of the vessel, or of part thereof in the case of part cargoes, and is payable in full irrespective of the quantity loaded being equal to or lower than the full carrying capacity.


Reference books i

  • The allocation of costs and risks differs substantially as a consequence of the varying control of the shipper/charterer over the employment of the ship.

  • In the liner shipping the carrier must have full control of loading and unloading operations in order to ensure that his ship operates on schedule and therefore normally pays for such operations, the cost of which is included in the freight, and takes upon himself the risk of delays during loading/discharging, delivery and redelivery of the cargo taking place ashore, normally in the warehouses of the carrier or of the port authority. Conversely, the carrier does not wait for the goods at the loading port and if they are not placed at his disposal on time the vessel will sail without them, the shipper paying the freight.

  • In the tramp shipping, the charterer has a varying degree or control over the operation of the vessel and consequently a part of the related risks and expenses are allocated to him. This allocation varies according to the type of C/P


Ii characteristic of tramp shipping

II Characteristic of tramp shipping

-no fixed schedule, no fixed route, arrange carriage as agreed

-specially for bulk cargo ( not general cargo)

-costs and risks depend on the clauses

-contract of affreightment (COA) or charter party entered into


Reference books i

III Kinds of tramp shippingbasically include the followings:1 voyage charter2 time charter3 bare boat charter new type :- TCT (time charter on trip basis or trip time charter)-Bare boat charter by purchase


Voyage charter

Voyage Charter

  • Key words and terms

  • Shipowner-出租人

  • Charterer-承租人

  • Preliminary voyage-预备航次

  • Demurrage-滞期费

  • Despatch money-速遣费

  • Laytime-装卸时间


Voyage charter1

Voyage Charter

  • -Conceptshipowner provides part of or whole of ship to charterer for agreed voyage(s)

    agreed cargo is carried from agreed loading port to discharging port.

    -the voyage may be divided into 4 stages:

    -preliminary voyage stage: vessel sails to the port of lading,during which all costs and risks are borne by the owner.

    -loading stage: vessel is at the port of loading, waits for berth and loads. There is cooperation between owner and charterer, costs shall be allocated according to clauses

    -voyage stage: all risks and costs are borne by owner,who has exclusive control over the preformance of the voyage

    -unloading stage: vessel is at the port of discharging, waits for berth and unloads. Also there is cooperation between owner and charterer, and costs and risks shall be allocated by clauses.


Reference books i

  • -Characteristic

    -the shipowner provides wages, bonus and other fees for crew

    -the shipowner is responsible for operation and management of ship

    -freight shall be calculated on the basis of quantity of cargo and freight rate

    -The cost for loading/discharging shall be ascertained

    -The provisions on demurrage, despatch money and laytime

  • -Kinds: single trip charter, return trip charter, consecutive single voyage charter or continuous return voyage charter

  • L/P D/P


Time charter

Time Charter

  • Key words and terms

  • Hire-租金

  • Delivery of ship-交船

  • Redeliver of vessel-还船

  • Withdrawal of vessel-撤船

  • Off-hire-停租


Time charter1

Time Charter

  • --Conceptcharterer has the right within the contractual period, to employ the vessel within the contractual limits in the way he likes and can directly order the master to perform the voyage he decides to make.

  • As the consequence of the employment of the vessel being under the control of charterer, there is no question of dividing the voyage into stages, and all risk of delay due to bad weather or congestion or other causes are borne by charterer. The owner only bears the risks connected with the working of the vessel, and if the vessel is prevented from working owning to breakdown of machinery or others, payment of hire is suspended until the vessel is placed again at the full disposal of the charterer.


Reference books i

  • -Characteristic

    -the shipowner provides the vessel and wages, bonus and other fees for crew

    -the charterer is responsible for operation and management of ship

    -hire shall be calculated on the basis of period of hire and hire rate etc.

    -The costs born for operation shall be provided as agreement

    -The provisions on delivery, redelivery of ship


Reference books i

  • TCT: which is a combination between a voyage and a time charter in that the allocation of risks and costs is that of time charter; the duration, however, is not fixed, but related to the performance of the specified voyage. It is used -----when the owner does not wish to take upon himself the risks which are normally at the charge of an owner in a voyage charter.

    ------ Such as: not familiar to the loading port / navigation route, or for some religious reasons during specified periods. (When the month of Ramadan(斋月) comes round each year, Moslems have to fast from dawn to dusk )


Bareboat charter

Bareboat Charter

  • --ConceptWhich is opposite to voyage and time charter, is qualified as contracts of lease. The possession of the vessel is transferred from the owner to charterer and the master and the crew are under the employment of the charterer and are paid by him.

  • -Characteristic

    -the shipowner provides the bare boat

    -the charterer is responsible for crewing,wages,bonus and other fees for crew

    - the charterer is responsible for operation and management of ship

    -The provisions on non-lien promise

    - special clauses for changing equipments and instruments onboard


Bareboat charter by hire purchase

bareboat charter by hire purchase

  • which is actually a contract of sale of ship with the form of bare boat charter.

  • For the reason of finance of shipping

  • Charterer (buyer) pays regular installment of hire together with purchase charge until the end of the hire of period any may employ possess the vessel under his disposal as if he were shipowner

  • Shipowner (seller) may withdraw of vessel if any regular payments fail to protect himself.


Chapter two charter party

Chapter two Charter Party

  • Under English Law: COA---- contract evidenced by B/L , Voyage C/P ,Time C/p; (COA: contract of affreightment)

  • Under CMC chapter IV: COA- Contract evidenced by B/l, voyage c/p , multimodal transport contract

  • Under CMC Chapter VI charter party: time c/p and bareboat c/p

  • Generally, C/P : voy.c/p,time c/p, bareboat c/p


Voyage charter party

Voyage Charter Party

  • Concept:

    ------CMC Art.92 “A voyage charter party is a charter party under which the shipowner charters out and the charterer charters in the whole or part of the ship's space for the carriage by sea of the intended goods from one port to another and the charterer pays the agreed amount of freight ”


Voyage c p non compulsory clause

Voyage c/p-non-compulsory clause

  • CMC art.94

  • The provision in art 47 and art 49 of this code shall apply to the shipowner under voy c/p.

  • The other provisions in this chapter (Chapter IV) regarding the rights and obligations of the parties to the contract shall apply to the shipowner and the charterer under voy.c/p only in the absence of relevant provisions or in the absence of provisions differing therefrom in the voy.c/p.---’freedom of contract with limits’

  • Voy c/p shall be concluded in writing which differs from other contract of affreightments. (CMC art.43)


The main provisions

The main provisions

  • CMC art. 93: name of owner/charterer,bale or grain capacity, description of goods, laydays, laytime, freight, demurrage ,dispatch money etc.

  • --description of vessel clause

  • --preliminary voyage clause

  • --owner’ liabilities and exceptions clause

  • --payment of freight clause

  • --loading and discharging clause

  • --demurrage and dispatch money clause

  • --cancelling clause

  • --lien clause and cesser clause

  • --both-to-blame collision clause, new Jason clause, general average clause, bill of lading clause, strike and war clause, ice, arbitration , commission clause etc.


Time charter party

Time Charter Party

  • Concept:

  • CMC Art.129 “A time charter party is a contract under which the shipowner provides a designated manned ship to the charterer, and the charterer employs the ship during the contractual period for the agreed service against payment of hire. ”

  • The character: seems to be a contract of leasing property-arguable comments on this issue


Freedom of contract for time bareboat c p

Freedom of contract for time & bareboat c/p

  • CMC art.127

    -------The provisions concerning the rights and obligations of shipowner and charterer in this chapter (VI) shall apply only when there are no stipulations or no different stipulations in this regard in the charter party.

  • CMC art 128

    -------Time & bareboat c/p shall be concluded in writing.


Cmc art 130

CMC art.130

  • A time charter party mainly contains the name of the shipowner, the name of the charter; the name, nationality, class, tonnage, capacity, speed and fuel consumption of the ship; the trading area; the agreed service, the contractual period, the time, place and conditions of delivery and redelivery of the ship; the hire and the way of its payment and other relevant matters.


Reference books i

The main provisions:

  • --description of vessel clause

  • --vessel’s speed and fuel consumption

  • --delivery of vessel

  • --period of hire clause

  • --cancelling clause

  • --lawful merchandise

  • --trading limits

  • --owners to provide,--charterers to provide

  • --payment of hire

  • --redelivery of vessel

  • --off-hire clause

  • --employment and indemnity clause

  • --sublet clause ,--others etc.


Bareboat charter party

Bareboat Charter Party

  • Concept:

  • CMC Art.144 “A bareboat charter party is a charter party under which the shipowner provides the charterer with an unmanned ship which the charterer shall possess, employ and operate within an agreed period and for which the charterer shall pay the shipowner the hire. ”

  • Characteristics: purely lease contract of property


Cmc art 145

CMC art 145

  • Mainly contains:

    the name of shipowner/charterer; name, nationality, class, tonnage and capacity of ship; trading area; employment of ship and period of hire; time, place and condition of delivery/redelivery; survey, maintenance and repair of ship; hire and payment; insurance of ship, the time and condition for the termination of c/p and others.


Reference books i

  • Main provisions:

  • There are some provisions which are quite similar to those of time c/p, except

  • --maintenance and operation clause

  • --inspection

  • -mortgage clause

  • --insurance and repairs

  • --assignment and sub-demise

  • --non-lien clause

  • --others etc.


Chapter three entering into c p standard form

Chapter three: Entering into C/P & Standard Form

  • I The making of c/p : chartering broker

  • Generally, dry cargo c/p is negotiated and concluded in one of freight markets of the world or through broker, while oil c/p are only negotiated through brokers.

  • Liner shipping, ship agent or freight forwarder plays important role in creating COA as agent only.

  • Chartering broker just plays the role of informative , intermediary and co-ordination functions.


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  • The broker should keep both owner and charterer continuously informed about the market situation, market development, available cargo proposals and shipment possibilities.

  • The broker should act strictly within given authorities in connection with the negotiations.

  • The broker should in all respects work loyally for this principal and should carry out skillfully negotiation and other works connected with c/p.

  • The broker may not withhold any information from his principal nor give him wrong information

  • Payment : commission/ address commission 1.25% of freight and/or hire,

  • Brokerage Commission usually shall be paid by shipowner only in the practice, except otherwise.


Process for negotiation of c p

Process for negotiation of c/p

  • Inquiry(询价)—offer(要约)—counter offer—firm offer—acceptance(承诺)—issue fixture note(订租确认书)—making, checking and signing c/p (on the basis of one kind of standard form)

  • According to Chinese Contract Law (art 13) “the parties shall, in making a contract, take the form of offer and acceptance.”


Reference books i

FIXTURE NOTE (sample )It is mutually agreed between Messrs (shipowner’s name and address) as Owners and Messrs (charterer’s name and address) as Charterers as the followings that:Cargo xxx t bag rice 5% MOLOOLOADING AT 1SBP IN XXX PORTLYCN: 27TH-30TH APRIL,2009FRT RATE USD XXX PER MT FIOST CQD BENDSFULL FRT PREPAID TO XXXX B4 RELEASING /SIGNING B/L BUT ALWAYS BBB (BEFORE BREAK BULK)…OTHERWISE DETAILS AS PER ‘94GENCON C/PFOR AND ON BEHALF OF / FOR AND ON BEHALF OFSHIPOWNER CHARTERER(signature) (signature)


Ii the forms of c p

II The forms of c/p

  • In the negotiation of c/p, reference form is made which the parties agree to take as a basis for their contract.

