The Swedish Club

Presentation for Reederei Nord

Bijela, Montenegro
31 May 2019
 Who we are
The Swedish Club
P&I, FD&D and H&M insurer

Martyn Hughes
Senior Claims Manager FD&D

Ellinor Borén
Claims and Loss Prevention Controller
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Today’s agenda

Points that arise from C/P and B/L obligations

• ETAs & NORs • C/P Obligations
• Tank Cleanliness • Importance of evidence
• Cargo surveyors and agents • B/Ls
• Sampling • Commingling/Blending/Additives
• LOPs • LOIs

Please feel free to ask questions as we go along

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C/Ps you use
• BPVoy5 (February 2016)
• ShellVoy5 (July 1987)

Almost 30 years separate them. Evident in the language used : e.g. BPVoy5
talks about e-mails & electronic B/Ls

1999 Shell Amendments

Distinguish Voyage Charters from Time Charters.

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Time C/P vs. Voyage C/P
• Time C/P : Charterer gets the use of the vessel to trade agreed cargoes,
in agreed areas
Charterer pays hire
Charterer usually provides the bunkers

• Voyage C/P : Charterer gets the carriage of cargo from A to B

Charterer pays freight
Freight includes a period for loading; carriage of the cargo;
a period for discharge (laytime)
Any excess : pays demurrage (agreed sum per day pro rata)

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This morning we focus on Voyage C/Ps

• So, we are talking about freight, laytime and demurrage

• How do these concern you as deck officers?

• Only indirectly, perhaps.

• But your role will allow Owners to maximise their earnings (e.g.demurrage )
and minimise their losses (e.g.cargo claims & coating damage claims)

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ETAs
Why given : relevant to laycan provision/cancellation of the C/P.

Always have to be given in good faith.

BPVoy5 Part 2 Cl. 6 : 7D, 96, 72, 48, & 24H before arrival

ShellVoy5 Part II Cl. 28 : later of (i) leaving final port under previous business
OR (ii) within 48H of fixing this C/P & not later than 72 and 24H before arrival
Both C/Ps include 6 hours variation requirement

Charterers may give additional instructions : must be complied with.

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NORs – the vessel must be ready in all respects
• Physically ready to commence cargo operations.

Shell Additional Clauses 1999 Cl.19 : H2S value also has to be acceptable
BPVoy5 Part 2 Cl. 19 : H2S & mercaptan levels also have to be acceptable

• At Charterers’ disposal i.e. berthed or waiting to go alongside an accessible

berth.

ShellVoy5 Part II Cl. 13: (6 hours turn time – extra time allowed to Charterers)
BPVoy5 Part 2 Cl. 10: Signed NOR Certificate (otherwise LOP)
For both: radio/verbal notices are valid provided re-confirmed in writing

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NORs continued

• Why given: relevant to start the running of laytime.

• Time, that Owners could otherwise have charged for, might be lost if you
get it wrong.

Always re-tender “without prejudice to the validity of any NOR

previously tendered”.

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NOR under BPVoy5 Part 2 Cl.10
Cl.10.5 Free Pratique – if Free Pratique is required but not given, can still
tender NOR but must also issue LOP

Master must then re-tender NOR “without prejudice to the validity of the
NOR previously tendered” immediately after FP is granted (otherwise, time
won’t count until commencement of cargo operations).

Similarly, if a valid COC is required (USA) and vessel does not have one, or it
lapses after NOR is given, must re-tender NOR once COC is received (or,
again, time will not count).

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Tank cleanliness
• C/P obligation stated in BPVoy5 Part 2 Cl. 1 & ShellVoy5 Part II Cl. 1 and 2
E.g. BPVoy5 Part 2 Cl. 1.1: “Owners shall before, at the commencement of,
and throughout the subject voyage, exercise due
diligence to make and maintain the vessel, her tanks […]
fit to carry the cargo nominated by Charterers […].

• Carefully follow the recommended cleaning procedures

• Keep records of the cleaning procedures carried out

• Before loading: Tank Clean Certificate / OBQ report

• After discharge: Empty Tank Certificate / ROB report

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Cargo surveyors & Agents
• Who is the cargo surveyor representing?
Representing the buyer and the seller of the cargo

• Who is the agent representing?

BPVoy5 Part 2 Cl. 8 & ShellVoy5 Part II Cl. 24 – nominated by
Charterers but employed and paid for by Owners

• Contact the Club’s listed correspondent in case you need assistance

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Sampling
• Samples are taken to protect Owners in case of:
1. Cargo quality/contamination claims
2. Tank coating claims

• Important to take own samples

• Recommended sampling points:

1. Manifold- Owners’ responsibility starts and ends at vessel’s manifold
2. Tank samples

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Sampling
• Samples must be:
- Taken with clean and appropriate sampling equipment
- Stored in proper and clean containers
- Representative
- Sealed
- Properly labelled
- Retained (ideally 12 months)

• Maintain a sample report

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Possible sources of contamination

What samples will show that:

1. the cargo was already contaminated prior to loading onboard the vessel?
2. the cargo became contaminated during loading as a result of using unclean
pipework – ashore and/or onboard?

3. the cargo became contaminated during the voyage, for example as a result of it
having been loaded in tanks which had not been cleaned properly?

4. the cargo became contaminated after discharge because of being stored in dirty
shore tanks?

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Letters of Protest (LOPs)
The tanker industry lives and breathes LOPs!
• Usually specified in the C/P

E.g. BPVoy5 Part 2:

Cl. 10.1 NOR- where Terminal fails to sign NOR Certificate (seen earlier)
Cl. 10.5 Free Pratique- where Port has failed to give FP (ditto)
Cl. 14.6 Loading/discharge rate - where restricted by Terminal

E.g. ShellVoy5:
Shell Additional Clauses Feb. 1999 Cl.10 - any impingement on
performance

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Obligations 1.
KNOW YOUR C/P OBLIGATIONS
• Trading between safe places: ShellVoy5 Part II Cl.4 & BPVoy5 Part 2
Cl.9.1: Due diligence only. Master remains ultimately responsible.

