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MASTER ORAL (1). What is the difference between Bareboat and Demise Charter?

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slide2

What is the difference between Bareboat and Demise Charter?

Bareboat charter is by paying hire money take total control of the vessel as desponent owner (the desponentowner stands in place of and in lieu of the legal owner and with his responsibilities, although without legal title to the vessel) i.etachnical/crew management and Operation.

The bareboat charterer bears Operation (Running) cost and Voyage costs.

The Demise charter is similar to bareboat charter but the technical and crew management is given to the existing Owner’s management team by paying Management Fees, while bearing the vessel’s Operating Costs.

slide3

What are the various type of Ship’s Regitry?

A registry that is open only to ships of its own nation is known as a  close, traditional or national registry.

Registries that are open to foreign-owned ships are known as open registries (off-shore), and some of these are classified as flags of convenienceparticularly if there is no genuine link between the Flag and the ship..

slide4

“Bareboat Registration” (sometimes also called “dual” or “parallel” registration). 

This is a system which in many cases will allow a ship registered in one state (the state of primary registration or “flagging out” state) to be bareboat chartered to nationals of another state (the “flagging in” state) for a fixed period during which the bareboat charterer will operate the ship under the flag of the flagging in state.  During the period of the bareboat charter the primary registration will be cancelled or suspended (though for certain purposes only) but will revive upon termination of the bareboat charter.

slide5

How would you verify the Authenticity of Flag of Convenience vessels?

Crew COC verify with crew’s National Authority who issued.

Class certificates, Statutory certificates verify either with Flag State or Classification Society.

Any other certificates issued by Flag State , to verify with Flag State.

(Is this Master’s job?)

slide6

What will you do when two Refugees are not given details of their information, such as name, nationality?

Captain has already rescued them; and they have no benefit of not disclosing their information, if they left their country to seek residency or asylum in other country.

Antyhow, since the question was aked;

Mostly Refugees can be of same nationality, and most likely they are not the strangers;

The reason they don’t disclose may be;

They don’t understand, then you looked for translator amongst them who speaks English

They may be scared, then you explain them if they wanted to be landed at next port, and everything goes smooth, they give their information to speed up the landing process

If you still could not obtain, then inform Owner, P&I, and next port agent and follow their instructions.

slide7

How would you apply for COR?

The following documents are required

Close Registry

Forms

Application to Register

Declaration of Eligibility (Declaration of Ownership)

Supporting Documentation

Bill of Sale

Copy of Certificate of Incorporation (if owner is a body corporate)

Certificate of Survey for Tonnage & Measurement

International Tonnage Certificate

Builders Certificate (for new builds)

Deletion certificate/transcript from the current register or a written undertaking to provide one within six weeks

Copy of the ship’s current Continuous Synopsis Record

Mortgage registration forms (if appropriate)

In Myanmar – Permission from Myanma Investment Commision (MIC), Ministry of Transport, Income-tax clearance require

slide8

Open Registry

Appoint Law Firm by giving Power of Attorney

Open Off-shore company and Register

Forms

Application to Register

Supporting Documentation

Bill of Sale

Copy of Certificate of Incorporation (if owner is a body corporate)

Certificate of Survey for Tonnage & Measurement

International Tonnage Certificate

Builders Certificate (for new builds)

Deletion certificate/transcript from the current register or a written undertaking to provide one within six weeks

Copy of the ship’s current Continuous Synopsis Record

Mortgage registration forms (if appropriate)

slide9

Required documents for (bareboat charter) registration

Forms

Application to Register a bareboat charter ship

Declaration of Eligibility for a bareboat charter ship

Supporting Documentation

Copy of Certificate of Incorporation (if charterer is a body corporate)

Copy of the charter party agreement

Primary registration certificate

Certificate of Survey for Tonnage & Measurement

International Tonnage Certificate (ITC69)

Copy of the ship’s current Continuous Synopsis Record

slide10

In all registration;

If a new name, get approval from Flag State

Apply MMSI number, Inmarsat ID, AAIC, Call Sign and apply Ship station licence before apply for Registration

Once the application is complete, a Carving and Marking note will be issued to the attending surveyor.  Once signed and returned the Certificate of Registry can be issued.

slide11

How would you change the Flag?

Apply as required for Close, Open or Bareboat Registry

Obtain Carving Note, Ship’s permanent marking marked

Apply Minimum Safe Manning Document

Apply CSR

Arrange for review of SMM by Flag State and undergo Interim Audit for DOC and SMC

Apply crew COR if crew nationality different from Flag State

slide12

Obtain Ship Station Licence and re-programmed EPIRB, AIS, Inmarsat, VHFs, SVDR, SSAS, LRIT with new MMSI and Call sign

Change POR and Call Sign on lifeboats, L/Rafts container, Port of Registry on Life buoys

Supply new National Ensign Flag

Undergo Flag change survey if require

Change new Statutory certificates, stating “by the Authorization of New Flag State)

Endorse on all Documents where new Flag State name is required

Obtain new COR

slide13

What would you do when COR is lost?

