i-law

Voyage Charters

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Chapter 33

Warranty – Voyage – Cargo
1. WARRANTY – VOYAGE – CARGO. The vessel, classed as specified in Part I hereof, and to be so maintained during the currency of this Charter, shall, with all convenient dispatch, proceed as ordered to Loading Port(s) named in accordance with Clause 4 hereof, or so near thereunto as she may safely get (always afloat), and being seaworthy, and having all pipes, pumps and heater coils in good working order, and being in every respect fitted for the voyage, so far as the foregoing conditions can be attained by the exercise of due diligence, perils of the sea and any other cause of whatsoever kind beyond the Owner’s and/or Master’s control excepted, shall load (always afloat) from the factors of the Charterer a full and complete cargo of petroleum and/or its products in bulk, not exceeding what she can reasonably stow and carry over and above her bunker fuel, consumable stores, boiler feed, culinary and drinking water, and complement and their effects (sufficient space to be left in the tanks to provide for the expansion of the cargo), and being so loaded shall forthwith proceed, as ordered on signing Bills of Lading, direct to the Discharging Port(s), or so near thereunto as she may safely get (always afloat), and deliver said cargo. If heating of the cargo is requested by the Charterer, the Owner shall exercise due diligence to maintain the temperatures requested.
33.1 The matters dealt with by this clause may be grouped into four, namely:
  • (1) the condition of the ship;
  • (2) the voyage to the loading port;
  • (3) the cargo to be loaded; and
  • (4) the cargo voyage.

1. Condition of the ship

Maintenance of class

33.2 At the date of the charter the ship must be classed as specified in Part IA, and the owner is obliged to maintain this class throughout the charter. The maintenance obligation obliges the owner to comply with class requirements as to surveys and inspections, and probably also to follow a prudent programme of his own of inspections and maintenance with a view to avoiding breakdown or damage which could lead to a withdrawal of class. However, the obligation is probably not absolute, and if, after the date of the charter, the vessel does lose her class in spite of the precautions mentioned above, there is no breach of the clause.1

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If, for any reason, the vessel loses her class, the owner’s obligation is to take within a reasonable time reasonable steps to have her class restored.2 33.3 For the effect of representations as to class in general, see paragraphs 3.26 et seq. The general approach of the decided cases, namely, that representations as to class apply only at the date of the charter, is modified by clause 1 in the manner indicated above.

Seaworthiness and cargoworthiness

33.4 Apart from maintenance of class, the owner’s obligation under clause 1 with regard to the seaworthiness of the ship is that she should be:
  • (a) seaworthy;
  • (b) with all pipes, pumps and heater coils in good working order; and
  • (c) in every way fitted for the voyage.
This obligation, which must be read in conjunction with the cleaning requirements of clause 18 and the requirements of Article III, rule 1 of the Hague Rules, does not appear to add to or detract from the scope of the general obligation of seaworthiness, which includes cargoworthiness.3 33.5 Clause 1 goes on to provide: (a) that the requirements of seaworthiness mentioned above are not absolute, but qualified by the obligation to exercise due diligence; and (b) that the owner is not liable for any failure to attain those requirements resulting from perils of the sea, or any cause beyond the owner’s or master’s control. The first of these qualifications is understandable, and merely reflects the provisions of Article IV rule 1 of the Hague Rules. The same conclusion would probably follow automatically from the Clause Paramount contained in clause 20, even in the absence of any express reference to due diligence in this part of the charter. Thus, in The Fjord Wind,4 where the charter contained an express and apparently unqualified warranty of seaworthiness at the date of the charter and a separate clause which obliged the owners to exercise due diligence to make the ship seaworthy, it was held that the owner’s obligation at each stage was the same, namely, to exercise due diligence. Any implied warranty of seaworthiness on the approach voyage would, it seems, be similarly qualified. 33.6 The second of the two provisions which qualify the obligation of seaworthiness is more problematic. On one interpretation, the express exceptions contained in clause 1, in particular the words any other cause of whatsoever kind beyond the Owner’s and/or Master’s control, might seem to go beyond the Hague Rule exception in Article IV rule 1 and protect the owner from liability for unseaworthiness caused by the fault of independent contractors. The clause may well be intended to protect the owner from liability for delay in making the vessel ready for loading as a result of one of the causes mentioned. However, as discussed below in view of the paramountcy of the Hague Rules under clause 20(b) including Article III rule 8, once loading has commenced (and certainly once the voyage commences) it is submitted that the Hague Rules will prevail and that clause 1 does not protect the owner from responsibility for damage caused by unseaworthiness due to an event outside his or the master’s control, but

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which would nevertheless constitute a failure to exercise due diligence within the meaning of Article III rule 1, for example, negligent workmanship by independent ship repairers.

