Safe Port. Obligation to exercise due diligence.

…if a reasonably careful charterer would on the facts known have concluded that the port was prospectively unsafe.
The Saga Cob [1992] 2 Lloyd’s Rep 545, per Parker LJ.

Reasonable conclusion

In some standard charterparty forms safe port warranty has been substituted by an obligation to exercise due diligence to ensure that the vessel is only employed between safe ports.

BPTIME3 clause 17

Concept of due diligence significantly qualifies strict obligation of the charterer to send the vessel to safe port. It was suggested that this protection is particularly likely to arise in cases where a port is conditionally safe as result of partial and temporary failure of port safety system, such for example as The Dagmar [1968] 2 Lloyd’s Rep 563 (failure to provide the master with the weather broadcast), The Khian Sea [1979] 1 Lloyd’s Rep 545 (inadequate weather forecasting system and no searoom for manoeuvre), The Mary Lou [1981] 2 Lloyd’s Rep. 272 (failure to provide reliable information about channel depth), The Marinicki [2003] 2 Lloyd’s Rep 655 (unsatisfactory regime in relation to the safety of vessels using the dredged channel) and The Count [2008] 1 Lloyd’s Rep 72(misalignment of buoys and the absence of an adequate system to monitor changes in the channel).

In K/S Penta Shipping A/S v Ethiopean Shipping Lines Corp (The Saga Cob) [1991] 2 Lloyd’s Rep 398 Judge Diamond, Q.C. Considered the Charterers’ liabilities under cl.3 of Shelltime 3 provided inter alia:

3. Charterers shall exercise due diligence to ensure that the vessel is only employed between and at safe ports … where she can always lie safely afloat but … Charterers shall not be deemed to warrant the safety of any port … and shall be under no liability in respect thereof save for loss or damage caused by their failure to exercise due diligence…

The vessel was chartered for employment in the Red Sea, the Gulf of Aden and East Africa. From the beginning of charter in January 1988 and until 7th Septembere called at Massawa about 20 times without any negative consequences. On the other hand there was an evidence about the vulnerability of the port of Massawa to occasional artillery attack by Eritrean guerillas which was known to the charterers – two attacks were launched on May 31, and Aug. 26 and vessel was ordered to proceed in navy convoy. As a result of attach crewmembers were wounded and vessel was so damaged that did not resume service under the time charter and major repairs were effected at Lisbon.

The learned judge was to decide whether port of Massawa was prospectively unsafe and if it was not whether the charterers were in breach of ‘due diligence obligation’. The judge held that Massawa was unsafe port because vessels proceeding to and from the port or lying at anchor outside the port could be subject to seaborne attack by the EPLF. He then turned to the question of ‘due diligence obligation’, at p.408:

It is, I think, clear that a charterer will not commit any breach of the due diligence obligation if he orders a vessel to a port which is found to be prospectively unsafe in fact but which neither the charterer nor anyone for whom the charterer is responsible either knew or ought to have known to be prospectively unsafe. The want of due diligence consists in sending the vessel to a port in circumstances when the charterer either knew or ought to have known of the relevant unsafety.

Based on this analysis the judge concluded at p.409 that:

…the facts known to the charterers should have led them to conclude that there was a small but nevertheless appreciable risk that a vessel ordered to Massawa in August 1988 might be the subject of a seaborne attack by the EPLF and this being so the charterers in my judgment failed to exercise due diligence to ensure that the vessel was only employed between and at safe ports, places, berths.

The Court of Appeal reversed decision of Judge Diamond on the question of safe port and therefore it was not necessary to decide on ‘due diligence’ issue. But Parker LJ felt himself obliged to state his opinion on decision of the lower court. He said:

It was submitted that if contrary to our view Massawa was then unsafe it must follow that since charterers knew all the facts they had failed to exercise due diligence. We do not accept that this necessarily follows. In our view if a charterer knows all the facts and orders the vessel to a port which is regarded generally by owners of vessels to be safe, he might well be protected.