Submit a letter providing details of the loss to the Registrar at your Port of Registry, which should include the Official Number and vessel's name (with photocopy of COR attached), along with payment of the appropriate fee for the reissuance of COR or a Provisional Certificate of Registry which to be surrendered in exchange of COR.

slide14

What is a mortgage?

A mortgage is a legal document that creates a security for a loan or other financial consideration, whereby, the registered vessel or share or a share of it is used as security. The person using the vessel as security and receiving the loan is called the mortgagor. The person taking the vessel as security and usually giving the loan is called the mortgagee.

Only registered vessels can have mortgages recorded against them. 

slide15

What is arrived ship?

a ship is considered arrived and the lay-time can commence when certain conditions specified in the charterparty(according to Notice Clause) are fulfilled,

i.e.

1) reach the designated position for loading or discharging,

2) vessel is ready in all respects for cargo operation and

3) NORproperly given  

slide16

What are NOR, NOP and LOP?

Notice of Readiness(NOR)

Notice presented to to the charterer, shipper, receiver or other person as required by the charter partyby masters or ships' agent stating the readiness of the arrived ship to load. It determines when the time starts to count.

slide17

Note of Protest

a written declaration by the Master of circumstances beyond his control which might have given rise to suspecting damages to the ship or cargo. It is to be made at the Notary Public (or) Consuls .

When the loss or damage not yet known

slide18

Letter of Protest

is a letter served by Master either to shipper, stevedores, charterers for performance that are inappropriate or failure in fulfilling their obligations which may cause future claims to the owner.

slide19

What is Master’s action when the ship has arrived but Charterer failed to load cargo?

  • Master should
  • Tender Letter of Protest
  • Sit out the laytime
  • when laytime expires , note protest, inform owner and wait for instruction
slide20

What is the purpose of Classification Societies?

The purpose of a Classification Society is to provide classification and statutory services

and assistance to the maritime industry and regulatory bodies (e.g Flag State Administration) as regards maritime safety

and pollution prevention, based on the accumulation of maritime knowledge and

technology.

slide21

The objective of ship classification is to verify the structural strength and integrity of essential parts of the ship’s hull and its appendages, and the reliability and function of the propulsion and steering systems, power generation and those other features and auxiliary systems which have

been built into the ship in order to maintain essential services on board. Classification Societies aim to achieve this objective through the development and application of their own Rules and by verifying compliance with international and/or national statutory regulations on behalf of flag Administrations.

slide22

By registering with Classification Societies the ship owners benefit from;

Knowing the condition of own ship

Knowing the ship is properly maintained by periodical surveys

Shippers attraction

Advantage in Insurance premium

Mortgaging

And Resale valuew

slide23

What is the purpose of Registration a ship?

  • To enable the ship to trade internationally;
  • to facilitate easier sale and purchase of the ship;
  • to facilitate ship finance (mortgages may not be obtainable for unregistered ships).
slide24

COR gives

identity of a ship

provides evidence of title to ownership

Indicates that the ship is engaged in lawful navigation

constitutes prima facie authority that the vessel is registered under the laws of the Flag State.

slide25

What is the difference between Statutory and Trading Certificates?

Statutory Certificates

Certificates issued to ships after relevant surveys as required by International conventions such as Safety Of Life At Sea (SOLAS), Load Lines (LL), Prevention of Marine Pollution from ships (MARPOL) and Tonnage Measurements are called Statutory Certificates.

Trading Certificates

Certificates that are required to be carried onboard besides Statutory Certificates to trade in certain area or to enter certain ports such as Certificate of Registry, Sanitary Exemption Certificates are called Trading Certificates.

slide26

What is Article of Agreement?

A contract between the Master of a ship and a crew member to record the conditions of employment for the crew for a voyage or a certain period of time signed prior to and upon termination .

Crew Agreements for each merchant ship generally list:

A description of the ship and it's owners

Name of the ship's Master

Where the article was signed/closed

Daily meal provisions for the crew

Rules or laws to be observed during the voyage

Particulars for each member of the crew, including name (signature), age, place of birth, previous ship, place

and date of signing, capacity , Certificate of Competency number (if any), when expected on board, salary, next of kin and address details

Particulars of discharge (end of voyage, desertion, sickness, death, never joined etc)

Records of Births, Deaths and Marriage

slide27

What is Salvage?

A service which confers a benefit by saving or helping to save a recognized subject of salvage when in danger from which it cannot be extricated unaided, if and so far as the rendering of such service is voluntary in the sense of being attributable neither to a pre-existing obligation, nor solely for the interests of the salvor.

slide28

The right to be rewarded for salvage at sea under common law is based both on equitable ( FAIR, REASONABLE. JUST. UNBIASED) principles and public policy and is not contractual in origin. The law seeks to do what is fair to both of the property owners and the salvors

  • Four elements for the salvage award
  • Recognized subject matter
  • Real danger
  • Voluntary service
  • Success
slide29

What considerations should be made when going for salvage operation?