When does the obligation arise?

33.7 Unlike the owner’s obligation with regard to class, the express obligation of seaworthiness under clause 1 probably applies only from the commencement of loading.5 Any obligation of seaworthiness before that time must therefore be implied, and the question whether any implied obligation of seaworthiness arises on the approach voyage is considered in . This aspect of clause 1 must also be considered in conjunction with Article III rule 1 of the Hague Rules, which obliges the carrier to exercise due diligence “before and at the beginning of the voyage” to make the ship seaworthy. In Maxine Footwear v. Canadian Government Merchant Marine,6 this phrase was held to comprise the period “from at least the beginning of loading until the vessel starts on her voyage”, and there is something to be said for the view that it ought to begin when notice of readiness is tendered. The precise duration of the period when due diligence must be exercised may be important, as the Maxine Footwear case shows, because outside that period the owner is entitled to rely upon exceptions which are inconsistent with due diligence, such as negligence in the management of the ship. 33.8 The obligation under the Rules to exercise due diligence ends when the ship sails from the loading port, although it may revive if other loading ports are visited.7 There is no obligation under clause 1 or the Rules to exercise due diligence after that time. However, seaworthiness means seaworthiness for the voyage as a whole, and the due diligence must be directed to that end. Moreover, certain aspects of unseaworthiness (or, more particularly, uncargoworthiness) will themselves involve a breach of Article III rule 2 of the Rules unless proper steps are taken to remedy them.

2. Proceeding to the loading port

33.9 When an “expected ready” date is inserted, as contemplated by Part IA, the ship must commence the voyage to the loading port in time to arrive and be ready to load, in the absence of unforeseeable circumstances, by the expected ready date.8 The ship must also arrive by the cancelling date or the owner risks the cancellation of the voyage.

“with all convenient dispatch”

33.10 This provision is no more than the obligation which would otherwise be implied.9 In The Tafaka,10 London arbitrators took the view that the obligation to proceed “with all convenient speed” referred to a speed that was convenient to the owner. It did not refer to the maximum speed appropriate to the conditions, but to a more moderate speed, calculated to make fair progress, but with reasonable regard to economy of bunkers. On appeal from the award, Hirst J. did not dissent from these views. He pointed out that the owner would be in breach if delay

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on the voyage arose from unseaworthiness for which the owner was liable. However, that case concerned the cargo-carrying voyage, and since it is open to doubt whether there is any implied warranty of seaworthiness on the approach voyage it is uncertain whether his remarks are applicable to the approach voyage. However, if the owner knows, or ought to know, that repairs or maintenance to the vessel will be required between the date of the charter and the date of loading, he must make due allowance for this in giving the “expected ready” date. 33.11 The obligation apparently takes effect at the date of the charter, even if the vessel is then engaged under a prior employment, the obligation in such a case being: (1) to commence the approach voyage to the loading port in time;11 and (2) to perform the approach voyage with reasonable dispatch. The exceptions in clause 19 apply to the latter obligation, but not to the former.12

“as ordered to loading port(s) named in accordance with clause 4”

33.12 Unless the charter specifies a named loading port, the charterer must nominate the loading ports, or order the vessel to a destination for wireless orders, within the time specified in clause 4(a).13

“or so near thereunto as she may safely get (always afloat)”

33.13 See paragraphs 5.101 et seq.

3. The cargo to be loaded

Quantity of cargo – “a full and complete cargo”

33.14 Part IE, or some other special clause in the charter, may define in terms of weight or volume how much cargo is to be loaded and, if maximum and minimum quantities are specified, in whose option. For the interpretation of such clauses in general see . Subject to any such special provisions, clause 1 imposes a mutual obligation to ship and to receive on board a full and complete cargo … not exceeding what she can reasonably stow and carry. This obligation is complied with by providing as much cargo as fills the ship, either by weight or by volume.14 The clause goes on to make detailed provisions regarding allowances for expansion of cargo, bunkers and stores, which do not in practice add or detract from the ordinary rules. Most of the larger oil companies have specific loading codes which are issued to the ship. However, the right and the duty to determine what is sufficient space for expansion is the owner’s.

