Anaysis of Gencon Charter Party - Case Study Example

Analysis of GENCON CHARTER PARTY Content list 1. INTRODUCTION 3 2. Owners' Responsibility Clause 3 3. Deviation Clause 4 4. Payment of Freight 4 5. Loading/Discharging 4 6. Laytime 5 7. Demurrage 6 8. Lien Clause 6 9. Cancelling Clause 6 10. Bills of Lading 7 11. Both-to-Blame Collision Clause 7 12. General Average and New Jason Clause 7 13. Taxes and Dues Clause 8 14. Agency 8 15. Brokerage 9 16. General Strike Clause 9 17. War Risks ("Voywar 1993") 10 18. General Ice Clause 13 19. Law and Arbitration 15 20. CONCLUSION 16 references 17 1. INTRODUCTION The Charterers are always there to help the transactions happen more safely than it can be. However there are certain rules that need to be followed in order to avoid misunderstandings and confusions. The clauses are here to determine the basis of all those consequences that may be sorted out without any tug. The comprehensiveness is very important between the Charterers and the owners. The attempts made by these clauses are to bringforth this comprehensive ness and transparency towards the smooth fulfillment of the trade and to maintain good relationship. Under any circumstances of loss or damage to the goods, it is the Owner who suffers, most. This is thus very important for him to be conscious of many of the things that are mentioned here in the clauses. The Charterers are subject to offer all possible assistance to the Owners in the ports and in the shipment of the Vessels or the allotted cargos. It is a matter of shared responsibility between the two and thus has got interdependencies. 2. Owners' Responsibility Clause The Owners has got the responsibility for loss of or damage to the goods. He is also in concern of any kind of delay in delivery of the goods. These are all his concern if any of these are caused by personal want of due diligence on the part of the Owners or their Manager. The responsibility of the owner of the Vessel is in making the Vessel seaworthy and to check whether it is secured enough. He or his manager needs to check the ways it gets manned, equipped and supplied. The Owners are not responsible for any kind of loss, damage or delay arising after the handing over or from any other causes. These are all under the periphery of the Master or crew. 3. Deviation Clause The Vessel has got the liberty to call at any port. It is also liberal to sail without pilots. The Vessels in all situations can be deviated for saving life and property. 4. Payment of Freight (a) The payment of the freight at the rate stated in Box 13, will be paid in cash and will get assessed on the intake quantity of cargo. (b) Payment of freight can also be done prepaid, that is on shipment. The payment will be taken as deemed earned and under any circumstances will not be returnable. In case of prepaid payments no endorse bills get signed till the freight due to the Owners has actually been paid. (c) Payment of freight can be paid on delivery. This payment is not deemed earned till the cargo is delivered. This process of payment doesn’t support (a). This type of payment supports the Charterers with the option of paying the freight on delivered quantity. If required, these payments are added with the highest current rate of exchange, subject to 2% to cover insurance and other expenses. 5. Loading/Discharging (a) Costs/Risks The cargo shall be brought into the holds and discharged by the Charterers. The process is free of any risk. The Charterers is responsible for proper storage and protection of the cargo on board. In such phases the Owners has to allow the use of all dunnage available on board. The Charterers even will pay the cost of removing their dunnage after discharge of the cargo under this Charter Party. (b) Cargo Handling Gear According to Box 15, the Owners throughout the process of loading and discharging will give free use of the Vessel's cargo handling gear with the equipment to be in good working order. (c) Stevedore Damage Beyond ordinary wear and tear, the Charterers shall be responsible for any kind of damages caused by Stevedores. If the notification fails the Charterers shall not be held responsible. Master needs to have Stevedores' written acknowledgement. Charterers can repair any stevedore damage, affecting the Vessel's seaworthiness before it sails from the port. The additional expenses incurred shall be for the account of the Charterers. However the lost shall be paid to the Owners by the Charterers at the demurrage rate. 6. Laytime (a) The separate laytime for loading and discharging cargo will be within the number of total running days/hours as indicated in Box 16. They are all relying on the weather conditions with Sundays and holidays excepted. (b) The total laytime for loading and discharging cargo will be within the number of total running days/hours as indicated in Box 16. They are all relying on the weather conditions with Sundays and holidays excepted. (c) Commencement of laytime for loading and discharging shall commence at 13.00 hours. The notice of readiness at loading port to be given to the Shippers named in Box 17 and in Box 18. This notice of readiness is given to the Receivers or to the Charterers or their agents named in Box 19. At the unavailability of loading/discharging berth Vessel shall be entitled to give notice of readiness within ordinary office hours. In such situations the Laytime shall be counted, but the time used in moving from the place of waiting to the loading/ discharging berth shall not becounted as laytime. In all phases the time used before commencement of laytime shall be counted, in accordance to the indication alternatives given in (a) or (b) as agreed, in Box 16. 