The Salvage that can possibly be carried out by a cargo ship is towing a disabled vessel to a port of refuge. So, the question is assumed as consideration for towing instead of Salvage as follows;

slide30

What is the difference between LOF 95 and LOF 2000

Development of Lloyd's Open Form(LOF):

LOF was established in 1908 by Committee of Lloyd’s as an international standard salvage agreement.

The characteristic of LOF is so called “No cure-No pay.”

However, to meet with increasing attention to the environmental protection, radical changes Salvage Agreement and SCOPIC have been made to the principle of “No cure-No pay” by the introduction of Safety Net and Special Compensation since the 1980s.

slide31

Fittings and structure of the vessel are not specifically designed for towing

  • May not be strong enough to bear the weight or be shock loaded.
  • May cause damage or stress to structure of vessel
  • May cause undue wear on tow line
  • Maneuverability of the towing vessel is restricted
  • The rope used for towingmay not be completely suitable as a tow line
  • The possible absence of expertise in towing operation
  • Emergency Towing Booklet shall be consulted.
slide32

Then, in LOF2000 which came into use on 1 September 2000, the SCOPIC Clause was incorporated.

LOF 1980 : Introduction of Safety Net

LOF 1990 : Incorporation of International Convention on Salvage 1989 Introduction of Special Compensation Article 14

LOF 1995 : Revision following the changes of UK Maritime Shipping Act

LOF 2000 : Introduction of SCOPIC Clause

LOF 2011 : The latest version incorporating SCOPIC 2005 & 2007

slide33

Vessel dropped anchor at Lanthaya, is that an arrived ship?

A vessel is an "arrived ship" and the laytime allowed under the charterparty begins to count as soon as the following events occur:

1. The vessel must reach the contractual loading or discharging destination as stipulated in the charter. ("Geographical arrival".)

2. The vessel must be ready in all respects to load or to discharge or lie at the disposal of the charterers. ("Actual readiness".)

3. Proper Notice of Readiness ("NOR") must have been given to the shippers or consignees in the manner prescribed in the charterparty. ("Triggering off laytime".)

If the C/P stated to reach Lanthaya within Laycan, or if no berth is nominated the ship was an "arrived ship" when it arrived at the port limits, in which cases dropped anchor at Lanthaya is anarrived ship.

slide34

What will you do when there is wharf contact and hull damage?

  • Inform agent
  • Inform owner to arrange P&I
  • Collect evidence
  • The following evidence should be retained on board the vessel in order to facilitate the handling of the claim: 
  • the exact date, time and location of the incident;
  • details of the weather and tidal conditions;
  • details of those on the bridge/in the engine-room/at mooring or anchor stations prior to/at the time of the incident;
  • the identity of any pilots or tugs assisting the vessel at the time of the incident;
slide35

the identity of any witnesses ashore or on other vessels;

  • details of any maneuvers which took place leading up to the incident;
  • details of any communication between the vessel/pilot/tugs leading up to the incident;
  • details of the vessel’s draughts;
  • details of the vessel’s colour scheme so that paint marks on damaged property can be matched;
  • details of the vessel’s condition immediately following the incident, with particular regard to the condition of cargo on board and leakage of oil.
  • Copy data from SVDR into its removable drive
slide36

Documents to be ready

  • the original working chart (from which nothing should be erased);
  • deck and engine room movement books;
  • rough and fair deck and engine-room log books;
  • any navigational equipment logs;
  • course recorder print-out;
  • telegraph and engine data logger print-out;
  • echo sounder print-out;
  • photographs/video recordings of the damaged property (and the damage or lack of damage to the vessel);
  • vessel turning circle and stopping distance data sheet;
  • any reports produced by pilots, tugs or witnesses including the vessel’s crew and third parties.
slide37

Most FFO claims occur whilst entering or leaving port or whilst berthing, at which time there is nearly always a pilot on board. However in most countries the pilot’s authority does not supersede that of the master. Irrespective of whether pilotage is compulsory or voluntary the master remains in overall control of the vessel and the pilot is a servant of the vessel owner. This being the case, the owner of the vessel remains vicariously liable for any claim by a third party resulting from the negligence of either the pilot or the master.

slide38

Any incident should be notified to the Club immediately and the circumstances of the case investigated as quickly as possible. This is because:

  • not all jurisdictions place strict liability on the vessel;
  • even in locations where strict liability applies, it is often subject to certain limited defences, for example Act of God, force majeure, or sole negligence of a third party;
  • it may be possible to pursue a recourse action against another party, for example, the charterer, on the basis of a breach of a “safe port” warranty in the charter-party;
  • it may be possible to pursue a recourse action against the pilot, although the liability of a pilot is frequently limited to a very small amount by local law and, in any event, pilots seldom have any substantial assets.
slide39

What is Seaworthiness Certificate?