Type of cargo – “petroleum and/or its products in bulk”

33.15 Under clause 1 the cargoes which the charterer is entitled to ship are limited to petroleum and/or its products in bulk, and this provision is reinforced by clause 16. If Part IE is completed in such a way as to allow other cargo, this will prevail, but in practice the opposite is usually the case, since Part IE will usually restrict the charterer to either clean or dirty cargoes, and to a maximum number of grades. For a discussion of the question whether a particular cargo falls within the permissible range of cargoes under the charter, see paragraphs 6.42 et seq. and The Atlantic Duchess.15 For the rights of the owner when cargo not permitted by the charter is shipped, see paragraphs 6.64 et seq.

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The loading operation

33.16 See the discussion under clause 10 in .

4. The cargo voyage

Commencing the voyage

33.17 There is an implied obligation, binding on both parties, that upon the completion of loading the voyage shall commence without unreasonable delay, and the owner is thereafter obliged to prosecute the voyage with reasonable despatch.16 Clause 1 reinforces the first of these obligations by providing that the voyage shall commence “forthwith” after completion of loading.

“as ordered on signing bills of lading”

33.18 The general rule, established by clause 1, is that discharging port orders must be given on signing bills of lading. However, this must be read subject to the provisions of clause 4(b), under which the charterer may be entitled to postpone the nomination of the discharging port.17

“direct to the discharging port(s)”

33.19 See the commentary on clause 20(b)(vii) in for a discussion of the obligation to proceed “direct”.

“so near thereunto as she may safely get (always afloat)”

33.20 See paragraphs 5.101 et seq.

Delivery of the cargo

33.21 Responsibility for the discharging operation is governed by clause 10, discussed in . For delivery generally see . Delivery against letters of indemnity is common in the oil carriage trade, as to which see the discussion in paragraphs 18.172 et seq. The current standard form IG Club approved form of letter of indemnity deems discharge into a tank farm to be “delivery” for the purposes of operating the letter of indemnity.18

Heating of the cargo

33.22 The provisions of clause 1 relating to the heating of the cargo will not apply if the vessel is coil-less, and stated to be so in Part IA. In The Gudermes,19 where the cargo was shipped without any charterparty having been concluded (and therefore without any contractual description of the ship) Hirst J. held that the knowledge of the receiver or his agent that the ship’s coils were inoperative gave rise to no inference that the receiver regarded carriage

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without heating as acceptable. However, the Court of Appeal20 appears to have inclined to the opposite view; and if the charter itself states that the ship is coil-less, the inference must be that the charterer has accepted that the cargo will be carried without heating. 33.23 If the vessel is coiled, and the charterer intends to load a cargo which requires heating, clause 1 is frequently amplified by provisions specifying the heat at which the cargo must be maintained, or the heating capacity of the coils. In the absence of any more specific clauses, the owner whose vessel is coiled, and so described in Part I, is probably obliged to provide a vessel with sufficient heating capacity to load, carry and discharge any reasonable cargo within the range of cargoes specified in Part I.21 In view of the disastrous consequences of cargo solidifying in the vessel, illustrated by The Busiris,22 it is important that the obligations of the parties are clearly defined. 33.24 Clause 1 contemplates that the charterer will request heating if necessary. However, the two cases referred to below establish that even in the absence of a request from the charterer the owner is under a duty under Article III rule 2 of the Hague Rules to apply heat if the characteristics of the cargo of which he is or ought to be aware are such that a reasonably prudent and skilful carrier would regard heating as a proper precaution. In The Rio Sun,23 the owner was held not to have breached the duty, since the cargo was crude oil of a variety not known to be unusually heavy or viscous and it was not general practice to apply heat to such cargoes. And in The Gudermes,24 the claim failed because there was no contract between the shipowner and the cargo owner on the terms of the bill of lading; nor was there any breach by the shipowner of any duty of care in tort, or as bailee, since the shipper had consented to carriage without heating.

U.S. Law

33A.1 The issues raised by this clause are discussed in connection with the corresponding provisions of the Gencon form.25