Voyage Charterparty
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Berth and Port Charters
Proceeding from commercial necessity, the charterer has an option to choose whether to send the vessel to a particular berth or to limit his instructions by nomination of a port only. This choice is expressed in terms of voyage charterparty in form of either a port or a berth charter.
Lord Brandon of Oakbrook in The Kyzikos [1989] AC 1264 at p.1273 gave the following description of both types of voyage charterparty:
The characteristics of a port charterparty are these. First, the contractual destination of the chartered ship is a named port. Secondly, the ship, in order to qualify as having arrived at the port, and therefore entitled to give notice of readiness to discharge, must satisfy two conditions. The first condition is that, if she cannot immediately proceed to a berth, she has reached a position within the port where waiting ships usually lie. The second condition is that she is at the immediate and effective disposition of the charterers. By contrast, the characteristics of a berth charterparty are these. First, the contractual destination of the chartered ship is a berth designated by the charterers within a named port. Secondly, the ship, in order to qualify as an arrived ship, and therefore entitled to give notice of readiness to discharge, must (unless the charterparty otherwise provides) have reached the berth and be ready to begin discharging.
Apart of geographical aspect the main factor which has to be taken into consideration when one is analysing two forms of charterparty is allocation of risks between the shipowner and the charterer.
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 they who determine 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.
When, however, the parties like to adopt traditional disposition of risks for delay they can allow earlier commencement of laytime in case of a berth charter by incorporation of WIBON (see for example Gencon94 Clause 6) into the charterparty and consequently shift the risk to the charterer where delay is caused by congestion. On the other hand, in case of a port charter, the liability for risk as to navigation, weather, etc. risks can moved back to the owner by incorporation of provisions similar to clauses 8 and 9 of Tankervoy 87. Most dry-cargo forms adopt a variant of the first method, and most modern tanker forms the second.
Summing up it shall be underlined that well-known dichotomy between port and berth charters is likely to be irrelevant, as Lord Roskill noted in The Laura Prima(Nereide SpA di Navigazione v Bulk Oil International Ltd (The Laura Prima) [1981] 3 All ER 737, [1982] 1 Lloyd’s Rep 1). What really matters in any given case, is to ascertain on what incidence of financial loss the parties must be taken to have agreed, by scrutinising how the parties provided in the contract regarding said incidence.
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