A certificate issued by a classification society surveyor to allow a vessel to proceed after she has met with a mishap that may have affected its seaworthiness. It is frequently issued to enable a vessel to proceed, after temporary repairs have been effected, to another port where permanent repairs ...

slide40

When do you contact P&I correspondent?

When crew sustained personal injury, death

When stowaways and Refugees onboard

Cargo Claims is expected

Salvage Agreement and SCOPIC Special Compensation and payment to the salvors under the SCOPIC clause (the SCOPIC remuneration which exceeds the salvage remuneration) shall be covered by the P&I Club

Loss of or Damage to Property

Collision

Oil Pollution

slide41

What Risks are under Protection?

  • PROTECTION (EXPENSES)
  • Liability for –
  • Injury, Illness or Death of
  • Stevedores
  • Visitors
  • Passengers
  • Crew members
  • Liability for-
  • Repatriation and substitution expenses of seaman
  • Loss/damage to effects of seaman & others
  • Shipwreck unemployment Indemnity
  • Stowaways and refugees
  • Net diversion expenses
slide42

What Risks are under Indemnity?

  • INDEMNITY (Losses)
  • Liability for –
  • Loss or damage to Property
  • Fixed or floating
  • Infringement of rights
  • e.g docks, jetties, buoys, fish farms
  • Liability for –
  • Pollution
  • Load, discharge, container lost, bunkering
  • Liability for –
slide43

Liability for –

  • Collision
  • 1/4th or 4/4th RDC (damage to other ship)
  • property/cargo onboard
  • Loss of life
  • sums in excess of sum property insured under H&M policy
  • Liability for –
  • Cargo
  • Loss, shortage, damage or other responsibility
  • costs of disposal of damaged cargo
  • failure of consignee to remove cargo
  • Through/transhipment B/L
slide44

Liability for –

  • Wreck removal
  • raising, removal, destraction, lighting, marking of wreck
  • property onboard if not covered by H&M
  • Wreck must be CTL
  • value of wreck for benefit of Club
  • Liability for –
  • Unrecoverable GA
  • Fines
  • Costs and Expenses
  • Omnibus Rules
slide45

How would you make the ship seaworthy under Hague Rule?

  • Due diligence to provide a seaworthy vessel (extends to manning, equipping and cargo-worthiness) before and at the beginning of the voyage.
slide46

What is FSA(Formal Safety Assessment)?

FSA is a structured and systematic methodology, aimed at enhancing maritime safety, including protection of life, health, the marine environment and property, by using risk analysis and cost benefit assessment. FSA can be used as a tool to help in the evaluation of new regulations for maritime safety and protection of the marine environment or in making a comparison between existing and possibly improved regulations, with a view to achieving a balance between the various technical and operational issues, including the human element, and between maritime safety or protection of the marine environment and costs.

slide47

FSA consists of five steps:

identification of hazards (a list of all relevant accident scenarios with potential causes and outcomes);

assessment of risks (evaluation of risk factors);

risk control options (devising regulatory measures to control and reduce the identified risks);

cost benefit assessment (determining cost effectiveness of each risk control option);

And recommendations for decision-making (information about the hazards, their associated risks and the cost effectiveness of alternative risk control options is provided).

slide48

In simple terms, these steps can be reduced to:

What might go wrong? = identification of hazards (a list of all relevant accident scenarios with potential causes and outcomes)

How bad and how likely? = assessment of risks (evaluation of risk factors);

Can matters be improved? = risk control options (devising regulatory measures to control and reduce the identified risks)

What would it cost and how much better would it be? = cost benefit assessment (determining cost effectiveness of each risk control option);

What actions should be taken? = recommendations for decision-making (information about the hazards, their associated risks and the cost effectiveness of alternative risk control options is provided).

slide49

How GA Contribution are made?

General Average contribution is the monetary contribution required of ship-owners and cargo owners in respect of general average expenditures and general average sacrifices.

The general average loss is contributed by the parties interested. In contribution of general average loss the contributory interest, amount to be made good and contributory values are considered.

There are

three main contributing interests' ship, cargo and freight. 

four main amount to be made good’ ship, cargo, freight and expenses. 

three main contributing values” ship, cargo and freight. 

slide50

If a general average situation arises the ships owner will normally appoint a firm of average adjusters to collect the general average contributions from all the parties liable within a general average claim. The adjusters work out how much each party has to pay based on the total value of the property rescued and the values of the property sacrificed and any expenditure to save the rescued cargo and vessel.This process takes a considerable period of time and as such a general average bond is usually sought in the interim from those liable before cargo is released. This general average bond is effectively a promise to pay whatever contribution is assessed, backed up by a general average guarantee form a bank or insurance company.

It is important to remember that the bond covers whatever contribution is assessed and is in relation to the cargo saved and not the value of your cargo on board.

slide51

What is Running Down Clause?

The Underwriters agree to indemnify the Assured for three-fourths of any sum or sums paid by the Assured to any other person or persons by reason of the Assured becoming legally liable by way of damages for

loss of or damage to any other vessel or property on any other vessel

delay to or loss of use of any such other vessel or property thereon

general average of, salvage of, or salvage under contract of, any such other vessel or property thereon, where such payment by the Assured is in consequence of the vessel hereby insured coming into collision with any other vessel.

slide52

What are INCOTERMS?

