Shipping Law: Contracts and Disputes - Assignment Example

Shipping Law: Contracts and Disputes In the maritime law context, a charterer has an implied duty to nominate only a safe port or safe berth to the ship owner. The US courts, however, seem unequivocal whether such liability should be strictly construed or not. The Atkins principle, for one, seem to point that the master of the ship is the best person to decide whether a port or berthing on it is safe and if damage is sustained by the ship, his diligence or lack of diligence must be established. The charterer can be held liable only if the master is found to have observed prudence and diligence. Other cases, however, seem to contradict this dictum, which is why US law on the matter is largely unsettled even to this day. Moreover, unlike in the English jurisdiction which normally attaches liability either on the charterer or ship owner, the US courts do not confine themselves to an either-or decision but may find both parties liable for the damage to the ship and cargo. The US Common Law on Safe Port Warranty Decisions of courts and arbitration tribunals have commonly acknowledged that a charterer, especially in a time charter, has a general obligation to nominate only a safe port to the ship owner. The lack of a “safe port” clause written into the charter contract does not negate this obligation as it is deemed an implied warranty by the charterer to the ship owner. A time charter is, as distinguished from the demise or bareboat charter, a private agreement between a charterer and a ship owner for the use of the former of the latter’s ship for a specific period of time for the purpose of transporting goods from one port to another. Whilst the bareboat or demise charter give a charterer control over the management of the ship, including navigation, operation and crewing, a time charterer leaves such to the ship owner (Nunes 2004 3-5). The obligation of a charterer to nominate a “safe port” has its origin in the English law Leeds Shipping v Société Française Bunge (The Eastern City), 2 Lloyd’s Rep. 127 (1958) where the English court defined the concept of a safe port as one in which “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.” The Court’s classic definition of the term stemmed from the case’s charter party in issue where the ship owner sustained damage due to an incident that took place in the port where the charterer had sent the ship to pick-up cargo from. While the ship picked up barley in the port of Mogador, Morocco, as specified in the charter party, it dragged anchor and sank. The Court held that the port was not safe for a ship the size of that of the ship owner’s and found the charterer liable for breaching the implied warranty of safe port. Despite having originated from the Leeds case, the US maritime law had deviated from a strict implementation of its principles as evinced from various decisions of US tribunals and arbitrators. Under US common law on the matter, liability may be apportioned between charterer and ship owner in accordance with their respective proportionate contribution to the ship’s damage while under English law, it is always an either-or situation on the basis of an assessment as to who between the charterer and ship master did not exercise proper diligence (Mainbrace 2008). Even in the earlier case of Robert Dollar Co v. Blood Holman & Co Ltd (1920) 36 TLR 843, the US common law had stressed basing liability on the facts of the case rather than follow a formulaic approach to shifting liability from one party to the other. In that case, for example, the Court ruled that liability must be determined by examining the condition of the port itself, the voyage and the dangers that are attached to it, the ease with which a ship can enter and leave the port, and the ship’s dimension and weight when loaded by cargo (Nunes 2004 4). The US law on safe port and safe berth, nevertheless, is not entirely unequivocal with cases here and there seemingly out to contradict each other’s dictum. This is evidenced by the different approaches taken in the cases of Atkins v Fibre Disintegrating Co 85 US 272 (1873) and Venore Transportation Co v Oswego Shipping Corp. 2d Cir. 1974, 498 F 2d 469. In the first case, the US court adopted the prudent man standard while in the second case, the court took a strict liability approach. In the Atkins case, the Court absolved the charterer when the ship it chartered to pick up bamboo bundles in Kingston and Port Morant in Jamaica was badly damaged as it struck a reef at the mouth of Port Morant as it maneuvered itself out of the port on the way to New York where it was to unload the cargo. Albeit the Court declared that Port Morant was not a safe port because of the its narrow opening and reefs surrounded it, it nevertheless pointed out that the master of the ship had accepted the risk when it docked in the port, loaded the cargo and started to leave it. The Court rationalized that the master of the vessel was the best person to judge the safety of the port and the capacity of his vessel and the fact that he did not object nor refused to go on with the docking at Port Morant was deemed a waiver of his right to do so. In contrast with the Atkins principle, the Venore case, decided in 1974, muddled the dictum held in Atkins that the master of the ship is the best man to exercise prudence with regards to the condition and safety of the port when it held that the charterer had a non-delegable duty to determine the safety of the port. Since the Atkins dictum was made in 1873 and the Venore case was decided in 1974, the conclusion would have been that perhaps, the new dictum would be that of the latter and towards a stricter liability for charterers. However, another case came up in 1991 that espoused again the Atkins principle. In Orduna SA v Zen-Noh Grain Corp 913 F 2d 1149 (1991) AMC 346 (5th Circ. 1990), the Court ruled that a safe port clause is a duty imposing upon a charterer the diligence to find a safe port and not a warranty that ensures the safety of the port. If the charterer is not found to have been negligent in such duty, he is not liable. References Atkins v Fibre Disintegrating Co 85 US 272 (1873). Force, R. & Yiannopoulos, M. & Davies, M. (2006). Admiralty and Maritime Law. Beard Books. Leeds Shipping v Société Française Bunge (The Eastern City), 2 Lloyd’s Rep. 127 (1958). Mainbrace (2008 April). Two Systems Divided by a Common Law: “Safe Ports and Safe Berths.” BlankRome Llp. http://www.blankrome.com/index.cfm?contentID=37&itemID=1488. Nunes, T. (2004). Charterers Liabilities under the Ship Time Charter, Houston Journal of International Law, BNET. http://findarticles.com/p/articles/mi_hb3094/is_3_26/ai_n29118534/pg_3/?tag=content;col1. Orduna SA v Zen-Noh Grain Corp 913 F 2d 1149 (1991) AMC 346 (5th Circ. 1990). Robert Dollar Co v. Blood Holman & Co Ltd (1920) 36 TLR 843. Venore Transportation Co v Oswego Shipping Corp. 2d Cir. 1974, 498 F 2d 469. Read More