Voyage Charters

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Chapter 1

Formation and Terms of the Charter

1. It is agreed 1
Formation of the Charter

Types of charter

1.1 Charterparties are customarily divided into three general categories: demise (or bareboat) charters, time charters and voyage charters, but a more recent development is now increasingly common, the slot charter.1 Demise charters are those by which, in return for payment of hire, possession of the chartered ship is given to the charterers, who provide crew and all supplies, pay all running costs and undertake the responsibility of shipowner to those whose goods are carried on the vessel. Time charters, whether for a period or for a trip, are those under which, in return for the payment of hire, the vessel’s employment is put under the orders of the charterers, while possession remains with the owners who provide the crew and pay the ordinary running costs, characteristically excluding specific voyage costs such as fuel and cargo handling and port charges, which are paid for by the charterers. Voyage charters are those by which the owner agrees to perform one or more designated voyages in return for the payment of freight and (when appropriate) demurrage; the costs of, and responsibility for, cargo handling are left to the terms of the specific agreement.2 Slot charters involve the chartering of a guaranteed number of container spaces either on a period or a voyage basis. Depending on the terms, and the governing law, of the bills of lading issued under a time or a voyage or a slot charter, either the shipowner or the charterer, or both, may be the “carrier” of the goods shipped there-under, and liable as such to the owner of the goods shipped during the period of the charter. However, whilst it is not uncommon for a time charterer to assume the role of carrier under the bills of lading, it is rare for a voyage charterer to do so, at any rate where English law applies. It is usual for a slot charterer to issue his own bills of lading under which he is the “carrier”. 1.2 Voyage charters for more than one voyage may fall into a number of different categories. They may be “consecutive voyage charters” where each voyage follows on directly from

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the previous one,3 they may be “intermittent voyage charters”,4 or they may be “contracts of affreightment” or “tonnage contracts” for a series of periodic voyages in a vessel or vessels to be nominated thereafter.5 All are often referred to merely as “COAs”6 in order to highlight their particular characteristics. It is common for single voyage charter forms to be adapted to cover multiple voyage contracts, and this can lead to particular difficulties concerning, for example, cancellation, liens and the effect of the Hague Rules when incorporated, not to mention the identification of the relevant parties.

BRM (as owners’ managers, but signing as “owners”) concluded various COAs on the Gencon form with F, whereby BRM would nominate carrying vessels from the fleet which they managed on behalf of one ship companies. The period of the COAs expired, but the parties continued on an understanding that they would continue until new terms were finalised, although in fact the precise format of their arrangements altered, with bills of lading referring to incorrect specific charterparty dates rather than COA dates. Nominations were made of vessels in the management of BRM and also of vessels chartered from the spot market. BRM argued that they were not liable as principals under the COA, which was to be implied by conduct, and that the registered owners of the vessels were principals.

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