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Chapter CHAPTER 28

Recommended Clauses
Recommended Clauses
28.1 As discussed in Chapter 10, the clubs recommend a number of provisions to their
members for incorporation into their charters or contracts of carriage which are designed
to ensure that the member will not incur particular liabilities which are excluded from club
cover. Many of the recommended clauses seek to exclude or restrict a members
liabilities in respect of activities which are excluded from club cover.
28.2 So, for example, clubs exclude liabilities in respect of cargo damage where the
cargo is carried on terms which are more onerous than the liabilities imposed upon a
carrier in the Hague or Hague-Visby Rules and there is a recommended clause for
incorporation into contracts of carriage which seeks to ensure that these Rules are
incorporated into the contract. Likewise, clubs exclude losses arising from the carriage of
certain nuclear cargoes and again there is a clause recommended to members for
incorporation into their contracts of carriage which seeks to ensure that the carrier does
not incur any such liabilities.
28.3 A number of the clauses which are recommended by the clubs are already
contained in standard form charterparties and bills of lading but some are not and where
that is the case members are recommended to use these clauses. In the event of a
failure to use an appropriate term, the clubs usually reserve to themselves a discretion to
reject or reduce any claim by a member to the extent to which the claim would not have
arisen if the member had used the recommended term. Such provisions usually place the
burden of proving that the claim would not have arisen on the member. Although the
incorporation of these clauses merely carries the recommendation of most clubs, any
liabilities faced by owners as a result of their failure to have incorporated them could
arguably give the club the right to decline cover also on the grounds of the members
imprudent trading or for agreeing to excessive contractual liabilities or his failure to act
as a prudent uninsured.
28.4 Except for standard form clauses which have been drafted by other shipping bodies,
such as BIMCO, there is some variation between the various clubs in the wording and
amount of detail of the Recommended Clauses. Also, some clubs do and some clubs do
not publish Recommended Clauses in their Rule-books or anywhere. Whether or not a
club does publish its Recommended Clauses members are strongly advised to contact
their own club to obtain their clubs preferred and most up-to-date wording of any
particular clause or to obtain a copy of all of the most up-to-date clauses recommended
by their particular club.
28.5 The following account of the effect of some of the clauses is not designed to be
exhaustive of all of the clauses. The examples of Recommended Clauses to be found at
Appendix I should not be relied upon as being the exact wording of any particular clause
but are simply illustrative of such clauses. Further, these examples are not designed to

be used in contracts of carriage and are simply provided by way of illustrations of typical
Recommended Clauses. Similarly, the commentary below is not based upon actual
clauses. Again, members are urged to seek guidance from their own club as to preferred
wordings and the most up-to-date wording of such clauses.
28.6 Examples of the types of Recommended Clause that can be found include the

Standard Law and Arbitration Clause 1

28.7 This Recommended Clause is a clause drafted by BIMCO2 for use in time voyage
charterparties, bills of lading or any other marine contracts. It seeks to subject the
contract to English law and refers all disputes to arbitration in London in accordance with
the Arbitration Act 1996. It provides that arbitrations are to be conducted in accordance
with the terms of the London Maritime Arbitrators Association. Where disputes are in
respect of so-called small claims (i.e. neither the claim nor counterclaim exceeds
US$50,000) or in any sum where the parties agree, the arbitration is to be referred to the
Small Claims Procedure available from the LMAA.

US Law, New York Arbitration Clause 3

28.8 This clause subjects contracts to the United States Code, Title 9 and the Maritime
Laws of the United States and refers disputes to arbitration in New York which are to be
conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc. As with
the previous clause, there is provision for referring small claims (i.e. less than
US$50,000) to the US Shortened Arbitration Procedure which is available from the SMA.

