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VOYAGE CHARTER

F05

S.A Hosseini IRISL Maritime Training Institute

Voyage Charter

Is a contract for the carriage by a named vessel of a specified quantity of cargo between named ports or places. May be thought of as equivalent to the hire of a taxi for a single journey, or for a series of several consecutive journeys in the case of a consecutive voyage charter.

Voyage Charter

The shipowner present the named vessel for loading at the agreed place within an agreed period of time and, following loading will carry the cargo to the agreed place, where he will deliver the cargo. The charterer, agrees to provide for loading, within the agreed period of time, the agreed quantity of the agreed commodity, to pay the agreed amount of freight, and to take delivery of the cargo at the destination place.

Voyage Charter

The

shipowner must provide the master and crew, act as carrier and pay all running and voyage costs, unless the charter party specifically provides otherwise.

SHIPS COST CLASSIFICATION

Capital costs - are fixed costs associated with the ships purchase. include pre-delivery costs, loan repayments, interest, leasing charges, initial registration fees, taxes (sometimes), and any bareboat charterhire payable. are the owners responsibility. Voyage costs - Are variable costs associated with the commercial employment of the ship. Include costs of bunkers, port and canal dues, pilotage, tug hire, agency fees and loading/discharge costs. Are the responsibility of the ships commercial operator. If the ship is let on a time charter, the charterer is liable for the voyage costs. Operating or running costs - Aare semi-variable costs which fall between capital and voyage costs. Include costs of crewing, storing, ship maintenance, insurance and administration. Are the responsibility of the ship owner or manager.

Voyage charter party clauses


1- Preamble:
Identity of parties, identity of vessel, warranty of seaworthiness, present position of vessel, expected date of readiness to load, obligation to proceed to loading port or place, identity of and safety of loading port or place, amount and nature of cargo to be loaded, obligation to proceed to and identity of discharge port or place, obligation to deliver cargo.

Voyage charter party clauses


2-Warranty of seaworthiness:

Unless a contract of carriage by sea has an express provision concerning seaworthiness, the absolute (common law) obligation, known as the warranty of seaworthiness, is implied in the contract. In a charter party the absolute warranty of seaworthiness is usually moderated, to an undertaking that the shipowner or carrier will only exercise due diligence to make the vessel seaworthy before sailing. For a shipowner or carrier to exercise due diligence he must: 1.Make a reasonable and careful inspection and perform maintenance of the vessel in accordance with the custom of the trade; and 2.Do this before the commencement of the voyage.

Voyage charter party clauses


2-Warranty of seaworthiness: Continued

Example of Exercising due diligence : Class surveys and statutory safety construction, equipment and loadline surveys are carried out and passed in accordance with current requirements (technically seaworthy); The cargo spaces are fit for the reception and carriage of the cargo and that the cargo is properly loaded and stowed taking into account the expected perils of the voyage (cargoworthy); The vessel is properly equipped and supplied for the expected duration of the voyage in terms of sufficient competent crew, navigational equipment and supplies, stores, provisions and spares, bunker fuel, fresh water, etc. (fittedness for the voyage).

Voyage charter party clauses


Safe ports and berths:

Charterers usually give an absolute warranty that ports to which they will send the vessel will be good and safe, If charterers breach their warranty, the master has a right to refuse to enter, or refuse to stay at, the port in question. Safe Port: A port will not be safe unless, in the relevant period of time the particular ship can reach it, use it and return from it without, in the absence of some abnormal occurrence, being exposed to danger which cannot be avoided by good navigation and seamanship. ( unsafe river approach, buoys out of position, excessive ranging of vessels on berths, unanticipated ice. )

Voyage charter party clauses


Requirements for a port to be considered a safe port are as follows follows: :
port. There must be safe access to the port. The vessel can lie safely afloat at all states of the tide tide. . There must be adequate facilities for trade trade. . port. . It must be a politically safe port The vessel must be able to leave safely safely. .

Voyage charter party clauses


3- Owners Responsibility Clause:

is a BIMCO clause that states the conditions under which the owners will be responsible for loss, damage or delay of the goods, to the exclusion of all other causes.

Replaces the traditional form of Exceptions Clause .

