Voyage Charters. Charterer’s obligation to load and discharge Last updated 29-Jun-2015

The stowage of goods, in the absence of any spec agreement, forms part of the obligation which the carrier takes upon himself. It is a duty to be discharged by the master and crew. … There is nothing to release master and crew from their responsibility in respect of the stowage.
Sandeman v Scurr (1866) 2 Q.B. 86 per Cockburn C.J. at p.98

Obligation to participate in loading and discharging

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. As Earl of Selborne LC said in Grant Co v Coverdale, Todd Co (1884) 9 App Cas 470 at 475-476:

…No doubt, for the purpose of loading, the charterer must also do his part; he must have the cargo there to be loaded, and tender it to be put on board the ship in the usual and proper manner. Therefore the business of both parties meets and concurs in that operation of loading. When the charterer has tendered the cargo, and when the operation has proceeded to the point at which the shipowner is to take charge of it, everything after that is the shipowner’s business, and everything before the commencement of the operation of loading, those things which are so essential to the operation of loading that they are conditions sine quibus non of that operation – everything before that is the charterer’s part only.

Such distribution of responsibilities between the charterer and the shipowner during loading and discharging operations is known at common law as ‘alongside rule’ or ‘tackle to tackle’ rule, i.e. the owner’s duty commences when the cargo to be loaded on the ship’s tackle crosses ship rails and ceases when this cargo has been discharged over the ship’s side. Rule’s notion of cargo handling technology evidently takes its roots from sail ship era, but was firmly holding its ground against criticism mainly because same period was conveniently covered by the Hague and the Hague-Visby regimes. Meticulous adherence to ‘tackle to tackle’ rule was reflected with scepticism by Devlin J in Pyrene Co Ltd v Scindia Steam Navigation Co Ltd [1954] 2 Q.B. 402 at p.419:

But the division of loading into two parts is suited to more antiquated methods of loading than are now generally adopted and the ship’s rail has lost much of its nineteenth century significance. Only the most enthusiastic lawyer could watch with satisfaction the spectacle of liabilities shifting uneasily as the cargo sways at the end of a derrick across a notional perpendicular projecting from the ship’s rail.

Besides, charterparties nowadays often provides for the cargo to be carried on f.i.o. (free in and out) terms, i.e. the charterer is responsible for the cost of loading and discharge. In such case the master is still responsible for the loading and stowage of the goods because improper stowage affects safety (seaworthiness) of the vessel.

 Availability and good operational status of ship’s loading and discharging gear for the ordinary purposes of loading and discharging is within vessel’s duty of seaworthiness.

It is necessary to stress that obligations imposed on the owners to receive on board and upon the charterers to supply a full and complete cargo are mutual and interdependent, i.e. the owners’ obligation to load is contingent upon and cannot be performed without performance by the charterers of their obligation to ship or to tender for shipment a full and complete cargo.

A promise to load a full and complete cargo creates a duty to fill the ship, not merely to provide a cargo equal to the capacity of the ship as stated in the charter. (Read more about Deadfreight)

If the charterer expressly or by conduct refuses to load the vessel, the shipowner does not have to wait till the end of the laydays before he can sue for a breach of the contract to load, but may accept such refusal and treat it as final.

Flaux J noted in SK Shipping (S) PTE Ltd v Petroexport Ltd [2009] EWHC 2974 (Comm) at para 104:

Whilst not in themselves renunciatory, the combined effect of those matters was enough, both subjectively in terms of [the owner’s] state of mind and objectively in terms of what a reasonable person in the position of [the owner] would have thought, to give rise to a concern as to whether [the charterer] would be able to perform the charterparty, notwithstanding that the laydays had not yet expired.

Similar strict obligation to provide means for discharging cargo imposed on the charterer at discharge port. As Lord Selborne LC stated in Postlethwaite v Freeland (1880) 5 App Cas 599 at p. 608:

There is no doubt that the duty of providing, and making proper use of, sufficient means for the discharge of cargo, when a ship which has been chartered arrives at its destination and is ready to discharge, lies (generally) upon the charterer. If, by the terms of the charterparty, he has agreed to discharge it within a fixed period of time, that is an absolute and unconditional engagement, for the non-performance of which he is answerable, whatever may be the nature of the impediments which prevent him from performing it, and which cause the ship to be detained in his service beyond the time stipulated.

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