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22 December 2014. Time charters. Redelivery earlier than the owners were entitled to expect.

When charterparty provides for redelivery notices ("on redelivery charterers to tender 20/15/10/7 days approximate and 5/3/2/1 days definite notice") failure to comply with this requirement will not be a condition precedent to redelivery but if vessel prematurely redelivered, i.e. redelivery earlier than the owners were entitled to expect, then such redelivery will constitute a breach of charterparty, see Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd (The Great Creation) [2014] EWHC 3978 (Comm).

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14 December 2014. HBC GmbH & Co KG v Huyton Inc (The Glory Sanye)[2014] EWHC 4176 (Comm)

Shipping – Voyage Charter – SYNACOMEX 2000 form – From Constanza to Djibouti – Vessel was unable to discharge because there were no receivers for the cargo in Djibouti – Discharge port was changed to Damietta on the Mediterranean coast – Pursuant to the terms of the head time charterparty (on amended NYPE form) the vessel was to be re-delivered at Port Said and so, regardless of any agreement between the disponent owners and charterers, the vessel would have had to pass through the Suez Canal in any event – Disponent owners claimed the costs of transiting the Suez Canal from their voyage charterers as an expense arising from the charterers’ failure to discharge the cargo at Djibouti.

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30 November 2014. Law of Contract. Liability for Breach.

Standard of duty: i) when liability for breach of contract is strict, and ii) when it is based on fault in the sense of want of care, diligence or honesty.
Strict contract: when it is, in general, immaterial why the defendant failed to fulfil his obligation, and certainly no defence to plead that he had done his best.
Duty to exercise due care: this standard of duty limits person’s undertaking in performing his services to one of exercising of reasonable care and skill.
When failure is not a breach: unilateral contract, counter-promises, frustration and force majeure.

28 November 2014. Updated Off-hire due to marine growth.

Charterers deducted from hire sums due, in their opinion, for underperformance and overconsumption. The vessel in question was the subject of two consecutive time charters on the NYPE 46 form for one time charter trip under each, with the second charter being in direct continuation of the first.

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25 November 2014. Effect of Breach.

Every breach of contract gives right to injured party to claim either damages or the agreed sum or specific performance or an injunction. Another important remedy, which under certain circumstances is available to innocent side, is termination of contract. While sometimes the innocent party may be entitled to more than one of these remedies: e.g. to an injunction and damages, but not every breach gives to the innocent party the right to terminate the contract.

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24 November 2014. Lifeboats Accidents.

The crash of a rescue boat took place on the "MTM Westport" 147-meter-long chemical tanker registered in Hong Kong on 21 November 2014 in the North Sea off the Elbe estuary. As a result of boat fall from 11 metres high into the water a sailor killed and two others seriously injured. This was announced by the river police in Hamburg and the Society for Sea Rescue in Bremen.

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20 November 2014. Law of Contract. Breach.

It is not always easy to establish breach of contract, as for example in case of unilateral contract when promisor promises to pay promisee a sum of money if he, promisee, without any obligation, will do something or refrain from doing it. In such contracts promisee will not be in breach if he never attempts to perform, because he has not promise anything. But if he starts his performance then such act will bide promisor thereupon. Moreover, having begun his performance promisee might also be held to have impliedly promised to complete it, so the contract would become bilateral.

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17 November 2014. Pilotage. Personal liability of pilot. Command & Jurisdiction. Ship and liability of inanimate things.

Duty and liabilities of pilots were very important legal matters for our ancestors who valued safety of their sea trade so high as to provide in laws of Oleron, art. 25, that "[I]f a pilot undertook to answer for the piloting on his head, and afterwards lost, or even perilled the ship, the seamen or merchant might strike off his head without being liable to any punishment" but, added the law, "before he is killed it is expedient to ascertain that he has not wherewithal to pay".

Legal liabilities of any person are usually governed by that jurisdiction under which his act or fault has been committed and depends on degree of personal undertaking. For example while English courts of the nineteenth century considered pilots wholly responsible for any loss or damage occasioned by their fault or incapacity at the time pilots were conducting compulsory pilotage, their American colleagues held that it was the ship to be prosecuted because an offence resulted from pilot’s mistake was committed by the vessel (See Personal liability of pilot). Therefore it well can be that in two different countries (jurisdictions) same misconduct in one case may and in another may not attach legal liabilities.

Ancient law considered man responsible for his own wrongs and for crimes or damages caused by his slaves. When his horse or cattle injured or damaged someone or someone’s property that horse and cattle was subject to forfeiture to the benefit of injured person. The owner himself had no blame . Similar rule was applicable to inanimate things. For example in Edward the First’s (King of England from 1272 to 1307) time some of the rules were close to barbarian laws at their rudest stage. If a man fell from a tree and was injured or died, the tree was to be punished and it was called deodand. In books we can find the following definition to deodand:

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31 October 2014. Law of Contract.

An agreement is the consent of two or more persons to form some engagement, or to rescind or modify and engagement already made. Dusrum vel plurium in idem placitum consensus. That kind of agreement, the object of which is the formation of an engagement, is called a contract.
A treatise on the law of obligations or contracts, M. Pothier, vol.1, 1806.

English law has no formal definition of the contract. In the absence of a Code it has not needed one, moreover any such definition is not a part of the law itself. Very generally it can be said that by the contract is usually understood a commercial agreement, which gives rise to obligations enforced and recognised by law.

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12 October 2014. Collision between Paula C and Darya Gayatri in Dover Strait.

Collision between Paula C and Darya Gayatri took place in Dover Strait TSS on 10 of December 2013. OOW on Paula C interpreted Dover Coast Guard question about "three sixty" turn as a suggestion, which he immediately adopted as solution to the collision avoidance problem. He put wheel hard to starboard and vessel started quickly approach Darya Gayatri, which in its turn just started her course alteration to port. In few moments vessels collided. This case study vividly illustrates how easy one "marker" word can break human line of thoughts and unintentionally prompt targeted person to catastrophic action.

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08 October 2014. Approval clause in voyage charters.

Approval clauses in voyage charters impose similar duty on the owner as their analogues in time charter forms, namely, that the vessel has obtained a certain level of tradability as reflected by majors’ screening process. For obvious reasons time charterers insist on such level of tradability to be kept throughout the duration of charterparty and necessary measures are to be undertaken when major or majors reject vessel for his or their businesses. This state of things is not always mirrored exactly in voyage charters, where owners’ warranty as to "approvals" may not necessary be a continuous one. Nowadays charterers and owners agree the terms of the charterparty by way of a fixture recap e-mails and such recap is considered to have an individual legal value, independent from incorporated charterers’ rider clauses and terms to which it refers.

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06 October 2014. Updated: Berth and Port Charters.

Traditionally risks for delays in getting into the berth were apportioned between the owner and the charterer in a way that all risk as to navigation, weather and alike were rested upon the owner and those as to congestion in the port or non-availability of the berth were on the charterer since it is him who determines the ports of loading and discharge, but some of these liabilities are usually transferred back to another party by way of exceptions. Thus under a berth charter, all risks for delay in getting into the berth are borne by the shipowner until the vessel arrives at the berth, even where the delay is caused by congestion and under a port charter, by contrast, all delay risks in getting into berth, once the vessel has arrived at the port, are borne by the charterer, even where the delay is caused by weather, or a navigation risk, which otherwise shipowner would bear.

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02 October 2014. Updated: Charterer’s obligation to load and discharge.

At common law the obligation to load, stow and discharge the cargo rests solely on the shipowner, but due to the fact that the loading is a particular operation in which both parties have to concur, the shipowner’s duty does not begin until the goods are under his charge.

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02 October 2014. Updated: Charterer’s obligation to provide cargo.

In absence of express stipulations the charterer is under an absolute obligation to provide cargo according to the charterparty, which duty forms the basis of the shipowner’s right to earn freight.

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02 October 2014. Updated: Voyage Charters.Charterer’s obligation to nominate port.

The charterer should nominate port of loading and discharging and this nomination is in no way limited by any consideration of the shipowner’s convenience or expense which would be incurred in complying with this nomination. Port nomination is, however, subject to safe port/berth warranty.

