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Voyage charterparty is a contract of carriage between the shipowner and the charterer, when the fromer let his vessel to the latter for a specific voyage or a number of consecutive voyages. The shipowner’s renumeration for the services rendered is freight which covers its costs, fuel and crew including, and its profit.

Voyage Charters
Last updated: 28-Nov-2015

In E. L. Oldendorff & Co. G.M.B.H. Appellants v. Tradax Export S.A. Respondents (The Johanna Oldendorf), [1974] AC 479 per Lord Diplock at p.554:

Voyage charters have been the subject of litigation in the English courts since the 16th century. Even in those days, merchants and shipowners recognised that ship’s time lost was money lost, and 16th century charter parties contained provision for payment of demurrage by the charterer if loading or discharging were prolonged beyond the agreed "lay time," specified in the charter party as the period during which it was to be available to the charterer for that purpose.

Despite the transformation that has taken place in shipping, in port facilities and in communications during the last four hundred years, the business nature of the adventure to which the contract between charterer and ship owner relates remains essentially the same. It is an adventure which of its nature has always been exposed to the risk of being prevented, impeded or delayed by a variety of causes beyond the control of either party. If it is known in advance how loss due to delay from any particular cause is to be borne as between charterer and ship owner, account can be taken of the risk in fixing the freight payable. What matters from a commercial point of view is not so much that the risk should be borne by one party rather than by the other, but that it should be known, at the time the charter party is made, by which of them it will be borne.

Charterparties originated at a period when contractual obligations were as a general rule treated as absolute. A party’s obligation was to secure that anything that he warranted should be done, was done. If it was not, then, unless this was the result of some default of the other party, he was liable in damages, even though circumstances over which he himself had no control and could not even have foreseen made it impossible for it to be done. In the case of maritime carriage this rule was subject to the exception that performance was excused if it were prevented by act of God or of the King’s enemies or by inherent vice in the goods carried. At a very early date it became usual to incorporate in charterparties express exceptions for other maritime perils, and in modern charterparties these have been extended to strikes and other hindrances to performance which take place on land. But that the old rule still applies in the absence of an express exception in the charterparty is shown by the fact that when there is deviation from the chartered voyage the shipowner’s liability for the safe delivery of the goods is absolute, save for the limited common law exceptions mentioned above.

In Boukadoura Maritime Corp. v Societe Anonyme Marocaine de l’Industrie et du Raffinage (The Boukadoura) [1989] 1 Lloyd’s Rep 393 Evans J summarised contractual relations between the shipper, the charterer, the carrier and bill of lading holder in the following words:

It is essential in my judgment to spell out certain assumptions which may be made as to the rights and obligations of the parties to a voyage charter-party such as this, although for present purposes they may be stated in general terms. The first is that contractual relations between the shipowner and charterer remain governed by the charter-party notwithstanding the issue of a bill of lading to a third party shipper. Secondly, although the shipper is an independent third party, for the purposes of the charter-party he should be regarded as the agent through whom the charterer has performed his undertaking to load cargo upon the vessel (see for example The Mediolanum, [1984] 1 Lloyd’s Rep 136 at p 140, per Lord Justice Kerr). Thirdly, when the shipowners through the master or their agents issue a bill of lading they undertake responsibilities and potential liabilities to third parties which are independent of the charter-party contract. If the document contains a false statement knowingly or recklessly made, then there is a potential liability in fraud: Brown Jenkinson & Co Ltd v Percy Dalton (London) Ltd, [1957] 2 Lloyd’s Rep 1; [1957] 2 QB 621. Fourthly, whereas in earlier times the bill of lading may have been regarded as a negotiable receipt issued as a favour by the shipowner for the convenience of the charterer, the commercial reality today is that the shipowner will invariably be required, and will expect to have to issue a bill of lading, which will or may be held by third parties other than the charterer. (It is noteworthy that in the present case a bill of lading was required, notwithstanding the special delivery provisions. The shippers were to obtain payment for the cargo from the charterers through the letter of credit machinery operated by their respective banks.) Fifthly, it is for practical purposes inevitable that the liabilities under the bill of lading contract will differ to a greater or lesser extent from those undertaken by the shipowner under the charterparty. The differences may result from different contractual terms of, in English law at least, from the operation of the doctrine of estoppel.

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