Owners will usually accept liability only where the loss, damage or delay has been caused by the improper or negligent stowage of the goods or by personal want of due diligence on the part of the owners or their manager to make the vessel in all respects seaworthy and to secure that she is properly manned, equipped and supplied, or by the personal act or default of the owners or their manager.

Voyage charter party clauses


4. Deviation Clause:

is a standard protecting clause giving the vessel the liberty to call at any port or ports in any order, for any purpose, to sail with or without pilots, to tow and/or assist vessels in all situations, and also to deviate for the purpose of saving life and/or property.

A P&I Bunker Deviation Clause is a form of deviation clause recommended by the P&I clubs which allows the vessel to deviate off the contract route in order to load bunker fuel without breaching the contract. Bunkers are often cheapest at ports near oil producing centres).

Voyage charter party clauses


5- Freight Clause:

specifies the freight rate, how freight will be calculated, when it must be paid, and the arrangements for payment. Details of bank accounts may be in a separate document annexed to the charter party. Freight: is the remuneration payable by the charterers to the owners for the performance of the contract. It may be called charter party freight in the contract. Freight is not payable unless the entire cargo reaches the agreed destination, even if not the carriers fault, e.g. if the voyage is abandoned after a General Average act.

Types of Freight

Ordinary or charter party freight Lumpsum freight Bill of lading freight Advance or pre-paid freight Pro-rata freight Ad valorem freight. Back freight Dead freight

Types of Freight
Bill of lading freight:

is freight calculated on shipped or intaken weights, as stated in a bill of lading.

is used in trades where intaken and outturn weights are likely to differ, e.g. where:

oil evaporates during the voyage; there is clingage; there is sedimentation; logs loaded from the water dry out on the voyage; ice melts on timber after loading; grabs cannot discharge all of a cargo.

Types of Freight
Lumpsum freight:

is a fixed sum payable irrespective of the amount of cargo carried, the owners usually guaranteeing a specified cargo capacity for the charterers use. is useful in mixed cargo charters where cargoes are of varying densities.

is more common in the tanker trades than in dry cargo trades.

Types of Freight
Advance or pre-paid freight:

is often demanded by carriers of dry cargoes, and is the usual type of freight in the liner trades. may be the total freight or an agreed proportion of it, payable in advance at the loading port, the balance being payable on delivery of the cargo.

is deemed to be earned as the cargo is loaded. is commonly required where cargo is shipped under a negotiable bill of lading, as buyers of goods covered by a bill of lading often require a freight paid bill of lading.

Types of Freight
Pro-rata freight:

is payable in common law where only part of the voyage has been completed, e.g. when the voyage is abandoned following an outbreak of war or an accident, and the cargo is discharged at an intermediate port, or if the vessel had to leave port because of the onset of ice. is not freight in the normal sense, but the shipowners compensation for carrying the goods at least part-way to their destination.

Types of Freight
Ad valorem freight:

is freight charged at a rate stated as a percentage of the value of a shipment, usually of high-value goods, e.g. bullion. is not normally used in voyage charter parties, generally being confined to liner shipments. An ad valorem bill of lading is one on which the value of the cargo is recorded and under which the carrier waives his right to limit his liability to the goods owner under the package limitation provisions in the contract, usually in return for the higher ad valorem freight. P&I clubs do not normally cover owners for liabilities in connection with high-value cargoes, and owners must usually make other insurance arrangements.

Types of Freight
Back freight:

is freight paid by a shipper for the return carriage of goods not delivered to or not accepted by their receiver or consignee. If the non-delivery or non-acceptance was the vessels fault (e.g. due to over-carrying), no back-freight will be payable.

Deadfreight:

is not genuine freight, but owners compensation for lost freight, payable by the charterers on a quantity of cargo short-shipped, i.e. a quantity which he agreed, but failed, to load. E.g., if the charter party agreement was that the charterers would load 60,000 tonnes of wheat, but he loaded only 50,000 tonnes, the shipowner will claim deadfreight on 10,000 tonnes at the agreed rate of freight.

Voyage charter party clauses


6- Loading and Discharging Costs Clause:

allocates responsibility for the costs of bringing cargo alongside and loading, stowage, any required trimming, and discharging.