  • The specific elements are discussed and the printed clauses are modified to the extent agreed and additional clauses are appended to the form (so called : ‘rider clause’)

  • standard c/p form---drafted or accepted by BIMCO (The Baltic and International Maritime Council) , UK Chamber of Shipping( previous- GCBS :General Chamber of British Shipping), NYPE (New York Produce Exchange) and Japanese Shipping Exchange (JSE)etc.

  • Also some other form prepared by big owners or charterers in special trade, such as Shell, Exxon, BP, Cargill etc.


Forms of voy c p

Forms of Voy.c/p

  • Uniform General Charter—GENCON 76/94 (BIMCO)

  • Scandinavian Voyage Charter-SCANCON (BIMCO)

  • Chamber of Shipping Walsh Coal Charter Party (GCBS)

  • Americanized Welsh Coal Charter-AMWELSH

  • Coal Voyage Charter-POLCOALVOY


Reference books i

  • Baltimore Berth Charter Party—Steam (Form C), 1913

  • BIMCO Grain Voyage Charter Party-GRAINCON

  • North American Grain Charter Party-NORGRAIN 89

  • North American Fertilizer Charter Party- FERTIVOY

  • Fertilizer Voyage Charter Party-FERTICON

  • C (ore) 7 Mediterran Iron Ore Charter party

  • Tanker Voyage Charter Party (ASBATANKVOY)

  • Australian Wheat Charter - AUSTWHEAT 1990

  • Others: SYNACOMEX ,GRAINVOY, NIPPONGRAIN etc.


Reference books i

Form of Time c/p

  • Uniform Time Charter (BALTIME)

  • Time Charter Party (NYPE) 46/93

    ASBATIME AND FONASBATIME

  • Time Charter Party 1980 (SINOTIME 1980)

  • General Time Charter Party(GENTIME)

  • Others:BIMCHEMTIME2005,BOXTIME,BPTIME3, GASTIME,SUPPLYTIME etc.

    Form of Bareboat c/p

  • Standard Bareboat Charter (BARECON)


Chapter four the law and shipping customs relating to the charter parties

Chapter FourTHE LAW AND SHIPPING CUSTOMS RELATING TO THE CHARTER PARTIES

  • No compulsory international conventions for c/p, and the provisions of the most of national law are not compulsory .

  • See CMC Art.94 and Art.127

  • However, the international conventions on b/l, such as 1924Hague Rules, 1968Visby Rules,1978Hamburg Rules, 2008Rotterdam Rules shall apply to bill of lading under c/p if only the holder of document is not charterer


International shipping practice

International Shipping Practice

  • There are some international shipping practice and rules on the terms and clauses of c/p. Such as 1980 Laytime Definition, 1993 Voyage Charter Party Laytime Interpretation Rules (voylayrule)

  • CMC art 268 “International practice may be applied to matters for which neither the relevant laws of PRC nor any international treaty concluded or acceded to by the PRC contain any relevant provisions.”


Chapter five chartering market

Chapter Five Chartering Market

  • Purpose

    -The chartering market is not a uniform market where the trend is entirely up or down. It does not have a homogeneous connection with a specific geographical area but rather with ships that can carry similar types of cargoes.

    -The current trend of the market is determined by the balance between the supply and demand of shipping services of various kinds. The freight market is dependent on the state of the world trade market and ever-changing price of oil and sometimes strongly influenced by circumstances such as war, widespread strike, bad harvests, ice-bound waters etc.

    -Contract between the different freight markets may be more or less extensively. This depends on the type and size of ships, the goods involved , and to certain extent on the distance of transportation.


Kinds of freight markets

Kinds of freight markets

  • -dry cargo market

    -- Bulker

    --Tweendecker

    -- Container

    --Ro/ro

    --Liner

    --Small ships

    --Special ships (tug, barge etc.)

  • Tanker market

  • -Reefer market

  • -Car carrier market

  • Passenger market

  • London market, New York market, Europe market, Asia market (Tokyo, Hong Kong, Shanghai etc.)


Bulker and tweendecker 5 000 180 000 tons dwt

Bulker and tweendecker (5,000-180,000 tons dwt)


Part two voyage charter party

Part two Voyage Charter Party

  • Key words and terms

  • MISREPRESENTATIONS:误述

  • Intermediate clause:中间义务条款

  • Laydays:受载期

  • Cancelling date: 解约日

  • Interpellation clause:质询条款

  • PRELIMINARY VOGAGE:预备航次


Part two voyage charter party1

Part two Voyage Charter Party

  • Chapter I REPRESENTATIONS UNDER VOYAGE CHARTER PARTY

  • I Definition

  • Representation means the statements given by shipowner about description of vessel.

  • Misrepresentation is a false statement of fact. A pure statement of opinion or of intention cannot amount to a misrepresentation

  • In negotiations leading to a contract, silence, even about a material fact, will not amount to a representation. But a statement which is only half true, in the sense that it discloses parts of the truth but conceals other parts, may be a misrepresentation.


Ii legal effect of misrepresentations

II LEGAL EFFECT OF MISREPRESENTATIONS

  • Under English Law, two forms of misrepresentations:

  • A Make the parties of contract to enter into contract

  • fraudulent misrepresentation

    • (1)knowingly;or (2)without belief in its truth;or(3)recklessly, careless whether it be true or false

      --a party who suffers loss through relying on it is entitled not only to rescind the contract, but also claim damages in tort for deceit.

    • negligent misrepresentation

      --innocent party may recover damages from the party making the misrepresentation unless the latter ‘proves that he had reasonable ground to believe and did believe up to the time the contract was made that the facts represented were true.’

    • innocent misrepresentation

    • --the court or arbitrator shall decide to rescind or award damage on the basis of the fact and circumstances.


B consist the provisions of contract

B Consist the provisions of contract

  • condition clause

    -A condition is a term of the contract that is of such importance that any breach of it will entitle the innocent party to treat the whole contract as discharged.

  • warranty clause

    -A warranty is a term of the contract of such minor importance that no breach of it will entitle the innocent party to treat the whole contract discharge, but only claims for damages

  • intermediate (or innominate) clause

    -Any term of the contract which cannot be classified as a condition or a warranty. Whether the innocent party is entitled to discharge the contract depends on the nature and consequences of the particular breach that has occurred, also may claim for damages


Chapter ii main provisions of representation

Chapter II main provisions of representation

  • name of vessel, see CMC art. 96

    Only the named ship may be accepted by charterer except one substitute vessel agreed by c/p

  • nationality of ship

    The flag concerns with safety or trading opportunities, as in wartime, neutrality or otherwise (intermediate clause)

  • classification (condition term)

    classification certificate given by one classification society is one of factor to determine the technical condition of vessel

  • Tonnage (intermediate clause)

  • position (condition term)

  • expected ready to load (laydays, cancelling date:LAYCAN ) (condition term)

    Eg:1st-5th May, 2011 layday: 1-5th, May

  • If cancelling date: 5th, May------laycan

  • If Cancelling date: 7th,May


Cmc art 96

CMC art 96

  • The shipowner shall provide the intended ship.The intended ship may be substituted with the consent of the charterer. However, if the ship substituted does not meet the requirements of the charter party, the charterer may reject the ship or cancel the charter.

  • Should any damage or loss occur to the charterer as a result of the shipowner’s failure in providing the intended ship due to his fault, the shipowner shall be liable for compensation.


Interpellation clause gencon 94 cl 9

interpellation clause (GENCON 94 Cl. 9)

  • Should the Owners anticipate that, despite the exercise of due diligence, the Vessel will not be ready to load by the cancelling date, they shall notify the Charterers thereof without delay stating the expected date of the Vessel's readiness to load the day she is stated to be expected ready to load, Charterers have the option of cancelling this contract, unless a cancelling date has been agreed upon and asking whether the charterers will exercise their option of cancelling the Charter Party, or agree to a new cancelling date.

  • Such option must be declared by the Charterers within 48 running hours after the receipt of the owners' notice. If the charterers do not exercise their option of cancelling, then this Charter Party shall be deemed to be amended such that the seventh day after the new readiness date stated in the Owners' notification to the Charterers shall be the new cancelling date.


Chapter iii preliminary vogage

Chapter III PRELIMINARY VOGAGE

  • GENCON’94 Clause 1: “the said vessel shall, as soon as her prior commitments have been completed, proceed to the loading port(s) or place(s) stated in Box 10 or so near thereto as she may safely get and lie always afloat……”


Chapter iv loading discharging clause

Chapter IV. LOADING /DISCHARGING CLAUSE

  • Loading/discharging port (s)(GENCON Cl.1)

    -SAFETY PORT , NEAR CLAUSE

    The said Vessel shall, …proceed to the loading port (s) or place( s) stated in Box 10 or so near thereto as she may safely get and lie always afloat, and there load a full and complete cargo

    , see CMC art. 91


Cmc art 91

CMC art. 91

  • If, due to force majeure or any other causes not attributable to the fault of the carrier or the shipper, the ship could not discharge its goods at the port of destination as provided for in the contract of carriage, unless the contract provides otherwise, the master shall be entitled to discharge the goods at a safe port or place near the port of destination and the contract of carriage shall be deemed to have been fulfilled.

  • In deciding the discharge of the goods, the master shall inform the shipper or the consignee and shall take the interests of the shipper or the consignee into consideration.


Loading discharging costs

LOADING /DISCHARGING COSTS

  • GENCON’94 Cl.5 ‘The cargo shall be brought into the holds, loaded, stowed and/or trimmed, tallied, lashed and/or secured and taken from the holds and discharged by the Charterers, free of any risk, liability and expense whatsoever to the Owners….

    -liner clause---berth clause, gross clause, free alongside ship (FAS)

    -free in (F.I)-----FILO

    -free out (F.O)-----LIFO

    -free in and out (F.I.O)

    -free in , out , stowed and trimmed (F.I.O.S.T)---LASHED, DUNNAGES, Secured,…..


Chapter v the duty of charter to provide cargo

Chapter VTHE DUTY OF CHARTER TO PROVIDE CARGO

  • THE SORTS OF CARGO

    --special cargo/ substitute cargo

  • CMC Art.100

  • ‘The charterer shall provide the intended goods, but he may replace the goods with the consent of the shipowner. However, if the goods replaced is detrimental to the interest of the shipowner, the shipowner shall be entitled to reject such goods and cancel the charter.

  • Where the shipowner has suffered losses as a result of the failure of the charterer in providing the intended goods, the charterer shall be liable for compensation.’


Reference books i

  • THE QUANTITY OF CARGO

    ----full and complete cargo xxx tonnage more or less at shipowner’s option/charterer’s option

    -----full and complete cargo xxx tonnage, not exceeding xx tons, not less than xxx tons

    ----declaration(宣载) by master before actual loading

  • The duty of charterer

    ----ready for cargo, take the cargoes alongside ship, provide cargoes, ship within fixed time


Chapter iv laytime dumurrage despatch money

Chapter IVLAYTIME/ DUMURRAGE/DESPATCH MONEY

  • LAYTIME

    means the period of time agreed between the parties during which the owner will make and keep the ship available for loading/discharging without payment additional to the freight.

  • PROVISIONS ON LAYTIME

  • Fixed laytime

  • --special loading/discharging days

     a) per day xx t , laytime = quantity/loading & discharging rate

    b) per hatch per day xx t, laytime =quantity of cargo /(daily rate x numbers of hatches)

    c) per working hatch per day xx t , laytime=quantity of cargo in the largest hold/(daily rate x numbers of hatch serving that hold)

  • Unfixed laytime

  • --CQD (customary quick despatch)

  • --as fast as the vessel can receive and / or deliver


Reference books i

  • PER HATCH PER DAY

  • means that laytime is to be calculated by multiplying the agreed daily rate per hatch of loading/discharging the cargo by the number of the ships hatches and dividing the quantity of cargo by the resulting sum.