For business terminology to be effective, phrases must mean the same thing throughout the industry. That is why the International Chamber of Commerce created "INCOTERMS" in 1936.

INCOTERMS are designed to create a bridge between different members of the industry by acting as a uniform language they can use.

Each defines

Costs: who is responsible for the expenses involved in a shipment at a given point in the shipment's journey?Control: who owns the goods at a given point in the journey?Liability: who is responsible for paying damage to goods at a given point in a shipment's transit?

slide53

Incoterms or International Commercial terms are a series of international sales terms, published by International Chamber of Commerce (ICC) and widely used in international commercial transactions.

As of January 1, 2011 the eighth edition, Incoterms 2010 in use

slide54

Incoterms 2010 applicable for all modes of transport:

EXW : ex worksFCA : free carrierCPT : carriage paid toCIP : carriage and insurance paid toDAT : delivered at terminal – NEW!DAP : delivered at place – NEW!DDP : delivered duty paid

slide55

Incoterms 2010 only applicable for sea and inland waterway transport:

FAS : free alongside shipFOB : free on boardCFR : cost and freightCIF : cost, insurance and freight

slide56

What is FOB?

FOB – Free on board (named loading port)

The seller must themself load the goods on board the ship nominated by the buyer, cost and risk being divided at ship's rail. The seller must clear the goods for export.

The buyer must instruct the seller the details of the vessel and port where the goods are to be loaded, and there is no reference to, or provision for, the use of a carrier or forwarder.

slide57

What is CIF?

CIF – Cost, Insurance and Freight (named destination port)

Exactly the same as CFR except that the seller must in addition procure and pay for insurance for the buyer. Maritime transport only.

slide58

How many types of policies in Marine Insurance?

Voyage Policy: A voyage policy is that kind of marine insurance policy which is valid for a particular voyage.

Time Policy: A marine insurance policy which is valid for a specified time period – generally valid for a year – is classified as a time policy.

Mixed Policy: A marine insurance policy which offers a client the benefit of both time and voyage policy is recognized as a mixed policy.

slide59

Open (or) Un-valued Policy: (Open Cover)

Marinecargo insurance that providesblanketcover against  loss or damage to all goods transported by a specific carrier, or by a specific shipper, during a stated period. Under its terms, the insured is required to periodically provide the insurer with the description, quantity, and value of goods shipped during that period. Also called open cover.

slide60

Valued Policy:

A valued marine insurance policy is the opposite of an open marine insurance policy.

In this type of policy, the value of the cargo and consignment is ascertained and is mentioned in the policy document beforehand thus making clear about the value of the reimbursements in case of any loss to the cargo and consignment.

slide61

Floating Policy: 

A marine insurance policy where only the amount of claim is specified and all other details are omitted till the time the ship embarks on its journey, is known as floating policy.

slide62

Wagering or Honour policy:- (Policy Proof of Interest P.P.I)

A wager policy is one where there are no fixed terms of reimbursements mentioned.

If the insurance company finds the damages worth the claim then the reimbursements are provided, else there is no compensation offered. Also, it has to be noted that a wager policy is not a written insurance policy and as such is not valid in a court of law.

slide63

What is common carrier and their characteristics?

A common carrier is a carrier who, for hire or reward, holds himself ready to carry from one place to another of any person who chooses to employ him for the purpose and pay his charges.

slide64

Must accept and carry whayever goods are offered for carriage unless;

His carriage is already full

The goods offered are not of a kind he is accustomed to carry

The destination of the goods is not on his accustomed route

The goods are of dangerous nature and impose extraordinary risk

The goods would be harmful to others already accepted

slide65

A general ship placed on the berth with an intimation (indication) by the owner or charterer thereof that he is willing to carry without special conditions the goods of anyone who offers them for their carriage is a Common Carrier.

If the goods are carried under the terms of B/L he is not a Common Carrier.

slide66

What is Private carrier and their characteristics?

A carrier refuses to carry goods other than those of particular kind, and makes a special contract of carriage with each consignor in turn, he is a private carrier or special carrier.

Although he is bound by certain of the common law obligations, he is permitted to include an exception clause in his contracts relieving him from specified liabilities, at the same time entitled to the same exceptions from liabilities as a common carrier.

In respect of a Voyage Charter the owner is a private carrier.

slide67

A Letter of Indemnity is offered by Shipper in return of Clean B/L what will you do?

LOI -A person issuing a Letter of Indemnity promises to relieve ship and Owners from any responsibility or from any claim whatsoever and howsoever regarding condition / contents /total weight or any claim whatsoever at the discharge port.

There is no obligation on the Master to accept an LOI.

