The impact of freedom of contract and new procedures in
international maritime transport (ISPS Code)[i]
By María B. Espiñeira
info@itl-legalconsultants.com
Overview
The purpose of this article is to develop the most relevant aspects involved in the liability system arising from delays in two major contracts of the maritime sector: the time and the voyage charterparties.
Within the usual context of maritime transport, it is quite frequent to find charterers who have been demanded to pay large amounts of money for having caused delays, and carriers facing huge economic losses for having their vessels detained in ports. As it will be evidenced throughout this article, the analysis and understanding of the liability system emerging from delays is arousing interest in all the parties somehow involved in maritime adventure. This is also a reason why I chose this as the subject matter of this article.
In view of providing an introduction to the issue and facilitating the understanding, you will find below the main themes to be addressed:
(1) differences between the two abovementioned contracts, so as to identify liabilities in cases of delay at each stage of execution;
(2) impact of freedom of contract on the allocation of liabilities;
(3) samples of tools that each party possess so as to transfer risks to each other;
(4) how progress in procedures of international transport, especially, after the entry into force of the ISPS Code[ii], may alter the balance of liability in contracts if it is not considered when entering into an international contract of carriage.
Finally, the reader will find the author’s opinion.
I.- General Considerations
The core difference between the charterparties lies in their service conditions.
Under the voyage charter-party[iii], a space in a vessel is provided by the shipowner to the charterer for the transport of cargo, without prejudice to time, in exchange of the payment of freight. Under the time charter-party,[iv] the shipowner places his vessel at the charterer’s disposal and commits himself to perform voyages during a specific period of time within the contract’s terms and conditions, in exchange of the payment of hire. [v]
In view of the above, and notwithstanding the clarifications I will provide on the next pages, it is understood that once the time charterers have the vessel at their disposal, they will try to engage her into new contracts of carriage so as to have her operative as much time as possible to make her economically effective and to avoid losses due to delays.
On the other hand, in voyage chartering, the charterer —or shipper— will usually place the cargo at the time and location agreed so that the shipowner —carrier— can transport it. The charterer will be liable for any delay occurring before or after the voyage while the shipowner will be liable for any delay occurring during the voyage.[vi]
In the following paragraphs, you will find the description of the various stages of execution of each charterparty. On the basis of this, I will set forth the allocation of risks of delay and the subsequent liabilities.
II.- Delays in Voyage Charterparty
It is evident from the above described that the voyage charterparty is a typical contract of carriage of goods, in which the freight rate depends on the service provided by the vessel and not on the time such service demands. Therefore, the loss of time at sea is borne by the party receiving the freight rate, i.e., the shipowner[vii].
Both in the English Law and in the Argentine Navigation Act (article 271)[viii] the traditional allocation of liabilities during the loading and discharging operations is based on the alongside rule, by which liabilities involved during the transport, loading, and discharging operations rest with the carrier until the “cargo is placed alongside the ship.”
Traditionally, voyage charting has been divided in four stages during which, unless otherwise stipulated, the risk of delay has always been undertaken by the carrier.
Those four stages are the following:
1) preliminary voyage (from wherever the ship is, to the loading port) 2) loading operation (delivery of the cargo at the place of loading and its stowage on board) 3) carrying voyage (from loading port to discharging port) 4) discharging operation.[ix]
Notwithstanding, the Navigation Act gives the parties the possibility of deviating from this traditional rule. In fact, the usual procedures in maritime transport evidence that the parties prefer contracts on f.i.o.s. or f.i.o.[x] terms by virtue of which the charterer assumes the costs and liabilities for the loading/discharging operations on board and ashore. Under this contracting modality, in the absence of an express contrary provision[xi], the general rule indicates that every delay occurring during the preliminary voyage (stage 1) and the carrying voyage (stage 3) falls upon the shipowner (carrier), while every delay occurring during the loading/discharging operations will be assumed by the charterer (shipper or consignee).[xii]
It is essential for the understanding of this article to accurately determine the limits of the abovementioned stages, since the conclusion of each defines the moment at which the risk is transferred.
