Voyage Charters

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Chapter 3

Description of the Ship

[clause 1 continued]  
… the 1  
steamer or motor vessel named in Box 5 of the gross/net Register 2
tons indicated in Box 6 and carrying about the number of tons of 3
deadweight cargo stated in Box 7 … 4
[clause 1 is continued below]

Contractual effect of descriptive statements

3.1 As a general rule words in a charter which describe the ship or her equipment are not mere representations, but are terms of the charter.1 As a result, if the ship fails to comply with the description the charterer will be entitled to damages for breach of contract. If the term is a condition, or if the breach goes to the root of the contract, the charterer will also be entitled, if he so elects, to refuse to ship the cargo and to terminate the charter. Alternatively, he may exercise any right to rescind or to claim damages which may be available to him in respect of any actionable misrepresentation.2

Condition, warranty or intermediate term

3.2 Assuming that a statement in the charter describing the ship is a term of the contract, the question arises whether it is a condition, a warranty or an intermediate term. In The Diana Prosperity,3 the charterer advanced an argument that every aspect of the vessel’s description was a condition, with the result that any departure would entitle the charterer to terminate the contract. This argument was rejected by the House of Lords, where Lord Wilberforce indorsed the approach adopted in Cargo Ships “El-Yam” v. “Invotra4 and Hongkong Fir Shipping v. Kawasaki Kisen Kaisha 5 of “attending to the nature and gravity of the breach or departure rather than accepting rigid categories which do or do not automatically give a right to rescind”. 3.3 On this approach many items of description are likely to be regarded as intermediate terms. Earlier cases in which they have been regarded as conditions, such as Pennsylvania

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Shipping v. Cie. Nationale de Navigation 6 (guarantee of diameter of cargo lines) and Behn v. Burness 7 (position of vessel) may have to be reconsidered.

When the ship must comply

3.4 On the face of it, statements in the charter describing the vessel relate to the time when the charter is entered into. The question thus arises whether it is sufficient that the vessel com-plies with the description at the date of the charter, or whether she must also comply at the date of loading the cargo, or even throughout the voyage. Decisions on this question vary depending upon the item of description in question. For example, it has been held that a statement of the vessel’s speed and consumption applied not only when the contract was made, but also on delivery.8 On the other hand, a statement of the vessel’s classification has been held to relate solely to the date of the charterparty, and not to give rise to any implied obligation to take reasonable steps to keep her in class, or to keep her in class subject to the excepted perils.9 If any uniform approach is possible it is submitted that it should be that adopted in Isaacs v. McAllum,10 namely, that the description relates to the ship at the date of the charter, but there is an implied term that the owner will not alter the ship so as to prejudice the services to be rendered to the charterer. An express obligation to maintain class is to be regarded as an innominate term such that a failure does not, without serious consequences, give the charterer a right to terminate the charter.11

Name of the vessel

3.5 Unless the charter is for a vessel “to be nominated”, or confers upon the owners a right of substitution, the charterparty is for the specific ship named in the charter and no other. Hence, the charterers are not obliged to load any other ship, even if she is identical in characteristics to the ship named in the charter; and owners are in repudiatory breach if they charter the named ship to a third party such that she cannot perform the charter with charterers.12 However, while performance by the specific named vessel is of the essence, it is submitted that the name is merely a means of identifying the vessel to be used, and is not used as a description of an essential characteristic of the vessel; the owner would therefore be entitled to change the vessel’s name and tender her for loading under the charter. This approach has been adopted where a newbuilding was described in the charter by her yard number.

A time charter for a newbuilding provided that the ship was “to be built by Osaka Shipbuilding Co. Ltd and known as Hull No. 354 until named”. The Osaka yard had sub-contracted the construction to another yard, where the vessel was being built to the Osaka yard’s design and under their supervision, and the vessel remained on the Osaka yard’s books, bearing the yard number stated. The charterers refused to accept delivery on the grounds that the vessel was not built by the Osaka yard.

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