If the Master honestly believes that the cargo is damaged and he wishes to issue a claused Mates Receipt or a claused Bill of Lading, then that is his right. He is not obliged to accept an LOI in relation to goods that he believes to be damaged.

slide68

There may be a contractual obligation in the charterparty to accept an LOI for Dispute to the condition of the cargo, or for a discharge without production of Bills of Lading or for a change of destination, but there is a likelihood you will lose your P&I insurance cover.

Issuing Clean B/L mis-describing the cargo can lead to fraud that Owner knowing that the LOI was given in order to negotiate a Bill of Lading, that is inaccurate, to an innocent third party.

slide69

Master should;

Never accept LOI.

Inform the owner and accept only at the owner’s written instruction.

The Owners do not have to accept an LOI.

If the Owners do, make very certain that it is from someone who has the money to pay and that it is properly signed. Further, consider the impact on P&I insurance.

slide70

Explain about relationship between Master and Flag State?

  • Flag State assume jurisdiction under its internal law over each ship flying its flag and its master, officers and crew in respect of administrative, technical and social matters concerning the ship.
  • Ensure that each ship is in the charge of a master and officers who possess appropriate qualifications, in particular in seamanship, navigation, communications and marine engineering, and that the crew is appropriate in qualification and numbers for the type, size, machinery and equipment of the ship;
  • The master fulfils the attributes and displays his activity according to the legal laws of his flag state, of the marine regulations and of the international conventions.
slide71

The Master’s duties in relation to Flag state as pursuant to Merchant Shipping act are;

To open and maintain Crew article of Agreement

Entries in the Official Log Book

Reports of Births, Deaths , Marriage and missing persons onboard

Discharge and repatriation of seafarers and record in Seaman’s discharge book

Maintaining Discipline onboard

Health and safety of crew onboard

To exercise Standard grievance procedures onboard (Handle crew complaint as per MLC procedure)

slide72

What is own un-insured properties mean?

A standard clause in a maritime insurance policy which allows the insured to recover from the insurer any reasonable expenses incurred by the insured in order to minimize or avert a loss to the insured property, for which loss the insurer would have been liable under the policy.

This clause that requires the insured to make all attempts to protect any salvageable property. This clause attempts to make the insured take proper care of the property as his own uninsured property.

slide73

Define followings?

“LAYTIME” means the period of time agreed between the parties during which the owner will make and keep the vessel available for loading or discharging without without incurring demurrage.

“LAYDAY” the number of days included in laytime. Usually, laydays are stated separately for either loading or discharging.

Laydays also refers to the period of time during which vessel must tendernotice of readiness to load; these laydays end with the canceling date.

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“Reversible laydays” allowing a fixed total number of laydays for both loading and discharging. Reversible lay days permit the shipper to add to the days allowed for unloading any days he has saved while loading.

Paramount Clause - inserted in a contract of carriage to indicate that the Hague Rules or Hague-Visby Rules are applicable to the bills of lading issued.

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Cesser or Lien Clause;

It is customary to insert a special clause in voyage charterparties, where the charterers' liability ceases as soon as the cargo is shipped and the advance of freight, deadfreight and demurrage in loading (if any) are paid, the owners have a lien on the cargo for freight, deadfreight, demurrage and general average contributions.

The clause is sometimes called a "Cesser and Lien Clause".

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In Time Charter the shipowners have no (lien)any contractual right to retain the goods against bill of lading holders, unless bill of lading holders and the charterers are the same legal entity.

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What is the Deck Cargoes limitation of Liability under Hague Rule?

Article 1(c) of the Hague Rules provides that:

“Goods” includes goods, wares, merchandises, and articles of every kind whatsoever, except live animals and cargowhich by the contract of carriage is stated as being carried on deck and is so carried.

Thus, deck cargo is entirely excluded and the carrier can claim exemption from liability.

But, where cargo is carried on deck without specific agreement between the parties as to the carriage on deck, and no statement appears on the face of the bill of lading that goods carried on deck are in fact so carried, the carriage is subject to the Rules.

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The limitation of carrier’s liability is stated in Article IV Rule 5 which provides that:

“Neither the carrier nor the ship shall in any event be or become liable for any

loss or damage to or in connection with goods in an amount exceeding 100 pound

sterling per package or unit, or the equivalent of that sum in other currency

unless the nature and value of such goods have been declared by the shipper

before shipment and inserted in the bill of lading”.

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What are the Master’s responsibilities for Deck cargo?

Ensure the deck cargo carriage is agreed by the shipper

Ensure deck cargo is properly stowed and lashed as required by Cargo Securing manual

Ensure the cargo is stated in B/L as carried on deck

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How many types of Ship employment are there?

Liner

Charter

a. Time charter

b. Voyage charter

c. Voyage and Time charter

d. Bareboat charter

e. Demise Charter

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How Bill of Lading generate?

As a contract, the bill of lading serves the same purpose as any other contract entered into

between two parties.

The face of the bill of lading provides for the entry of information

required for the transportation of the freight.

The reverse side usually contains the terms

and conditions of carriage.