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30 September 2014. Voyage Charters. Charterers’ Obligations

There are 3 main duties which charterers ought to perform under a voyage charter:

1. To nominate port of loading and discharging;

2. To provide the goods for loading and

3. To load and later to discharge the goods at the discharging port.

Breach of any of these obligations, unless it is of frustrating nature, does not give right to the shipowner to rescind the charter, so he can only sue for damages.If, however, by words or conduct the charterer professes inability to perform the charter, it will be sufficient to constitute an anticipatory breach, which if accepted by shipowner, will bring the contract to an end. When the shipowner choses to rescind charter it will be irrelevant whether or not the charterer was able to perform. The owner also has an option to affirm the contract but reserve his right for damages. In this case all rights and duties of parties under contract remain unchanged and parties obliged to fully perform contract. If the shipowner does not accept the refusal as final, the charterer can withdraw it at any time before expiration of the laydays and is entitled to begin loading.

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24 September 2014. Voyage Charters. Once on demurrage always on demurrage?

Liability for demurrage is absolute (see Liability for Breach), i.e. it does not depend on fault on the part of the charterer, nor on whatever the nature of the impediments met by the charterers. Thus, the underlying idea of "once on demurrage always on demurrage" concept is that demurrage, being a damages for continuing breach of contract, once started goes on until discharge is completed and the ship is once more available to the shipowner to use for other voyages. It is for the charterers therefore, when laydays become exceeded, to show some special reason why they should not be liable for the time spent in excess of laytime. Such special reason(s) interrupting demurrage can be only clear and unambiguous provision in charterparty or the owners’ fault.

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22 September 2014. Voyage Charters. Demurrage and Despatch.

Those are days beyond the lay day but during which the amount that he has to pay for the use of the ship is a fixed sum, necessarily what it costs the owner to keep his ship, but a fixed sum, which is usually about what it is supposed it costs the owner to keep the ship. This stipulation also is in favour of the charterer, because instead of being involved in a dispute as to what he would have to pay for days during which the ship is kept idle, a sum is fixed, and he knows what he has to pay if he keeps the ship beyond the lay days. Those are the "demurrage days".
Per Lord Esher in Nielsen v Wait (1885) 16 QBD 67 at pp.70-71

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22 September 2014. Voyage Charters. Laytime or demurrage interrupted due to owner’s fault.

Owners’ claim for demurrage is always subject to their compliance with an obligation to do nothing to prevent the vessel being available and at the disposal of the charterers for the purpose of completing the loading or discharging of the cargo.Therefore running of laytime or demurrage, as applicable, will be interrupted if due to the owners’ fault vessel was not available to the charterers either for loading or discharging operation. It is irrelevant that liability for the breach which flows from such fault is excluded by express provision in charterparty.

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01 September 2014. Voyage Charters. Laytime. Charterer’s duty to procure berth ‘reachable on arrival’.

Some recent arbitration cases show that "reachable on arrival" provision may well be used when vessel visit such ports as Lagos or Qingdao where waiting place is well outside of port limits, to deprive the charterers from the benefit of unused laytime.

On the other hand, as author of Commencement of Laytime points out, "reachable on arrival" provision is not necessarily to be considered so very favourable to the shipowners if exceptions are sufficiently clearly drafted as to suspend running of laytime or demurrage in instances when berth is not reachable on arrival.

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31 August 2014. Voyage Charters. ‘Reachable on arrival’ - The Laura Prima.

The effect of words in cl. 6 where delay is caused to Vessel getting into berth after giving notice of readiness for any reason over which Charterer has no control’ was held to give protection to the charterers only when they satisfied requirements of cl.9 which impose on them a duty to procure place reachable on arrival.

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30 August 2014. Voyage Charters. ‘Reachable on arrival’ - The President Brand.

… when breach occurred without fault from either side, the ultimate question is how does the charterparty provide for risk apportionment between the owner and charterer in case of such breach. He held that it was the Charterers’ obligation was to nominate a berth which the vessel could reach on arrival and they are in breach of that obligation if they are unable so to do.

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30 August 2014. Voyage Charters. ‘Reachable on arrival’ - The Angelos Lusis.

… on true construction of cl. 6 the vessel should arrive physically whether within or outside the commercial limits of the port, but be so positioned that nomination of a particular loading place would become relevant if the vessel is to proceed directly to the berth. When the owner brought the vessel to such position, the charterers become obliged to indicate reachable place which she would be able to reach and occupy. Under the reachable place Megaw J apparently meant a vacant berth since delay in berthing was caused by congestion in port.

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26 August 2014. Voyage Charters. Laytime. The Johanna Oldendorff & The Maratha Envoy.

In E.L. Oldendorff & Co GmbH v Tradax Export SA (The Johanna Oldendorff) [1973] 3 All ER 148 the charterers, instructed The Johanna Oldendorff to proceed 'to the port of Liverpool/Birkenhead to discharge'. When she arrived at Mersey Bar anchorage at 17.00 hours on 2 January 1968, no berth was nominated by charterers, therefore vessel anchored there and the next day proceeded to Princes Pier landing stage, Liverpool, and cleared with the customs. She was then ordered by the port authority to leave and proceed to anchor at the Bar light vessel. The vessel lay at anchor at the Bar from 3rd to 20 January ready, so far as she was concerned, to discharge. Owners claimed demurrage on the footing that that The Johanna Oldendorff became an arrived ship when she anchored at the Bar anchorage because that is within the port of Liverpool. In reply charterers argued that anchorage is at least 17 miles from the dock area, or commercial area of the port, that arrival at that anchorage is not arrival at the port of Liverpool/Birkenhead and that the ship did not arrive until she proceeded to her unloading berth in the Birkenhead docks.

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25 August 2014. Voyage Charters. Laytime. WIPON/WIBON.

As it can be seen from decisions in both The Johanna Oldendorff and The Maratha Envoy usual waiting place shall be within port, however, parties can and often do provide for an option that in case of congestion inside the port or in case the berth is occupied on arrival vessel can tender NOR "at the usual waiting place, whether in berth or not, whether in port or not". By introducing a "whether in port or not" clause, the owner, when in doubt about the port limits and boundaries of customary waiting places, is given some flexibility and his tender of notice of readiness will be effective with greater degree of certainness.

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16 August 2014. Voyage Charters. Laytime. Arrived Ship. Destination point.

If charterparty in question is a berth charter, then the owner fulfils his duty as to ‘arrived ship’ only when his vessel gets alongside the berth. Any notice sent before this moment is premature and invalid and will remaining invalid unless another one tendered from the berth (read more Premature and Invalid NOR).

By contrast, position under a port charter was a matter of many controversies until the end of the last century. Whereas decision of the Court of Appeal in The Leonis was considered to firmly lay down general principles which must be followed, the difficulty has been to find out what those principles are. The essence of legal polemics was concentrated on efforts to define port limits as combination of geographical, legal and administrative limits. The task was very difficult in view of unprecedented expansion of limits of many ports prompted by rapid growth in size and number of ships after the end of WW II . The problem was vividly highlighted by discussions and decision of the House of Lords in The Aello [1960] 2 All ER 578.

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15 August 2014. Voyage Charters. NOR and Laycan

Situation when vessel arrives within laycan does not require any additional elaboration. If, however, the vessel arrives earlier than the first date of laycan, then the question whether she may, should or should not tender an NOR will depend on the wording of charter in question.

BPVOY4 in para 6.2 says that NOR shall not be tendered, nor shall the Vessel proceed to berth, prior to the Commencement Date without Charterers’ prior agreement in writing, while SHELLVOY5 and SHELLVOY6 in cl.13(1)(a) states that notice shall not be tendered before commencement of laydays without any qualification for Charterers’ consent.

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14 August 2014. Time Charters. Termination: Renunciation and Rescission

The charterers under a strict obligation to pay freight to the owners under a voyage charter. This obligation is not qualified by such external factors as financial difficulties, drop in freight rates, market conditions, etc. In such cases there is no doubt that the charterers are liable.

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12 August 2014. Time Charters. Condition of Vessel on Redelivery

Extent and validity of charterer’s duty to redeliver in the same good order as when delivered is rather difficult to assess, because all of a sudden at the end of charter period time charterers accrue liability which was the owners’ burden all the way through this period of time as a part of their duty to keep the ship in good order and condition during time charter. It is suggested therefore that under this type of clause the charterers incurs no liability as regards defects in the condition of the ship on redelivery unless those defects have arisen from their contractual default or resulted from last employment orders given by the charterers. This latter qualification related to charterers’ duty to redeliver vessel fully discharged and free of previous cargoes.