General Clause Paramount 4

28.9 This clause is recommended for use in all contracts of carriage: voyage charterparties, bills of lading and seaway bills. Already found in most common standard form
contracts of carriage, this provision is designed to ensure that the contract of carriage is
governed by the provisions of the Hague or Hague-Visby Rules where they have been
enacted either in the country of shipment or country of destination or in neither country.
This is designed to ensure that the carriers responsibilities start no earlier or continue no
further and that his liability should not be any more extensive than is provided for under
these conventions.5

Voyage Charter Clause Paramount 6

28.10 Under a voyage charterparty, in the absence of express provisions to the contrary,
the shipowner is subject to an implied warranty of absolute seaworthiness.7 This clause
is expressly to the contrary and seeks to override this implied term or indeed any other
express provisions to the contrary. Under this provision the owners obligation with regard
to the seaworthiness of his vessel is relaxed to that which was introduced by the Hague
Rules; that is, simply to exercise due diligence to ensure the vessels seaworthiness. In
addition, the clause provides that the owner will have the benefit of all the rights and

immunities and be subject only to the responsibilities which are accorded to a carrier
under that convention. Also, notwithstanding Article IV Rule 5 of the Hague and HagueVisby Rules,8 this clause limits the owners liability to 200 per package or unit. Further,
this clause provides that any bill of lading issued under the charterparty must contain a
clause paramount incorporating the Hague Rules.

Clause incorporating US COGSA 1936 9

28.11 The clubs recommend that all bills of lading for carriage to or from the United
States should contain this provision, which incorporates the provisions of the US
Carriage of Goods by Sea Act 1936 which in some respects is broadly equivalent to the
Hague Rules.

Clause incorporating Canadian COGWA 1936 10

28.12 This clause is equivalent to that noted immediately above in that it seeks to
incorporate the Canadian Carriage of Goods by Water Act 1936.

General Deck Cargo Clause 11

28.13 The Hague and Hague-Visby Rules12 both provide that the goods to which the
Rules apply do not include cargo which by the contract of carriage is stated as being
carried on deck and is so carried.13 The purpose of the General Deck Cargo clause is to
make it clear that goods carried on deck are entirely at the shippers risk.

US Deck Cargo Clause 14

28.14 As with the Hague and Hague-Visby Rules, the American COGSA 1936
provides15 that its provisions do not apply to cargo which is stated as being carried on
deck and is so carried and, as with the previous clause, this clause seeks to ensure that
such goods are carried at the risk of the shipper.

Hamburg Rules Clauses 16

28.15 Following the coming into force of the Hamburg Rules17 in November 1992, the
clubs of the International Group18 issued circulars to their members explaining club cover
and advising on amendments to contracts of carriage. Subject to a discretion being
exercised otherwise under Club Rules, it is still the case that liabilities, costs or expenses
arising from carriage on terms less favourable than those of the Hague or Hague-Visby
Rules will not be covered. Where, however, carriage is on such terms solely because of
the compulsory application by operation of law of the Hamburg Rules to the contract of
carriage, cover will be available. If, though, a member voluntarily adopts the Hamburg
Rules for a voyage to which the Rules do not compulsorily apply, his cover will be
28.16 Clubs of the International Group have recommended to their members clauses for
incorporation into contracts of carriage in order to deal with the application of the
Hamburg Rules. The first clause, Form A, can be used by members who wish to adopt