  • PER WORKING HATCH PER DAY

  • means that laytime is to be calculated by dividing the quantity of cargo in the hold with the largest quantity by the result of multiplying the agreed daily rate per working or workable hatch by the number of hatches serving that hold.

  • CUSTOMARY DESPATCH

    ----means that the charterer must load and or discharge as fast as is possible in the circumstances prevailing at the time of loading/discharging.

  • AS FAST AS THE VESSEL CAN RECEIVE/DELIVER

  • —means that the laytime is a period of time to be calculated by reference to the maximum rate at which the ship in full working order is capable of loading/discharging the cargo.


Definition of days as laytime

DEFINITION OF “DAYS” AS LAYTIME

  • DAY

  • RUNNING DAYS OR CONSECUTIVE DAYS

  • WORKING DAYS: W.D

  • WEATHER WORKING DAYS: W.W.D ( W.W.D, SHEX OR SSHEX)

    EIU (EVEN IF USED)/ UU (UNLESS USED)

  • WEATHER WORKING DAYS OF 24 HOURS

  • WEATHER WORKING DAYS OF 24 CONSECTIVE HOURS

  • Fact:0800-1600:working time, 1000-1200/0600-0800: raining

  • 0000 0800 1600 2400


1980 laytime defination

1980 Laytime Defination

  • “DAY”—means a continuous period of 24 hours which, unless the context otherwise requires, runs from midnight to midnight.

  • “RUNNING DAYS” or “CONSECUTIVE DAYS”—means days which follow one immediately after the other.

  • “WORKING DAYS”(W.D.)—means days or part(s) thereof which are not expressly excluded from laytime by the charterparty and which are not holidays.


Reference books i

  • “WEATHER WORKING DAY”(WWD)—means a working day or part of a working day during which it is or, if the vessel is still waiting for her turn, it would be possible to load/discharge the cargo without interference due to the weather. If such interference occurs (or would have occurred if work had been in progress), there shall be excluded from the laytime a period calculated by reference to the ratio which the duration of the interference bears to the time which would have or could have been worked but for the interference.

  • “WEATHER WORKING DAY OF 24 CONSECUTIVE HOURS”—means a working day or part of a working day of 24 hours during which it is or, if the ship is still waiting for her turn, it would be possible to load/discharge the cargo without interference due to the weather. If such interference occurs (or would have occurred if work had been in progress) there shall be excluded from the laytime the period during which the weather interfered or would have interfered with the work.


Reference books i

  • EIU: even if used/ always excepted

  • means that the specified days do not count as laytime even if loading or discharging is done on them

  • UU: unless used

  • means that if work is carried out during the excepted days the actual hours of work only count as laytime.

  • Holiday:

  • Means a day of the week or part (s) thereof on which cargo work on the ship would normally take place but is suspended at the place of loading/discharging by reason of: (i) the local law or (ii) the local practice.

  • In China, New year (Jan 1st), Spring Festival,Memorial Day (April 5th), Labour Day (May 1st), Duanwu (dragon boat festival), National Days (Oct.1st-3rd),Lunar Day.


Under voylayrule1993

Under voylayrule1993

  • Weather working day” (WWD) or “Weather working day of 24 hours ” or “Weather working day of 24 consecutive hours”

  • mean a working day of 24 consecutive hours except for any time when weather prevents the loading or discharging of the vessel or would have prevented it, had work been in progress

  • It has the similar meaning as WWD of 24 consecutive hours under 1980 Definition.


Commencement and end of laytime

COMMENCEMENT AND END OF LAYTIME

COMMENCEMENT (GENCON cl.6(c))

‘Laytime for loading and discharging shall commence at 13.00 hours, if notice of readiness is given up to and including 12.00 hours, and at 06.00 hours next working day if notice given during office hours after 12.00 hours.’

  • What is notice of readiness (NOR or N/R)

  • NOR means the notice to charterer, shipper, receiver or other person as required by c/p that the vessel has arrived at the port or berth, as the case may be, and is ready to load or discharge.


The requirements for acceptance of nor

the requirements for acceptance of NOR

  • ---a arrived vessel

    port contract: the ship should be within ‘commercial area’of the port, that is used for laoding/discharing purposes.

    berth contract: the ship shall arrive at the berth designated in c/p.

    Q: what if the anchorage area is out of the scope of port boundary?

    -whether in port or not (WIPON)---for some special ports


B be ready in every respect

----b be ready in every respect

---means anything that the preparation of the ship to receive or deliver cargo: the removal of hatch covers, the cleaning of holds, the rigging of loading gear etc.

---from the trends of world, it is not the precedent condition for the ship to perform all necessary procedures at the port, customs, quarantine, inspection etc. before rendering NOR. However, all procedures shall be done before the actual loading operation.

--- any time lost by reason of delay in the vessel's completion of either of these formalities shall not count as laytime or time on demurrage

-- whether customs cleared or not, whether in free pratique or not )


C nor has been tendered

----c NOR has been tendered

---effective NOR shall be tendered on time, neither later, nor earlier than the actual readiness otherwise the laytime shall not begin as the stipulation in c/p.

  • WWWW (whether in port or not, whether in berth or not , whether customs cleared or not, whether in free pratique or not )


Problems arising for berth contract

Problems arising for berth contract

  • usual clauses relating to waiting time of berth

  • ---“time lost in waiting for berth to count as loading/discharging time ” or “as laytime”

  • it means that if no loading or discharging berth is available and the vessel is unable to tender NOR at the waiting place then any time lost to the vessel shall count as if laytime were running, or as time on demurrage if laytime has expired. Such time shall cease to count once the berth becomes available. When the vessel reaches a place where she is able to tender NOR laytime or time on demurrage shall resume after such tender and, in respect of laytime, on expiry of any notice time provided in the charterparty.(Voylayrule 1993)


Reference books i

  • ------means that if the main reason why a notice of readiness cannot be given is that there is no loading/discharging berth available to the ship the laytime will commence to run when the ship starts to wait for a berth and will continue to run, unless previously exhausted, until the ship stops waiting. The laytime exceptions apply to the waiting time as if the ship was at the loading/discharging berth provided the ship is not already on demurrage. When the waiting time ends time ceases to count and restarts when the ship reaches the loading/discharging berth subject to the giving of a notice of readiness if one is required by the charterparty and to any notice time if provided for in the charterparty, unless the ship is by then on demurrage. (1980 Definition)


Whether in berth or not wibon

“whether in berth or not” : WIBON

  • It shall mean that if no loading or discharging berth is available on her arrival, the vessel on reaching any usual waiting place at or off the port, shall be entitled to tender notice of readiness from it and laytime shall commence in accordance with the charterparty. Laytime or time on demurrage shall cease to count once the berth becomes available and shall resume when the vessel is ready to load or discharge at the berth. (Voylayrule 1993)


Reference books i

  • ------means that if the location named for loading/discharging is a berth and if the berth is not immediately accessible to the ship a notice of readiness can be given when the ship has arrived at the port in which the berth is situated.

    (1980 definition)


Reachable on her arrival always accessible

reachable on her arrival/“always accessible”

  • ---It shall mean that the charterer undertakes that an available loading or discharging berth be provided to the vessel on her arrival at the port which she can reach safely without delay in absence of an abnormal occurrence.(Voylayrule 1993)

  • ----means that the charterer undertakes that when the ship arrives at the port there will be a loading/discharging berth for her to which she can proceed without delay (1980 definition)


Demurrage despatch money

DEMURRAGE /DESPATCH MONEY

  • DEFINITION

    a demurrage

    ---shall mean an agreed amount payable to the owner in respect of delay to the vessel beyond the laytime, for which the owner is not responsible. Demurrage shall not be subject to laytime exceptions.

    b dispatch money

    ----shall mean an agreed amount payable by the owner if the vessel completes loading or discharging before the laytime has expired

    c damage for detention

    ----it is unliquidated damages which arise where a vessel is delayed by default of the charterer , or those he is responsible, either on the preliminary voyage, or carrying voyage, or at the port of loading or discharge. It also differs from demurrage.


Caculation

CACULATION

  • A demurrage

    • demurrage runs continuously (once on demurrage, always on demurrage)

    • demurrage runs uncontinuously (or per like day)

  • B dispatch money

    all time saved : ATS

    ----means that despatch money shall be payable for the time from the completion of loading or discharging to the expiry of the laytime including periods excepted from the laytime.

    all working time saved: WTS

    ---- means that despatch money shall be payable for the time from the completion of loading or discharging to the expiry of the laytime excluding any periods excepted from the laytime.


Whether to add l d laytime together

Whether to add L/D laytime together?

  • TO AVERAGE Laytime

    -----shall mean that separate calculations are to be made for loading and discharging and that any time saved in one operation is to be set off against any excess time used in the other

  • REVERSIBLE Laytime

    ---shall mean an option given to the charterer to add together the time allowed for loading and discharging. Where the option is exercised the effect is the same as a total time being specified to cover both operations


Reference books i

装货港

1/8 Mon. 全天装货 2/8 Tue. 全天装货3/8 Wed. 全天装货4/8 Thu. 全天装货5/8 Fri. 全天装货6/8 Sat. 停工

7/8 Sun. 停工

8/8 Mon. 全天装货9/8 Tue. 装货完毕

卸货港

17/8 Wed. 全天卸货18/8 Thu. 全天卸货19/8 Fri. 罢工

20/8 Sat. 停工

21/8 Sun. 停工22/8 Mon. 全天卸货23/8 Tue. 卸货完毕

计算实例:假设租船合同规定装货和卸货的可用时间各为5个良好天气工作日,星期六、星期日、节假日除外, 罢工、停工时间也除外,滞期时间连续计算,速遣时间按节省全部工作时间计算,滞期费率为2,000美元/天,速遣费率为1,000美元/天。装卸时间事实记录(laytime statement of fact: SOF)


Reference books i

  • Q 1: loading port

    ------demurrage 4 days:8000USD

  • Q2: discharging port

    ------despatch 1 day:1000USD

  • Q3: reversible laytime

    -------demurrage 1 day, 2000USD

  • Q 4: average laytime

    -------demurrage 3 days,6000USD


Chapter vii other clauses under gencon 94

Chapter VII OTHER CLAUSES UNDER GENCON’94

  • RESPONSIBILITIES AND EXCEPTIONS OF SHIPOWNER (Art.2)

  • ‘---The Owners are to be responsible for loss of or damage to the goods or for delay in delivery of the goods only in case the loss, damage or delay has been caused by personal want of due diligence on the part of the Owners or their Manager to make the Vessel in all respects seaworthy and to secure that she is properly manned, equipped and supplied, or by the personal act or default of the Owners or their Manager .

  • ----And the Owners are not responsible for loss, damage or delay arising from any other cause whatsoever, even from the neglect or default of the Master or crew or some other person employed by the Owners on board or ashore for whose acts they would, but for this clause, be responsible, or from unseaworthiness of the Vessel on loading or commencement of the voyage or at any time whatsoever.’


Cmc art 47

CMC art. 47

  • The carrier shall, before and at the beginning of the voyage, exercise due diligence to make the ship seaworthy, properly man, equip and supply the ship and to make the holds, refrigerating and cool chambers and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation.


Deviation clause art 3

DEVIATION CLAUSE(Art.3)

  • Liberty clause, liberty deviation clause

  • ‘The Vessel has liberty to call at any port or ports in any order , for any purpose, to sail without pilots, to tow and/or assist vessels in all situations, and also to deviate for the purpose of saving life and/or property.’


Cmc art 49

CMC art 49

  • ‘The carrier shall carry the goods to the port of discharge on the agreed or customary or geographically direct route.