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10 August 2014. Time Charters. Date of Redelivery

Timely redelivery is not always a condition of a time charterparty, but may well be an 'intermediate' term since a short delay in redelivery will not justify the termination of the contract. When the charterers insist on their orders which, at the moment of performance, will apparently lead to late redelivery, they may find themselves in repudiatory breach shall they not replace that orders for a valid one, if in a result of compliance with such orders, the vessel would proceed on last voyage and consequently being redelivered late.

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6 August 2014.Tidal Energy Ltd v Bank of Scotland Plc [2014] EWCA Civ 1107 (31 July 2014)

Contract – CHAPS payment – Payment form includes box "Receiving (beneficiary) customer name" – Money sent to beneficiary customer account and sort code which did not match beneficiary name – Is the bank authorised to debit appelants’ account with the amount specified on the form?

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30 July 2014. Mate’s Receipt

Mate’s receipt is a document originally issued by the first mate of the ship (see photo), who is in charge for cargo operation. Then mate’s receipt or receipts collected by the shipper or his representative and later exchanged for a bill of lading, which should incorporate any qualifications or conditions inserted into the mate’s receipt. In modern practice, mate’s receipt, when exists, is usually signed by the representative of shipping company or its agents, who is responsible for loading and not by ship’s officer. Since all the business related to mate’s receipt is of some antiquity, I offer in this topic several illustrations of how it operated in its original mode on case law example from the nineteenth century: Schuster v M’Kellar (1857) 7 El. Bl. 704. It shows way of dealing with mate’s receipts and associated legal issues and liabilities.

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30 July 2014. Time Charters. Place of Redelivery

Place of redelivery together with the time of redelivery are the two terms which define the extent of contractual service. Range "from Japan to Persian Gulf" can encompass Honolulu as it was held in The Sanko Honour because under the provision of charterparty Japan was the central locus. When both terms expressly stipulated in time charter, failure of charterers to comply with either of them, will constitute breach of the charter for which the charterers will be liable in damages.

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24 July 2014. Time Charters. Redelivery - Power of disposition

Mackinnon L.J., called a time charterparty "a misleading document, because the real nature of what is undertaken by the shipowner is disguised by the use of language dating from a century or more ago". Originated from what is now known as demise charterparty, certain phrases "survived" to be seen in modern time charters provisions. Delivery and redelivery terms are from that category … "Redelivery" relates to the power of disposition of the ship. When the power of disposition is restored to the owner there is a redelivery within the meaning of the clause.

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22 July 2014. Soufflet Negoce SA v Fedcominvest Europe Sarl [2014] EWHC 2405 (Comm)

Sale Contracts – GAFTA 64 – Clause 19 – Whether "any notice received after 1600 hours on a business day shall be deemed to have been received on the business day following" apply to all contracts or only in case of resales/repurchases?

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20 July 2014. Time Charters. Wrongful termination

Repudiation or termination of charter is wrongful when either party misinterpret its right as injured side to bring the contract to an end. Decision to terminate contract is wholly in hands of the innocent party, but the right to terminate is only accrued when an opposite side has broken such clause in charterparty which is:

i) condition or
ii) intermediate term which deprives innocent party of substantially the whole benefit of charterparty.

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20 July 2014. Time Charters. Termination. Damages

Damages for repudiation of a time charter assessed on the basis of general principle of restitutio in integrum, within the limits expressed in Hadley v Baxendale, (1854) 9 Exch. 341 and comparable with that of the law for sale of goods: where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been delivered or (if no time was fixed) at the time of the refusal to deliver. Sale of Goods Act 1979, s 51(3).

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19 July 2014. Law of Contract: Option to disregard repudiation

One may wonder why aggrieving party should wish to go on and incur expense in performing the contract instead of confirming repudiation, terminating contract and recovering damages from the party in default.

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19 July 2014. Law of Contract: Repudiation.Option to terminate

In majority of cases innocent party may and will accept the repudiation and terminate contract. Termination of contract in case of breach generally means that primary obligations of both sides have come to the end and the innocent party or, in some cases, both parties are excused from further performance. In other words injured party is no longer bound to pay any further payments which had not yet fallen due at the time of rescission, but remains liable to perform obligations which had accrued before rescission.

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19 July 2014. Law of Contract: Repudiation.Positive Election

… it is said that there is no third option open to the innocent party in the sense that there is no way to affirm the contract and yet be absolved from tendering further performance. But there is a recognised decision making period of time between acceptance of repudiation and affirmation of the contract.

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19 July 2014. Law of Contract: Repudiatory Breach

Generally, any breach which goes to the root of the contract and gives a right to the aggrieved party to exercise his option to terminate the contract, or in the other words to repudiate the contract, is a repudiatory breach. Breach of condition therefore is always a repudiatory breach (for Conditions, Warranties and Innominate terms see Contractual Terms). The following acts illustrate accrual of the right to repudiate:

• Breach by the shipowner of implied common law undertakings to provide seaworthy ship;
• Breach of duty to commence and carry out the voyage contracted for with reasonable diligence and without unjustifiable deviation;
• Breach by the time charterer expressed or implied duty to pay hire accurately and in full.

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18 July 2014. Law of Contract: Repudiation. Drastic Measure

Decision to terminate contract is wholly in hands of the contracting party, but the right to terminate is only accrued in certain circumstances. Therefore, while each of the parties to contract is free to stop his contractual performance when he considers that happening of certain events gave him a right to do so, such action if later be found by the court as a wrongful termination, may leave him liable for substantial damages. Thus, repudiation is a very important decision which if rightly exercised can become a highly effective remedy, but when wrongfully made may fire back with equal force.

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18 July 2014. Law of Contract: Repudiation and Rescission

Imperfection of terminology concerning to repudiation and rescission is well known. It is said that owing to the historical difference between common law and equity, the language adopted is far from uniform: while common lawyers usually use the word repudiation, equity lawyers inclined to employ words rescission or setting a contract aside.

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17 July 2014. Time Charters. Termination. Available options

In recent decision of the Commercial Court in Isabella Shipowner SA v Shagang Shipping Co Ltd (the Aquafaith) [2012] EWHC 1077, the shipowners appealed from the arbitrator’s award on the question of law, whether they were entitled to refuse early re-delivery of the vessel and affirm the charter, or whether they were bound in law to accept early re-delivery and merely entitled to sue for damages. (follow these links to read more on the general rule on the right of innocient party to elect whether to affirm or disregard to accept repudiation.)

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14 July 2014. Time Charters. Concept of vetting.

Notwithstanding that fact that vetting inspections concerned with the physical condition of the ship for the purpose of sea carriage of nominated cargo, such inspections are outside of scope of either legal readiness or seaworthiness requirements, because, they are not "required by the law of the vessel’s flag or by the laws, regulations or lawful administrative practices of governmental or local authorities at the vessel’s ports of call".

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11 July 2014. Time Charters. Off-hire due to the seizure by pirates

Apart of human problem of releasing crews from lengthy captivity there are many complex financial issues related to ship and cargo being out of owners’ hold for significant time. Masefield AG v Amlin Corporate Member Ltd [2010] EWHC 280 (Comm) and Cosco Bulk Carrier Co Ltd & Anor v M/V Saldanha C/P dated 25/06/08 [2010] EWHC 1340 (Comm)

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9 July 2014. Revised Letters of Protest. User’s Manual.
7 July 2014. Nidera BV v Venus International Free Zone for Trading & Marine Services SAE [2014] EWHC 2013 (Comm)

Sale of Goods – GAFTA 49 – Clause 6 and 8 – Extension of Delivery – Whether buyer has unqualified right to extend period of delivery when timely notice served?

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18 June 2014. Terminal Contenitori Porto Di Genova Spa v China Shipping Container Lines Ltd [2014] EWHC 1629 (Comm)

Contract – Safe Berth – Sudden increase of wind blow the vessel off terminal – Damage to shore crane during re-berthing – Whether Owners conducted themselves with reasonable skill and care at all times when using the Terminal?

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11 June 2014. Falkonera Shipping Co v Arcadia Energy Pte Ltd (The Falkonera) [2014] EWCA Civ 713

Shipping – Shipping – Voyage Charter – BPVOY4 cl.8.1 – STS lightering clause – STS transfer between two VLCCs – Owners withholding their approval of the receiving Vessels – Whether no reasonable shipowner could have regarded their concerns as sufficient reason to decline approval?