the Hague or Hague-Visby Rules in preference to the Hamburg Rules where possible.
The clause is designed to ensure that where one or other of the Hague, Hague-Visby or
Hamburg Rules regimes would be applicable on its own terms by reason of the location
of the port of shipment or by reason of the port of discharge, the Hague or Hague-Visby
Rules have been preferred. The incorporation of this clause, however, is no guarantee
that proceedings will be commenced in a state which has not ratified the Hamburg Rules
and any cargo claimant might have the right to bring proceedings in a state which is a
party to the Hamburg Rules in a case where the Hague or Hague-Visby Rules have been
applied in preference to the Hamburg Rules.
28.17 The other clause recommended by the clubs, Form B, has been drafted with a view
to compliance with Article 23(3) and (4) of the Hamburg Rules. By Article 23(3) the
document evidencing any contract of carriage which is subject to the Hamburg Rules
must contain a statement that the contract of carriage is subject to the Hamburg Rules
and that any stipulation to the contrary to the detriment of the shipper of consignee is
void. In this way the Hamburg Rules attempt to ensure that even if proceedings are
commenced in a non-contracting state, the Rules will nevertheless apply. Where a
contract of carriage does contain such a statement, the courts in a state which is a
signatory to the Hague or Hague-Visby Rules might apply the Hamburg Rules to the
contract inasmuch as they are more burdensome to the carrier. This is so because the
Hague and Hague-Visby Rules allow the carrier to surrender his rights and increase his
liabilities under those Rules.19
28.18 Where no such statement is contained in the contract of carriage, Article 23(4) of
the Hamburg Rules requires the carrier to compensate the cargo claimant for any loss he
has suffered by reason of not incorporating such a statement. This provision enables a
cargo claimant to sue in a contracting state where, by reason of the omission of a
statement in the contract of carriage, the cargo claim has been dealt with in a noncontracting state without regard to the Hamburg Rules. The clubs have, therefore,
warned members of the potentially adverse consequences of omitting such a statement
from their contracts of carriage to which the Hamburg Rules apply. Form B is suggested
to members to enable compliance with Article 23(3) and (4) and it should be used only
when the carriage is between states which are contracting parties to the Hamburg Rules.
28.19 The clubs have also suggested a clause to be incorporated into contracts of
carriage of cargo on deck with the agreement of the shipper under the Hamburg Rules.
The deck-carriage clause is designed for over-stamping on contracts of carriage.
28.20 In recommending the use of these clauses, the clubs have been careful to give
caveats to their members. First, the use of a clause paramount is not of itself a guarantee
that the contract of carriage will be entirely appropriate for use on voyages covered by
the Hamburg Rules. Secondly, the recommended clauses have been designed primarily
for incorporation in contracts of carriage subject to English law and jurisdiction. For those
members who use contracts of carriage which are subject to law and jurisdiction other
than English, they are recommended to seek advice from local lawyers as to whether the
clauses will be of benefit under the relevant applicable law. This advice is particularly

important in those jurisdictions where contracts of carriage are construed against the
carrier in cases of ambiguity. Further, the clubs have suggested to members who wish to
use these new clauses, that they seek confirmation from their club as to their suitability.
28.21 On the question of liability arising in connection with the issue of bills of lading
under charterparties, the clubs have suggested a charterparty clause which provides that
neither the charterers nor their agents shall permit the issue of a bill of lading, waybill or
other evidence of the contract of carriage incorporating the Hamburg Rules or other
legislation which imposes liabilities exceeding those under the Hague and Hague-Visby
Rules, where such legislation or Hamburg Rules are not compulsorily applicable. The
clause goes on to provide for an express indemnity to owners should charterers breach
this clause.

Himalaya Clause 20
28.22 This clause seeks to overcome the English rules as to privity of contract by making
some of the ships servants, agents and independent contractors (i.e. those who are not
a party to the contract of carriage) parties to the bill of lading contract to enable them to
have the defences and limitations which are available therein. The clause achieves this
by enabling the carrier to contract on behalf of all servants, agents and independent
contractors; this category would include ships crew and stevedores. On their behalf, the
carrier agrees that they will be under no liability to the shipper, consignee, owner or
holder of bill of lading and in any event the benefits of all rights, exemptions and
limitations to which the carrier is entitled under the bill of lading or under the Hague or
Hague-Visby Rules are extended to this category of persons. In this way, aggrieved
cargo interests are prevented from skirting the bill of lading or applicable Hague or
Hague-Visby Rules and obtaining any or any better rights by pursuing the servants or
agents of the shipowner rather than the carrier himself.21

Both-to-Blame Collision Clause 22

28.23 This provision is required for US trades and it is designed to avoid an anomalous
situation under American law of Carriage of Goods by Sea.23 It seeks to avoid this
anomaly in a somewhat circuitous manner. In English law the carrying vessel is usually
exempted from liability in respect of loss or damage to cargo caused by a collision. If the
carrier has not expressly reserved himself this exemption he will receive the exemption
by virtue of the so-called error of navigation defence under Article IV Rule 2(a) of the
Hague or Hague-Visby Rules which are either applied by law or apply as incorporated in
the contract of carriage.
28.24 Under US law24 the position is the same. The cargo owner cannot recover at all
against the carrying vessel by virtue of the error of navigation exemption. According to
US case law, however, it has been held25 that where the collision is caused by the fault of
both vessels (as is usually the case) and cargo is damaged, the cargo owner can recover
in full against the non-carrying vessel (regardless of his appointment of blame for the
collision). Again, according to US case law, having settled the cargo claim the non-