…We make no decision on the point and make the above observations in case it should be said in the future that we have by silence accepted the Deputy Judge"s conclusions that on the facts known the charterers should have concluded that there was small but nevertheless appreciable risk that a vessel might be subject to seaborne attack and had therefore failed to exercise due diligence. There is in our judgment at least a strong argument that the test should be expressed thus - "if a reasonably careful charterer would on the facts known have concluded that the port was prospectively unsafe".

Thus the charterers should form a reasonable conclusion as to the safety of the port and if they concludes that the port is safe it will be enough to discharge their obligation to exercise due diligence.

Serious of consequences or the remoteness of the chance

While such test is generally in line with decision of the House of Lords in The Amstelslot [1963] 2 Lloyd’s Rep. 223, it does not sound very convincing if we try (as it was suggested by Lord Devlin) to level in the one scale likelihood of an attack to be launched (two recently preceding incidents and organisation of navy convoy) and in the other scale the serious of damage and loss that could occur in case of such attack.

In support of his conclusion Parker LJ suggested the following test:

Suppose a charterer was uncertain of the position and enquired of a number of owners who used the port whether it was in their view safe and received replies from all of them "We regard it as safe; of course it is possible that a guerilla attack could happen but we pay no attention to it".

It is doubtful that such construction is really sufficient, under Lord’s Devlin test, to protect the charterers in case of armed attack when the master was wounded and substantial damage was caused to the vessel and especially to her superstructure, hull, engine room, radar electrical installation and steering gear.

Gatehouse J in The Chemical Venture [1993] 1 Lloyd’s Rep 508 accepted decision in the Saga Cob in that part that the case is one of res ipsa loquitur unless the charterer adduces evidence to justify his order, but reserved his opinion as below:

Secondly, it will not apparently be sufficient for the charterer to adduce some opinions that the port is safe if there is evidence that other users, qualified to give an opinion, hold a contrary view.

Thirdly, events subsequent to the casualty in question are relevant, also, to the question of due diligence, (see p 551, col 2). As I am not bound by this part of the judgment, I would prefer to say that I respectfully disagree, for I cannot see how subsequent events can be relevant to the issue: Did the charterer, at the time he gave the order to go to a port which at that time and for that vessel was (prospectively) unsafe, exercise due care?

But I see no logical difference between taking account of subsequent events on the issue of safe port and on the issue of due diligence. I am bound to do so for the first. I therefore do so for the second.

Emphasis on the value of ‘post-fact evidence’ as demonstrated in Saga Cob, is at least doubtful. The course of subsequent events may and usually is affected by the casualty in question. It is often the casualty itself which trigger the administrative actions to correct or eliminate sources of previous unsafety. Some authors suggest that post-fact evidence, may either prompt port authorities to improve their systems or they will consciously control their actions after an incident in order to appear ‘administratively competent’.

As it was noted by Parker LJ there is a difference between physical danger, such as a sand bank or reef, and political danger. Assessment of political danger the learned judge found to be necessarily subjective. I think, however, that there is another and more crucial for the purpose of test of due diligence difference. In case of banks and shoals it would be reasonably sufficient to confine Charterers’ duty to appraisal of reliable sources as to position and another navigational safety issues involved. But in case of quite real danger to human lives (say nothing about damage to the vessel) from guns and rocket grenades of rebelling opposition, obligation to exercise due diligence, evidently, require from the charterers more than just collecting opinions from a number of owners. In my opinion serious of consequences in such case shall obviously take priority over the remoteness of the chance.

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Readers’ comments:

Posted by: J.F.L.Kalee, 04 March 2011

Good evening,
I was on board of that ship m.s.Amstelslot,and i have made it all,in september 1957.From Honolulu to Kobe,further to Hong-Kong,a few days in a hotel,with an airplane from Hong-Kong to Amsterdam,(via Saigon-Bangkok-Karachi-Teheran-Rome-Paris.
I was Ass.Engineer and 17/18 jears old.
I,m sorry about my English.
Best Regards,
John Kalee.
P.S.I'm thinking that I am the latest living crew member from that ship.
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