In the dry bulk trades it is normal for the charterers to make arrangements for bringing cargo forward and for payment of all loading and discharging costs, in which case the terms are known as free in an out (FIO).

Where the owners are responsible for the cargo handling costs, terms are liner terms, sometimes called gross terms.

An agreement may provide for a combination of the above, such as Free in/Liner out.

Voyage charter party clauses


7- Laytime Clause:

states the period of time allowed for loading and for discharging. The clause may provide for separate laytime for loading and discharging or for total laytime. states the conditions under which Notice of Readiness may be tendered.

8- Demurrage Clause:

states the maximum period of time allowed on demurrage and the rate at which demurrage will be calculated. The clause is often combined with a provision covering payment of despatch money .

Voyage charter party clauses


9- Lien Clause:

gives owners a lien on the cargo for specified debts, which generally include freight but may also include demurrage, deadfreight and damages for detention (or any of these).

10- Bills of Lading Clause:

requires the master or owners agent to sign bills of lading, sometimes at such rate of freight as presented, without prejudice to this charter party. may require the owners to give agents written authority to sign bills of lading.

Voyage charter party clauses


11- Cancelling Clause:

gives the charterers an option to cancel the charter party if the vessel is not ready to load on the cancelling date indicated in the charter party. may contain an obligation on owners to inform the charterers of any delay to the ships arrival, and an obligation on the charterers to declare whether he will exercise this option or not.

12- General Average Clause:

identifies the Rules under which any General Average will be settled, e.g. YorkAntwerp Rules 1994 and any subsequent modification thereof. states the obligation of cargo owners to pay cargos share of General Average expenses, even where these are necessitated through neglect or default of the owners servants. may be combined with the New Jason Clause, which will apply if General Average is to be adjusted in accordance with US law.

Voyage charter party clauses


13- Agency Clause:

Port agents are normally selected, appointed and have their fees paid by the shipowner. Where the charter party terms are free in and out (f.i.o.), the charterers are responsible for loading and discharge costs, and he will often reserve the right to nominate port agents .

The shipowner may appoint a protecting agent / husbandry agent to protect his own interests, although this will mean paying two agency fees.

14- Brokerage Clause:

specifies the amount of any brokerage commission due, and the party to whom it is payable.

Voyage charter party clauses


15- Strikes Clause

allocates responsibility for the consequences of workers stoppages that prevent fulfilment of the parties obligations under the charter party. Different strikes clauses feature in different charter party forms, Some clauses refer only to strikes, some to strikes and lock-outs, and others including all forms of industrial action.

16- War Risks Clause

sets out the rights of the owners and the vessels master should the vessel find herself in a war zone.

17- Ice Clause

should be included in the charter party terms where there is any possibility of the vessel being sent to a port which is ice-bound on her arrival, or where the onset of ice may cause the master to decide to leave the port before cargo operations are complete.

Voyage charter party clauses


18- Clause Paramount

A Clause Paramount General Paramount Clause incorporates into the contract of carriage one of three international conventions setting out minimum terms and conditions out of which the carrier cannot contract, i.e. the Hague Rules, the Hague-Visby Rules or the Hamburg Rules. It is inserted in any charter party under which a bill of lading is required to be issued, and is also found in various forms in liner and charter party bills of lading. Where the sea carriage is from a country which compulsorily applies none of the three conventions, the parties to the contract may still agree to be bound voluntarily by the rules of one of them so as to simplify the resolution of disputes; in this case the contract should have a Clause Paramount to identify the applicable rules.

Voyage charter party clauses


19- New Jason Clause (or Amended Jason Clause)

is required to protect owners against the possibility of US lawsuits. Under US common law, a shipowner cannot claim General Average contributions from cargo where there has been faulty navigation or management of the ship. The owners will therefore seek to exonerate himself from liability for loss from these causes. the Harter Act 1893 made it illegal to insert any clause in a bill of lading exonerating the ship from liability for loss caused through negligence, improper stowage, etc. Even so, a clause was commonly inserted in bills of lading giving owners the right to claim General Average contributions from cargo.