7. Demurrage Any kind of demurrage related to loading and discharging port is payable by the Charterers, as in Box 20 and is payable upon receipt of the Owners' invoice. If it is not paid in accordance Owners shall give the Charterers 96 hours to rectify. On the contrary Owners can terminate the Charter Party and can stick to the claim. 8. Lien Clause Owners with lien on the cargo is payable in respect of the whatever the type of the cargo, due under this Charter Party including 1recovering. 9. Cancelling Clause (a) If the Vessel is not to load on the cancelling date as in Box 21, the Charterers can cancel this Charter Party. (b) If Owners oppose that, then they can notify the Charterers without delay with the expected date of the Vessel's readiness. It has got the option of Charterers’ exercise cancelling the Charter Party, or agreeing to new cancelling date; declared Charterers within 48 hours after Owners' notice. If it is not done, then this Charter Party shall be deemed to be amended on the seventh day after new date of readiness. There is a sub-clause (b) it operates only once, and in further delay, the Charterers shall have the option of cancelling the Charter Party as per sub-clause (a) of this Clause. 10. Bills of Lading Bills of Lading by the Master as per the "Congenbill" Bill of Lading form, Edition 1994. A written authority has to be given by Owners to the agents, with a copy to Charterers. The Charterers will assure Owners of consequences that may arise from the bills of lading. The fact is, the terms of bills of lading impose more heavy liabilities upon the Owners. 11. Both-to-Blame Collision Clause According to this clause if the Vessel gets into collision due to the default of the Master, Mariner, Pilot or the servants of the Owners, then the owners of the cargo carried hereunder will indemnify the Owners against all loss to the other. Such loss or claim of the owners gets paid by the other and it sets off, recouped by the other. The proceedings apply the owners in charge of any vessel to the colliding vessels are at fault in respect of a collision or contact. 12. General Average and New Jason Clause General Average gets adjusted in London as agreed in Box 22, according to York-Antwerp Rules 1994. Proprietors of cargo to pay the cargo’s share in general expenses as in Clause 2. To adjust General Average in accordance with the law of the USA, the following Clause gets applied, ‘for event of accident, danger, damage or disaster before or after the commencement of the voyage, …for the consequence of which, the Owners are not responsible, …shall contribute with the Owners in General Average to the payment of any sacrifices, losses or expenses of a General Average nature that may be made or incurred and shall pay salvage and special charges incurred in respect of the cargo. In case of salving vessel … salvage shall be paid for as fully as if the said salving vessel or vessels belonged to strangers. Deposit of this type may deem sufficient to cover the estimated contribution of the goods and any salvage and special charges thereon shall, if required, be made by the cargo, shippers, consignees or owners of the goods to the Owners before delivery.’ 13. Taxes and Dues Clause (a) On Vessel -The Owners shall pay all dues, charges and taxes. It will be customarily levied on the Vessel with the amount assessed. (b) On cargo -The Charterers shall pay all dues, charges, duties and taxes. It will be customarily levied on the cargo as per the amount assessed. (c) On freight –As in Box 23, taxes levied on the freight shall be for the Charterers' account. 14. Agency Owners have to appoint their own Agent both at the port of loading and discharge. These agents are responsible for making all the deals in favour of the Owner. As they are all solely appointed by the Owner their acts are all in charge of the owner and have got nothing to do with the Charterers. 15. Brokerage A brokerage commission is charged as in Box 24. It will be on the freight, dead-freight and demurrage earned and is due to the party in Box 24. For non-execution, 1/3 of the brokerage on the estimated amount has to be paid by the party responsible. A broker as indemnity for the latter’s expenses and work, which may differ with more voyages. 