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Bill of Lading Preparation

Bills of lading must be legibly written in ink, indelible pencil, or preferably, typed. It is

important that all information be written or typed in the exact space provided for it. B/L should be numbered.

bills of lading must include:

1. Names of consignor and consignee.

2. Origin and destination points.

3. Number of packages.

4. Description of freight.

5. Weight, volume, or measurement of freight (if applicable to the rating of the

freight).

B/L are issued in sets of 2 or more negotiable (originals) and 1 or more non-negotiable (copies) including Master’s copy.

B/L should be correctly dated with the actual date of shipment.

The apparent condition of goods as remarked in Mate receipts shall be claused on B/L.

Practically this is done by Owner’s agent, based on their mate receipt’s copy and shippers obtained B/L by surrendering their Mate receipt copy at the Agent

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What are the functions of Bill of Lading?

It’s a receipt that the cargoes described in the B/l is actually loaded onboard.

It is a contract between carrier and shipper

It is a document of title to the goods

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What are the different types of B/L?

There are many types of bills of lading one can meet in practice. Some of them listed below:

Bearerbill of lading - A bill of lading, which does not identify a consignee but is merely marked 'to order'. When a bearer bill is transferred to a third party, constructive possession can be transferred without the need for indorsement of the bill.

charterparty bill of lading - A bill of lading, which incorporates the terms of a charterparty.

charterer’s bill of lading - A bill of lading, issued by a charterer rather than a shipowner. Any implied or statutory contract that arises under this document will be with the charterer, rather than the shipowner.

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claused bill of lading(foul)- A bill of lading that contains adverse remarks as to the apparent order and condition of the goods to which it refers, or a bill of ladingwhich contains qualifications as to the weight or quantity of the goods loaded thereunder.

clean bill of lading - A bill of lading that notes the loading of goods in apparent good order and condition.

combined transport bill of lading - A bill of lading issued for carriage which will involve more than one mode of transport, for example, road and sea carriage.

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freight forwarder’s bill of lading- A bill of lading whereby the contractual carrier will be a freight forwarder, notwithstanding that this party will play no physical role inthe actual carriage of the goods.

freight prepaid bill of lading - A bill of lading marked in this manner will generally prevent the carrier from claiming freight from the bill of lading holder or from exercising a lien over its cargo.

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liner bill of lading - A bill of lading under which the carrier is responsible for loading, stowing and discharging the cargo.

long form bill of lading - A form of bill of lading issued by the carrier setting forth all the terms of the contract of carriage.

multimodal or combined transport bill of lading - A through bill of ladingwhich involves at least two different modes of transport, i.e. road, rail, air and sea.

named (nominate/straight) bill of lading - A bill of lading providing for the delivery of the goods to a named person, without also specifying "to order or assigns".

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ocean bill of lading - A bill of lading under which the carrier’s responsibilities for the cargo start with its loading and end with its discharge.

ocean through bill of lading - A "pure" ocean through bill of lading is a bill of lading whereby the issuer undertakes to be responsible for the carriage of goods by successive ocean carriers from the point of reception to final destination.

order bill of lading- A bill of lading which names a consignee, for example, 'to X or order'. The bill of lading must be indorsed by the consignee, by signing the reverse of the bill, when it transfers the document to a third party.

received for shipment bill of lading - A bill of lading which records receipt of the goods by the carrier at a time prior to that at which they are loaded onto the carrying vessel.

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shipped bill of lading - A bill of lading which records receipt of the goods by the carrier at the time they are loaded onto the carrying vessel.

shipowner’s bill of lading- A bill of lading under which the shipowner is the соntractualcarrier.

short form bill of lading - A form of bill of lading (supra) issued by the carrier incorporating by reference the terms of the contract of carriage set forth in the carrier’s long form bill of lading.

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spent bill of lading - A bill of lading which can no longer be used to transfer constructive possession in the goods which it represents, for example, where the person entitled to possession of those goods receives the bill of lading after it has actually taken delivery of the goods.

straight bill of lading - A bill of lading, which names a consignee but is not adocument of title due to the absence of words such as 'to order'. Such adocument is very similar to a waybill, save that delivery still has to be made against production of an original bill of lading.

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through bill of lading - A bill of lading that is issued when the carriage will involve transshipment. Depending on the terms of the bill, the initial carrier may continue to be liable after transshipment.

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Ship is German Flag and when alongside at Yangon, your crew are quarrel with stevedore. What will you do if you are a Master?

This is a very complicated, wide and awkward question and only comment can be given;

Before given comment there are things to be clarified.

Are the crew Myanmar?

Quarrel has different meanings, was that an argument or fighting?

Were the crew under influence of alcohol?

Were the crew under influence of Alcohol?

Was there any injury or property damage?

Was that a work related problem or personal?