Voyage charter party clauses


20- Both to Blame Collision Clause

Under the Hague and Hague-Visby Rules collision, as a peril of the sea, is an excepted peril, allowing the carrier to avoid cargo loss or damage claims arising out of a collision with another ship. Normally an owner of collision damaged cargo must therefore claim on his cargo insurance policy. Under the law of the USA and certain other countries which have not ratified the Collision Convention 1910, a merchant whose cargo has been damaged in a collision may claim the full amount against the owners of the noncarrying ship and thereby circumvent the Hague or Hague-Visby Rules. The non-carrying ships owners may then recover from the owners of the carrying ship a proportion of the claim equivalent to their percentage of the blame for the collision. The Both to Blame Collision Clause is designed to enable a carrier to preserve the collision defence and get round the US law. Under the clause, the cargo owner agrees to indemnify the carrying ship against any liability to the noncarrying ship in the event of collision.

Both to Blame Collision Clause


Example:

Ships A and B collide in American waters. Ship A is the cargocarrying ship, ship B the non-carrying ship. Ship A is held by a US court to be 60% to blame for the collision, and ship B 40% to blame. Shipper A loses $1000 worth of cargo damaged on ship A, but cannot claim against the owners, who are protected by their bill of lading terms (incorporating the Hague-Visby Rules). Shipper S is allowed to claim the entire $1000 from the owners of the non-carrying ship B. But Ship B is only 40% to blame, so her owners can claim $600 back from the owners of ship A. The net effect is that the owners of ship A, while in no way contractually liable to shipper S, must pay 60% of Ss loss.

Voyage charter party


Laydays and the cancelling date

Laydays refers to a period of specified days (e.g. Jan 8/15) during which owners must present the vessel for loading. should not be confused with laytime, which is the period allowed to the charterers for loading and/or discharging without payment additional to the freight.

The cancelling date is the final layday and the date beyond which, if the chartered vessel has not been presented for loading, the charterers may reject her and cancel the charter,it will usually be found in a Cancelling Clause, which provides that the charterers will not be entitled to cancel the charter before the stated cancelling date, even when it is obvious that the vessel cannot arrive at the loading port by this date.

Together, laydays/cancelling or the laycan is the period within which the vessel must be presented at the agreed port or place.

Voyage charter party


Preliminary voyage to the loading port

Where the charter party requires the vessel to ....proceed with all convenient speed.... to the loading port or place, she must proceed with all reasonable speed. Provided the owners despatches the vessel on this preliminary voyage at the appropriate time, they will be protected by the Exceptions Clause or Owners Responsibility Clause in the charter party in the event that the vessel is unable, due to an excepted peril, to reach the loading port by the cancelling date. If, however, the vessel does not depart at the appropriate time, the owners will be liable for the late arrival even though the delay was due to an excepted peril, i.e. one named in the Exceptions Clause.

Voyage charter party


Laytime

is defined as the period of time agreed between the parties during which the owners will make and keep the vessel available for loading or discharging without payment additional to the freight.

is time allowed to the charterers for cargo operations without additional payment. practicable. should, in the interests of the owners, commence as soon as

may be separate for load and discharge ports, or reversible (or all purposes) may be of three types with respect to the method of determining the duration:

definite laytime; calculable laytime; or indefinite laytime.

Voyage charter party


Laytime

if definite will be stated in the charter party as a specified period of time, e.g. 6 (six) days.... or .....48 running hours. if calculable must be determined by making a computation from information in the charter party, e.g. where a cargo weighing 20,000 tons is to be loaded at a rate of 10,000 tons per day, the laytime will be 2.00 days. if indefinite the charter party may state that the cargo is to be loaded with customary despatch or customary quick despatch or as fast as the vessel can receive. Masters should obtain from their owners or managers a copy of Voyage Charter party Laytime Interpretation Rules 1993, which explain all the usual terms associated with the calculation of laytime, demurrage and despatch.

Voyage charter party


Laytime can only start to count against the
charterers after three conditions have been fulfilled: 1. The vessel has become an arrived ship within the terms of the charter party; 2. The vessel is in all respects ready to load / discharge; and 3. Notice of readiness has been served on the charterers or their agent.