  • Any deviation in saving or attempting to save life or property at sea or any reasonable deviation shall not be deemed to be an act deviating from the provisions of the preceding paragraph .’


Lien clause cesser clause art 8

LIEN CLAUSE (CESSER CLAUSE ) (Art.8)

‘The Owners shall have a lien on the cargo and on all sub-freights payable in respect of the cargo, for freight, deadfreight, demurrage, claims for damages and for all other amounts due under this Charter Party including costs of recovering same.’

‘Charterers shall remain responsible for dead freight and demurrage (including damages for detention), incurred at port of loading. Charterers shall also remain responsible for freight and demurrage (including damages for detention) incurred at port of discharge, but only to such extent as the Owners have been unable to obtain payment thereof by exercising the lien on the cargo.’ (GENCON 76 art 8)

freight sub-freight

  • Shipowner--------- charterer—------- sub-charterer

    head voy.C/P sub-voy.C/P

    Back –to –back contract


Cmc art 87 lien on cargo

CMC art. 87 lien on cargo

  • If the freight, contribution in general average, demurrage to be paid to the carrier and other necessary charges paid by the carrier on behalf of the owner of the goods as well as other charges to be paid to the carrier have not been paid in full, nor has appropriate security been given, the carrier may have a lien, to a reasonable extent, on the goods


Law and arbitration clause art 19

LAW AND ARBITRATION CLAUSE (Art.19)

  • ‘(a) This Charter Party shall be governed by and construed in accordance with English law and any dispute arising out of this Charter Party shall be referred to arbitration in London in accordance with the Arbitration Acts 1950 and 1979 or any statutory modification or re-enactment thereof for the time being in force. Unless the parties agree upon a sole arbitrator, one arbitrator shall be appointed by each party and the arbitrators so appointed shall appoint a third arbitrator, the decision of the three man tribunal thus constituted or any two of them, shall be final. On the receipt by one party of the nomination in writing of the other party's arbitrator, that party shall appoint their arbitrator within fourteen days, failing which the decision of the single Arbitrator appointed shall be final’

  • (b) in New York, American Law applied

  • (c) in other place agreed, proper law applied accordingly

  • (d) if there is no choice, sub clause (a) of this Clause shall apply .


Cmac model arbitration clause

CMAC Model Arbitration Clause

  • Any dispute arising from or in connection with this contract shall be submitted to China Maritime Arbitration Commission for arbitration which shall be conducted in accordance with the Commission’s arbitration rules in effect at the time of applying for arbitration. The arbitral award is final and binding upon both parties. (not simply say “Arbitration in Beijing”)


Part three time charter party

Part three Time Charter Party

  • Key words and terms

  • legitimate last voyage:合法的最后航次

  • WITHDRAWAL OF VESSEL:撤船

  • anti-technicality clause:反技巧性条款/抵御市场波动条款

  • OFF-HIRE:停租

  • enjusdem generis:同类解释原则(拉)

  • Sub-let :转租

  • Sub-charter party :转租租船合同

  • Head Charter Party:主(租船)合同

  • disponet owner:二船东

  • Safe port (berth):安全港口(泊位)


Part three time charter party1

Part three Time Charter Party

  • Chapter IREPRESENTATION UNDER TIME C/P

  • NYPE 46:‘Owners of the good Steamship/Motorship…of…tons gross register, and……tons net register, having engines of………indicated horse power and with hull, machinery and equipment in a thoroughly efficient state, and classed……at……of about……cubic feet bale capacity, and about ………tons of 2240 lbs. deadweight capacity (cargo and bunkers, including fresh water and stores not exceeding one and one\|half percent of ship’s deadweight capacity, allowing a minimum of fifty tons) on a draft of……feet……inches on……… Summer freeboard(夏季干舷) , inclusive of permanent bunkers, which are of the capacity of about……tons of fuel, and capable of steaming, fully laden, under good weather conditions about……knots on a consumption of about………tons of best Welsh coalbest grade fuel oil—best grade Diesel oil, now………and…Charterers ’

    Similar clauses in NYPE 93 & Baltime


Vessel s speed and fuel consumption

VESSEL’S SPEED AND FUEL CONSUMPTION

----capable of steaming

# at the time of delivery of vessel

---- fully laden

-----good weather conditions

-----about

# it allows the owners a margin of accuracy, no general rule on the margin, however, it depends on the fact, the age of ship and particular trade route etc.

-----other causes to affect speed/fuel

# wind course, water current, bottom fouling, bunker quality etc.


Chapter ii shipowner charterer to provide

Chapter IISHIPOWNER /CHARTERER TO PROVIDE

  • SHIPOWNER TO PROVIDE

    ----NYPE46 cl.1 ‘Owners shall provide and pay for all provisions, wages and consular shipping and discharging fees of the Crew; shall pay for the insurance of the vessel, also for all the cabin, deck, engine-room and other necessary stores, including boiler water and maintain her class and keep the vessel in a thoroughly efficient state in hull, machinery and equipment for and during the service…’

    --- see also BALTIME cl. 3, NYPE93 cl.6


Maintenance clause

---“maintenance clause”

(initial seaworthiness—delivery of vessel)

  • This obligation continues through the charter period, supplementing the initial warranty of seaworthiness at delivery of vessel.

  • However, it is not an absolute one. If her machinery or equipment do become inefficient during the period, the owners are obliged to take reasonable steps within a reasonable time to put them right.


Cmc art 133

CMC art 133

  • ---During the charter period, if the ship is found at variance with the seaworthiness or the other conditions agreed upon in the charter, the shipowner shall take all reasonable measures to have them restored as soon as possible.

  • ----Where the ship has not been operated normally for 24 consecutive hours due to its failure to maintain the seaworthiness or the other conditions as agreed upon, the charterer shall not pay the hire for the operating time so lost, unless such failure was caused by the charterer .


Charterer to provide

CHARTERER TO PROVIDE

  • ---1946 NYPE cl.2

  • ‘..the Charterers shall provide and pay for all the fuel except as otherwise agreed, Port Charges, Pilotages, Agencies, Commissions, Consular Charges ( except those pertaining to the Crew) and all other usual expenses except those before stated, but when the vessel puts into a port for causes for which vessel is responsible, then all such charges incurred shall be paid by the Owners. Fumigations ordered because of illness of the crew to be for Owners account. Fumigations ordered because of cargoes carried or ports visited while vessel is employed under this charter to be for Charterers account …

  • Charterers are to provide necessary dunnage and shifting boards, also any extra fittings requisite for a special trade or unusual cargo. .’

    ---see also BALTIME cl.4, NYPE93 cl.7


Chapter iii period of hire delivery redelivery

Chapter III PERIOD OF HIRE /DELIVERY/ REDELIVERY

  • THE PERIOD OF HIRE

    NYPE93 Cl.1

    ‘The Owners agree to let and the Charterers agree to hire the Vessel from the time of delivery for a period of ….within below mentioned trading limits ….’

    Baltime Cl.1 (The Owners let, and the Charterers hire the Vessel for a period of… calendar months from the time (not a Sunday or a legal Holiday unless taken over) the Vessel is delivered and placed at the disposal of the Charterers …)

    Usual clauses on the period of hire

    ---a xxx months

    ---b about xxx months

    ---c xxx months, more or less at charterer’s option

    ---d not more than xxx months, not less than xxx months

    ---e the period necessary to perform voyages such as xxx to xxx months


Delivery of vessel

DELIVERY OF VESSEL

  • Date,palce and condition of delivery (NYPE93 Cl.2/Cl.16)

  • ----‘The Vessel shall be placed at the disposal of the Charterers at……..The Vessel on her delivery shall be ready to receive cargo with clean-swept holds and tight, staunch, strong and in every way fitted for ordinary cargo service, having water ballast and with sufficient power to operate all cargo-handling gear simultaneously.

  • ----‘The Owners shall give the Charterers not less than…days notice of expected date of delivery ‘.

  • ----‘If required by the Charterers, time shall not commence before…and should the Vessel not be ready for delivery on or before…but not later than …hours, the Charterers shall have the option of cancelling this c/p’

  • -----If the Owners warrant that the Vessel will not be ready for delivery by the cancelling date, and provided the Owners are able to state with reasonable certainty the date on which the Vessel will be ready, they may, … require the Charterers to declare whether or not they will cancel the Charter Party. See also NYPE 46 ,Baltime Cl.1&5


Place of delivery

Place of delivery

NYPE 46: ‘Vessel to be placed at the disposal of the Charterers, at…..in such dock or at such wharf or place (where she may safely lie, always afloat, at all times of tide, except as otherwise provided in clause No.6), as the Charterer may direct.

  • If such dock, wharf or place be not available time to count as provided.

  • Baltime cl.1 ‘the Vessel is delivered and placed at the disposal of the Charterers between 9 a.m. and 6 p.m., or between 9 a.m. and 2 p.m. if on Saturday, at…in such available berth there she can safely lie always afloat, as the Charterers may direct ….’


Conditions of delivery initial seaworthiness

Conditions of delivery---initial seaworthiness

  • NYPE: ‘….with clean-swept holds and tight, staunch, strong and in every way fitted for ordinary cargo service….’

  • Baltime cl.1‘…she being in every way fitted for ordinary cargo service….’

  • In general, the meaning of seaworthy ship shall be broad one ,not as narrow as the clauses mentioned above.

  • --the ship itself

  • --man the ship and have proper provisions

  • --it is available and fitful for cargo’ transportation, storage etc.


Cmc art 132

CMC art 132

  • At the time of delivery, the shipowner shall exercise due diligence to make the ship seaworthy. The ship delivered shall be fit for the intended service.

  • Where the shipowner acts against the provisions in the preceding paragraph, the charterer shall be entitled to cancel the charter and claim any losses resulting therefrom.


On off hire survey nype 93 cl 3

On-Off Hire Survey (NYPE 93 Cl.3)

  • Prior to delivery and redelivery the parties shall, unless otherwise agreed, each appoint surveyors, for their respective accounts, who shall not later than at first loading port/last discharging port respectively, conduct joint on-hire/off -hire surveys, for the purpose of ascertaining quantity of bunkers on board and the condition of the Vessel.

  • A single report shall be prepared on each occasion and signed by each surveyor, without prejudice to his right to file a separate report setting forth items upon which the surveyors cannot agree.


Redelivery of vessel

REDELIVERY OF VESSEL

NYPE93 cl.10 (date, place, condition)

  • …hire shall continue until the hour of the day of her redelivery in like good order and condition, ordinary wear and tear excepted, to the Owners (unless Vessel lost) at………… unless otherwise mutually agreed.

  • The Charterers shall give the Owners not less than……days notice of the Vessel's expected date and probable port of redelivery.

    See NYPE46 cl.3/4/13;. Baltime cl.7


The time of redelivery

THE TIME OF REDELIVERY

AFTER THE EXPIRATION OF HIRE

  • legitimate last voyage

  • Under English law: the charterer is not in breach if, when the vessel was dispatched on its final voyage he could reasonably have expected the voyage to be completed within the charter period plus the permitted leeway expressly or implied in c/p.

  • Under USA law: overlap< underlap

  • Overlap: the delay after expiration of period of hire if the last voyage shall be performed.

  • Underlap: the time saved before expiration of period of hire if the last voyage shall not be performed.

  • expiration of period

  • Underlap A overlap


Cmc art 143

CMC art.143

  • If, on the basis of a reasonable calculation, a ship may be able to complete its last voyage at around the time of redelivery specified in the charter and probably thereafter, the charterer is entitled to continue to use the ship in order to complete that voyage even if its time of redelivery will be overdue. During the extended period, the charterer shall pay the hire at the rate fixed by the charter, and , if the current market rate of hire is higher than that specified in the charter, the charterer shall pay the hire at the current market rate.


