Voyage Charters. Mutual Obligations Last updated 30-Jun-2015

[T]he charterers put on board the wine and nuts … The stevedore, who is the agent of the charterer by the terms of the charterparty, had an empty ship and might have stowed the cargo as he thought fit, subject only to the master’s control in matters affecting the safety of the ship; yet with his knowledge on the subject, the stevedore deliberately places the wine and nuts in the way that has been proved. The contract may have been such that he could not stow them in any other way, but still it is a fact that he does stow them in a position from which damage ensues
Per Sir Robert Phillimore in The Catharine Chalmers (1875) 32 LT (NS) 847

At the expenses and risk of

When damage to the cargo is claimed to be caused by bad stowage or discharge the question as to what extent the responsibility for bad loading, stowage and discharge rested on the charterers or the owners depends on allocation of the actual performance of the operations. Generally speaking, risk and cost of cargo operation are regulated by "tackle to tackle" rule, which, however, can be altered to suit the parties’ needs. Formula that cargo shall be loaded, trimmed and/or stowed at the expenses of Shippers/Charterers but under master's direction and responsibility, draws the border between cost, which in such case is attributable to the cargo interests, and the risk, which is to be born by the owners.

Notably, words "master’s responsibility" and "master’s supervision" provide different standards of duty. In Court Line v Canadian Transport [1940] A.C. 934, Lord Atkin stated at p.938 that supervision alone is "in any case a matter of course; [master] has in any event to protect his ship from being made unseaworthy." By law master has unrestricted right to intervene if he considers that the proposed stowage is unsafe or likely to impose a liability upon his owners. His Lordship concluded:

If it could be proved by the charterers that the bad stowage was caused only by the captain’s orders, and that their own proposed stowage would have caused no damage no doubt that enable them to escape liability.

Another way of assigning cost and risk of the cargo handling in port is the custom of the port. In Smith, Hogg & Co Ltd v Louis Bamberger & Sons [1929] 1 KB 150, the charterparty provided that "[t]he cargo to be brought to and taken from alongside the steamer at the charterer’s risk and expense as customary." On arrival at London owners partly discharged cargo into lighters and partly on to the quay and later claimed this expenses from endorsees of bills of lading alleging that because endorsees did not take the cargo from alongside the steamer they, owners, had had to incur the expense of stacking on the quay and of stowage in the lighters. It was held that by the custom of the Port of London the shipowners were under an obligation to bear all costs of unloading and stacking on the quay and of delivery and stowage in the lighters, and as there was no inconsistency between the custom and the charterparty the owners’ claim failed.

In Societe De Distribution De Toutes Merchandises En Cote D'Ivoire (t/a "SDTM-CI") & Ors v Continental Lines N.V. & Anor [2015] EWHC 1747 (Comm) Flaux J. considered Clause 5 of the standard Synacomex 90 Form charterparty, which provided as follows:

Cargo shall be loaded, spout trimmed and/or stowed at the expenses and risk of Shippers/Charterers at the average rate of 1,500 metric tons per weather working day … Cargo shall be discharged at the expenses and risk of Receivers/Charterers at the average rate of 1,500 metric tons per weather working day … Stowage shall be under Master’s direction and responsibility…Charterers and Owners are allowed to work overtime, such expenses shall be for the account of the party ordering same. If ordered by Port Authorities, overtime shall be for Charterer’s account. Overtime services rendered by ship's crew shall be in all cases for Owners’ account.

The judge held that the words "at the expenses and risk of Shippers/Charterers" (in the case of loading) and "at the expenses and risk of Receivers/Charterers"(in the case of discharge) in clause 5 are sufficiently clear to transfer responsibility for loading and discharge and for any shortcomings in those operations to the charterers and the cargo interests.
He said at paras 37, 39:

37. …Given the equation in those authorities between risk and responsibility, it is nothing to the point that, in the first sentence, responsibility is imposed on the charterers/cargo interests for loading and discharge by making those operations at their "expense and risk", whereas in the later sentence, responsibility for stowage is imposed on the carrier by a specific provision that stowage is the responsibility of the Master.

39. If the cargo interests are correct that the words: "Cargo shall be loaded, spout trimmed and/or stowed at the expenses and risk of Shippers/Charterers" do not transfer responsibility for cargo operations to the charterers, but that responsibility rests with the carrier, then the later sentence: "Stowage shall be under Master's direction and responsibility" is completely pointless and otiose, because stowage, like loading and discharge, would be the carrier's responsibility anyway at common law. On the other hand, whilst the carrier's construction does create an inconsistency, the fact that the opening words of the clause transfer responsibility for the cargo operations to the charterers does at least make sense of the sentence: "Stowage shall be under Master's direction and responsibility", namely that it is making it clear that responsibility for stowage remains with the carrier. Absent that sentence, that responsibility would be with the charterers/cargo interests.

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