• Early loading: Shell Additional Clauses Feb. 1999 Cl.4 Charterers have
benefit of time saved (to use elsewhere).

• Shifting: ShellVoy5 Part II Cl.9 & BPVoy5 Part 2 Cl.9 Charterers’ right &
expense (although limited liability for bunkers burned under BPVoy5)

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Obligations 2.
KNOW YOUR C/P OBLIGATIONS continued

• IGS: ShellVoy5 Part II Cl.19 (& 1999 Amendments Cl.2) & BPVoy5 Part 2 Cl.15:
inerted throughout

• Cargo temperature/heating: ShellVoy5 Part II Cl. 27 & BPVoy5 Part 2

Cl.20

• Under Keel Clearance: BPVoy5 Part 2 Cl.23: minimum 30cm after squat

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Obligations 3.
KNOW YOUR C/P OBLIGATIONS continued
• Revised voyage orders/at sea awaiting orders: ShellVoy5: Part II
Cl.26 Feb. 1999 amendments Cl.3 & BPVoy5: Part 2 Cl. 24

• Divert for inspections: BPVoy5: Part 2 Cl. 29

• Backloading: BPVoy5: Part 2 Cl. 26 Any load or disport discharge &

backload full or part cargo for final discharge. ShellVoy5: Part II Cl. 38 Any
disport : load part cargo at any disport for a subsequent disport (1999 Shell
riders Cl. 38 add loadport)

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Obligations 4.
KNOW YOUR C/P OBLIGATIONS continued

• Electronic B/Ls: BPVoy5 Part 2 Cl.30: eDoc

• OB/L carried on board: ShellVoy5 Part II Cl.26 Feb. 1999 Additional

Clauses Cl.2

• Trading in Ice: BPVoy5 Part 2 Cl.33 & ShellVoy5: Part II Cl.22: remain
outside ice bound area & request revised orders

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Importance of evidence
• Evidence to be collected by the vessel:
- Samples
- Records (loading, discharge, cleaning etc.)
- Logs (heating, inert gas, COW performance etc.)
- Cargo documents
- Letters of Protest
- Statements
- Photos (EX classed camera) A picture paints a 1000 words

• Evidence to be saved for 12 months

• BPVoy5 Part 2 Cl. 39- Claim must be supported by evidence

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B/Ls
• The significance of a B/L – more often than not it gives title to the cargo
(which is why an original should be presented)
• Shipper is entitled to demand the issuing of a B/L
• Acts as a receipt of the quantity
• Must not mis-describe the cargo
• If the B/L presented mis-describes the cargo it must be claused
• Or an LOI must be obtained

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When to clause the B/L for a cargo of….

Gin…………..contaminated with Tonic

B/L describes the cargo as ”A Cocktail” :

OK – no need / entitlement to clause
B/L describes the cargo as ”Gin” :
NOT OK - must be claused to reflect Tonic content.
B/L describes the cargo as ”Tonic” :
NOT OK – must be claused to reflect Gin content.
Case example : MT ROSE (NORDROSE)

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Split B/Ls
• What’s the difference between :

1 B/L for 12,000MT cargo

&

3 B/Ls for 4,000MT cargo ?

INCREASED RISK

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Commingling / Blending / Additives
• The Good, the Bad and the Ugly

• BPVoy5 clearly defines commingling and blending in its Interpretation and

Definitions section and at Cl.31

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Commingling
• Commingling is : two or more sources of the same product

This is fairly standard and should not be a problem.

May be different tanks in the same tank farm.

May be different locations : if so, better to indicate on B/L how much from
each source and commingled on board.

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Blending
• Blending is : two or more different products to be mixed together
Risk of getting the respective proportions wrong and not producing the
intended ”blend”.
BPVoy5 Part 2 Cl.31.4 specifies return of all 3 OB/Ls for cargoes blended and
B/L for blended product to carry over those details and indicate date and
place of blending
Risk of not being covered (P&I) for claims arising out of blending process if
considered a specialist operation.

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Additives
• Additives are : e.g. dyes used to mark / identify the product.

Can lead to problems : particulates in the cargo

tank coating damages
BPVoy5 Part 2 Cl.31.3 Charterers warrant stability of additives. Cl. 59: a
maximum of 15 drums of additive to be carried as cargo.

• Distinguish the product to be added from the (incorrect) application by the

crew : something wrong with the additive and mistakes made in the
dosing of the product. You still have the burden of proving it was the
product at fault.
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LOIs
May be provided for in the C/P
BPVoy5 Cl.30.7; Cl.31 (deemed) & ShellVoy5 Cl. 33 6 (non production of OB/L)
If not, LOI is relevant / required whenever you are asked to do something you
are not obliged or supposed to do.
Obtaining an LOI does not mean you remain in cover.
LOIs replace Owners’ lost / prejudiced P&I insurance.
Fraudulent LOIs are unenforceable : relying on the word of the provider.
LOIs that do and those that do not cover crew negligence.
E.g. BPVoy5 Cl.31 2a) does not cover crew negligence. Arguably it should!

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Sum up / Top takeaways
• The surveyor is representing the buyer and the seller of the cargo
• Take proper manifold samples
• Collect the evidence that will be required
• Check the B/L does not mis-describe the cargo
• Check the C/P obliges you to do what Charterers are asking
• If not, get an LOI – preferably one that also covers crew negligence
& FINALLY….

• Don’t hesitate to ask your Club for help

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Any questions?
Now or later!