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27 May 2014. Fulton Shipping Inc of Panama v Globalia Business Travel S.A.U. of Spain [2014] EWHC 1547

Shipping – Timecharter – NYPE form – Charter repudiated by the charterers with two years to go – Owners sell vessel because they cannot find employment – Whether the Owners required to give credit for any benefit in realising the capital value of the Vessel, by reference to her capital value at the end of charterparty time?

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20 May 2014. Off-hire due to marine growth.

Accumulation of marine growth (barnacles or molluscs) on ship’s hull in warm waters is often a cause of significant reduction in ship’s speed and impairment of vessel’s performance. Such accumulation produces particularly negative effect on speed and fuel consumption characteristics after prolonged idle periods (more than 2 weeks) at anchor in tropical water. As a result, this natural phenomenon brings up the following issues:

i) loss of speed and increase of time during loaded and ballast passages;
ii) increase of fuel consumption to compensate speed underperformance;
iii) expenses and delays associated with necessity of hull cleaning.

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14 May 2014. Lifeboats Accidents.

Recent accidents with reports and photos.

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14 May 2014. Use of VHF in Collision Avoidance. Language barrier, wrong assumptions and national incompatibility.

Filipino 2/O of CMG CGM Florida offered his Chinese colleague 2/O, who was on board for a period of familiarisation, to make a passing agreement with Chinese 2/O officer on give way vessel Chou Shan in Mandarin language, which he was not able to understand and therefore was not aware about exact outcome of communication between two Mandarin speaking officers.

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12 May 2014. Amended Time Charters. Off-hire clause.

A charter-party might provide that the vessel would remain on hire except during delay caused by a breach of contract on the part of the owner; or it might provide that the vessel should be off hire in the event of delay, unless caused by breach of contract on the part of the charterers. Either solution would provide a rule that was tolerably clear and workable. But those who make charter-parties prefer something more complicated. They provide for a vessel to be off hire in some events which are not a breach of contract by either party - for example, interference by authorities in the present case. As is fashionable nowadays, the clause is said to deal with allocation of risk. The only general rule that can be laid down is that one must consider the wording of the off-hire clause in every case.

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10 May 2014. Amended Time Charters. Off-hire.

Each to time charter contract protects is aware of the possibility of the benefit which party is contracting to obtain, being interrupted by various causes and each party protects itself against such eventualities. The owner, for example, has a right to withdraw the vessel on the charterer’s failure to make its payments punctually and regularly; on the other hand the charterer is guarding himself against interruptions in ship’s services by the clause which suspends payment of hire during such period of time, when happened by reason of any of the contingencies which this particular clause contemplates.

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10 May 2014. American Overseas Marine Corp v Golar Commodities Ltd (The LNG Gemini) [2014] EWHC 1347 (Comm)

Shipping – Timecharter – Injurious Cargoes – Whether anything that is harmful or tends to harm the vessel as an instrument of trade is harmful to the vessel?

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7 May 2014. Amended Safe Port Warranty - Named port or ports.

The owners shall be aware that in absence of safe berth/port warranty they have to satisfy themselves not only that anticipated berth or port is safe for vessel to reach and remain, but also that their vessel is fully fitted for that berth and/or port.

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27 April 2014. Added Tank Cleaning: Absolute liability.

Tank cleaning operation is a procedure by which the owner assures cargo readiness or in other words physical readiness of the vessel to load the goods nominated by the charterer. If the vessel is not fit to carry the goods specified in the contract, that will amount to uncargoworthiness as an integral part of unseaworthiness, even though the vessel itself might well be able to complete the contract voyage in safety.

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27 April 2014. Added Tank Cleaning: Extent and operation of duty of due diligence.

When the owners warrant only exercising of due diligence, their failure to present ship’s tanks cleaned to satisfaction of charterers’ inspector(s) at loadport, not necessarily constitute a breach. Consequences of non-acceptance of the vessel’s tanks before loading and an effect of such failure on parties liabilities under laytime and demurrage provisions was a subject of an interesting analysis done by Moore-Bick J in Triton Navigation Ltd v VITOL SA (The Nikmary) [2003] EWHC 46 (Comm).

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27 April 2014. Added Tank Cleaning: Jointly appointed inspector.

It is very unlikely that the parties would have intended to entrust such an important determination unless the person was jointly appointed. By analogy with the Protank Orinoco a determination by charterers’ surveyor alone or by jointly inspection by independently appointed inspectors has a much limited effect and would merely entitle the charterer to order vessel to undertake some further cleaning.

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27 April 2014. Added Tank Cleaning: Continuous Obligation under time charter.

To evaluate whether the owner has discharged his duty of due diligence when performing tank cleaning operation the court scrutinises documentary evidence such as ship’s log books, recorded procedures, master’s and chief officer’s reports and experts evidence. Thus, investigation invariably raise complex technical questions as shown in The Aditya Vaibhav [1993] 1 Lloyd’s Rep 63 and especially in The Liepaya [1999] 1 Lloyd’s Rep 649.

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24 April 2014. Added Laytime & Demurrage in Charterparty and sale contract

International transaction for the sale of goods has underlying contract of sale between the seller and the buyer and a contract of carriage between either seller or the buyer with the carrier, so there are two different contracts between different parties. In case of FOB contract it is usually the buyer who enters into the contract of carriage, i.e. charters the vessel, and in case of CIF the seller.

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24 April 2014. Added Laytime & Demurrage in sale contract - indemnity or independent provision?

There are two conflicting constructions said to be able to achieve the commercial purpose of the laytime and demurrage clause in the contract of sale: a) provisions operating as an indemnity and b) independent provisions. The difference between these two approaches is …

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31 March 2014. Added Meaning of Safe Port: Safety System of the Port

While usually predictable, adverse meteorological conditions nevertheless can deeply affect safety of any given port. Therefore in many ports a system of protection against bad weather conditions has been developed. A port which is only safe in fair weather is not safe, as Donaldson J said in Vardinoyannis v The Egyptian General Petroleum Corp. (The Evaggelos Th) [1971] 2 Lloyd’s Rep 200 at p.206.

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30 March 2014. Geden Operations Ltd v Dry Bulk Handy Holdings Inc (The Bulk Uruguay) [2014] EWHC 885 (Comm)

Shipping – Timecharter – NYPE – Amended BIMCO Piracy Clause – GOA OK vessel – Anticipatory breach – Whether there is some principle of law whereby a party who has made his performance dependent on a discretion to be exercised by a third party is ipso facto deemed to be evincing an intention not to perform – Required inevitability of breach.

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30 March 2014. Amended Dangerous Goods.

It was, however, disputed for many years whether absence of knowledge or means of knowledge on the part of the shippers is a good defence against the owners’ claim. This issue was specifically addressed by Lord Lloyd of Berwick in Effort Shipping Co Ltd v Linden Management SA (The Giannis NK) [1998] 1 All ER 495 when he hold at p.506 that:

…the liability of a shipper for shipping dangerous goods at common law, when it arises, does not depend on his knowledge or means of knowledge that the goods are dangerous.
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26 March 2014. Amended Meaning of Safe Port: Physically safe.

Physical safety of the port refers to the dangers which the vessel may encounter when she enters and leaving port, such as wrecks, and other hidden dangers, narrow channels, shifting mud banks, ice etc.

Beginning from the last quarter of the nineteenth century rapid development of propulsion systems stimulated, in its turn, significant growth in size of the ships. Obviously, a bigger vessel was able to carry more goods and also draw more water but apart from draft limitations, such a vessel required larger sea room for anchoring and safe manoeuvring within port limits, tug assistance in narrow channels, experienced pilot and master to handle it inside the harbour. It therefore became necessary to consider individual particulars of each vessel to ascertain safety of port in question.

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26 March 2014. Amended Meaning of Safe Port: Legal consequences of inaccessibility of port.

In cases when impediment made the port inaccessible for uncertain period of time the courts were involved in proceeding on an erroneous estimate of the facts and probabilities to apportion liabilities for resulting delays, or in other words, it was necessary to decide whether what had in fact been done was a commercially reasonable way to act to avoid an absurd result. This concept naturally involves consideration on the matter of degree, i.e. whether anticipated delay would have been inordinate.

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26 March 2014. Amended Meaning of Safe Port: Effect of threats of war, aggression or terrorism.