Regarding the end of stages 1 and 3, the English case law sets forth:
a) When the ship arrives at port (“arrived ship”)[xiii],
b) When the Master issues a valid Notice of Readiness[xiv] to the consignee, and
c) When the vessel is in fact ready to be loaded/discharged.[xv]
In other words, only when these three requirements are fulfilled, the risk of delay is transferred from shipowner to charterer, who starts being responsible for the delays taking place during the loading and discharging operations.
II.I. Laytime/ Demurrage
Building on the previous item, the conclusion of stages 1 and 2 not only determines the transfer of risk of delay on the charterer, but it also indicates the beginning of the laytime.
The laytime refers to the period of time, contractually agreed, during which the charterer is allowed to perform and complete, at the port of call[xvi], cargo loading and discharging operations. This time is deemed to be included in the payment of freight and as long as it is not over, the vessel is considered to be at the charterer’s disposal[xvii].
Once the laytime is over, those delays occurring during the loading/discharging operations will cause damages to the shipowner and they will be compensated by the charterer with damages for demurrage or detention.[xviii]
“Demurrage” is commonly defined by the English doctrine as “liquidated damages.” It is contractually agreed by the parties and it consists of a compensation which will be paid by the charterer (or consignee) to the shipowner in case the loading and discharging operations exceed the time agreed for their execution, i.e. when they exceed the laytime.[xix]
The Argentine legal system defines “demurrage” in a similar way, and it identifies its legal nature with that of a penalty clause; that is, an anticipated assessment of damages resulting from not having completed the loading/discharging operations within laytime and extending the stay of the vessel at port.[xx]
To receive this compensation, the shipowner does not need neither to comply with any additional requirement nor to prove the occurrence of any damage. Typically, this compensation includes the loss of freight caused by the delay.
Moreover, once the loading and discharging operations are completed, the risk of delay, for whatever reason, is transferred again to the shipowner unless expressly stated to the contrary in the contract or the cause of delay is attributable to the charterer (shipper). After the risk is transferred, the charterer can start a new voyage.
However, if the loading/discharging operations are not completed within the term provided for that, the risk of any damage which the vessel may suffer —either loss of time due to any reason (strikes, wars, etc.) or for other causes (damages, etc.)— will be continually borne by the charterer.[xxi] If such damages occur, the charterer must compensate the shipowner (carrier).
This is grounded on the fact that if the ship had not been delayed beyond the agreed term, it would have been at open sea and it would not have suffered the damages which happened later. Exceptions will be accepted provided those were included in the contract by clear, accurate, and defining terms.[xxii] Ambiguous exception clauses will not be accepted in many jurisdictions (like the English one).
It is relevant to point out that the Argentine Navigation Act, in its article 248,[xxiii] regulates this matter in a subsidiary manner to what the parties agree. Therefore, according to the customary practices of the local and international transportation, this article is rarely applied, since the “standard” charterparties usually regulate the responsibility for delay, excluding the subsidiary application of this legal provision.
II.II. Voluntary Allocation of Risk of Delay: Exception Clauses
Based on the possibility that delay may be contractually agreed by the parties,[xxiv] the described system of responsibility could include exception clauses aimed at transferring risks of delay to the shipowner during the loading/discharging operations and to the charterer (shipper) before arriving at the port or berth.
For instance, it may occur that after having arrived at the port, the vessel is unable to get to the discharging berth for various reasons, like congestion, not having met the customs/port requirements, bad weather, strikes at the port/by port authorities, or others. Given these circumstances, since the ship is not ready (as per the sense of “arrived ship” and ready to discharge, mentioned above), the laytime would not start running, and the delay would still be borne by the shipowner and could not be transferred to the charterer.
However, one of the resources the shipowners have to avoid the situation described is to include in the contract a clause similar to the one stated below.
Demurrage Clause included in GENCON 1994:
“If the loading/discharging berth is not available on the Vessel’s arrival at or off the port of loading/discharging, the Vessel shall be entitled to give notice of readiness within ordinary office hours on arrival there, whether in free pratique or not, whether customs cleared or not. Laytime or time on demurrage shall then count as if she were in berth and in all respects ready for loading/ discharging provided that the Master warrants that she is in fact ready in all respects. Time used in moving from the place of waiting to the loading/ discharging berth shall not count as laytime.”