Legal effect of legitimate last voyage

Legal effect of legitimate last voyage

  • -the shipowner shall follow the order given by charterer and perform the last voyage at the payment of hire as agreed in c/p.

  • --during the delay, shipowner entitled to claim for the difference between the higher market rate and contract rate, not for any other losses suffered by delay, such as damages for failing perform the next charter.

  • Therefore, it is still unfair for shipowner if the delay caused the benefit loss for non performing next charter on time.


Illegitimate last voyage

illegitimate last voyage

  • English Law

    ---when the vessel was dispatched on its final voyage he could not reasonably have expected the voyage to be completed within the charter period plus the permitted leeway

  • USA Law: overlap > underlap

  • Chinese law: keep silent

  • Effects: the master may refuse to follow the order given by charterer for illegitimate last voyage and entitled to claim for all losses resulting from it.


Earlier redelivery

EARLIER REDELIVERY

  • Earlier or delay to redeliver the vessel to shipowner depends on the change of market.

  • 2008 Finance Crisis, a lots of disputes on this point. Eg, Capsize ship (35,000 USD/day-3000USD/day)

  • The shipowner has to accept and has the obligation to minimize the loss for other arrangement of charting during the period of earlier redelivery.

  • -shipowner claims for loss resulting from it on proven anticipated losses therefrom.


The conditions of redelivery

THE CONDITIONS OF REDELIVERY

  • ----The charterer will be liable in damages if as a result of a breach of any of their obligations under the charter they redeliver the ship in a worse condition than when delivered, ordinary tear and wear excepted.

  • ordinary tear and wear---means normal depreciation. The nature of particular trade in c/p is a relevant factor. The scrathces, nicks, gouges, dents, bending and shearings of the metal parts of a ship’s holds, hatches and decks that are inherent in the usual method of discharge of most bulk cargoes by grab buckets or other mechanical equipment, but which when not major, do not affect the strength or function of the structural members of a ship’ hold, hatches and decks are considered as ordinary tear and wear.


Legal effects

Legal Effects

  • ----Under maintenance clause, the owners will be obliged to make good much of damage which occurs during the charter and they will only recover the cost of repairs from charterer when they show that damage was caused by charterer.

  • -----The owners cannot refuse the redelivery of damaged ship and are left to a claim for damages.


Cmc art 142

CMC art.142

  • ‘When the charter redelivers the ship to the shipowner, the ship shall be in the same good order and condition as it was at the time of delivery, fair wear and tear excepted.

  • Where, upon redelivery, the ship fails to remain in the same good order and condition as it was at the time of delivery, the charter shall be responsible for rehabilitation or for compensation.


Chapter iv payment of hire and withdrawal of ship

Chapter IV PAYMENT OF HIRE AND WITHDRAWAL OF SHIP

  • PAYMENT OF HIRE -NYPE’46cl.5 (NYPE’93 cl.11)

    ‘Payment of said hire to be made in New York in cash in United States Currency , semi-monthly in advance, and for the last half month or part of same the approximate amount of hire, and should same not cover the actual time, hire is to be paid for the balance day by day, as it becomes due, if so required by Owners, unless bank guarantee or deposit is made by the Charterers, otherwise failing the punctual and regular payment of the hire, or bank guarantee, or on any breach o f this Charter Party, the Owners shall be at liberty to withdraw the vessel from the service of the Charterers, without prejudice to any claim they (the Owners) may otherwise have on the Charterers ’


Baltime cl 6

Baltime cl.6

‘The Charterers to pay as hire……………per 30 days, commencing in accordance with clause 1 until her re-delivery to the Owners. Payment of hire to be made in cash, in…………without discount, every 30 days, in advance.In default of payment the Owners to have the right of withdrawing the Vessel from the service of the Charterers, without noting any protest and without interference by any court or any other formality whatsoever and without prejudice to any claim the Owners may otherwise have on the Charterers under the Charter. ’


Reference books i

  • Cash

    ------Means actual currency, bank checks, payment orders, or telex transfer.

  • without discount

    -----charterer has no right to withhold hire except as expressly provided in c/p for off-hire or advances. Any deduction shall be made bona fide and be assessed on a reasonble basis.


Reference books i

  • --previous off-hire

  • Apr. Off-hire due date May

  • Advances paid by the charterer on the request of master

  • Speed & fuel consumption

  • Any others agreed between the parties

  • If the deduction is allowable, the charterer shall make it on bona fide(诚实信用原则)


In advance

In Advance

-----each periodic payment shall be made by charterer on or before but not later than the due date. If the due date for a particular payment falls on a Sunday or some other non-banking day, charterer must make their payment on an earlier banking day.

-----To pay on or before the due date is an absolute obligation for charterer


Withdrawal of vessel

WITHDRAWAL OF VESSEL

-----conditions of withdrawal

If charterer fails to make punctual payment of an instalment of hire on or before the due date, owner is entitled to withdraw the ship from the service and brings the charter to an end.

----limits to exercise withdrawal

anti-technicality clause: “ when there is any failure to make punctual and regular payment of hire, the charterers shall be given by the owners xxx bank’s working day’s written notice to rectify any failure.”


The legal effect of withdrawal

the legal effect of withdrawal

Upon a valid withdrawal by owner, the charter comes to an end. But owner may continue to be liable to the owners of cargo under b/l issued under c/p, therefore, owner may claim for remuneration for those services. And also owner has the right to claim the unpaid hire together with any other amounts due from charterer at the time of withdrawal.

-------- waiver of the right to withdrawal

* accept the late payment

* accept punctual payment, but not full amount of payment

* not exercise the right of withdrawal on time

* confirm to perform the contract by owner


Chapter v off hire

Chapter V OFF-HIRE

  • Baltime cl.11

  • ‘In the event of drydocking or other necessary measures to maintain the efficiency of the Vessel, deficiency of men or Owners' stores, breakdown of machinery, damage to hull or other accident, either hindering or preventing the working of the vessel and continuing for more than twenty four consecutive hours, no hire to be paid in respect of any time lost thereby during the period in which the Vessel is unable to perform the service immediately required. Any hire paid in advance to be adjusted accordingly.’


Nype 93cl 17

NYPE’93cl.17

  • In the event of loss of time from efficiency and/or default and/or strike of officers or crew,

  • deficiency of stores,

  • fire,

  • breakdown of, or damages to hull, machinery or equipment, grounding,

  • detention by the arrest of the Vessel,

  • detention by average accidents to the Vessel or cargo unless resulting from inherent vice, quality or defect of the cargo,

  • drydocking for the purpose of examination or painting bottom,

  • by any other similar cause preventing the full working of the Vessel, the payment of hire and overtime, if any, shall cease for the time thereby lost. (see alsoNYPE’46 cl 15)


Common provisions for off hire

common provisions for off-hire

  • ----deficiency of men

    -----break down or damage to hull, machinery or equipment

    ------detention by average accidents to ship or cargo

    ------ dry-docking

    ------any other causes preventing the full working of the vessel

  • enjusdem generis of “any other causes”

  • “any other whatsoever causes” has more chance to broad the meaning of ‘any other causes’, however, cannot be extended too much.

  • Such as detention and arrest by Somalia piracy in latest UK cases.


Chapter vi responsibilities obligations exemptions

Chapter VI RESPONSIBILITIES/ OBLIGATIONS/EXEMPTIONS

  • RESPONSIBILITIES AND OBLIGATIONS OF SHIPOWNERS

    (1)---initial seaworthiness;

    (2) -----maintenance seaworthiness

    (3) ----- the shipowners to provide;

    (4)-----reasonable despatch


Reference books i

  • SHIPOWNER TO PROVIDE

    ----NYPE46 cl.1 ‘Owners shall provide and pay for all provisions, wages and consular shipping and discharging fees of the Crew; shall pay for the insurance of the vessel, also for all the cabin, deck, engine-room and other necessary stores, including boiler water and maintain her class and keep the vessel in a thoroughly efficient state in hull, machinery and equipment for and during the service…’


Reasonable despatch

reasonable despatch

  • NYPE’93 cl.8(See also NYPE’46 cl.8;Baltime cl.9 (similar clauses)

  • “The Master shall perform the voyages with due despatch, and shall render all customary assistance with the Vessel's crew….”

  • --this obligation shall be balanced against the paramount duty of master to provide the safety of the vessel, her crew and cargo. If the master acts in good faith and with a reasonable exercise of judgment in the particular circumstances in concluding that the voyage must be delayed for the safety of the vessel, crew or cargo ,such delay would not constitute a violation of the charter.


Reference books i

  • ----customary assistance---means the master and crew would normally work or perform just like if the ship is not under charter. It depends on the matter of fact. Among other relevant factors will be the flag of the ship, the articles signed by the crew and the trade in which the ship is engaged. Generally, removal of soft non –adhering rust is the duty of the crew


Responsibilities and obligations of charterers

RESPONSIBILITIES AND OBLIGATIONS OF CHARTERERS

---Charterers to provide

---safety of port/berth

NYPE 93 cl.12—berth: ‘The Vessel shall be loaded and discharged in any safe dock or at any safe berth or safe place that Charterers or their agents may direct, provided the Vessel can safely enter, lie and depart always afloat at any time of tide.’

cl.5 trading limits ---’The Vessel shall be employed in such lawful trades between safe ports and safe places within…’

See also NYPE preamble, Baltime cl.2


Charterer to provide1

CHARTERER TO PROVIDE

  • ---1946 NYPE cl.2

  • ‘..the Charterers shall provide and pay for all the fuel except as otherwise agreed, Port Charges, Pilotages, Agencies, Commissions, Consular Charges ( except those pertaining to the Crew) and all other usual expenses except those before stated, ……. . Fumigations ordered because of cargoes carried or ports visited while vessel is employed under this charter to be for Charterers account …

  • Charterers are to provide necessary dunnage and shifting boards, also any extra fittings requisite for a special trade or unusual cargo. .’

    ---see also BALTIME cl.4, NYPE93 cl.7


Definiton of safe port

DEFINITON OF SAFE PORT

  • Definition of 1980:

  • “means a port which, during the relevant period of time, the ship can reach, enter, remain at and depart from without, in the absence of some abnormal occurrence, being exposed to danger which cannot be avoided by good navigation and seamanship.”


Scope of safe port geography safe political safe

SCOPE OF SAFE PORT (---Geography safe & political safe)

--the port must be safe for the particular ship chartered. eg,one port may be entirely safe for 99 out of 100, except the very big ship.

---the ship must be able to reach the port in safety. If the approach to one port is such that the ship cannot reach in safety without dismantling part of her structure, it is unsafe. Or the ship must lighten some of her cargo to enter into.

---the port must be physically safe in its location, size and layout for the particular ship to use at the relevant time, having regard to both its natural and artificial aspects. Defective or missing navigational aids, incompetent or unavailable pilot , inadequate mooring facilities might make the port unsafe at the time of using.


Reference books i

  • the port will not be safe if the ship is endangered in departing from it. Eg. one ship in laden condition has no difficulties in entering, after discharging she could not clear the canal bridge on her outward passage owing to decreased draft.

  • abnormal occurrences----means some event which is unrelated to the prevailing characteristics of the particular port, or can not be regarded as an attribute or its own qualities of the port. Eg, exceptional storm or damaged by another ship being negligently navigated.


Reference books i

----Good navigation and seamanship

most navigable rivers, channels, ports, harbors and berths have some dangers from tides, currents, swells, banks, bars or revetments.Such dangers are frequently minimized by lights, buoys, signals, warnings, and other aids to navigation and can normally be met and overcome by proper navigation and handling of a vessel in accordance with good steamship. But if more than ordinary skill is required to avoid the dangers the port will not be safety.