If not the ship itself but only the goods would be subjected to confiscation such nominated port will also be unsafe and the master’s duty to take care of the cargo will justify him, apart from any express provisions in the bill of lading or charterparty, in landing the goods at another safe place. The case of Nobel’s Explosives Co. v Jenkins [1896] 2 Q. B. 326 shows that only threat (albeit well founded) of seizure is sufficient for the port to be considered as unsafe, Mathew J formulated his opinion in the following words:

I am satisfied that if the master had continued the voyage with the goods on board he would have been acting recklessly. It was argued for the plaintiffs that the clause did not apply unless there was a direct and specific action upon the goods by sovereign authority. It was said that the fear of seizure, however well founded, was not a restraint, and that something in the nature of a seizure was necessary. But this argument is disposed of by the cases of Geipel v Smith (1872) L.R. 7 Q.B. 404, L. R. 7 Q. B. 404, and Rodoconachi v Elliott, (1874) L. R. 9 C. P. 518. The goods were as effectually stopped at Hong Kong as if there had been an express order from the Chinese government that contraband of war should be landed. The analogy of a restraint by a blockade or embargo seems to me sufficiently close.
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19 March 2014. Amended Safe Port. As near thereto as she can safely get.

Have a look at amended sub-chapters: Geographical limits; Politically unsafe; Dahl v Nelson.

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18 March 2014. Amended Safe Port warranty: Nugatory nomination.

For a long time safe port implication was considered to necessary follow from the Charterers’ duty to order vessel to go to the port to which she could proceed. Nomination of impossible port is a nugatory nomination which could not possibly be acted upon. On the other hand it is said that no decision had yet gone so far in a voyage charterparty case and any suggested implied term has to be considered against the general business background to the transaction and the express terms of the charter.

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18 March 2014. Amended Safe Port Warranty: Implied safe port warranty.

The main difficulty with implication of safe warranty comes from the considerations that the omission of an express warranty may well have been deliberate or such an implied term is not necessary for the business efficacy of the charter or because such an implied term would at best lie uneasily beside the express terms of the charter.

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18 March 2014. Amended Safe Port Warranty: Named port or ports.

When the charterparty provides for a named port/berth or for two or more out of a number of named ports or berths nominated for the owners’ vessel to go, but silent as to safety, it is doubtful whether the charterer will be under any obligation as to the safety at all.

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17 March 2014. Amended Safe Port warranty. Unnamed port or ports.

Second part of celebrated statement of Dixon CJ in Australian Wheat Board v Reardon Smith Line Ltd [1954] HCA 27 is understood as possibly meaning that where the charterer cannot specify the place at the time of the charter a warranty would be implied that the nominated port or ports was or were safe. Due to lack of direct authority this question is yet to be finally decided.

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17 March 2014. Added Safe Port. Express warranty - Case law overview.

Analysis of English and American case law on express safe port warranty in charterparties: St Vincent Shipping Co Ltd v Bock, Godeffroy & Co (The Helen Miller) [1980] 2 Lloyd’s Rep 95; Atkins International HA v Islamic Republic of Iran Shipping Lines (The APJ Priti) [1987] 2 Lloyd’s Rep 37; Ullises Shipping Corporation v Fal Shipping Co Ltd (The Greek Fighter) [2006] EWHC 172 (Comm); AIC v Marine Pilot Ltd (The Archimidis) [2008] EWCA Civ 175; The Ahos I [2013] US11-2576.

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17 February 2014. Added Omv Supply And Trading AG v Kazmunaygaz Trading AG (Rev 1) [2014] EWCA Civ 75

Sale contracts – All fees … and penalties incurred by non EU origin, in force at the time of cargo customs clearance – Whether the seller is to pay the fees whatever they may be even if they exceed the price.

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17 February 2014. Revised: Ignorant and Illiterate

One of the main rights of the seamen was and is their right to be paid at the time when their contract comes to an end. As far as English law goes this right was guaranteed by the lien over the vessel on which seaman has served and goes back over 400 years in English Admiralty Court. The right for wages based on the contract of employment was not always easy to enforce due to the "extreme disparity" between seamen and the shipowners …

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16 February 2014. COLREGS Rule 19. The tragedy of Sun Cross

In recent collision case M.V. Sun Cross v M.V.Rickmers Genoa [2010] EWHC 1949 (Admlty) the Court was to consider the question of liability arising out of a collision which took place in the early hours of 8 March 2005 in the Yellow Sea between the vessels SUN CROSS and RICKMERS GENOA. Behind this formal words related to claim of the cargo owners we must not forget that this collision brought with it much more valuable damage which cannot be remedied at all: lives of all but two of the crew of Sun Cross. Enormous human loss and many similar contributing factors put this tragedy in one line with Mineral Dampier disaster. In aftermath of collision, 13 crewmembers of SUN CROSS went missing; water flooded one of the RICKMERS GENOA’s cargo holds contained 600 tons of a granulated, magnesium-based desulphurization reagent. About four hours later, the RICKMERS GENOA suffered an explosion and fire in that hold. The chief officer died in the explosion and the ship itself sustained serious damage.

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16 February 2014. COLREGS Rule 17.

… deck officers usually ignorant about distinction between sections (a)(ii) and (b), i.e. instances when stand-on vessel first ‘may’ and later ‘shall’ take avoidance action, and have little idea about objective assessment of distances between vessels at both stages. Distinction is important because it imposes different degree of duty on stand-on vessel and accordingly the law treats differently violation of ‘may’ and ‘shall’ obligations which is finally reflected in apportionment of collision claims.

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16 February 2014. Use of VHF in collision avoidance.

… establishing of VHF contact and reaching of passing agreement does not bring as such any benefits for the purpose of collision avoidance when COLREGS and rules of good seamanship are forgotten or not followed.

… the persistent and unsuccessful attempts to make contact whilst in the meantime making no alteration of course and speed is strongly suggestive of a reliance on VHF contact as the method of first resort in collision avoidance.

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06 February 2014. Added - In-Transit Loss (ITL) Clause.

… clause connotes loss that is incidental to the carriage of oil products, and does not extend to losses such as those that occurred because of the action of the pirates.…

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06 February 2014. Amended Freight; Cargo Retention Clause.

Complexity of ascertainment of short delivery after a normal voyage was acknowledged by Kerr LJ in The Olympic Brilliance [1982] 2 Lloyd’s Rep 205, at p.209 as notoriously difficult in the bulk carriage of oil …

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01 February 2014. Amended Time charters - Withdrawal as equivalent to cancellation.

Withdrawal is irrevocable and therefore operates only in one way: in way of cancellation of charterparty. There cannot be a partial withdrawal of the owners’ vessel and neither any temporarily suspension of the timecharter can take place unless such right is expressly granted to them by the contract …

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01 February 2014. Amended Time charters - Time is of essence of withdrawal provision.

For late payment of hire to be of repudiatory character it would be necessary to find that they evinced clearly by it an intention not to be bound by the terms of the contract. However in several later decisions of the House of Lords unequivocal statements of Lord Diplock suggest that timely payment of hire is of the essence and therefore a condition of the contract of affreightment …

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01 February 2014. Amended Time charters - Suspension of hire and suspension of service.

In Tradax Export SA v Dorada Compania Naviera SA of Panama (The Lutetian) [1982] 2 Lloyd’s Rep. 140, Bingham, J. held that the language of cl 15 of NYPE 46 form, which said that when time was lost from the listed causes "the payment of hire shall cease", accords with the Charterers’ construction that the parties intended the owners to be secured by payment in advance in respect of hire which he would or might earn but not in respect of hire which he could never earn. Accordingly, no hire was payable on the due date if the ship was off-hire at that time. …

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29 January 2014. Amended Time charters - Withdrawal for underpayment.

The charterers have a right to deduct from the hire on the basis of equitable set off. But for such the deductions to be permissible it is essential that the estimates of the amounts of each of them were reasonable. To satisfy this test the deductions should be calculated on a reasonable basis in good faith and with detailed justifications. …

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29 January 2014. Amended Time charters. Withdrawal.

The the common law generally gives to the innocent party only remedies in damages for breach of contract, unless said breach is of repudiatory character. Accordingly, the common law does not treat the late payment of hire by the charterers as a breach of sufficient gravity to give the owners a right to rescind the contract, unless the conduct of the charterers show unwillingness or inability to pay or delay in payment amounts to repudiation of the charter. …

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27 January 2014. Glencore Energy UK Ltd v Cirrus Oil Services Ltd [2014] EWHC 87 (Comm) (24 January 2014)

Sale contracts – Binding contract – Identity of purchaser – Repudiation – Measure of damages– Sale of Goods Act 1979 sec 50 (2)(3)

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26 January 2014. ISM and Safety Culture.