Through the insertion of this text in the contract, laytime would start counting and the risk would be transferred to the charterer (shipper) even before the beginning of the loading and discharging operations. As it can be seen, this clause grants great benefits to the carrier, particularly, in charterparties to berth.
Notwithstanding this, for the benefit of the shipper, it can be contractually provided that the laytime starts running only when the weather conditions allow the loading/discharging operations. Accordingly, GENCON 1994 says:
“The cargo shall be loaded within the number of running days/hours as indicated (…), weather permitting, Sundays and holidays excepted, unless used, in which event time used shall count.”
In order to counterbalance the effects of this clause, the shipowner should include the phrase “weather permitting or not”, or “as long as the conditions permit the discharge or not.” Then, laytime would start counting without prejudice to the weather conditions permitting the loading/discharging operations or not.
III.- Delays in Time Charterparties
Following the same study methodology used in the description of the voyage charterparty, I will divide the time charterparty into its different stages of execution so as to identify each party’s liabilities for delay emerging from each stage.
Thus, the time charterparty can be divided into three stages:
1) preliminary voyage (towards the discharging port as agreed) 2) free use of vessel (within the contract limits) 3) last voyage (towards the port of return).
The responsibility system works differently in this contract.
Based on the fact that the hire rate estimation is strictly related to the period of time during which the charterer controls the operation of the vessel and her holds, the risk of loss of time during all that period is placed on him.[xxv]
The shipowner will not be concerned about optimizing the use of the ship since he will only bear the losses arising from delays occurred while the ship is under his control, i.e., during the preliminary voyage (first stage).(28)[xxvi]
Once the charterer is in charge of the vessel’s exploitation (second stage), and pursuant to Argentine Navigation Act, art. 236, unless otherwise expressed, the hire shall be paid on a monthly basis and in advance,[xxvii] giving the charterer the chance of exempting himself from the payment due to causes not attributable to him, when he is not able to use the ship, and especially, when the vessel has to be immobilised for more than 24 hours so that the shipowner can comply with his duties related with the conservation of the vessel seaworthiness conditions.[xxviii]
According to the English doctrine, the hire must be paid on a regular and uninterrupted basis and in advance, and the only way the charterer has to exempt himself from paying the rate for the delay of the vessel is by arguing and proving any of the factual situations stipulated in the off-hire clauses. Otherwise, the losses for delay shall be undertaken by him.
The off-hire clauses are usually found in time charterparties and they consist of exceptions of payment of the hire during certain periods when the vessel is partially or totally (as agreed) inoperative for the charterer due to accidents or problems in the ship which are not attributable to him. These clauses are triggered by the mere occurrence of the situations provided in them, without prejudice to the charterer’s fault. Whenever the vessel is included in off-hire clauses, the charterer will have the right to receive the adjustment of the hire rate.[xxix]
Moreover, during the third stage of the time charterparty, i.e. during the voyage of return, the greatest risk the charterer assumes is the late return of the vessel at the place agreed in the contract.[xxx] This late return may cause considerable economic damages to the shipowner, and if these occur, the charterer will have to compensate them.
The rate of liquidated damages[xxxi] will be estimated by considering the current values in the international market[xxxii]. The charterer will only be released from his responsibility of returning the vessel in due form and time in case an express, clear, and accurate exception clause had been included in the contract.[xxxiii]
Various English Courts have decided that the risk of late return of the vessel is transferred to the party receiving her when the charterparty includes a “without guarantee clause”.[xxxiv] By virtue of this clause, the charterer will not be responsible for the late return when time provided for the conclusion of the contract and the return of the vessel were given in good faith.[xxxv]
III.I. Voluntary Allocation of Risk of Delay: Off-Hire Clause
As explained above, under this type of contract, the charterer bears the losses for delay of the vessel during the voyage, even when there is no fault from him and the cause of such delay is attributable to the same ship. The only exceptions to the shipowner’s right to receive the hire rate are provided by Argentine Navigation Act, article 237, or by an off-hire clause in the contract.[xxxvi]
It should be taken into account that off-hire clauses may contemplate various situations and that, usually, the parties change the standard clauses provided by international standard contracts.