carrying vessel can then claim half of those damages from the carrying vessel.26 The
anomalies are, first, that the carrying vessel is deprived of much of the benefit of the
exemption clause by something of a back door route in that he will be paying towards
the cargo claim by virtue of having to partly indemnify the non-carrying vessel. Secondly,
the carrying vessel is actually in a worse position in being partly to blame than he would
have been if he were wholly to blame. If he were wholly to blame this means that the
non-carrying vessel would have no blame and the cargo owner would never have been
able to sue the non-carrying vessel, which in turn would have had no liability to be
indemnified by the carrying vessel.
28.25 In order to overcome such a peculiar situation, carriers are recommended to
incorporate the both-to-blame collision clause. This clause seeks to complete the
circular movement of claims by requiring the cargo owner to indemnify the carrying
vessel in respect of any liability that the carrying vessel has to the non-carrying vessel in
respect of the liability of the non-carrying vessel to the cargo owner. It means that where
both vessels are to blame and the cargo owner cannot, by virtue of the error of
navigation defence, claim against the carrying vessel, should he then claim against the
non-carrying vessel and in turn the non-carrying vessel claim against the carrying vessel,
the carrying vessel can then claim an indemnity in the same amount from the cargo
owner. In effect, whatever the cargo owner receives from the non-carrying vessel with
one hand he has to pay back to the carrying vessel with the other hand.
28.26 There are both-to-blame collision clauses for incorporation into both bills of lading
and charterparties.27

New Jason Clause 28

28.27 This provision is recommended for use by carriers engaged in trading to the United
States or where the United States Harter Act 1893 or the US Carriage of Goods by Sea
Act 1936 is incorporated into the contract of carriage. There is a difference between
English law and American law with regard to an owners right to claim contributions in
general average.29
28.28 The general rule under English law is that where a general average situation has
arisen because of the actionable fault of one of the parties to the event, the party at fault
is not entitled to recover a general average contribution from any of the other parties to
whom he would be liable in respect of that fault. If, however, the party (e.g. the carrier) is
exempted by contract from that liability, then the fault will not be actionable. Where a
contract of carriage contains exemptions in favour of the carrier, therefore, the carrier will
not be denied the right to recover general average contributions from the other parties
even though, but for the contractual exemption, he would have been liable.30
28.29 Accordingly, where the contract of carriage is subject to the Hague or Hague-Visby
Rules, any loss or damage arising from causes for which the carrier is exempt from
liability31 will not give rise to an actionable fault on the part of the carrier and so the
carrier would still be entitled to recover in general average from the other parties. Where,
for example, the general average event arises from a collision for which the carrier is

responsible, this would prima facierepresent an actionable fault but the carrier could rely
upon the Hague or Hague-Visby exemption in respect of acts, neglects or defaults in the
navigation or management of the ship,32 and in this way he not only could defend himself
against a cargo claim but is also not deprived of claiming a general average contribution
from cargo interests.33
28.30 The position under US law is somewhat different. The Harter Act 1893 and COGSA
1936, which are broadly equivalent to the Hague and Hague-Visby Rules, provide that if
the shipowner has exercised due diligence to make the ship seaworthy, neither he nor
his servants nor charterers shall be liable for loss or damage arising from, inter alia,
errors in navigation or management of the vessel.34
28.31 In the US case of The Irrawaddy,35 however, it was held that this exemption to the
carriers liability did not entitle the carrier to claim contributions in general average when
the loss was caused by the negligence of the carriers crew. It may be said that although
the carrier can use the statutory exemption to shield himself from the cargo claim he
cannot then use this shield as a sword in order to carve out a claim in general average. In
order to give the shipowner the right to claim general average contributions in such
circumstances a negligent general average clause was devised known as the Jason
Clause after name of the case in which such clause was first upheld as being
valid.36 The clause has appeared in various versions and is now known either as the
Amended Jason Clause or, more commonly, the New Jason Clause.37

GA Clause for Dutch Ports 38

28.32 In similar fashion to the position in the United States, the Dutch Commercial Code
also prohibits recovery of general average contributions where the event giving rise to the
general average expense was caused by the fault of the carriers servants.39 The clause
recommended provides that where there has been fault of the master or crew in the
navigation or management of the vessel, the carrier will still be entitled to recover general
average contributions from the consignees.