So that is about ISM, at least in its modern status - of worship of words. I call it 'paper safety' (an non-existent reality), a bureaucratic set of rules, instructions and checklists which on the basis of foolproof presumption, covers every new accident with new checklist and circular, thus providing shipping managers with sufficient evidence against anticipated insurance claims.

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26 January 2014. Lifeboats Safety.

See shocking video on reckless way of conducting rescue boat drill underway!

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22 January 2014. Tanker Vetting F.A.Q.Are checklists for pre-arrival, pre-departure and pilot card effectively completed?

One will agree that observations which may occur here are quite obvious: some of checklists were found not properly completed, some items not ticked, UKC calculation not correct, signature missing, etc. But what if all requirements for checklists and master-pilot exchange fulfilled but inspector nevertheless made an observation?

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20 January 2014. Tanker Vetting F.A.Q. Conduct of inspection.

As it often happens, inspector during the course of inspection makes passing observations and remarks in his pocketbook without much discussion on site as VIQ requires and without clear identification of his future observation. Then during final part of his inspection inspector announces that he …

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20 January 2014. Master’s Blog. …Trust reposed in him

The authority of the master is so very great, and the trust reposed in him, including not merely the ship and goods of his employers, but he lives of the crew and passengers, so very extensive, that it is the bounden duty of the public to provide that it be not committed to ignorant or incapable hands.

COLREGS 72;
Letters of Protest;
Tanker Vetting. FAQ;
Safety at Sea and more …

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20 January 2014. Time Charters. Major approval clauses

Historically major’s approval was to the bigger extend based on the results of their physical inspection, which since the beginning of vetting process at the end of the last century, provided oil majors with first-hand information about tanker’s condition and her suitability for chartering purposes. Inspection report with the list of observations was a hard copy explanation of either rejection or duly communicated approval and a To-Do list for the owners and ship’s command.

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20 January 2014. Time Charters. Oil Major Approval - Effective cause of major’s rejection

Negative vetting decisions are normally communicated to the party proposing the business without reasons and without the vetting company separately informing the operator. Thus a vessel operator will usually not know why the vessel has not been accepted. Analysis: Dolphin Tanker Srl v Westport Petroleum Inc (The Savina Caylyn) [2010] EWHC 2617 (Comm)

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11 January 2014. Galaxy Energy International Ltd v Murco Petroleum Ltd [2013] EWHC 3720 (Comm)

Sale Contracts – Laytime – Delay in loading – Whether buyers agreed on extension of period of delivery – Market price.

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11 January 2014. ED & F Man Sugar Ltd v Unicargo Transportgesellschaft GmbH [2013] EWCA Civ 1449

Shipping – Voyage charter – Sugar Charter Party 1999 - The fire had destroyed the conveyor-belt system linking at the loading terminal – Vessel incurred substantial demurrage in loading port – Force-majeure clause (cl 28) – Whether the charterers have demonstrated that the delay in loading the vessel at Paranagua was caused by mechanical breakdown – Whether delay in loading caused by and/or in consequence of a fire which destroys mechanical loading equipment (and/or a port authority’s re-scheduling of loading following such destruction) counts as laytime under the Charterparty and whether the fact that loading thereunder at "1-2 safe berths" is lawfully relevant to the operation of Clause 28 of Charterparty.

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29 October 2013. Revised Meaning of an ‘Oil major’ and ‘Recognised Oil Majors’

While there is, of course, a good commercial sense in the arbitrator’s finding that ‘the tradability of the vessel will be affected by a good or poor report from any of the oil majors’, but proposed reading would require in-service approvals from virtually unlimited set of oil majors because in certain regions companies like Statoil, Cepsa, Repsol or Lukoil secured a significant market share and their good or poor report would certainly affect vessel’s tradability. Say nothing about the fact that both Conoco and Phillips recently began to conduct independent inspections.

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28 October 2013. Added Flame SA v Glory Wealth Shipping PTE Ltd [2013] EWHC 3153 (Comm)

Shipping – Time Charter – COA for 6 cargoes of coal in bulk in each of the years 2009, 2010 and 2011 – Charterers failed to declare laycans for the 5th and 6th shipments of 2009 and for all 6 shipments in 2010 – Assessment of damages for breach of contract – Whether innocent party still bore the burden of proving its loss on the balance of probabilities if it had accepted the repudiatory breach of the "contract-breaker" – Whether the vessel nominated by disponent owners must be owned by the them or be time, voyage or slot chartered by them.

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25 October 2013. Revised: Time Charters. Oil Major Approval

In and before 1999 it seems that some major oil companies were happy to inspect oil tankers and record the results of that inspection on a database, available to subscribers, called SIRE. If an owner wanted to comment on any such inspection report, he was entitled to do so and those comments would also be available on SIRE for all subscribers to see. The relevant oil company would if satisfied then issue an approval of the vessel. The approvals would be dated and would often be expressed to be valid for a particular period of time and thus have an expiry date which an owner could then write in to any contract …

This practice began to change as a result of pollution incidents involving the vessels "ERICA" and "PRESTIGE" in 2002 because statements that those vessels had been "approved" by oil majors led to damaging publicity for the oil majors concerned.
Per Lord Justice Longmore in Transpetrol Maritime Services Ltd v SJB (Marine Energy) BV (The Rowan) [2012] EWCA Civ 198

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21 October 2013. Revised: Time Charters. Hire

The ability of the vessel to earn hire is continuous and reflected in the value of the vessel and if the vessel was stranded and later lost due to the Charterers’ breach of safe port warranty, the hire which would have fallen due until the date of loss was recoverable as damages.

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21 October 2013. Revised: Time Charters. Damages for Repudiation

Although revival of the market is relevant for the purpose of establishing whether the owners’ loss is self-induced and flows from his failure to mitigate it does not in itself provide the correct measure of damages.

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20 October 2013. Revised: Time Charters. Frustration

The parties released from the contract even if the cause of frustration was within the contemplation of the parties when they made the contract. In this context the "unforeseen circumstances" means circumstances for which was no provision made in the contract.

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12 October 2013. New: Time Charters. Employment and Indemnity

Usual form of time charter contract when the charterer requires to have the vessel at his disposal and to be free to choose voyages and cargoes and negotiates bill of lading terms also, adopts the concept that the owner must be expected to grant such freedom only if he was entitled to be indemnified against loss and liability resulting from it. In other words indemnity serves to compensate the owner against losses arising from risks or costs which he has not expressly or implicitly agreed in time charterparty to bear. However, there is no the indemnity for risks which the owner has contractually agreed to take, e.g. navigation of the ship or incidents of navigation, or which arise from his own negligence or breach of contract or which are incidental to the service for which the vessel was required to be available, e.g. marine growth and hull fouling.

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11 October 2013. Revised: Time Charters. Types

Concept of time charter is fundamentally different from one of voyage charter; it is not a contract of carriage of the goods by sea between certain geographical locations but a contract for services rendered by the owners’ vessel during a certain period of time for agreed pay. Basically, a time charter is a contract of lease of the vessel when the owners are paid irrespective whether their vessel employed during the time of lease or not, therefore apart from trip charter neither departure port nor the port of destination is of any importance for the owners.

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11 October 2013. Revised: Time Charters. Delivery and Duration

As to geographical position of the vessel at the date of delivery it must meet requirement that the vessel is at the immediate and effective disposition of the charterers. The concept of laycan has a lot of similarity with one developed in voyage charters, although, terms related to place of delivery in time charter are less stringent as compared with a berth or a port voyage charters. Usually time charter provides for locations such as ‘dropping last outward pilot’ or OPL Singapore, where exact vessel’s location at the moment of delivery is of no importance.

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10 October 2013. Revised: Time Charters. Description of the vessel

Description of the vessel is, naturally, very important to both sides of charterparty contract, because it outlines particulars and characteristics of the subject-matter of contract. The charterers obviously expect from the owners a punctual compliance with these provisions and in case of misdescription may be entitled to terminate contract or insist on rectification. In their turn the shipowners must tender the actual ship as per description in charter and, in the absence of a clearly drafted substitution clause, they are neither bound nor entitled to tender another ship.

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08 October 2013. Revised: Time Charters. Introductory section

Formation of a time charterparty, same as a voyage charter, governed by the ordinary rules of the law of contract, i.e. there must be an offer and acceptance, then the parties must have agreed all the essential terms either in writing or verbally to make the contract binding.

