Law & Sea - Shipping and Maritime Law Expertise

Time Charters. Off-hire. Seizure & Capture.
In The Global Santosh (NYK Bulkship (Atlantic) NV v Cargill International SA [2016] UKSC 20, [2014] EWCA Civ 403, [2013] EWHC 30) time charter between the owners NYK Bulkship and the charterers Cargill for one time charter trip was made on amended NYPE form with 3 independent off-hire clauses, one printed - cl. 15 and two typed - cl. 48 and cl. 49. Clause 49 was an additional off-hire clause designed to deal with such off-hire events as capture, seizure or arrest, inter alia it said:

Should the vessel be captured or seizured or detained or arrested by any authority or by any legal process during the currency of this Charter Party, the payment of hire shall be suspended until the time of her release, unless such capture or seizure or detention or arrest is occasioned by any personal act or omission or default of the Charterers or their agents.

Eventually vessel was sub and sub-sub-chartered to the seller of the cargo of cement, to be delivered from Sweden to the buyer in Port Harcourt in Nigeria. On arrival to Port Harcourt and tendering valid NOR, vessel suffered substantial delays which in part was attributed to the breakdown of the buyer’s off-loader. Such long delay brought about considerable demurrage liability on the part of the buyer, which prompted the seller to arrest the cargo and the vessel as a security for its demurrage claim.

Vessel was arrested for almost one month and was subsequently released and discharged her cargo. Relying on cl.49, the charterers withheld hire for the period of arrest but recommenced the payment of hire when discharge began. The owners opposed this action contending that arrest was occasioned by "personal act or omission or default of the Charterers or their agents."

Read more here: http://www.lawandsea.net/CP_Time/Charterparty_Time_Off_hire_Capture.html

Law & Sea | Time Charters - Off-hire due to seizure and capture Time Charterparty - Off-hire due to seizure and capture. For charterers to be responsible for something that either seller or buyer might do which results in the detention of the ship, there must be some nexus between the occasion for the arrest and the function which the seller or the buyer are per...

Light Ballast - term was recently considered in the Hight Court.

Mr Justice Phillips in Regulus Ship Services PTE Ltd v Lundin Services BV & Anor [2016] EWHC 2674 (Comm) said at paras 66-71:

66. In its defence Lundin pleaded that the provision in the Towcon that the IKDAM would be "in light ballast condition" meant that she would carry (as well as any constants and consumables) the minimum ballast that would enable her to proceed safely and in a seaworthy condition on her intended voyage.

Read this article in full here: http://caselawquotes.net/L/LightBallast.html

Case Law Quotes | Light Ballast Case law quotes on and legal definition of - Light Ballast.

Time Charters. Hull fouling - risk that generally accepted by the owners as occurring in the course of contractual trading.

Foreseeability test is now extended or clarified in both Imperator I Maritime Company v Bunge SA (The Anny Petrakis) [2016] EWHC 1506 (Comm) and ENE Kos 1 Ltd v Petroleo Brasileiro SA (No 2) [2012] 2 AC 164 to mean that, any such claim will be looked at from the point of view whether risk of hull fouling was accepted by the owners at the time of charterparty conclusion.
Read more: http://www.lawandsea.net/CP_Time/Charterparty_Time_Off_hire_HullFouling.html

Law & Sea | Time Charters - Off-hire due to marine growth Time Charterparty - Off-hire, hull fouling. Accumulation of marine growth on ship’s plating in warm tropical seas is often a cause of significant reduction in ship’s speed and impairment of vessel’s performance.

Time Charters. Hull fouling - risk that generally accepted by the owners as occurring in the course of contractual trading.

Foreseeability test is now extended or clarified in both Imperator I Maritime Company v Bunge SA (The Anny Petrakis) [2016] EWHC 1506 (Comm) and ENE Kos 1 Ltd v Petroleo Brasileiro SA (No 2) [2012] 2 AC 164 to mean that, any such claim will be looked at from the point of view whether risk of hull fouling was accepted by the owners at the time of charterparty conclusion.
Read more: http://www.lawandsea.net/CP_Time/Charterparty_Time_Off_hire_HullFouling.html

Shelltime 4. Charterers' liability for detention.
Ordering vessel to load the cargo which is not authorised by local government, i.e. illegal, will have same consequences as ordering to proceed to unsafe port. In ST Shipping and Transport Pte Ltd v Space Shipping Ltd(The CV STEALTH) [2016] EWHC 880 (Comm) time charterers took delivery of owners’ vessel in August 2014. Timecharter party was for eight month (until April 2015) and was on amended Shelltime4 form, with clause 28 stating inter alia that:

28. … No voyage shall be undertaken, nor any goods or cargoes loaded, that would expose the vessel to capture or seizure by rulers or governments.

On 4 September 2014 time charterers sub chartered vessel to a voyage charterer to load crude oil at Puerto La Cruz, Venezuela. Time charterers’ orders included nomination of local agent who was to oversee events at Puerto La Cruz. On 11 September forged authorisation to load cargo, which usually issued by PDVSA, the state oil company was received by time charterers. The Authorisation was stamped but not signed. It aroused time charterers’ suspicions, and they put in train enquiries to check its authenticity with PDVSA. On 12 September 2014 time charterers instructed the master to ignore the Authorisation and comply only with orders coming from the Charterers themselves. It was discovered that forged document was issued by time charterers’ agent. As a direct result of such illegal activity, vessel was arrested in Venezuela and at the moment (April 2016) remains there.
Read more: http://www.lawandsea.net/CP_Time/Charterparty_Time_Employment_Indemnity.html

Law & Sea | Time Charters - Employment & Indemnity Time Charterparty.Employment & Indemnity. Charterer is to indemnify the shipowner against the consequences of complying with an order as to the employment of the ship.