P&I Bunkering Clause 40

28.33 Under a voyage charter, unless expressly provided otherwise, the owner has an
implied duty to proceed on the chartered voyage without departing from the proper
course. If the proper course is not stated in the charter, it is presumed to be the usual
route or the most direct geographical route.41 This recommended clause entitles an
owner to depart from the customary or most direct route in order to take bunkers and it
allows this whether or not the bunkers are actually required for that particular chartered
voyage. In other words, the clause seeks to protect the owner from claims that he has
deviated from the voyage.

Voyage (or Deviation) Clause 42

28.34 This recommended clause entitles an owner under a voyage charterparty to depart
from the contractual route in circumstances which are more extensive than simply picking

up bunkers as provided for in the previous clause. This clause gives a wide liberty to the
shipowner to depart from the contractual route but it should be noted that it is not so wide
as to enable the owner to nullify the charter or to call at ports totally outside the range of
the charter such as to make the original agreed charter voyage a nonsense; on a voyage
from Southampton to Lisbon it would hardly permit calling at Cape Town.43

Strike Clause 44
28.35 This short clause is designed to relieve the shipowner from any liability for loss,
damage or delay arising from strikes, stoppages and other labour disputes.45

Carriage of Nuclear Materials Clause 46

28.36 Club Rules provide that unless otherwise agreed with the managers in writing, a
member is not insured against any liabilities, costs or expenses arising from the carriage
of nuclear materials except for a few stated exceptions.47 This clause, for use in either
time or voyage charters, expressly excludes the carriage of the prohibited cargoes whilst
allowing carriage of the permitted cargoes only with owners prior approval.

General Ice Clauses 48

28.37 For use in voyage charterparties, these are clauses in respect of problems arising
from ice at both the port of loading and port of discharge and there are two clauses
dealing with each port.
28.38 In the clause designed for the port of loading, the master is at liberty to leave an
ice-bound port without loading cargo and charter is rendered null and void in the event
that the port of loading is inaccessible by reason of ice at the time that the vessel is ready
to proceed to it from its last port of call or at any time on its voyage to the ice-bound
loading port or after its arrival there. If during loading the master fears the vessel will
become frozen in, he has liberty to leave the port part-loaded and the part-loaded cargo
can then be forwarded to the contractual destination at the owners expense against
payment of freight.
28.39 In the case of the port of discharge, the clause provides that in the event of the
vessel not reaching the port by reason of ice, the receivers have the option of paying
demurrage and keeping the vessel waiting until navigation is reopened or of ordering the
vessel to a safe and immediately accessible port. Any such orders must be given within
48 hours after notice has been given to charterers of the impossibility of reaching the
port. If during discharging the master fears that his vessel could be frozen in he has
liberty to leave and discharge the remainder of the cargo at the nearest accessible port.
The clause provides that upon delivery at such a port all the condition of the bill of lading
shall apply and the vessel shall receive the same freight as if it had discharged at the
original port of discharge except that if the substitute port is more than 100 nautical miles
from the original port the freight will be increased in proportion.

Conwartime 2004 Clause 49

28.40 This clause was drafted by BIMCO for use in time charterparties. The clause is
another example of a clause which seeks to excuse members from performing activities
under their charters, liabilities for which are excluded from club cover.50 The clause
requires charterers to either obtain the written consent of the owners or else to refrain
from ordering the vessel to any area where it appears in the reasonable judgement of the
owners or of the master that it might be exposed to war risks. Also, the clause provides
that if the vessel is in an area which becomes dangerous it is at liberty to leave that area.
Further, the clause provides that the vessel shall not be required to load contraband or
pass through blockades.
28.41 Under this clause owners are given liberty to effect war risks insurance in respect of
P&I,51 hull and machinery, loss of earnings and crew risks. Calls and premiums for such
insurances are for owners account unless the vessel is within a war risks Additional
Premium zone or is due to enter one, in which case the clause requires charterers to
reimburse the owners in respect of premium.
28.42 The clause also entitles owners to reimbursement from charterers in respect of any
additional wages or bonuses which become payable to the crew under the terms of their
employment contracts. In addition, the vessel has liberty to comply with orders and
directions regarding its movements which are issued by the flag state of the vessel or
other government to which the owners are subject or of the United Nations Security
Council, European Community or any other supernational body or national laws to which
the owner is subject or of the insurers from which the owner has obtained war risks
28.43 Also, the vessel is given liberty to make diversions to avoid, inter alia, confiscation,
arrest or other sanctions. If under this clause the vessel does or fails to do anything
which would otherwise be regarded as a deviation, it shall be executed. Where the
owners do refuse to proceed to a nominated loading or discharging port they are required
to notify charterers, who have 48 hours to nominate a safe port failing which the owners
may discharge at a safe port of their own choice.