There are two kinds of off-hire clauses: the net loss of time and the period off-hire clause. Under the first one, the right to receive the hire is interrupted when the vessel is delayed and the charterer cannot use it for the purpose he is expected to complete at that moment. Under the period off-hire clause, such right is interrupted when the vessel is detained, without prejudice to the real utility of the vessel for the charterer[xxxvii].
The following are the most frequent situations causing delays in vessels and that are usually considered in off-hire clauses:
a) Flaws, cracks, faults, or failures in the vessel’s hull, machinery, or equipment.
b) Maintenance repairs and operations in the vessel, including dry dock.
c) Every non-compliance, defective compliance, or slow compliance by the vessel’s Master/Officers/Crewmembers of directions given by the charterer or to provide the services he requires.
d) Seizure or requisition,
e) Deviation,
f) Strikes and/or stoppages by port authorities or others,
g) Failure to comply with ISPS Code requirements.
h) The clause can also read “any other cause whatsoever”[xxxviii], meaning any other cause giving rise to defective operation or the complete impossibility to operate the vessel.
By merely including off-hire clauses and proving the occurrence of any of the cases contemplated in them, the risk of delay is transferred to the shipowner, who will not receive the hire rate during the period when the vessel is delayed or not able to fully operate.[xxxix]
IV.- New Procedures in International Maritime Transport and the Risk of Delay[xl]
In view of the terrorist attacks against the United States on September 11, 2001, the international maritime community, made up of representatives from different sectors, fostered the enactment of the International Ship and Port Facility Security (ISPS) Code[xli], aimed at providing the best possible security in vessels and at port facilities.
Those circumstances in which the ISPS Code rules are applicable usually result in delays at the vessel’s entry into and/or exit from the port. For example, if a ship does not count with ISPS Certificates, proving the vessel complies with the Code requirements[xlii], she will not be allowed to enter the port, or at least, this situation will cause loss of time for all the interested parties in the maritime adventure.
This is the reason why these new procedures should be taken into consideration, and the international contracts of carriage should include clauses stipulating guidelines to balance the liabilities for delay at ISPS ports and to avoid the surprising occurrence of non-contemplated damages.
It is important to point out that even when the vessels have the mentioned ISPS certificates, the port authorities are entitled to perform controls which could also generate delays.
Regarding the voyage charterparty, the English case law holds that such controls are mere formalities which do not prevent the vessel from being ready for the Master to send the Notice of Readiness[xliii] to the receiver of the cargo or to its legitimate representative.[xliv] At this moment, the responsibility for the delay may be transferred to the charterer although the ship has not passed the controls performed by the ISPS authority yet.
However, if the vessel does not have the documents required by the ISPS Code and she has not passed the controls, the loss of time inputted to such controls will not be considered mere formality and the resulting delay will be borne by the owner.
This conclusion arises from the assumption that the vessel was not in the seaworthy condition necessary to undertake the voyage and that the legal requirements to enter the port were not fulfilled.
In respect of time charterparty, since the charterer is obliged to nominate the port of destination and to make the proper inquiries so as to comply with the legal requirements of the nominated port, any delays which may occur at such port will be attributed to the charterer, unless that particular circumstance was expressly included in an off-hire clause.
In usual maritime practice at ISPS ports, it may occur that both charterers and owners bear losses for delay, even when they are not effectively responsible for them. In order to avoid such uneven situation, I suggest including terms regulating the contractual relationship between the parties under these circumstances.
An illustrative sample can be found in BIMCO ISPS/MTSA Clause for Voyage Charterparty, which says the carrier shall comply with the ISPS Code requirements and the charterer shall provide the owner with relevant documents/information necessary to meet such requirements. Loss, damages, expense or delay caused by failure on any party to comply with the requirements shall be for that party’s account, except as otherwise provided in the charterparty. It also sets forth that provided that the delay is not caused by the owners’ failure to comply with their obligations, notwithstanding anything to the contrary provided in the charterparty, the vessel shall be entitled to tender Notice of Readiness. Besides, any delay resulting from measures imposed by a port facility or by any relevant authority shall count as laytime, unless such measures result solely from the negligence of the owners, Master or crew or the previous trading of the vessel, the nationality of the crew or the identity of the owners’ managers.