Contract for services. It is necessary to note that a time charter is a contract for services to be rendered to the charterer by the shipowner through the use of the vessel by the shipowner’s own servants, the master and the crew. The charterer has no proprietary interest in the vessel, i.e. ship is not leased or withdrawn, only her services matters to the charterer.

Performance of charter. Duration of a time charter implicate period of the time not the length of single or a number of voyages or geographical rotation. Therefore a time charter unlike a voyage charter, instead of provisions for freight, laytime and demurrage has stipulations for payment of hire, delivery, redelivery and off-hire events.

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21 October 2013. Revised: Time Charters. Hire

The ability of the vessel to earn hire is continuous and reflected in the value of the vessel and if the vessel was stranded and later lost due to the Charterers’ breach of safe port warranty, the hire which would have fallen due until the date of loss was recoverable as damages.

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21 October 2013. Revised: Time Charters. Damages for Repudiation

Although revival of the market is relevant for the purpose of establishing whether the owners’ loss is self-induced and flows from his failure to mitigate it does not in itself provide the correct measure of damages.

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20 October 2013. Revised: Time Charters. Frustration

The parties released from the contract even if the cause of frustration was within the contemplation of the parties when they made the contract. In this context the "unforeseen circumstances" means circumstances for which was no provision made in the contract.

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12 October 2013. New: Time Charters. Employment and Indemnity

Usual form of time charter contract when the charterer requires to have the vessel at his disposal and to be free to choose voyages and cargoes and negotiates bill of lading terms also, adopts the concept that the owner must be expected to grant such freedom only if he was entitled to be indemnified against loss and liability resulting from it. In other words indemnity serves to compensate the owner against losses arising from risks or costs which he has not expressly or implicitly agreed in time charterparty to bear. However, there is no the indemnity for risks which the owner has contractually agreed to take, e.g. navigation of the ship or incidents of navigation, or which arise from his own negligence or breach of contract or which are incidental to the service for which the vessel was required to be available, e.g. marine growth and hull fouling.

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11 October 2013. Revised: Time Charters. Types

Concept of time charter is fundamentally different from one of voyage charter; it is not a contract of carriage of the goods by sea between certain geographical locations but a contract for services rendered by the owners’ vessel during a certain period of time for agreed pay. Basically, a time charter is a contract of lease of the vessel when the owners are paid irrespective whether their vessel employed during the time of lease or not, therefore apart from trip charter neither departure port nor the port of destination is of any importance for the owners.

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11 October 2013. Revised: Time Charters. Delivery and Duration

As to geographical position of the vessel at the date of delivery it must meet requirement that the vessel is at the immediate and effective disposition of the charterers. The concept of laycan has a lot of similarity with one developed in voyage charters, although, terms related to place of delivery in time charter are less stringent as compared with a berth or a port voyage charters. Usually time charter provides for locations such as ‘dropping last outward pilot’ or OPL Singapore, where exact vessel’s location at the moment of delivery is of no importance.

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10 October 2013. Revised: Time Charters. Description of the vessel

Description of the vessel is, naturally, very important to both sides of charterparty contract, because it outlines particulars and characteristics of the subject-matter of contract. The charterers obviously expect from the owners a punctual compliance with these provisions and in case of misdescription may be entitled to terminate contract or insist on rectification. In their turn the shipowners must tender the actual ship as per description in charter and, in the absence of a clearly drafted substitution clause, they are neither bound nor entitled to tender another ship.

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08 October 2013. Revised: Time Charters. Introductory section

Formation of a time charterparty, same as a voyage charter, governed by the ordinary rules of the law of contract, i.e. there must be an offer and acceptance, then the parties must have agreed all the essential terms either in writing or verbally to make the contract binding.

Contract for services. It is necessary to note that a time charter is a contract for services to be rendered to the charterer by the shipowner through the use of the vessel by the shipowner’s own servants, the master and the crew. The charterer has no proprietary interest in the vessel, i.e. ship is not leased or withdrawn, only her services matters to the charterer.

Performance of charter. Duration of a time charter implicate period of the time not the length of single or a number of voyages or geographical rotation. Therefore a time charter unlike a voyage charter, instead of provisions for freight, laytime and demurrage has stipulations for payment of hire, delivery, redelivery and off-hire events.

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21 September 2013. White Rosebay Shipping SA v Hong Kong Chain Glory Shipping Ltd (Fortune Plum) [2013] EWHC 1355 (Comm)

Shipping – Timecharter – NYPE 93 – Persistent late payment of hire by the charterers – Certain instalments not paid at all – Discovery by the owners that charterers had amended sub-charterparty to delete the owners’ right to a lien on sub-freights and sub-hires – The owners decided to terminate the charterparty but let the vessel to complete discharging – The tribunal held tha allowing the vessel to remain in the Charterers’ service for 3 days for the purposes of discharging the cargo, the owners had affirmed the charter – Whether subsequent termination of the charter by the onwers after an affirmation was a repudiatory breach..

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15 September 2013. Great Elephant Corp v Trafigura Beheer BV & Ors [2013] EWCA Civ 905 (Comm)

Shipping – Voyage Charter – BPVoy 3 – Commencement of loading with culpable breach of loacal regulations – Detention of the tanker by the Nigerian authorities – Whether delay was caused by an unforeseeable force majeure event beyond the reasonable control of terminal operator or, if relevant, the contracting party.

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14 September 2013. Gard Marine & Energy Ltd v China National Chartering Co Ltd & Ors [2013] EWHC 2199 (Comm)

Shipping – Bareboat Charterparty – Safe Port warranty – "Reasonable Safety" – Exposure to a danger which cannot be avoided by good navigation and seamanship.

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25 June 2013. Two words from the Editor about new design and revised content.

Dear Reader!

As you can see from this new home page, site’s got its new and I hope more user-friendly design.Some excessive (in majority’s view) graphic disappeared and was replaced with clean design and text. However, as you will notice, not all pages have changed their appearance from old to new design yet. The main reason behinds this is that redesign of site is going together with complete revision of its content. Just to copy-paste old misprints and mistakes into new pages is a waste of time, in my view. Since altogether there are almost 500 pages now, it takes time to review them; so this job will be continued through the next couple of months.

Last but not least, many thanks to all of you who expressed their valued opinion as to contents and design of www.lawandsea.net, for all your support without which this project would never survive for more than 5 years now.

17 June 2013. Completely revised - Bill of Lading, Statutory Developments.

With the rapid growth of international trade and significant influence of laissez-faire ideology on the development of contract law in the first half of the nineteenth century, the shipowners were able to took advantage of their superior bargaining power by introducing clauses into the contract of carriage which, to an increasing extent, excluded their common law liability. Thus, with the passing of time, characteristics of a common carrier had been vanished to the bigger or smaller degree from the way shipowners conducted their business and they became private carriers.

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17 June 2013. Added: THE HARTER ACT 1893.

An Act relating to navigation of vessels, bills of lading, and to certain obligations, duties, and rights in connexion with the carriage of property.

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16 June 2013. Added: Sargent v Morris (1820) 3 B & A 277.

Carriage of goods – Bill of Lading – Delivery of goods for the consignor, and, in his name, to consignee – Goods damaged during sea passage – Consignee insured goods – Consignee’s right to sue the owner for damages.

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16 June 2013. Revised: Bill of Lading, historical background and short overview.

In the Medieval Ages shippers (usually the owners of the goods) as a rule accompanied their cargoes on the voyage to destination and bill of lading served only as an invoice of the goods shipped. Record of the goods loaded was kept by ship’s clerk in the "Register", "Book" or "Writing." All these names apparently describe a document which was kept by ship’s clerk with a copy given to the merchant as a receipt. Such rudimentary bills of lading was not transferrable, mainly, because merchant travelled with their goods and while original was in possession of the shipowner the only one copy of bill, held by merchant, was necessary.

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14 June 2013. Revised: Seaworthiness - An absolute obligation.

It is implied by common law in every contract of affreightment an obligation that shipowner shall provide a seaworthy vessel. (See also Foundation of carrier’s liability to provide sseaworthy ship). Extent of this duty is such, that he is responsible for any latent defect the existence of which renders the ship unseaworthy even if the defect could not have been detected by any reasonable means before it actually showed itself and for any other loss or damage caused by unseaworthiness because exception clauses would not cover loss or damage occasioned by initial unseaworthiness.

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12 June 2013. Revised: Seaworthiness - A relative and flexible term.