Voywar 2004 52
28.44 This clause is the equivalent to the previous provision, for use in voyage charters.
In the case of a voyage charter, if prior to loading it appears in the reasonable judgement
of the owners or master that the vessel could be exposed to war risks, the owners are
entitled to cancel the charter. If the charter provides for loading at a range of ports and
one or more of the nominated ports are attended with apprehended war risks, owners are
required to allow charterers to nominate any other safe port in the range and can only
cancel the charter where the charterer fails to make such a nomination within 48 hours.
28.45 Owners are given the right to avoid discharging at ports attended by war risks and
to give 48 hours notice to charterers to nominate an alternative safe port and, failing
such a nomination, the owner may discharge at any safe port of his choice in complete
satisfaction of the contract of carriage. In addition, owners are entitled to recover from the
charterer the extra expenses involved in discharging at a different port. Where discharge

takes place at any port other than the original loading port, the owner may recover full
freight and if the extra distance exceeds 100 miles, owners can claim additional freight at
the charter rate and owners are given a lien on the cargo for such freight and expenses.
Under the clause the vessel has liberty to change its course to avoid war risks and where
this new route exceeds the contractual route by a distance of more than 100 miles the
owner is entitled to extra freight.
28.46 As with the clause previously considered, the vessel has liberty to comply with
orders of governments, the United Nations Security Council, etc.53 Again, the vessel can
avoid ports which could expose the vessel or crew to detention. Should any change in
route, voyage or port occur then such changes are not to be regarded as a deviation.

War Risks Deviation Clause 54

28.47 This is a much shorter and less detailed clause which simply allows the vessel to
comply with orders as to change of ports, routes, stoppages and delivery in accordance
with the directions of the government of the vessels flag or any other body with authority
to give such directions or under the war risks insurance cover.

Stowaways Clause 55
28.48 In recent years owners have suffered much inconvenience and incurred large
expenses in having to deal with stowaways found on board their vessels. Expenses can
include the costs of clothing, provisions and medical treatment whilst on board followed
by further hospitalisation, accommodation and repatriation when landed and can expose
the owners to fines and the vessel to detention. Stowaways found at American ports can
be a most expensive problem. The question arises as to whether it is the owner or
charterer or container owner/operator or cargo interests that is liable for such expenses.
28.49 This clause seeks to resolve these disputes and apportion liability for the costs and
expenses of stowaways according to the means by which they gained access to the
vessel. If they gained access by hiding in cargo and/or containers shipped by the
charterers then liability rests with the charterers; otherwise the responsibility lies with the
28.50 This clause is designed for use in time charters and provides that charterers
warrant to exercise due diligence in preventing access to the vessel by stowaways. If
stowaways do gain access by means of hiding in cargoes and/or containers shipped by
charterers this will amount to a breach of charter by charterers for which they are liable
and charterers are required to indemnify owners and hold them harmless in respect of all
costs, expenses, fines and loss of time and the vessel is to remain on hire. Should the
vessel be arrested as a result of having stowaways on board, charterers are required to
take reasonable steps to secure its release at their expense.
28.51 If, on the other hand, stowaways have gained access to the vessel by means other
than hiding in cargo and/or containers shipped by the charterers, all time lost and all

expenses, costs, fines, etc. are to be for owners account and the vessel shall be off-hire.
It follows that owners are responsible for securing the release of the vessel from arrest.