Time Charter. Duration of one trip charter, SBT Star Bulk & Tankers (Germany) GmbH & Co KG v Cosmotrade SA [2016] EWHC 583 (Comm)

Time charterere under trip charter contract have right to order the vessel to visit any port or ports which they wish within trading limits subject to any express agreement to the contrary.
Read more: http://www.lawandsea.net/CP_Time/Charterparty_Time_Delivery_Duration.html

Law & Sea | Time Charters - Delivery & Duration Time Charterparty.Delivery & Duration. An owner delivers a ship to a time charterer by placing her at the Charterers’ disposal and by placing the services of her master, officers and crew at the Charterers’ disposal. Duration of time charter may be expressed in fixed terms such as "six months" or "t…

Trip Time Charter.
Ultimately, the scope of any "trip time charter" will depend upon the particular terms agreed between the parties. However, I accept the basic underlying notion of any time charter including a trip time charter viz. that the vessel will generally be under the directions and orders of the charterer as regards her employment for the charter period. Of course, the charterers' entitlement to give directions and orders may be restricted by whatever may be agreed between the parties with regard, for example, to period, trading limits, geographical route and even (perhaps) number and designation of loading and discharging ports or ranges. However, any such restriction would have to be specifically agreed and, in my view, would require clear words...
Read more: http://caselawquotes.net/T/Trip_TimeCharter.html

Case Law Quotes | Trip, Time Charter Case law quotes on and legal definition of - Trip, Time Charter -the length of the period of hire is limited by a trip defined within a geographical range (and sometimes, though not in this case, by a maximum duration), the nature of the contract for the duration of the period remains that of making…

Paramount Clause. Yemgas FZCO & Ors v Superior Pescadores S.A. [2016] EWCA Civ 101 (24 February 2016)
In Yemgas FZCO & Ors v Superior Pescadores S.A. [2016] EWCA Civ 101, for some of damaged packages the Hague Rules limit was higher than the Hague-Visby limit, and the claimants have claimed this higher limit, while for another packages, application of the Hague Rules yields a higher limitation figure. In the case of each package the claimants have claimed whichever limitation figure is the higher on the pretext that the wording in the Paramount Clause "as enacted in the country of shipment" when it relates to the country of shipment which adhered to the Hague-Visby Rules was thought to be able to produce such result.
http://www.lawandsea.net/COG/COG_TheHagueRules_ClauseParamount.html

Law & Sea | The Hague Rules, Paramount Clause Carriage of Goods by Sea. The Hague Rules, Paramount Clause.

Freight. Owners’ dealing with freight, even if it involves turpitude, do not forfeit their right to the freight, Glory Wealth Shipping PTE Ltd v Flame S.A. [2016] EWHC 293 (Comm)

The right to freight or right to receive freight is not affected by any subsequent intention of the ship owner how he would dispose the sum due, because the right to dispose of the freight is attached to the ownership of the right to the freight. The owner also has a right to direct the charterer to pay the freight to another.
http://www.lawandsea.net/CP_Voy/Charterparty_Voyage_Freight1.html

Speed & bunker consumption warranty.

Owners guaranty is twofold: first it warrants that during good weather period vessel will proceed with contracted speed and, secondly, for steaming at this speed she will consume certain amount of bunker. Vessel is considering underperforming when any of these parameters, either speed or consumption is not met during good weather period.

In The Didymi [1988] 2 Lloyd’s Rep. 108 the Court of Appeal formulated principles of assessment of under or over performance and how these principles apply to the whole duration of time charter. Bingham LJ said at p.117:

If the vessel had under-performed, the basis for which the charterers contend would lead to the charterers being very inadequately compensated. The purpose of the stipulated conditions was to provide a yardstick which was then to be used to assess the loss or gain in other conditions more usually encountered. So in my judgment the procedure envisaged was clear and involved these stages: first, assess the vessel’s performance in good conditions as defined on all sea passages from seabuoy to seabuoy, excluding altogether any period of slow steaming at the charterers’ request; secondly, if a variation of speed from the stipulated norm is shown, that variation should be applied with the necessary adjustments and extrapolations to all sea passages from seabuoy to seabuoy in all weather conditions, but excluding periods of slow steaming at the charterers’ request; thirdly, if there is a variation of consumption from the stipulated norm, that variation should be applied, with the necessary adjustments and extrapolations, to all sea passages from seabuoy to seabuoy in all weather conditions, including periods of slow steaming at the charterers’ request.
Read more: http://www.lawandsea.net/CP_Time/Charterparty_Time_Speed_and_Fuel_Consumption_Warranty.html

OWBM case reached the Court of Appeal: PST Energy 7 Shipping LLC v OW Bunker Malta Ltd & Ors [2015] EWCA Civ 1058
But unfortunately for the shipowners decision left them facing the risk to pay for one bunker twice....
Read more: http://www.lawandsea.net/List_of_Cases/P/PST_Energy_v_OWBM_2015_EWCA_Civ_1058.html

Bill of Lading. Conversion.
As long ago as in 1919 Atkin J held in Lancashire and Yorkshire Railway v MacNicholl (1919) 88 LJKB 601 that conversion is a dealing with goods in a manner inconsistent with the rights of the true owner … provided … there is an intention on the part of the defendant in so doing to deny the owner’s right or to assert a right which is inconsistent with the owner’s right.
Read more: http://www.lawandsea.net/COG/COG_Bill_of_Lading2_Conversion.html

Law & Sea | Bill of Lading - Conversion Law and Sea. Carriage of Goods by Sea. Conversion is dealing with goods in a manner inconsistent with the rights of the true owner.