Summary of Charterer s Liability In Carriage Of Good By Sea

1. 2. 3. 4. 5.

Dirgantara Adi Nugroho Muhammad Rifky Wicaksono Eldo K. Alwi Royhan Akbar Vierna Wensatama

A Charterer is a company/person who has chartered/hired a ship for a specified period of time for seaborne transportation. In contracts of carriage of goods by sea, in a charter party specifically, there are basically two contracting parties to wit: the Ship-owner and Charterer. Here, the Charterer hires from the Ship -owner the use of the ship for a voyage or time charter in consideration of payment of money called freight. This includes the profit derivable by a ship-owner from the employment of his ship to carry his own or third party goods. There are however certain duties, responsibilities and liabilities Charterer towards the ship owner. Charter Party is a written contract between the owner of a vessel and the person desiring to employ the vessel (charterer); sets forth the terms of the arrangement, such as duration of agreement, freight rate and ports involved in the trip. 1 Thus seeing the definition of the charter party, it shows that Charterer bares liability towards ship owner on employing the vessel to perform a specific voyage. The liability of the charterer may vary depending on the form of the charter party used and also on the agreement of the parties. Nevertheless there are some obligation which are implied enethough it is not put into the charter party it self. These implied obligation are fundamental obligation of the charterer unless it was specificly excluded by a clear wording in the charter party. There are sofar several implied duty of the charterer s based on charter party, which are Charterers implied duty to nominate a safe port 2, Charterers duty and repsonsibility to ship/load no n dangerous goods without the consent of the ship owner, charterers' duty to complete loading/discharge within the laytime period or pay demurrage or damages for detention under voyage charter, Charterer s obligation to provide cargo. 1. DUTY TO NOMINATE A SAFE PORT The classic definition of a safe port is that of Sellers, L.J., in The Eastern City 3 : a port will not be safe unless, in the relevant period of time, the particular ship can reach it, use it and return from it without, in the absence of some abnormal occurrence, being exposed to danger which cannot be avoided by good navigation and seamanship . . The time charterer generally has a duty to the ship owner to ensure that the ship is only routed to "safe" ports. Even in the absence of a specific "safe" port provision in the charter party, courts and arbitration tribunals often find that such an implied warranty exists. 4 Because meteorological and political circumstances may arise that threaten the safety of a seemingly-safe port at any particular moment, the ship owner also shares in the responsibility to identify such circumstances. Similarly, many charters also include a "safe berth" clause, which specifies that the charterer must nominate those berths inside a safe port that accommodate the ship's dimensional characteristics, including length and draft.

William Tetley, Int'l. M. & A. L., 2003 at pp. 145 -159. See, e.g., Aegean Sea Traders Corp. v. Repsol Petreleo SA, [1999] 2 Lloyd's Rep. 39, 67; Vardinoyannis v. Egyptian Gen. Petroleum Corp., [1971] 2 Lloyd's Rep. 200, 205. 3 The Eastern City [1958] 2 Llyod s Rep. 127 (CA). 4 Ibid.
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The main function of the safe berth clause is to ensure that the charterer does not exercised his otherwise unfettered right to nominate a port in such a way as to imperil the owner s ship and crew, thereby imposing upon him the r isk of loss. 5 A warraty of a safe port are divided into several phase, which are at the time before signing the contract, when the contract is made, a ship must be able to safely enter the port, use it safely and exit with safety. 6 a. Before Signing The Contract The charterer is not obliged to consider the ship owner s convenience when selecting the port, provided it is within the indicated range. The charterer warrants that the port is safe. The ship owner can refuse a nominated port if he is aware that the port is inherently unsafe. b. When The Contract Is Made The right to nominate a safe port is a clause (express term) included in the contract. In the absence of such a clause the common law implies an obligation (implied term) to the same effect. The charterer s obligations regarding the safety of the port are primarily related to the moment when the order is given. At that moment the port must be prospectively safe, and in the absence of unexpected events, it will be safe for the ship at the time when she actually arrives there. This requirement does not entail that the port must be safe at that particular moment but merely that it will be safe on arrival. c. The Ship Must Be Able To Safely Enter The Port The ship must be able to reach the port in safety. 7 As per Devlin J. In Compania Naviera Maropan v Bowaters it is essential that the danger must be linked with the use of the nominated port, because it is obvious in point of fact that the more remote it is from the port, the less likely it is to interfere with the safety of the voyage. The charterer does not guarantee that the most direct route or any particular route to the port is safe, but the voyage which he orders must be one which an ordinary prudent and skillful master can find a way of making in safety . In the The Sussex Oak8, it was held that a port will be unsafe if the approach to it is such that the ship cannot reach the port in safety without dismantling part of her structure. In most situations the master is unaware of potential dangers and he presumes that the charterer has, in fact, nominated a safe port. As a result, on arrival at the port, if he discovers any hazards that the render the port unsafe, he is still entitled to refuse to enter. d. The Ship Must Be Able To Use It Safely

The Hermine [1979] 1 Llyod s Rep.212 (CA) per Roskill LJ at p. 231. Supra note 3. 7 Kanchenjunga [1990] 1 Lloyd s Rep 391. 8 Grace v. General Steam Navigation (The Sussex Oak) [1949] 83 Lloyd s Rep. 297.