Stevedore Damage Clause 56

28.52 This clause is recommended for use in time and voyage charterparties. It requires
that any damage caused by stevedores during the charterparty shall be reported by the
master to the charterers or their agents, in writing, within 24 hours of the occurrence or
as soon as possible and that the master shall use his best efforts to obtain written
acknowledgement of responsibility for the damage. Where the damage has affected the
seaworthiness or proper working of the vessel it must be repaired without delay to the
vessel and it is to be repaired in the charterers time and paid for by the charterers. Other
repairs can be done at the same time or later in owners time but all repairs of stevedores
damage are for charterers account and that is so whether or not payment had been
made by stevedores to the charterers.

Bunker Quality Control Clause 57

28.53 The supply of inferior bunkers by the charterers can cause damage to the vessels
engines and auxiliaries and result in reduced speeds and loss of time.58 This clause, for
use in time charterparties, provides that charterers shall supply bunkers of a suitable
quality and which conform to specifications agreed under the charter.
28.54 At the time of delivery of the vessel under the charter, owners are required to
provide to charterers the bunker delivery notes and any samples of fuels on board.
During the charter the charterers are required to provide the bunker delivery notes to the
master/ owners at the time of the supply of bunkers and samples are to be taken and
sealed in the presence of representatives of both owners and the charterers. Such
samples are to be retained by the vessel for 90 days after the bunkers are supplied or for
whatever necessary period if there is an on-going dispute. The clause provides owners
with the right to claim against charterers for any damage caused by the use of unsuitable
bunkers and owners are not to be responsible for any reduction in speed or increased
bunker consumption or any time lost or other consequences arising out of the use of
unsuitable bunkers.
1 Infra, Appendix I(a).
2 The Baltic and International Maritime Council.
3 Infra, Appendix I(b).
4 Infra, Appendix I(c).
5 See Scrutton on Charterparties and Bills of Lading, 21st edn., 2008, at para. B1 p.
374 et seq., Carver on Bills of Lading, 2nd edn., 2005 at paras. 9.087-9.096.
6 Infra, Appendix I(d).
7 See Scrutton, op. cit. fn. 5 supra, at A51.

8 Article IV Rule 5 provides: 5(a) Unless the nature and value of such goods have been
declared by the shipper before shipment and inserted in the bill of lading, neither the
carrier nor the ship shall in any event be or become liable for any loss or damage to or in
connection with the goods in any amount exceeding 666.67 units of account per package
or unit or 2 units of account per kilogramme weight of the goods lost or damaged,
whichever is the higher.
(b) The total amount recoverable shall be calculated by reference to the value of such
goods at the place and time at which the goods are discharged from the ship in
accordance with the contract or should have been so discharged. The value of goods
shall be fixed according to the commodity exchange price, or, if there be no such price,
according to the current market price, or, if there be no commodity exchange price or
current market price, by reference to the normal value of goods of the same kind and
(c) Where a container, pallet or similar article of transport is used to consolidate goods,
the number of packages or units enumerated in the bill of lading as packed in such article
of transport shall be deemed the number of packages or units for the purpose of this
paragraph as far as these packages or units are concerned. Except as aforesaid such
article of transport shall be considered the package or unit.
(d) The unit of account mentioned in this Article is the special drawing right as defined by
the International Monetary Fund. The amounts mentioned in sub-paragraph (a) of this
paragraph shall be converted into national currency on the basis of the value of that
currency on a date to be determined by the law of the Court seized of the case.
(e) Neither the carrier nor the ship shall be entitled to the benefit of the limitation of
liability provided for in this paragraph if it is proved that the damage resulted from an act
or omission of the carrier done with intent to cause damage, or recklessly and with
knowledge that damage would probably result.
(f) The declaration mentioned in sub-paragraph (a) of this paragraph, if embodied in the
bill of lading, shall be prima facie evidence, but shall not be binding or conclusive on the
(g) By agreement between the carrier, master or agent of the carrier and the shipper
other maximum amounts than those mentioned in sub-paragraph (a) of this paragraph
may be fixed, provided that no maximum amount so fixed shall be less than the
appropriate maximum mentioned in that sub-paragraph.
(h) Neither the carrier nor the ship shall be responsible in any event for loss or damage
to, or in connection with, goods if the nature or value thereof has been knowingly misstated by the shipper in the bill of lading.
See also, section 1.A. of the Carriage of Goods by Sea Act 1971 as inserted by the
Merchant Shipping Act 1995, Schedule 13, para. 45 (Conversion of Special Drawing
Rights into Sterling).
9 Infra, Appendix I(e).