Voyage charter party


Arrived ship

To determine whether the vessel has become an arrived ship within the charter party terms the master will need to know whether the charter party is a port charter party or a berth charter party. The agreed voyage is defined by the places named in the charter party for loading and discharging. These will either be ports (e.g. ..shall proceed to Rotterdam, and there load.) or berths (e.g. ..shall proceed to one safe berth Rotterdam (Vaalhaven), and there load..).

Voyage charter party


Arrived ship- port charter party

If a port is defined as the place for loading (e.g. Rotterdam), without stipulating a particular berth, the charter party is a port charter party. The characteristics of a port charter party are: the contractual destination is a named port . in order to qualify as having arrived at the named port and therefore be entitled to give notice of readiness to load (or discharge) the following two conditions must be satisfied: 1. if the vessel cannot immediately proceed to a berth, she has reached a position within the port where waiting ships usually lie; and 2. she is at the immediate and effective disposal of the charterer.

Voyage charter party


Arrived ship- Berth charter party

If a particular berth is defined as the loading place, the charter party is a berth charter party. The characteristics of a berth charter party are: the contractual destination is a berth designated by the charterers within a named port; in order to qualify as an arrived ship, and therefore be entitled to give notice of readiness to load (or discharge) the vessel must have reached the berth and be ready to begin to load (or discharge).

Voyage charter party


Arrived ship- Port / Berth charter party

To protect themselves, and convert a berth charter party into a port charter party, the owners will often: insert a Waiting for Berth clause or insert a protecting phrase in the Laytime Clause to make it clear that time can count as laytime once the vessel is at the customary waiting place. These phrases include: Abbreviation Meaning w.i.p.o.n. or WIPON w.i.b.o.n. or WIBON w.c.c.o.n. or WCCON w.i.f.p.o.n. or WIFPON Abbreviation Meaning whether in port or not whether in berth or not whether customs cleared or not whether in free pratique or not

Voyage charter party


In all respects ready to load

means the vessel is seaworthy and in every way fit to carry the particular cargo on the voyage contemplated by the charterer. The vessel must be fully at the charterers disposal, i.e. with derricks or cranes ready for operation, holds or tanks cleaned, prepared and surveyed, free pratique and customs clearance granted, etc. - unless the charter party allows otherwise, which it may do by the inclusion of a protecting phrase .

most modern charter party forms have reduced the absolute obligation ( in common law ) to a duty of exercising due diligence, i.e. doing everything which a prudent shipowner can reasonably do to make the vessel seaworthy without actually guaranteeing her seaworthiness.

Voyage charter party


Notice of readiness

is a notice to the charterer, shipper, receiver or other person as required by the charter party that the vessel has arrived at the port or berth, as the case may be, and is ready to load or discharge.

may be (and is often) given by the ships agent on the masters behalf. (In many cases the Notice of Readiness is sent by the ships agent to an agent of the charterer.)

must be given before laytime can commence. must be given within the laycan period. must be given in accordance with the procedure in the Notice Clause or Laytime Clause in the charter party. is often required to be given during office hours from Monday to Saturday.

Voyage charter party


Notice of readiness

Notice of Readiness may be tendered by delivery of a printed form or letter, or by telex, fax or cable, unless the charter party provides otherwise. must be addressed to the charterers or their agent . should be sent in duplicate with a request that the second copy, with the time and date of acceptance completed, should be returned for the masters retention.

If receipt of Notice of Readiness is not acknowledged on the first day notice is tendered, daily attempts to have it accepted should be made. It is important to the shipowner or time charterer that Notice of Readiness is tendered as soon as the possible. A few minutes delay in tendering on a Saturday morning could mean that laytime will not commence until Tuesday morning, even though cargo work starts earlier.

Voyage charter party


Examle of NOTICE OF READINESS
m.v. Hudson Bay At Rotterdam 15th September 2003

Dear Sirs Please be advised that the above-named vessel, under my command, arrived within Rotterdam port limits at 0625 hours Local Time on 15th September 2003 and is now in every respect ready to commence discharge in accordance with all terms, conditions and exceptions as per the charter party dated Hamburg, 17th July 2003. Cargo: 149,252 longtons iron ore. Kindly sign and return the enclosed copy, acknowledging receipt of this notice of readiness. Yours faithfully (Signed), John McNab Master Notice tendered at 0900 hours Local Time on 15th September 2003. Notice received at .... hours Local Time on ..................... ..........................