In time charterparties, I suggest including a clearly expressed off-hire clauses involving cases of delay related to the Code provisions, since under certain legal systems, such as the English one, the mere addition of a generic exception clause is not enough to include, within the assumptions of that clause, the delay caused by controls of ISPS port authorities.[xlv]
Moreover, it is also highly recommended to include specific clauses, such as those provided in BIMCO ISPS/MTSA Time Charterparty (similar to what was above described), where the risk of delay is evenly allocated between the parties specifically breaching their contractual obligations.
V.- Conclusions
It has been evidenced throughout this article that the delay is an aspect of the charterparties which the parties can administrate at their own will, and that the allocation of liabilities entirely depends on the contractual terms agreed by them.
Just as it was illustrated, it is interesting to highlight that the parties count with the possibility of including in their contracts specific clauses aimed at even out, as in a clock’s pendulum, the liabilities arising from delays. This means that a specific clause can shift the sphere of responsibility from one party to the other and vice versa.
This power of the parties to contractually decide on the terms of delay and the possible harmful consequences which could result from the fact of not including in the contracts situations as those described in this article make it essential to count with highly specialised legal counselling.
Finally, you may have noticed the last item in this article makes reference, by means of the example of the ISPS Code, to the influence of the constant evolution of the international rules in the regime of liabilities for delay. By virtue of this, it has also been proved that the nature of admiralty law —particularly, its dynamism and internationality— is still present in this aspect of the transport, making the continuous updating and adjustment of contracts essential needs in order to avoid the surprising occurrence of great economic losses.
Notes:
(*) Article published in the magazine Ateneo del Transporte, Revista de Estudios Marítimos, No. 53, pages 82 to 94.
[i] The International Ship and Port Facility Security Code
[ii] Argentina is party to the International Ship and Port Facility Security Code.
[iii] Argentine Navigation Act, art. 241.
[iv] Argentine Navigation Act, art. 227.
[v] John F. Wilson, Carriage of Goods by Sea, Pearson Longman, Sixth Edition, 2007. Chapters 1, 3, and 4.
[vi] It should be pointed out that, in both cases, the shipowners retain the control over the equipment and the crew, and they agree to provide a transport service. However, the difference is in the allocation of costs and liabilities for delay in the voyage.
[vii] Martin Dockray, Cases and Materials on the Carriage of Goods by Sea, Cavendrich Publishing, Third Edition, Chapter 1.
[viii] Argentine Navigation Act, art. 271: The carrier shall proceed in an adequate and appropriate way to the loading, manipulation, stowage, carriage, custody, and discharge of the cargo. The party may agree that the loading and discharging operations, unless in their public law aspect, are in charge of the shipper and consignee. This shall be duly expressed in the Bill of Lading or in other documents replacing it.
[ix] Omisis
[x] F.i.o.s: Free in out stow. F.i.o: Free in out.
[xi] These exception clauses will be explained in detail in the following paragraphs.
[xii] The Johanna Oldendorff, House of Lords, 18 July 1972, [1973] 2 Lloyd’s Rep. 285. Lord Dicplock at 304, reproduced by the sentence issued by the House of Lords in The Aello, making reference to a voyage charter.
[xiii] John F. Wilson, Carriage of Goods by Sea, Pearson Longman, Sixth Edition, 2007. Chapter 3 and The Johanna Oldendorff, House of Lords, 18 July 1973, [1973] 2 Lloyd’s Rep. 285. Argentine case law considers the vessel arrived when she is at the geographical and legal surrounding area of the port, usually understood as that by the common sense of the users of the port. For example, the area assigned for the vessels to wait (note this is not the same in every jurisdictions)
[xiv] “Valid” means sent to the person allowed to receive the cargo or his/her legitimate representative, at due time and form as agreed in the contract. Some jurisdictions consider the ship is ready when the loading and discharging operations in fact start, even when a valid Notice of Readiness has not been sent to the shipper or consignee (“Transgrain Shipping B. C/ Global Transporte Oceanico S.A.” [the “Mexico 1”], Court of Appeal, 31 January 1990, 1 Lloyd’s Rep. 507, in this case, the Appeals Chamber applied the Doctrine of the Stoppel, which in Argentina is known as Doctrina de los Actos Propios).