---the risk of hostile seizure or attack en route to the port nominated may make the port unsafe.


When to warranty the safety of port prospectively safe theory

WHEN TO WARRANTY THE SAFETY OF PORT-prospectively safe theory

  • --primary obligation

  • It arises when the order the ship to the port. At that time, the port need only be prospectively safe for the ship at the appropriate time in the future, to reach, use and leave. It cannot be broken by a state of unsafety prevailing at the time of the order which will have been cured before the ship’s arrival.

    --secondary obligation: port becomes unsafe after nomination

    Under new obligation, Charterer comes to cancel the original order and issues fresh orders to another port which is then prospectively safe. Similarly if a subsequent state of unsafety arises when the ship is at the port but she may still avoid danger by leaving.


Exceptions clause

Exceptions Clause

  • NYPE’93 Cl.21 (NYPE’46 Cl.16)

  • ‘The act of God, enemies, fire, restraint of princes, rulers and people, and all dangers and accidents of the seas, rivers, machinery, boilers, and navigation, and errors of navigation throughout this Charter, always mutually excepted ‘’

  • Baltime Cl.13

  • ‘The Owners only to be responsible for delay in delivery of the Vessel or for delay during the currency of the Charter and for loss or damage to goods onboard, if they are caused by want of due diligence on the part of the Owners or their Manager in making the Vessel seaworthy … or any other personal act or omission or default of the Owners or their Manager. ….

  • …Not be liable for loss or damage caused even if by the neglect or default of their servants.

  • …not to be liable for loss or damage arising or resulting from strikes, lockouts or stoppage or restraint of labour (including the Master, Officers or Crew) whether partial or general. ….


Common nature for exception clause

Common nature for exception clause

  • Act of god

    ----due to natural causes, without human intervention, the event must be so overwhelming and unanticipated.

  • Enemies

    ----the actions of enemies of the state whose flag the ship flies and of enemies of the states in which the charterer or owner are registered.

  • Fire

    -----the fire is not caused by negligence. Damage by reason of fire includes damage by smoke and damage from water used to extinguish the fire.


Reference books i

  • Restraint of princes, rulers and people

    -----which covers forcible interference by a government or state preventing or impeding the performance of the charter, such as the imposition of restrictions on trade, action taken pursuant to Customs or quarantine regulations, action to protect the government’s own proprietary interests in the cargo or action taken for political reasons.

    ----which excludes

  • actions by any body of persons who do not constitute the ruling power, or the executive of the ruling power of the country;

  • arrest or detention under ordinary judicial process;

  • restraint arising from a state of affairs which existed at the time the charter was entered into, where the law applicable was known to the party seeking to rely on the exception.

  • restraint resulting from negligence


Reference books i

  • All dangers and accidents of the seas,rivers

    -----which covers perils peculiar to seas or rivers or to the navigation of a ship at sea or in rivers which cannot be avoided by the exercise of reasonable care. It also relates to dangers and accidents of the seas rather than on the seas (fire or lighting, rain etc)

  • Break down of Machinery, boilers

    ----which covers those physical risks incident to vessel’s equipments etc., it afford no protection if what occurs is caused by negligence.

    Errors of navigation

    ---which does not cover negligence unless agreed otherwise.


Reference books i

  • Strike (voylayrule 93 art.28 )

    ----- which means a concerted industrial action by workmen causing a complete stoppage of their work which directly interferes with the working of the vessel. Refusal to work overtime, go-slow or working to rule and comparable actions not causing a complete stoppage shall not be considered a strike.

    A strike shall be understood to exclude its consequences when it has ended, such as congestion in the port or effects upon the means of transportation bringing or taking the cargo to or from the port .


Chapter vii other main clauses under time c p

Chapter VII OTHER MAIN CLAUSES UNDER TIME C/P

  • I EMPLOYMENT AND INDEMNITY CLAUSE

    NYPE’93 Cl.8 (NYPE’46 Cl.8)----employment only, no indemnity

    ‘The Master shall …be under the orders and directions of the Charterers as regards employment and agency; and the Charterers shall perform all cargo handling, including but not limited to loading, stowing, trimming, lashing, securing, dunnaging, unlashing, discharging, and tallying, at their risk and expense, under the supervision of the Master’.


Baltime cl 9

Baltime Cl.9

‘The Master to be under the orders of the Charterers as regards employment agency, or other arrangements. The Charterers to indemnify the Owners against all consequences or liabilities arising from the Master, Officers or Agents signing Bills of Lading or other documents or otherwise complying with such orders, as well as from any irregularity in the Vessel's papers or for overcarrying goods. The Owners not to be responsible for shortage, mixture, marks, nor for number of pieces or packages, nor for damage to or claims on cargo caused by bad stowage or otherwise..’


Cmc art 136

CMC Art.136

  • The charterer shall be entitled to give the master instruction with respect to the operation of the ship. However, such instruction shall not be inconsistent with the stipulations of the time charter.


The problem of under supervision of master or and responsibility of

The problem of under supervision of master (or ‘….and responsibility of…’)

  • ---the master has the right to supervise the cargo operation, particularly from the view of safety of ship. If the ship is damaged by the negligence of the stevedores in these operations, the damage shall be recovered by owners except that the damage was in fact attributable to the master’s supervision.

  • ---- ‘under the supervision & responsibility of master’

  • It is prima facie the liabilities and risks transferred from charterer back to owner for entire operation of loading/discharging/trimming/stowing. Transfer means not only for loss or damage to the cargo but also for loss of ship.

  • However, if the operation was interfered by the charterer or this agents or representatives, then the charterer is estopped.


Who shall be responsible for damages caused by stevedore

Who shall be responsible for damages caused by stevedore?

  • NYPE 93 Cl.35 (silent in NYPE 46 & Baltime)

  • ‘Notwithstanding anything contained herein to the contrary, the Charterers shall pay for any and all damage to the Vessel caused by stevedores provided the Master has notified the Charterers and/or their agents in writing as soon as practical but not later than 48 hours after any damage is discovered. Such notice to specify the damage in detail and to invite Charterers to appoint a surveyor to assess the extent of such damage.

    (a) In case of any and all damage(s) affecting the Vessel's seaworthiness and/or the safety of the crew and/or affecting the trading capabilities of the Vessel, the Charterers shall immediately arrange for repairs of such damage(s) at their expense and the Vessel is to remain on hire until such repairs are completed and if required by the Vessel's classification society.


Reference books i

  • (b) Any and all damage(s) not described under point (a) above shall be repaired at the Charterers' option, before or after redelivery concurrently with the Owners' work. In such case no hire and/or expenses will be paid to the Owners except and insofar as the time and/or the expenses required for the repairs for which the Charterers are responsible, exceed the time and/or expenses necessary to carry out the Owners' work. ’


Ii trading limits clause

II TRADING LIMITS CLAUSE

  • NYPE ’93 Cl.5 ( NYPE’46 preamble)

    ----‘The Vessel shall be employed in such lawful trades between safe ports and safe places within …..excluding….as the Charterers shall direct ’

  • -Baltime Cl.2

    ------‘The Vessel to be employed in lawful trades for the carriage of lawful merchandise only between good and safe ports or places where she can safely lie always afloat within the following limits……..

  • Purpose: Opposite to voy.c/p, time charterer originally is free to send the ship to any navigable waters in the wide world that he likes. This clause is not to grant a liberty, but to impose a limit or restriction, by cutting down the unlimited and universal liberty of the charterer and excluding him from certain areas.


Cmc art 134

CMC Art. 134

  • The charterer shall guarantee that the ship shall be employed in the agreed maritime transport between the safe ports or places within the trading area agreed upon.

  • If the charterer acts against the provisions of the preceding paragraph, the shipowner is entitled to cancel the charter and claim any losses resulting therefrom.


Reference books i

  • Point I: orders to trade outside the limits

    -----master may refuse an order from charterer to proceed outside limits even under employment clause. Nor is the master obliged to sign a b/l which names a port of discharge outside limits.

  • Point II: obedience to charterer’s order outside

    ---Mere compliance with charterer’s order to proceed outside limits will probably not amount to a waiver of owner’s right either to refuse further compliance subsequently or to claim damages for the breach.


Reference books i

  • Point III: measure for damages for outside

    ----if owner instructs the master to comply with order under protest, owner may claim for the difference between the charter rate and market rate (if higher) for the voyage performed outside the limits even if that exceeds the additional costs to which the owner has been put by those voyages.

  • Point IV: agreement that limits may be broken

    --- It is usual for the parties to agree in the charter that charterer may order the ship outside the specified trading limits, while paying any extra premium consequently required by ship’s underwriter (insurer).


Lawful merchandise clause

LAWFUL MERCHANDISE CLAUSE

  • Baltime Cl.2

  • ‘No live stock nor injurious, inflammable or dangerous goods (such as acids, explosives, calcium carbide, ferro silicon, naphtha, motor spirit, tar, or any of their products) to be shipped’


Nype 93 cl 4 nype 46 preamble

NYPE ’93 Cl.4 (NYPE’46 preamble)

  • ‘The Vessel shall be employed in carrying lawful merchandise excluding any goods of a dangerous, injurious, flammable or corrosive nature unless carried in accordance with the requirements or recommendations of the competent authorities of the country of the Vessel's registry and of ports of shipment and discharge and of any intermediate countries or ports through whose waters the Vessel must pass. Without prejudice to the generality of the foregoing, in addition the following are specifically excluded: livestock of any description, arms, ammunition, explosives, nuclear and radioactive materials,…


Cmc art 135

CMC Art.135

  • The charterer shall guarantee that the ship shall be employed to carry the lawful merchandise agreed.

    Where the ship is to be employed by the charterer to carry live animals or dangerous goods, a prior consent of the shipowner is required.

    The charterer shall be liable for any loss of the shipowner resulting from the charterer’s violation of the provisions of paragraph 1 or 2 of this article.


Reference books i

  • Point I : what is lawful?

    ---goods will not be lawful if their loading amounts to a breach of local law nor if they can not lawfully be discharged at the nominated discharge ports. They must be lawful under the law of the ship’s flag and the proper law of the charter.

  • Point II : shipment of cargo excluded under c/p

    ----it is the breach of contract for charterer to ship goods excluded by c/p and master may properly refuse an order to load such goods


Reference books i

  • Point III : effect to load exclusive goods

    ---if the owner either are unaware of this or instruct the master to accept it under protest, owner may be entitled to additional remuneration based on the current market rate for carriage of the excluded cargo ,either as damages or under an implied promise by the charterer.

  • Point IV: what is dangerous goods

    ---it is implied at common law not shipping dangerous goods unless owners or their crew knew or ought reasonably to have known of these peculiar characteristics.

    ---It is not easy to differ safe and dangerous. Reference on IMDG CODE.


