Voyage Charters. Berth and Port Charters Last updated 06-Oct-2014

Berth charters are those in which the place to which the vessel is to proceed and there load or discharge is a single berth, either named in the charterparty itself or nominated thereafter by the charterer in the exercise of an express power to do so. Dock charters are those in which the corresponding named or nominated place is a dock containing, it may be, several berths. So charterers and shipowners when fixing the freight under these types of charters knew where they stood as respects this risk. They knew when lay time would start to run. But there is another common type of voyage charter, a port charter, in which the named or nominated place of loading or discharge is a port containing, it may be, several docks each with several berths.
Per Lord Diplock in EL Oldendorff & Co GMBH Appellants v Tradax Export SA Respondents (The Johanna Oldendorf) [1974] AC 479

Berth & Port Charters. Definitions and comparative analysis.

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.

It follow that general apportion of liabilities between shipowner and charterer can be described as below:

Port charter – charterer has greater flexibility in delivery his goods for loading when he has to nominate port or range of ports, but he also allows the vessel to tender Notice of Readiness at the earliest possible moment, i.e. arrival at usual waiting place, thus triggering laytime also at the earlier stage.

Berth charter – charterer should nominate certain berth with port and accordingly much more limited in his options as to loading place, on the other hand Notice of Readiness can be validly tendered only alongside and therefore laytime starts to run at the latest possible moment.

Another important 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 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.

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 they consequently shift the risk to the charterer where delay is caused by congestion. Now, in case of a port charter, the liability for risks related to navigation, weather, etc. can be 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.

Apparent importance of correct assumption whether the charter in question is a berth or a port one, requires careful approach to relevant wording in charterparty. Devlin J in Stag Line v Board of Trade (1950) 83 Ll. L. Rep. 356 formulated general test distinguishing berth from port charter:

… if the berth at which the vessel ultimately has to load or discharge is named in the charter-party, she is not an arrived ship until she arrives at the berth, and by named in the charter-party I mean either named in it when originally drafted or named in it by virtue of a power of nomination expressly given by the charter-party. If, on the other hand, there is no power of nomination expressly given so that no berth is named therein, and she proceeds to the berth ordered by the charterers merely by virtue of the implied right which the charterers have to select the loading berth, then she becomes an arrived ship when she arrives at the place then named in the charter-party which is the port.

In The Finix [1975] 2 Lloyd’s Rep. 415 Donaldson J held that wording ‘One safe berth, London’ will point at berth charter and ‘London, one safe berth’ to port charter. In most recent case Novologistics Sarl v Five Ocean Corporation (The Merida) [2009] EWHC 3046 (Comm), Gross J, held that combined effect of recap wording "one good and safe chrts’ berth terminal 4 stevedores Xingang to one good and safe berth Cadiz and one good and safe berth Bilbao", which expressly directs Charterers to nominate the berth at Xingang, and cl.2 (1) of charterparty saying "The vessel to load at one good and safe port/one good and safe charterers’ berths Xingang and to discharge at one good and safe port/one good and safe charterers’ berth Cadiz and at one good and safe port/one good and safe charterers’ berth Bilbao", identifies the destination as the berth.

Share this article on:

Readers’ comments:

Posted by:   

Be first to comment …
Leave your questions and comments here

Although author encourages visitors to leave their comments using this form, but if you unable or unwilling to use it for any reason you can forward your mail to to contact with him.