10 Infra, Appendix I(f).

11 Infra, Appendix I(g).
12 Article I(c). See also, Scrutton, op. cit. fn. 5 supra, at para. B1 pp. 383-384.
13 A liberty provided in the bill of lading to carry goods on deck does not remove the
goods from the ambit of the Rules; Svenska Traktor aktiebolaget v Maritime Agencies
(Southampton) [1953] 2 Lloyds Rep 124.
14 Infra, Appendix I(h).
15 See US COGSA 1936, Title I, section 1(c).
16 Infra, Appendix I(i).
17 United Nations Convention on the Carriage of Goods by Sea 1978.
18 See Chapter 24 supra.
19 Article V.
20 Infra, Appendix I(j).
21 Scrutton, op. cit. fn. 5 supra, at para. A16A.
22 Infra, Appendix I(k).
23 Cooke, Young and Taylor, Voyage Charters, 3rd edn., 2007, at paras. 75.1-75.2.
24 Harter Act, 1893, section 3; US Carriage of Goods by Sea Act 1936 Title I, section
4(2)(a); see Coghlin, Baker, Kenny & Kimball, Time Charters, 6th edn., 2008, at p. 577.
25 The Beaconsfield (1894) 158 US 303; The Atlas (1876) 93 US 302.
26 The Chattahoochee (1899) 173 US 540.
27 It has been held that the clause was invalid in a bill of lading not issued under a
charterparty; see USA v Atlantic Mutual Insurance Co [1952] 1 TLR 1237. See also The
Frances Hammer [1975] 1 Lloyds Rep 305, Dist. Court, Southern Dist. of New York.
The legal effectiveness of the clause is doubtful but it remains in common use.
28 Infra, Appendix I(l).
29 See Lowndes and Rudolf, The Law of General Average and The York-Antwerp
Rules 13th edn., 2008, at paras. 00.56-00.57.
30 See The Carron Park (1890) 15 PD 203; Louis Dreyfus & Co v Tempus Shipping
Co [1931] AC 726; The Makedonia [1962] 1 Lloyds Rep 316.
31 See Article IV Rules 1 and 2.
32 Hague and Hague-Visby Rules Article IV Rule 2(a).
33 Under the York-Antwerp Rules 1974 and 1994, Rule D, adjustments can be made and
contributions sought without regard to fault, although this does not affect any remedies or

defences of the parties in respect of such fault; see Lowndes and Ruldolf, op. cit., paras
D.22 et seq.
34 Section 3 and US COGSA 1936 section 3.
35 (1898) 171 US 187.
36 The Jason (1912) 225 US 32.
37 For a more complete account of the effect of the clause, see Lowndes and Rudolf, op.
cit. fn. 29 supra.
38 Appendix I(m).
39 See Article 700.
40 Appendix I(n).
41 See The Indian City [1939] AC 562 especially at p. 584 per Lord Parker.
42 Infra, Appendix I(o).
43 See Scrutton, op. cit., fn. 5 supra at para. 127.
44 See Appendix I(p).
45 See Voyage Charters, op. cit., fn. 23 supra at paras. 25.1 et seq.
46 See Appendix I(q).
47 See paras. 10.63 and 12.11 supra.
48 Infra, Appendix I(r). See Voyage Charters, op. cit. fn. 23 supra, at paras. 27.1 et seq.
49 Infra, Appendix I(s).
50 See para. 12.10 supra.
51 Ibid.
52 Infra, Appendix I(t).
53 Supra at paras. 28.42-28.43.
54 Infra, Appendix I(u).
55 Infra, Appendix I(v).
56 Infra, Appendix I(w).
57 Infra, Appendix I(x).
58 See Nourse v Elder Dempster (1922) 13 Ll L Rep 197; a fire in bunkers supplied by
the charterers.