Sub let clause

SUB-LET CLAUSE

  • NYPE 93 Cl.18 (NYPE 46 Preamble)

    ----‘Unless otherwise agreed, the Charterers shall have the liberty to sublet the Vessel for all or any part of the time covered by this Charter Party, but the Charterers remain responsible for the fulfillment of this Charter party’


Reference books i

  • Baltime Cl.20 (CMC: art 137 has similar provision)

  • ----‘The Charterers to have the option of subletting the vessel, giving due notice to the Owners, but the original Charterers always to remain responsible to the Owners for due performance of the Charter’

  • head charter Sub-charter

    Shipowner--------------charterer (disponet)---------subcharterer

    Point I : there is no direct contract relation between owner and subcharterer

    Point II : Maybe there is direct contractual relation between owner and sub-charterer under b/l issued under sub-charter

    (Under CMC, carrier, actual carrier)


Part four bareboat charter party

Part Four Bareboat Charter Party

  • Chapter I Main provisions

  • Delivery clause ( Barecon Art.1-3,7)

    I place:

    ‘The Vessel shall be delivered and taken over by the Charterers at the port indicated in Box 15, in such ready berth as the Charterers may direct. ’


Ii conditions

II conditions

--seaworthy: ‘The Owners shall before and at the time of delivery exercise due diligence to make the Vessel seaworthy and in every respect ready in hull, machinery and equipment for service hereunder. The Vessel shall be properly documented at time of delivery…’

---latent defect:...the Owners shall be responsible for repairs or renewals occasioned by latent defects in the Vessel, her machinery or appurtenances, existing at the time of delivery under the Charter, provided such defects have manifested themselves within 18 months after delivery …. (special)

---lists of provisions: ‘A complete inventory of the Vessel's entire equipment, outfit, appliances and of all consumable stores on board the Vessel shall be made by the Charterers in conjunction with the Owners on delivery and again on re-delivery of the Vessel ’ (special)


Time for delivery cancelling

Time for delivery & cancelling

  • ---time : ‘The Vessel to be delivered not before the date indicated in Box 16 unless with Charterers' consent.

  • ---notice to delivery:Unless otherwise agreed in Box 19, the Owners to give the Charterers not less than 30 running days' notice of the date on which the Vessel is expected to be ready for delivery.

  • The Owners to keep the Charterers closely advised of possible changes in the Vessel's position. (30/15/10/7/3/2/1 ETA)

  • ----Cancelling & interpellation clause:If it appears that Vessel will be delayed beyond the canceling date, Owners shall, as soon as they are in a position to state with reasonable certainty the day on which Vessel should be ready, give notice thereof to Charterers asking whether they will exercise their option of canceling, and the option must then be declared within one hundred and sixty eight (168) hours of the receipt by Charterers of such notice. If Charterers do not then exercise their option of canceling, the seventh day after the readiness date stated in Owners' notice shall be regarded as a new canceling date for the purpose of this Clause.


Cmc art 146 delivery

CMC Art. 146—delivery

  • The shipowner shall deliver the ship and its certificates to the charterer at the port or place and time as stipulated in the C/P. At the time of delivery, the shipowner shall exercise due diligence to make the ship seaworthy. The ship delivered shall be fit for the agreed service.

  • Where the owner acts against the provisions of the preceding paragraph, the charterer shall be entitled to cancel the charter and claim any losses resulting therefrom.


Surveys inspection

Surveys & Inspection

  • Surveys: (Art.5)

    ---’The Owners and Charterers shall each appoint surveyors for the purpose of determining and agreeing in writing the condition of the Vessel at the time of delivery and re-delivery hereunder. The Owners shall bear all expenses of the On-Survey including loss of time, if any ,and the Charterers shall bear all expenses of the Off-Survey including loss of time, if any, at the rate of hire per day or pro rata, also including in each case the cost of any docking and undocking, if required, in connection herewith.


Inspection art 6

Inspection (Art.6)

---- ‘The Owners shall have the right at any time to inspect or survey the Vessel or instruct a duly authorized surveyor to carry out such survey on their behalf to ascertain the condition of the Vessel and satisfy themselves that the Vessel is being properly repaired and maintained ……

-----The Charterers shall also permit the Owners to inspect the Vessel's log books whenever requested and shall whenever required by the Owners furnish them with full information regarding any casualties or other a accidents or damage to the Vessel.

---- If required, the Charterers shall from time to time keep the Owners advised of the intended employment of the Vessel


Maintenance operation art 8

Maintenance & Operation (Art.8)

  • Complete control ---- ‘The Vessel shall be in the full possession and at the absolute disposal for all purposes of the Charterers and under their complete control in every respect….’ .

  • Maintain the good order---- ‘The Charterers shall maintain the Vessel, her machinery, boilers, appurtenances and spare parts in a good state of repair, In efficient operating condition and in accordance with good commercial maintenance practice and keep the Vessel with unexpired classification ….’


Reference books i

  • Reasonable repair---- ‘The Charterers to take immediate steps to have the necessary repairs done within a reasonable time failing which the Owners shall have the right of withdrawing the Vessel ….’

  • Structural changes-----in the event of any improvement, structural changes or expensive new equipment becoming necessary by reason of new class requirements or by compulsory legislation shall be allocated between two parties or as agreed.


Cmc art 147

CMC Art. 147

  • —maintenance and operation

  • The charterer shall be responsible for the maintenance and repair of the ship during the bareboat charter party


Hire art 9

Hire (Art.9)

  • ----date of payment : ‘The Charterers shall pay to the Owners for the hire of the Vessel at the lump sum per calendar month as indicated in Box 23 commencing on and from the date and hour of her delivery to the Charterers …until the date and hour when the Vessel is re-delivered..

  • ----cash, in advance: ‘Payment of Hire, … shall be made in cash without discount every month in advance…


Reference books i

  • ----ship missing : ‘Should the Vessel be lost or missing, Hire to cease from the date and time when she was lost or last heard of. Any Hire paid in advance to be adjusted accordingly….

  • ----withdrawal ‘In default of payment beyond a period of seven running days the Owners to have the right of withdrawing the Vessel from the service … without noting any protest and without interference by any court or any other formality whatsoever and without prejudice to any claim the Owners may otherwise have against the Charterers ……


Cmc art 152

CMC art. 152

  • The charterer shall pay the hire as stipulated in the charter. In default of payment by the charterer for seven consecutive days or more after the time as agreed in the charter for such payment, the shipowner is entitled to cancel the charter without prejudice to any claim for the loss arising from the charterer's default.

  • Should the ship be lost or missing, payment of hire shall cease from the day when the ship was lost or last heard of. Any hire paid in advance shall be refunded in proportion


Mortgage art 10

Mortgage (Art.10)

  • ----no mortgage : ‘Owners warrant that they have not effected any mortgage of the Vessel unless otherwise indicated in Box 27.

  • ----limits on mortgage: ‘Owners hereby undertake not to effect any (other) mortgage of the Vessel without Charterers' prior approval….

  • ‘Any mortgage approved by Charterers hereunder is herein referred to as an “approved mortgage” and any mortgagee under an approved mortgage is herein referred to as an “approved mortgagee” ’


Cmc art 150

CMC Art. 150

  • —mortgageclause

  • The shipowner shall not establish any mortgage of the ship during the bareboat charter period without the prior consent in writing by the charterer.

  • Where the owner acts against the provisions of the proceeding paragraph and thereby causes losses to the charterer, the owner shall be liable for compensation.


Insurance repairs art 11 or art 12 optional

Insurance & repairs (Art.11 or Art.12 optional)

  • Insurance

    ---who pays for insurance? ‘Vessel shall be kept insured by Charterers at their expense against marine, war and Protection and Indemnity risks in such form as Owners shall in writing approve, which approval shall not be unreasonably withheld….’


Reference books i

-----fails to insure ‘If the Charterers fail to arrange and keep any of the insurances provided …., Owners shall notify Charterers whereupon Charterers shall rectify the position within seven running days, failing which Owners shall have the right to withdraw the Vessel from the service of the Charterers without prejudice to any claim the Owners may otherwise have against the Charterers. …..

----Total loss : Should the Vessel become an actual or constructive total loss under the insurances …… all insurance payments for such loss shall be paid to Owners, who shall distribute the moneys between themselves and Charterers according to their respective interests. …..


Reference books i

  • repairs

    ----repairing covered by insurance: ‘The Charterers shall, subject to the approval of the Owners and the Underwriters, effect all insured repairs and shall undertake settlement of all costs in connection with such repairs as well as insured charges, expenses and liabilities …… to the extent of coverage under the insurances provided for …..

    ----other repairs: ‘The Charterers also to remain responsible for and to effect repairs and settlement of costs and expenses incurred thereby in respect of all other repairs not covered by the insurances and/or not exceeding any possible franchise(s) or deductibles provided for in the insurances…..


Cmc art 148

CMC Art.148

  • —insurance

  • During the charter period, the ship shall be insured, at the value agreed upon in the charter and in the way consented to by the shipowner, by the charterer at his expense.


Re delivery art 13

Re-delivery (Art.13)

  • -----Time & place---‘-The Charterers shall at the expiration of the Charter period redeliver the Vessel at a safe and ice-free port as indicated. …

  • ----notice of redelivery The Charterers shall give the Owners not less than 30 days' preliminary and not less than 14 days' definite notice of expected date, range of ports or port of re-delivery. Any changes thereafter in Vessel's position shall be notified immediately to Owners.


Reference books i

  • -----dealy in redelivery ‘Should Vessel be ordered on a voyage by which Charter period may be exceeded Charterers to have the use of Vessel to enable them to complete voyage, provided it could be reasonably calculated that the voyage would allow re-delivery about the time fixed for the termination ….

  • -----condition ‘..Vessel shall be re-delivered to Owners in the same or as good structure, state, condition and class as that in which she was delivered, fair wear and tear not affecting class excepted.

  • The Vessel upon re-delivery shall have her survey cycles up to date and class certificates valid for at least the number of months agreed.


Non lien art 14

Non-lien (Art.14)

  • ------no possessory lien or maritime lien etc. ‘Charterers will not suffer, nor permit to be continued, any lien or encumbrance incurred by them or their agents, which might have priority over the title and interest of the Owners in the Vessel. …’

  • ------ indemnify : ‘Charterers shall indemnify and hold Owners harmless against any lien of whatsoever nature arising upon the Vessel during the period …. and against any claims against Owners arising out of operation of the vessel by Charterers ….


Reference books i

  • ----security : ‘Should the Vessel be arrested by reason of claims or liens arising hereunder by Charterers, Charterers shall at their own expense take all reasonable steps to secure that within a reasonable time the Vessel is released and at their own expense put up bail to secure release of the Vessel ….


Cmc art 149

CMC Art. 149

  • —indemnityclause

  • During the charter period, if the charterer’s possession, employment or operation of the ship has affected the interests of the owner or caused any losses thereto, the charterer shall be liable for eliminating the harmful effect or compensation for the losses.

  • Should the ship be arrested due to any disputes over its ownership or debts owed by the shipowner, the owner shall guarantee that the interests of the charterer is not affected. The owner shall be liable for compensation for any losses suffered by the charterer thereby.


Assignment and sub demise art 19

Assignment and Sub-Demise (art 19)

  • ----limits on assignment & sub demise: ‘The Charterers shall not assign this Charter Party nor sub-demise the Vessel except with the prior consent in writing of the Owners which shall not be unreasonably withheld and subject to such terms and conditions as the Owners shall approve …

  • ---no limits on sub charter other than sub demise, it is the liberty of charterer to sublet under voy./time c/p


Cmc art 1501

CMC art. 150

  • During the bareboat charter period, the charterer shall not assign the rights and obligations stipulated in the charter or sublet the ship under bareboat charter without the shipowner's consent in writing.

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  • CMC Art. 153 : the followings under time c/p of CMC provisions shall apply to bareboat c/p

  • Art 134 (safe port &trading limits), Art 135 (1)(lawful cargo), Art 142(condition of redelivery), Art 143 (legitimate last voyage)


Chapter ii bareboat charter with hire purchase

Chapter II Bareboat charter with hire purchase

  • Special provisions other than bareboat c/p

  • I Transfer of title of property and risks (Art.26,31)

  • ---time to transfer title: On expiration of this Charter and …Charterers have fulfilled their obligations ….. that on payment of the last month's hire installment ….. Charterers have purchased the Vessel with everything belonging to her and the Vessel is fully paid for …..