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Base on the circumstances there are only two actions that can be taken to crew namely;

  • Disciplinary action
  • Criminal action (under host State jurisdiction)
  • Disciplinary offenses are defined by;
  • Flag State Crew Article of Agreement if there is one (some flag doesn’t have)
  • Contract between Company and crew
  • Contract between Company and SECD
  • As a Master it is important to solve the problem amicably between the stevedores depending on the seriousness of the quarrel as the situation might lead to;
  • delays by stevedores refuse to work
  • Problems in loading, stowage, lashing
  • Its best to resolve at the bottom level, like foreman, discussed peacefully to reach agreement, let the wrong doer apologize and urge the other to accept so that the work is not disturbed and owner’s interest is protected.
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If unable to settle, and if happened by stevedores fault then meet higher official, first repot verbally and if required followed by written protest for necessary appropriate action. If happened by crew fault, apologize on behalf of the crew and give guarantee that you’ll control the crew that this will not happen again, and inform proper action will take against responsible crew.

If it was crew fault, and if it would affect the vessel’s operation or owner’s interest, follow disciplinary procedures according to SMM or Human Resources policy, inclusive of Verbal, written reprimands or dismissal as necessary, and proper entry into Official Log Book. Inform crew representative at Yangon accompanied by detail report signed by witnesses to arrange dismissal and relieving.

Note: in future Master cannot endorsed on CDC for seaman character and ability anymore.

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If there was any criminal act, involving personal injury , inform Local crew Agent, arrange criminal case open at Police Station, and for medical treatment, and follow up accordingly to the fitness of crew to sail, if crew was a victim. If crew was Assailant , inform agent for out of court settlement if possible, follow by dismissal of the relevant crew.

This is just the general outline, and may need more to do depending on what really happened.

The Inclusion of Germen Flag was to confuse the candidate. The Flag State Jurisdiction on criminal cases extends if happens on High Seas normally, though there is no clear procedures and agreement. But if in Other State territory, the host state jurisdiction applies for criminal case.

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Although Flag State jurisdiction covers crew disciplinary offenses, in this particular case, Myanmar crew is subjected more to SECD’s Disciplinary Rule.

The Shipping Company these days does not make any effort of pursuing disciplinary cases deeply, rather they do not re-employ the crew.

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What does due diligence means?

Article III of the Hague Visby Rules and Hague Rules require the carrier to exercise "due diligence" before and at the beginning of the voyage to make the vessel seaworthy.

"Seaworthy" means that the vessel must be physically sound, she must have proper equipment and supplies and efficient and sufficient manpower. The vessel must also be "cargoworthy", that is completely fit and safe to receive, carry and protect the cargo.

The phrase "due diligence" is difficult to define. "Diligent" can mean that a person is attentive to duties or uses persistent effort or work to achieve some objective. In shipping, therefore, it may mean that the carrier must be careful, reasonable and honest in his duty to make the vessel seaworthy. He should show reasonable and ordinary care. However, it seems clear that the duty is only an "attempt". Because the obligation is not absolute, if the carrier fails, for some reasonable cause, he may not be liable for a breach of the obligation.

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"Whenever loss or damage has resulted from unseaworthiness the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption under this article."

This indicates that once the vessel is proved to have been unseaworthy, the burden then lies on the carrier to prove that he did exercise due diligence. 

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Any restrictions on the carrier's protection can be eased in two situations.

First, the obligation to exercise due diligence is only before and at the beginning of the voyage.

Secondly, the carrier will not be held to have failed to exercise due diligence if a defect causing unseaworthiness is of so latent a nature the due diligence could not have discovered it.

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In Marine Insurance the plain meaning of the phrase “want of due diligence” implies the absence of reasonable care and ordinary prudence, which are essential to the concept of negligenceand therefore “want of due diligence” and negligence mean the same thing

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What is Salvage and Towage?

The rescue of vessels or cargo in peril at sea, and the reward thereof is Salvage.

A service which confers a benefit by saving or helping to save a recognized subject of salvage when in danger from which it cannot be extricated unaided, if and so far as the rendering of such service is voluntary in the sense of being attributable neither to a pre-existing obligation, nor solely for the interests of the salvor.

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Towage Definition:

Towage service may be described as the employment of one vessel to expedite the voyage of another when nothing more is required than the accelerating (of) her progress.“

Towage implies that there is no "actual (or) imminent probable danger.“

Towage can also refer to the money due for towage services as in "towage fees

"Although there  is a maritime lien in respect of salvage, there is no maritime lien in respect of towage."

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What is Justifiable and Unjustifiable Deviations?

Justifiable

A deviation made to save or attempt to save life (e.g. responding to a 'Mayday';

a deviation made to avoid imminent danger (e.g. a TRS);

a deviation due to the default of the charterer, e.g. where I find the discharge port nominated by the charterer to be unsafe;

an involuntary. deviation due to force. majeure beyond my control; and

a deviation made to save property, e.g. for salvage purposes.

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Unjustifiable

Taking a route which is not the custom of the trade, for purely private reasons;

putting in to an intermediate port or place for stores or provisions which are not essential to the safe completion of the voyage;

putting in for bunkers for a future voyage when there is no clause in the contract of carriage permitting it.