Seaworthiness can also be described as a relative and flexible standard because its degree which the vessel is required to maintain depends on many things such, for example, as: the nature of the trade and on the particular voyage on which the ship is about to embark ; on the particular stages of that voyage and on the nature of the ship itself.Moreover, duty to provide a seaworthy ship at common law also includes the second aspect, namely, cargoworthiness, which is an undertaking that the vessel should be reasonably fit to receive and carry the cargo and deliver it at the specified destination.

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10 June 2013. Revised: Seaworthiness - Modern Regime.

The absolute undertaking of seaworthiness implied by the common law is nowadays usually abrogated either by express words in standard charterparty forms or by incorporation into the contract of carriage The Hague or The Hague-Visby Rules. The Rules limit the carrier’s liability to exercise due diligence to make the ship seaworthy before and at the beginning of the voyage: Art III (1) and Art IV (1). Furthermore, duty to exercise due diligence is a positive obligation which the carrier must discharge in order to be protected by Art IV(2).

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15 June 2013. Added: The Hamburg Rules.

UNITED NATIONS CONVENTION ON THE CARRIAGE OF GOODS BY SEA (1978).
PREAMBLE
The states parties to this convention, having recognized the desirability of determining by agreement certain rules relating to the carriage of goods by sea, having decided to conclude a convention for this purpose and have thereto agreed as follows:

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02 June 2013. Revised: Seaworthiness - Foundation of liability.

Foundation of the carrier’s liability to provide seaworthy vessel originated, so far as the earliest evidence goes, from the law of bailments where the duties of a common carrier were equal to those of bailees in general, i.e. to return the goods entrusted to him in same condition as they were initially delivered.

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27 May 2013. Revised: Laycan - Cancelling Clause.

The right to cancel conferred on charterers by express wording gives them a right to terminate the charterparty if the vessel is not ready even if an event has happened which frustrates the commercial adventure. Such right does not depend on whether such later arrival was or was not a result of the owners’ breach.

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25 May 2013. Amended: Cargo Retention Clause

Charterers sought to rely on the cargo retention clause to entitle them to deduct the CIF value of a quantity of crude oil remained on board after discharging upon binding surveyor’s determination. While it was found that the surveyor’s report was an adequate determination of the stated quantity of liquid ROB, it failed to definitely certify that the liquid cargo was pumpable …

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25 May 2013. Amended: Laycan

The term "laycan" is habitually used in the negotiation of charterparties, to refer to the earliest date at which the laydays can commence and the date after which the charter can be cancelled if the vessel has not by then arrived.
Per Clarke J. in SHV Gas Supply and Trading SAS v Naftomar Shipping and Trading Co Ltd Inc [2005] EWHC 2528 (Comm) at para 9.

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25 May 2013. Revised: Laycan & Laytime

in absence of express wording, timely arrival of the vessel itself and not the tender of valid NOR is a prerequisite of compliance with the cancelling clause conditions. Read more →

15 May 2013. Amended: Voyage Charters. Historical Notes.

… under [charterparty] the charterer only acquires a right to have his goods carried in the shipowner’s ship, while the latter is liable both in contract and in tort for the acts of his servants in charge of her ….
ENCYCLOPAEDIA OF THE LAWS OF ENGLAND, Vol.II, 1897.

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15 May 2013. Amended: Common law duties of the shipowner and the charterer.

The duty of common carriers by the common law is perfectly well understood; it is a warranty safely and securely to carry; whether they be guilty of negligence or not is immaterial;…
Per Wilde C.J. in Richards v L.B. & S.C. Ry. Co.(1849) 7 C.B. at p.858

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15 May 2013. Amended: Voyage Charters. Formation of Charter.

The parties’ agreement may be made in the course of written exchanges, e-mails, or during conversations and/or meetings, therefore so long as the parties have reached complete agreement, formal exchange of signed charterparty is unnecessary.

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15 May 2013. Amended: Standard sets of clauses in voyage charterparty contracts.

An introductory clauses. These clauses (Condition of vessel, Cleanliness of tanks, Voyage, Safe port in Shellvoy6) identify the contracting parties, the vessel, and the agreed voyage. Cargo capacity is usually expressed in terms of deadweight tonnage which, when translated, means the weight of cargo the vessel is capable of carrying when loaded down at its maximum permitted draught. Statements refer to the maximum weight that the vessel can carry.

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15 May 2013. Amended: Categories of voyage charters.

Originally featured for a single voyage, voyage charter contract can embrace several voyages either consecutive, then called a ‘consecutive voyage charter’, see for example Suisse Atlantique Sociètè d’Armement Maritime S.A. v N.V. Rotterdamsche Kolen Centrale [1967] 1 AC 361 and Anglo-Saxon Petroleum Co. Ltd v Adamastos Shipping [1957] 2 W.L.R. 968; or occurring at irregular intervals, also called an ‘intermittent voyage charter’, see as an example The Oakworth [1975] 1 Lloyd’s Rep. 581.

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15 May 2013. Amended: Voyage Charter. Distribution of Risks.

Under a voyage charter time is money; so it is of commercial importance to the parties to provide by their contract how any loss occasioned by delay due to such causes is to be allocated between them.
Per Lord Diplock in Aldebaran Maritima v Aussenhandel (The Darrah)[1977] AC 157.

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12 April 2013, COLREGS72: Rule 17.
From practical viewpoint application of Rule 17 should seemingly provide no difficulties. Stand-on vessel’s first duty is to keep her course and speed until the moment when it becomes evident that give-way vessel is not taking appropriate action; it is when she may take action to avoid collision. After that, if situation develops so that collision cannot be avoided by the action of the give-way vessel alone, stand-on vessel becomes obliged to take such action as will best aid to avoid collision.

However, as far as my personal experience goes, deck officers usually ignorant about distinction between sections (a)(ii) and (b), i.e. instances when stand-on vessel first ‘may’ and later ‘shall’ take avoidance action, and have little idea about objective assessment of distances between vessels at both stages.

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12 April 2013. COLREGS72: Rule 19. The Tragedy of The Sun Cross.

In recent collision case M.V. Sun Cross v M.V.Rickmers Genoa [2010] EWHC 1949 (Admlty) the Court was to consider the question of liability arising out of a collision which took place in the early hours of 8 March 2005 in the Yellow Sea between the vessels SUN CROSS and RICKMERS GENOA. Behind this formal words related to claim of the cargo owners we must not forget that this collision brought with it much more valuable damage which cannot be remedied at all: lives of all but two of the crew of Sun Cross. Enormous human loss and many similar contributing factors put this tragedy in one line with Mineral Dampier disaster. In aftermath of collision, 13 crewmembers of SUN CROSS went missing; water flooded one of the RICKMERS GENOA’s cargo holds contained 600 tons of a granulated, magnesium-based desulphurization reagent. About four hours later, the RICKMERS GENOA suffered an explosion and fire in that hold. The chief officer died in the explosion and the ship itself sustained serious damage.

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12 April 2013. Know your rights. "Ignorant and illiterate".

One of the main rights of the seamen was and is their right to be paid at the time when their contract came to an end. As far as English law goes this right was guaranteed by the lien over the vessel on which seaman has served and goes back over 400 years in English Admiralty Court. The right for wages based on the contract of employment was not always easy to enforce due to the "extreme disparity" between seamen and the shipowners …

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12 April 2013. Know your rights. When Contract Ends.

Each and every contract has the day when it starts and the day or event when it finishes. Seaman’s employment contract does not usually stipulate any certain date when it ends, but continues for a certain period of his or her sea service time. Such contract can be for 3, 4, 6 months sharp or for 3, 4, 6 months plus/minus 30 days. When contract stipulates for some "plus/minus" days it does not mean that there is a bigger tolerance to the final date than in contract for let say 4 months without plus or minus.

Just to the contrary, "plus/minus" margin gives more flexibility to the crewing but being incorporated for the sole benefit of the shipowner/management has such a final effect that on the last day of "plus" period seaman not only has no any further obligation under his contract …

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12 April 2013. Know your rights. Home Allotments - sacred claim.

… seaman’s claim for his wages was sacred as long as single plank of the ship remained.
Per Sir William Scott in The Sidney Cove (1815) 2 Dods. 503. …

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12 April 2013. Recent case law.

BP Oil International Ltd v Target Shipping Ltd [2013] EWCA Civ 196 (14 March 2013)
Shipping – Voyage charter – Payment of Freight – Overage freight – Meaning of "Overage 50pct applicable for Euromed discharge only".

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