Reference books i

  • ----failing to pay on time : ‘If the payment of the installment due is delayed for less than 7 running days or for a reason beyond Charterers' control, the right of withdrawal …. shall not be exercised. However, any delay in payment of the installment due shall entitle the Owners to an interest of 10 percent. per annum …..

  • -----risks & expenses : ‘The Vessel with everything belonging to her shall be at Sellers' risk and expense until she is delivered to the Buyers, subject to the conditions of this Contract ….. after which the Sellers shall have no responsibility for possible faults or deficiencies of any description….


Time commence for purchasing contract art 26 27

time commence for purchasing contract: Art.26/27

  • On expiration of this Charter and …Charterers have fulfilled their obligations ….. that on payment of the last month's hire installment ….. Charterers have purchased the Vessel with everything belonging to her and the Vessel is fully paid for …..

  • the Owners are referred to as the Sellers and the Charterers as the Buyers.


Seller s guarantee art 29

Seller’s guarantee (Art.29)

  • ----non lien ‘The Sellers guarantee that the Vessel, at the time of delivery, is free from all encumbrances and maritime liens or any debts whatsoever other than those arising from anything done or not done by the Buyers or any existing mortgage agreed not to be paid off by the time of delivery.

  • ----indemnify ‘Should any claims, which have been incurred prior to the time of delivery be made against the Vessel, the Sellers hereby undertake to indemnify the Buyers against all consequences of such claims to the extent it can be proved that Sellers are responsible for such claims…..


Reference books i

  • ----bill of sale : ‘In exchange for payment of the last month's hire installment the Sellers shall furnish the Buyers with a Bill of Sale duly attested and legalized, together with a certificate setting out the registered encumbrances, if any.

  • -----registry : ‘On delivery of t he Vessel the Sellers shall provide for deletion of the Vessel from the Ship's Register and deliver a certificate of deletion to the Buyers.’


Instruments and costs art 29 30 32

Instruments and costs (Art. 29,30,32)

  • ----classification certificates etc. ‘The Sellers shall, at the time of delivery, hand to the Buyers all classification certificates (for hull, engines, anchors, chains, etc.), as well as all plans which may be in Sellers' possession….

  • ----Some instruments: ‘The Wireless Installation and Nautical Instruments, unless on hire, shall be included in the sale without any extra payment.


Reference books i

  • -----costs for dispatch of crew: ‘The Buyers undertake to pay for the repatriation of the Captain, Officers and other personnel if appointed by the Sellers to the port where the Vessel entered the Bareboat Charter or to pay the equivalent cost for their journey to any other place.


Part five bill of lading under charter party

Part FiveBILL OF LADING UNDER CHARTER PARTY

  • Key words and terms

  • INCORPORATION CLAUSE:并入条款

  • B/L under Charter party:租约提单/租船合同下签发的提单

  • Identify of carrier—承运人识别

  • Demise clause-光租条款(过户条款)


Part five bill of lading under c p

Part FiveBILL OF LADING UNDER C/P

  • It is normal for b/l to be issued by the master or other agent of the shipowner even though the cargo has been shipped under a c/p. Most standard charter forms make express provision to this effect while, in the event of the shipper being a party other than charterer.

    c/p

  • Shipowner ---------------------------charterer

    b/l sale or other

    holder of b/l (not charterer)


B l under c p and ordinary ocean b l

B/L under C/P and Ordinary Ocean B/L

  • General Ocean B/L

    ----Three functions according to CMC as well as other int’l conventions.

  • B/L under C/P

    -----the receipts for the goods shipper

    -----potential documents of title

    -----do not constitute evidence of the contract of carriage

    -----the relationship between owner and charterer is governed solely by the terms of c/p, unless the latter contains provision that its terms can be modified or superseded by the subsequent issue of a b/l.

    -----neither the Hague Rules , Hague/Visby Rules, Hamburg Rules, nor Rotterdam Rules are applicable to a b/l in the hands of charterer. That is one of reasons why it is common to have expressly incorporation clause in most standard c/p forms to incorporate those Rules into c/p. However, if the b/l under c/p is in the hands of party other than charterer, all Rules mentioned above shall apply.


Incorporation clause

INCORPORATION CLAUSE

  • It is the statement which incorporates some terms and clauses of one designated c/p into the b/l issued under c/p.

  • differences between c/p and ocean b/l

    ---freedom/compulsory

    ---privacy of contract rule

  • Purpose: from the view of shipowner, making no differences on obligations and rights of him under both c/p and b/l

  • Short form for b/l under c/p (only few clauses provided ----CONGENBILL, General Paramount Clause , General Average , New Jason Clause , Both-to-Blame Collision Clause etc.)


Which contract may be incorporated into b l

Which contract may be incorporated into b/l

  • The eventually holder of b/l is left quite unclear and uninformed as to which c/p (especially under sub-let) is the one intended to be incorporated.

    ------It depends on the exact meaning of incorporation clause in b/l

    ------Only the contract of carriage of goods shall be incorporated into b/l (such as voy.c/p)

    -------If there are a chains of voy.c/p and it is blank on the dates or which shall be referred in the b/l, only the head charter shall be incorporated into according to English Law (“San Nicholas” 1976 1 Lloyd’s Rep.8)


Common incorporation clauses

common incorporation clauses

  • “freight and all other conditions as per c/p”

  • “all the terms, conditions, exceptions as per c/p dated on XXXX”

  • “arbitration clause ”

  • “All terms and conditions, liberties and exceptions of the Charter Party, dated as overleaf, including the Law and Arbitration Clause, are herewith incorporated” (CONGENBILL cl.1)


The general principles of effectiveness

THE GENERAL PRINCIPLES OF EFFECTIVENESS

  • First of all, Effective words of incorporation must be found in the b/l itself without reference to the provisions of the charterparty. The followings shall be noted:

  • -----description issue: if the incorporation clause itself is wider enough to incorporate the provisions of charter party

    Eg. “all conditions and exceptions of c/p…” are appropriate to the carriage and delivery of goods and not extent to collateral terms such as an arbitration clause

  • -----consisitency issue: if the contents in c/p which intends to be incorporated into b/l make sense to b/l or conflict with expressed clauses in b/l

    In the event of any conflict, the provisions of b/l will prevail.

  • -----if the incorporation clause is conflict with that of international conventions or national laws related to bill of lading

    Eg, the obligation for providing seaworthy ship


Cmc art 95

CMC art 95

  • Where the holder of the b/l is not the charterer in the case of a b/l issued under a voyage charter, the rights and obligations of the carrier and the holder of the b/l shall be governed by the clauses of the b/l. However, if the clauses of the voy. c/p are incorporated into the b/l, the relevant clauses of the voy.c/p shall apply.

  • ----there are almost no any limits on this point. However, it is a little bit different in the judicial practice which differs in different maritime court.


Problems incorporation of arbitration clause

Problems : incorporation of arbitration clause

  • A. “All conditions and exception of c/p shall be incorporated…” X

  • B. “all terms whatsoever shall be incorporated…” X

  • C. “all disputes arising under this c/p shall be referred to arbitration ….”+ “All terms , conditions, exceptions and Arbitration Clause, are herewith incorporated…. X

  • D “all disputes arising under this c/p ,or any b/l issued hereunder, shall be referred to arbitration.”+ “All terms , conditions, exceptions and Arbitration Clause, are herewith incorporated…. √

  • E “all disputes arising under this c/p ,or any b/l issued hereunder, shall be referred to arbitration+ “arbitration under c/p shall be incorporated….” √

    Note: the arguable point on “shall be referred to arbitration…” under 1995 Arbitration Law and Chinese Arbitration Act.


Bill of lading clauses under charter party

BILL OF LADING CLAUSES UNDER CHARTER PARTY

  • GENCON’94 cl.10

    “b/l shall be presented and signed by the master as per ‘Congenbill ’b/l form, without prejudice to this charter party, or by the owner’s agent provided written authority has been given by owners to the agents, a copy of which is to be furnished to the charterers. The charterers shall indemnify the owners against all consequences or liabilities that may arise from the signing of b/l as presented to the extent that the terms or contents of such b/l impose or result in the imposition of more onerous liabilities upon the owners than those assumed by the owners under this charter party.”


Reference books i

  • NYPE’93 cl.30, (NYPE’46 cl.8, BALTIME cl.9, BARECON cl.20)

  • (a) The Master shall sign the bills of lading or waybills for cargo as presented in conformity with mates or tally clerk's receipts. However, the Charterers may sign bills of lading or waybills on behalf of the Master, with the Owner's prior written authority, always in conformity with mates or tally clerk's receipts.

  • (b)All bills of lading or waybills shall be without prejudice to this C/P and the Charterers shall indemnify the Owners against all consequences or liabilities which may arise from any inconsistency between this C/P and any bills of lading or waybills signed by the Charterers or by the Master at their request.

  • (c) Bills of lading covering deck cargo shall be claused: “Shipped on deck at Charterers', Shippers' and Receivers' risk, expense and responsibility, without liability on the part of the Vessel, or her Owners for any loss, damage, expense or delay howsoever caused.”


As presented

“as presented”

----the master is under a duty to the charterer to sign b/l as presented to him, breach of which the owner is liable.

---it is charterer to have the right to decide the form of b/l, not shipowner

----master is required to sign bills as presented, even if they conflict with the charter or expose the owner to liabilities other than those imposed by c/p.

----the few situation to refuse to sign b/l

(1)For cargo which has not in fact been loaded; (anti-dated b/l; or b/l in advance)

(2) which names a discharge port outside the allowed trading limits.

(3)sign clean b/l when he knows the goods were not in good order and condition when received.

(4)if b/l purports to bind third person he knows are not parties to the contract of affreightment;

(5)no authority to sign blank b/l


Without prejudice

“without prejudice”

  • It means that the rights and liabilities of the owner and charterer as between themselves under c/p will not be affected by the bill.

  • ----if owner was imposed greater liabilities than imposed by charter, the owner had a valid cause of action against the charterer for indemnity since the charterer had caused the master to issue b/l which conflicted with the charter and which subjected the owner to a loss.

  • ----the owner and charterer are of course, free to impose restrictions on the issuance of b/l. such as “in the event charterer wish issuance of liner b/l, then authority at each time to be requested from owners……”


Who is the carrier in case of b l under c p

Who is the carrier in case of b/l under c/p

  • Normally shipownerwould be regarded as the carrier since, despite the existence of c/p, he remains responsible for the management of the ship.

  • Generally, if the master signs the bills, which are issued as owner’s agent. (shipowner-carrier)

  • Any bills presented by charterer and signed by the master under the authority of the clause such as NYPE form, shipowner will be carrier.

  • The shipowner is a carrier even though the bill are signed by the charterer himself, providing that he indicates on the bill that he is signing on behalf of the master and owners.


Reference books i

  • If c/p provides that the master is authorised to sign b/l ‘as agent on behalf of the charterer’, then charterer is the carrier.

  • If charterer negotiates contract of affreightment in his own name and issues his own b/l, charterer is the carrier.

  • Charterer may also be a carrier where he merely signs b/l without indicating that he is acting as the agent of the master and owners.

  • Somehow, it is usual that charterer transfers carrier’s liabilities to owner under some clauses in c/p.– Identity of carrier clause /demise clause


Demise clause

Demise clause

  • ‘If the ship is not owned by or chartered by demise to the company or line by whom this b/l is issued, this b/l shall to be effect only , as a contract with the owner or demise charterers as the case may be as principal made through the agency of the said company or line who act as agent only and shall be under no personal liability whatsoever in respect thereof.’

  • ------such clause is invalid in the b/l since it attempts to exclude carrier liability as prescribed by International Rules.


Reference books i

Thank You All !

“3QORZ”


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