[xv] “Ready” means qualified in three senses: physical conditions, customs requirements, and sanitary demands. Ready to start the loading or discharging operations as required without significant delays for the consignee.
[xvi] Stowage time is considered part of the loading operations, and as long as stowage is not finished, the risk of delay is not transferred to the shipowner.
[xvii] Notwithstanding this, take into consideration that if the loading and discharging operations are completed before the end of laytime, the charterer is not entitled to retain the vessel for having her at his disposal. When the operations finish, the vessel is no longer at his disposal.
[xviii] Unless otherwise provided by the contract or the delay is caused by the vessel’s fault or interest.
[xix] John F. Wilson, Carriage of Goods by Sea, Pearson Longman, Sixth Edition, 2007. Chapter 3.
[xx] Luis Beltrán Montiel, Curso de Derecho de la Navegación, Astrea de Alfredo y Ricardo Depalma, 1976, page 248. And J. Domingo Ray, Contratos de utilización de buques y fletamento, 1962. They argue this is a contractual compensation.
[xxi] Note the parties can agree on deviating from the rule “once in demurrage, always in demurrage”.
[xxii] “Union of India c/ Compañía Naviera Aeolus S.A.”, House of Lords, October 8, 1962, [1962] 2 Lloyd’s Rep. 175, “If a strike occurs before the end of the laytime neither party can be blamed in any way. But if it occurs after demurrage has begun to accrue the owner might well say: true, your breach of contract in detaining my ship after the end of the laytime did not cause the strike, but if you had fulfilled your contract the strike would have caused no loss because my ship would have been on the high seas before it began.”
[xxiii] Argentine Navigation Act, art. 248: “In absence of express provision in charterparty, laytime solely comprise working days. The customary practice of the port shall determine the duration and the moment from which it start counting, as well as demurrage duration, amount, time and mode of payment. In case it does not exist customary practice, laytime shall be judicially determined and the duration of demurrage shall be half the working days corresponding to laytime and it shall be computed in running days.”
[xxiv] As for example, by hours or days, in relation to the amount of cargo loading or discharged by hour or day, or according to the customary practice of the place, or as fast as the vessel can be loaded/discharged. It can also be allocated in a proportion of 50/50 for each party, etc.
[xxv] “Torvald Klaveness A/S c/ Arni Maritime Corporation” (The “Gregos”), House of Lords, October 27, 1994, [1995] 1 Lloyd’s Rep. 1.
[xxvi] Argentine Navigation Act, art. 230, provides the charterer with the right to rescind the contract, prior written notice, in cases when the shipowner does not place the vessel at his disposal in the time and form as agreed in the contract. It also sets forth that the compensation for damages shall be estimated in view of the circumstances of each case.
[xxvii] Argentine Navigation Act, art. 236: Unless otherwise stipulated, the hire rate shall be paid on a monthly basis and in advance, and in absence of said payment, the shipowner may terminate the contract, prior notice to the charterer, and withdraw the vessel from the charterer’s disposition with a simple order to the Master (…)”.
[xxviii] Argentine Navigation Act, art. 237: “The hire rate shall not be demandable when the charterer is not able to use the vessel, due to causes not attributable to him; especially, when she needs to be immobilized for more than 24 hours so that the shipowner can perform his duties relating to the conservation of the navigation conditions (…)”.
[xxix] The adjustment clause may be express or implied, provided that the adjustment is estimated in good faith and on reasonable grounds.
[xxx] The shipowner will be interested in recovering the vessel within the time agreed because most possibly, he has committed to enter into a new charterparty before the end of the one in course.
[xxxi] It will be estimated considering the values in the international market for the time chartering under similar terms.
[xxxii] In cases of late return, article 233 of Argentine Navigation Act says: “(…) For the days exceeding such date, the charterer shall pay a rate determined by the international market for this type of chartering, provided this is higher than the one stipulated in the contract.”