Voyage charter party


Demurrage

If cargo operations are completed after expiry of the laytime, there is a breach of contract for which the charterers would be technically liable for damages. Demurrage is defined as an agreed amount payable to the owners in respect of delay to the vessel beyond the laytime, for which the owners are not responsible. Demurrage shall not be subject to laytime exceptions. Demurrage will only be payable if provided for in a clause in the charter party, e.g. a Demurrage Clause or Demurrage/Despatch Money Clause. The demurrage rate, which is normally quoted in US Dollars, will normally be a daily rate that will at least cover the owners costs of keeping the ship in the port. Demurrage is normally paid per running day, i.e. without exclusion of any Sundays, holidays, or bad weather, strikes, etc., occurring during the detention period once on demurrage, always on demurrage.

Voyage charter party


Despatch

If cargo operations are completed before expiry of the laytime, a monetary reward, termed despatch or despatch money, is normally payable by the owners to the charterer.

Despatch money or despatch is defined as an agreed amount payable by the owners if the vessel completes loading or discharging before the laytime has expired.

Despatch will only be payable if provided for in a charter party clause (e.g. a Demurrage/Despatch Money Clause). Some charterparties stipulate free dispatch, meaning that the owners will not pay any dispatch money if time is saved.

The daily despatch rate, which is normally quoted in US Dollars, is traditionally half the agreed demurrage rate.

Charter-related and other problems at the loading port


If charterers repeatedly reject the vessel on grounds of unclean holds or tanks:

Unless the charter party provides otherwise, the master has final responsibility for deciding when cargo compartments are sufficiently clean for loading. If personally satisfied that compartments are clean enough for the intended cargo, the master should: act reasonably; bear in mind that he is acting in the interests of both the owners and the charterer; politely and firmly point out to the surveyor ( charterer ) that the responsibility outlined above is the masters; point out that the cost of any further cleaning will be for the charterers account; and note protest.

If ordered to leave the loading berth before acceptance, the master should not agree to do so unless so instructed by the owners/disponent owners, or unless there is a clause in the charter party giving the charterers the right to order the vessel off the berth, in which case the order should come from the charterers to the master via the owners.

Charter-related and other problems at the loading port


If charterers cannot provide a cargo on arrival

The master should tender notice of readiness in accordance with the charter party, and inform the shipowner.

The charterers are not in breach of contract until the agreed laytime has expired. The vessel should sit out the laytime, the period of which should be computed from the charter party. If no cargo has been provided by the time of expiry of laytime, the master should note protest, stating that the owners obligations under the charter party have been met, and await instructions.

Charter-related and other problems at the loading port


If charterers cannot provide the agreed cargo quantity

It is customary in the bulk trades for the charter party to allow for the actual weight intaken to be more or less ( MOL) than the proposed weight by a margin of perhaps 10%, in either the charterers option (MOLCO) or the owners option (MOLOO).

If the weight loaded is less than the agreed margin, the charterers will be in breach of contract and liable for deadfreight. The owners will be entitled to take reasonable steps to find other cargo to fill the unused space.

In such a case the master should send a letter of protest to the charterer, contact the owners, and note protest. A deadfreight claim form may have to completed by the master, for submission to the charterer.

Voyage Charter Party- Discharge Port


Outturn problems

Problems may arise over the outturn of cargo, i.e. discrepancies between the loaded (or bill of lading) quantity and the discharged quantity. The carrier is obliged to deliver the cargo in the same quantity and condition as when loaded and has a prima facie case to answer if any loss or damage occurs during the voyage. The carrier must then be able to show that he is exempt from liability under one or more of the exceptions in the contract of carriage. If he cannot prove that the loss/damage was covered by one of the exceptions in the contract, he will be liable for the loss/damage.