The port must be physically safe in its location, size and layout for the particular ship to use at the relevant time, having regard to both its natural and artificial aspects. The fact that it is safe to enter is not enough if the port may become unsafe for the ship to remain at. There are several factors that affects the safety of use of a port which are the port must be politicaly safe to use, 9 it must has sufficient buoys for anchorage, 10 it must have proper navigation lights,11 sufficient pilots on duty, 12 proper weather forcasting system,13 good places to drop anchor, 14 sufficient room to manouvre in the port, 15 sufficient tugs and stowage,16 functioning fenders for the docking process, 17 proper survey of the port s seabed to ensure that there are no dangerrous underw ater obstructions 18. e. Safely On Departure The port will not be safe if the ship is endangered when leaving from it. However, it has not yet been clear how far the warranty of safety extends after the vessel has left the port. 2. CHARTERERS DUTY AND REPSONSIBILITY TO SHIP/LOAD NON DANGEROUS GOODS WITHOUT THE CONSENT OF THE SHIP OWNER Under the common law the shipper owes an absolute duty not to deliver for the shipment the goods of a dangerous nature without expressly giving notice that they are of a dangerous nature. In Mitchell, Cotts & Co v Steel Bros & Co Ltd 19 it was held that the shipper s obligation as to shipment of goods amounts at least to an und ertaking by him that he will not ship goods likely to involve unusual danger or delay to the ship without communicating to the shipowner facts which are within his knowledge indicating that there is the risk, provided that the shipowner does not and could not reasonably know those facts. Both the Hague and Hague-Visby Rules contain identical provisions on dangerous cargo in Art IV(6), which provides that; Goods of an inflammable, explosive or dangerous nature to the shipment whereof the carrier, master or agent of the carrier has not consented with knowledge of their nature and character, may at any time before discharge be landed at any place, or destroyed or rendered innocuous by the carrier without compensation and the shipper of such goods shall be liable for all damages and

The Chemical Venture [1993] 1 Llyod s Rep. 508. The Houston City [1956] 1 Llyod s Rep. 1. 11 Supra note 5. 12 The Khian Sea [1979] 1 Llyod s Rep. 545. 13 The Dagmar [1968] 2 Llyod s Rep. 563. 14 Supra note 5. 15 Supra note 11. 16 The Universal Monarch [1988] 2 Llyod s Rep. 483. 17 The Carnival [1994] 2 Llyod s Rep. 27. 18 The Marinicki [2003] EWHC 1894. 19 [1916] 2 KB 610.
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expenses directly or indirectly arising out of resulting from such shipment. If any such goods shipped with such knowledge and conse nt shall become a danger to the ship or cargo, they may in like manner be landed at any place, or destroyed or rendered innocuous by the carrier without liability on the part of the carrier except to general average, if any. In The Giannis NK 20, it was held that the Art. V of the Hague Visby imposes strict liability on shippers in relation to the shipment of dangerous goods, irrespective of fault or neglect of the other part. Moreover according to The Fiona21, carrier are still responsible for the damages if the damages are caused by the carriers breach of an overriding obligation of seaworthiness. 3. CHARTERERS' DUTY TO COMPLETE LOADING/DISCHARGE WITHIN THE LAYTIME PERIOD OR PAY DEMURRAGE OR DAMAGES FOR DETENTION UNDER VOYAGE CHARTER Laytime In a charterparty, is the period of time agreed between the parties during which the shipowner will make and keep the vessel available to the voyage charterer for loading or discharging without payment additional to the freight. 22 Normally three conditions must be satisfied before the charterer can be required to start loading or discharging, as the case may be, and therefore before the laytime allowed starts to run. These are that the ship must have arrived at the destination specified in the charter, the ship must be ready and in a fit condition to receive or discharge her cargo, where required, notice of her readiness must have been given to the charterer. In the absence of an express provision to the contrary, however, this last requirement applies only at the first load port. When these conditions have been met, the vessel is an Arrived ship and, subject to the expiry of any period prescribed in the charter, laytime begins to run. 23 When a laytime is exceeded the charterers are in breach of the charterparty contract. As a result of this breach the charterer becomes liable in liquidated damages, as contractually agreed, by way of demurrage. It is clear that a marine adventure by its nature has always been exposed to the risk of being prevented, impeded or delayed by a variety of causes beyond the control of either party. According to The President Bran 24, Roskill J clarified that It may be, that the breach arises without what one might call fault on their part but the ultimate question is what does this charter-party provide are the respective liabilities of owners and charterers . Thus it is not so important to know that the risk should be borne by one party rather than by the other, what really matter is that it should be accurately defined, at the time the charter party is made, by which of them it will be borne . Stipulation as to demurrage is introduced into a charterparty for the benefit of both th e charterer and the owner, for example the owner receives an additional payment (based on
[1998] 1 All ER 495, at p.502. [1994] 2 Lloyd s Rep. 506. 22 William Tetley, Int'l. M. & A. L., 2003 at p. 135 . 23 John Schofield, Laytime And Demurrages 6th Edition, 2005. 24 [1967] 2 Lloyd s Rep 338.
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the current freight rate) for the delay beyond the laydays and cannot withdraw the ship from the service, so the charterer is entitled to keep the vessel for agreed period or, if not agreed, as long as it will not commercially frustrate the adventure.25 4. CHARTERER S OBLIGATION TO PROVIDE CARGO

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Inverkip Steamship Company, Limited v Bunge & Co., [1917] 2 K.B. 193 at p.201.