Furthermore, international case law indicates that the shipowner shall be compensated for the loss of hire he could not receive plus the difference the market may demand and the loss of profit caused by the late return (e.g. cancelation of other charterparty). For more information, see the English leading case “Transfield Shipping Inc. c/ Mercator Shipping Inc.” (The Achilles), [2008] UKHL 48: 9 July 2008.
In case of anticipated return, the compensation shall be the payment of the complete hire rate, plus all the expenses (e.g. fuel) incurred by the shipowner during that charter period less the amount he saved for not having the vessel in operation.
Both solutions seem to be accepted by our courts to the extent the Navigation Act sets forth the damages shall be defined as per the circumstances of the case (following the opinion of Luis Beltrán Montiel in his book Curso de Derecho de la Navegación).
[xxxiii] Example, Clause 18 from Shelltime 3: “Notwithstanding the provisions of clause 3 hereof, should the vessel be upon a voyage at the expiry of the period of this charter, Charterers shall have the use of the vessel at the same rate and conditions for such extended time as may be necessary for the completion of the round voyage on which she is engaged and her return to a port of redelivery as provided by the charter.”
[xxxiv] Example: “the vessel shall be redelivered to owners at «X» Port, 70/80 days from the delivery date, without guarantee”.
[xxxv] Besides, take into account that adding the word “about” in the contract term clause in considered, in some jurisdictions, an implicit acceptance of reasonable tolerance.
[xxxvi] Martin Dockray, Cases and Materials on the Carriage of Goods by Sea, Cavendich Publishing, Third Edition, Chapter 15.
[xxxvii] For instance, if the vessel cannot navigate for a technical flaw in the motor, and it is detained at port while the cargo loading operations are taking place, although the vessel is immobilized, it is not for the charterer’s purposes since the corresponding operations can be performed without suffering loss of time.
[xxxviii] In some jurisdictions, especially those under the Common Law, the use generic terms should be avoided, since they may be restrictively interpreted.
[xxxix] If the Navigation Act were applicable, its article 237 determines that the charterer cannot be exempted from the payment when the immobilization was caused by a forced arrival prompted by perils of the sea, groundings, damages suffered by the cargo or acts from national or foreign authorities. The payment shall be owed during all the period of immobilization, discounting the expenses for repairs or costs saved by the shipowner as a consequence of the immobilization.
[xl] Baris Soyer and Richard Williams: “Potential legal ramifications of the International Ship and Port Facilities Security (ISPS) Code on Maritime Lay, Lloyd’s Maritime and commercial Lay Quarterly”, [2005] L.M.C.L.Q. 515.
[xli] International Ship and Port Facility Security Code. This code is binding for 148 countries which are parties to the SOLAS Convention and it imposes obligations on shipowners, operators, contracting states, and port facilities. It also provides rules which shall be met in the operations on board and ashore.
[xlii] IMO Web Page, www.imo.org. If vessels which must comply with ISPS Code requirements do comply with them, they shall be granted by an ISPS Certificate and a Ship Security Certificate (after July 2004), which shall allow them to enter certain ports and make them subject to specific controls performed by ISPS port authorities from every country which have adopted the Code in its legal system. If a vessel does not count with these certificates, she may be either prevented from entering or expelled from a port. She may also be detained until the documents are finally granted.
[xliii] “Cobelfret NV c/ Cyclades Shipping Co Ltd” (The Linardos), The Queen’s Bench Division (Commercial Court), 25 May 1993, [1994] 1 Lloyd’s Rep. 28.
[xliv] Baris Soyer and Richard Williams: “Potential legal ramifications of the International Ship and Port Facilities Security (ISPS) Code on Maritime Lay, Lloyd’s Maritime and commercial Lay Quarterly”, [2005] L.M.C.L.Q. 515.
[xlv] “Andre et Cie S.A. c/ Orient Shipping (Rotterdam) BV (The Laconian Confidence)”, The Queen’s Bench Division (Commercial Court) held on 9 October 1996, [1997] 1 Lloyd’s Rep. 139.