If the carrier can prove exemption from liability, however, the cost of the loss/damage will lie with the party bearing the risk in the cargo (e.g. the consignee), subject to possible recovery from the seller or the cargo insurer.

In order to provide the necessary proof, the carrier will require full documentary evidence from the ship.

Voyage Charter Party- Discharge Port


Carriers lien on cargo

In common law, a carrier may exercise a possessory lien on any part of the cargo in respect of which freight is owing at the destination, and also for money which has been spent in protecting the cargo (e.g. where reefer goods have been warehoused by the shipowner while a damaged reefer vessel has been drydocked). A common law lien is not allowed on unpaid deadfreight or demurrage. However, carriers often insist on the insertion in the contract of carriage of a Lien Clause giving themselves a contractual lien on the cargo for deadfreight and demurrage, and sometimes also for damages for detention. A contractual lien for anything other than freight must be clearly expressed in the contract terms. The carriers lien is exercised by the shipowners port agent or by the master as agent of the shipowner; it is not the masters lien.

Voyage Charter Party- Discharge Port


Carriers lien on cargo- cont

Once delivery of the goods is made, the lien is lost. (For this reason most dry cargo charter party forms require freight to be paid on or at some time before delivery.) To preserve his lien, the carrier must retain actual or constructive possession of the goods on which freight is due. The cargo on which the lien is exercised should therefore be discharged into a warehouse under the exclusive control of the carriers agent who should be given instructions to release the goods only after surrender of an original bill of lading and payment of freight. If freight is still not paid after a certain period of time, local law may allow the goods to then be sold to pay freight, storage charges, customs duty, etc. Many bills of lading have a clause (such as a London Clause) giving the master the right to discharge cargo immediately on arrival and without notice to receivers.

Voyage Charter Party- Discharge Port


Cesser and Lien Clause

Where the charterers are not the owners of the goods but is acting only as an agent or broker for the loading of another partys goods, he will probably be anxious to ensure that his liability for the cargo ceases once it is loaded.

This is usually expressed in a Cesser Clause stating that ...charterers liability will cease on shipment of cargo and payment of freight, deadfreight and demurrage, i.e. sums incurred at the loading port.

The shipowner, will not want to find himself without a remedy for any breach of contract or damage done to his vessel after the charterers liability has ceased, and will want legal recourse against another party, who will usually be the receiver of the goods. Therefore, if a Cesser Clause is incorporated in the charter party, a Lien Clause will also be included giving the owners the right to retain possession of the goods at the discharge port until outstanding debts are paid.

The two clauses are often combined in a Cesser and Lien Clause. The relief given to the charterers from their obligations only operates to the extent that outstanding sums can be recovered at the discharge port. The owners must proceed against the receiver first, but the charterers will remain liable for sums which cannot be recovered from the receiver.

Voyage Charter Party- Discharge Port


If the consignee fails to take delivery of cargo

When market conditions are poor, a consignee faced with having to take delivery of goods damaged during a voyage may prefer to reject the goods on the grounds that the damage is so extensive that it amounts to a total loss. However, whether his goods are damaged or not, it is the consignees duty to: take delivery of his goods; mitigate his loss; and make his claim against the carrier

voyage charter party- laytime alculations

The purpose of laytime calculations is to determine whether on completion of loading or discharge operations despatch is payable to the charterers or demurrage is due to the owners. There are seven stages in a laytime calculation:
1. Read relevant clauses in the charter party. 2. Obtain Statement of Facts from agent. 3. Determine duration of laytime allowed. 4. Establish time of commencement of laytime. 5. Allow for interruptions to laytime as per the charter party. 6. Establish time of expiry of laytime. 7. Calculate despatch or demurrage payable.

voyage charter party- laytime alculations

words and phrases used in a charter party


Working days (WD) shall mean days not expressly excluded from laytime. Running days or Consecutive days shall mean days which follow one immediately after the other. Weather working day (WWD) or Weather working day of 24 hours or Weather working day of 24 consecutive hours shall mean a working day of 24 consecutive hours except for any time when weather prevents the loading or discharging of the vessel, or would have prevented it, had work been in progress. Weather permitting (WP) shall mean that any time when weather prevents the loading or discharging of the vessel shall not count as laytime.

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