16. General Strike Clause This clause clarifies three aspects of strike. It aims at maintaining all possible deals during the strikes or lock-outs. It stands for al possible aspects making no loss to anybody during the loading and delivery of the shipment. (a) A strike affecting the actual loading of the cargo, when the Vessel is ready to proceed from her last port or at any time during the voyage to the port or ports of loading or after her arrival there; the Master may ask the Charterers to declare, that they agree to reckon the laydays. Declaration has to be made by the Charterers in writing within 24 hours, or the Owners have the right of cancelling this Charter Party. In case of part cargo that has been already loaded, the Owners have liberty to complete with other cargo on the way for their own account. (b) A strike affecting the actual discharging of the cargo on or after the Vessel's arrival at or off port of discharge needs to be settled within 48 hours. the Charterers can keep the Vessel waiting till the strike ends. There is of course a half or full demurrage payment to be made after expiration of the time provided for discharging. Orders are to be given in 48 hours after the Owners have given notice to the Charterers of the strike affecting the discharge. After the delivery of the cargo at port, all conditions of this Charter Party and of the Bill of Lading gets applicable making the Vessel receive the same freight. It is applicable except that if the distance to the substituted port exceeds 100 nautical miles, on the contrary the freight on the cargo delivered at the substituted port to be increased in proportion. (c) Except for (a) and (b) neither the Charterers nor the Owners shall be responsible for the consequences of any strikes affecting the actual loading or discharging of the cargo. 17. War Risks ("Voywar 1993") 1. This Clause is structured in order to prevent the damages during the Wars. It has been specified with the transparency of meaning to certain words - (a) As for "Owners" means shipowners, bareboat charterers, disponent owners, managers or other operators who are charged with the management of the Vessel, and the Master. (b) "War Risks" means any war, or act of war, civil war, hostilities, revolution, rebellion, civil commotion, warlike operations, the laying of mines, acts of piracy, acts of terrorists, acts of hostility or malicious damage. It also includes the blockades by any person, body, terrorist or political group, or the Government of any state in the reasonable judgment of the Owners, may be dangerous to the Vessel, her cargo, crew or other persons on board the Vessel. 2. Before the Vessel commences loading, if it appears that the reasonable judgment of the Owners, performance of the Contract of Carriage, may expose the Vessel, her cargo, crew or other persons on board the Vessel to War Risks, the Owners may give notice to the Charterers canceling the respective Contract of Carriage. He can also refuse to perform such part of it as may expose; provided always that if this Contract of Carriage provides that loading or discharging is to take place within a range of ports. This can also be at the port or ports nominated by the Charterers the Vessel, her cargo, crew, or other persons onboard the Vessel may be exposed. Under any circumstances or possibility, the Owners first needs to inform the Charterers to nominate any other safe port which lies within the range for loading or discharging, and may only cancel this Contract of Carriage must get nominated for safe port or ports within 48 hours of receipt of notice of such requirement. 3. The Owners does not need to continue to load cargo for any voyage. He is also not liable to sign Bills of Lading for any port or place, or to proceed or continue on any voyages that are likely to be, exposed to War Risks. Under these phases the Owners may request the Charterers to nominate a safe port for the discharge of the cargo. Within 48 hours of the receipt of such notice, if the Charterers did not nominate such a port, the Owners may discharge the cargo at any safe port of their choice. This will be inclusive of the port of loading, in complete fulfilment of the Contract of Carriage. The Owners will have recoveries of extra expenses of such discharge, from the Charterers. In case of the discharge taking place at any port other than the loading port, the Owner will receive the full freight as though the cargo had been carried to the discharging port. For extra distance exceeding 100 miles, to additional freight shall be of the same percentage to the freight contracted for as the percentage which the extra distance represents to the distance of the normal and customary route, the Owners having a lien on the cargo for such expenses and freight. 4. If the voyage at any stage after the loading of the cargo commences, appears in the reasonable judgment of the Owners; the Vessel, her cargo, crew or other persons on board the Vessel may get exposed to War Risks. It can be in the part of the route that might include any canal or waterway, which is normally used in a voyage. In the circumstances of change in the contracted route, there is another longer route to the discharging port. In this phase the Owners shall give notice to the Charterers for the change in route. In the process, if the total extra distance exceeds 100 miles then the Owners shall be entitled to the additional freight. This freight shall be the same percentage of the freight contracted for as the percentage which the extra distance represents to the distance of the customary route. 5. The Vessel has been backed by some kinds of liberty. These are (a) to be strict enough in the process of following all orders, directions, recommendations or advice as to departure, arrival, routes, sailing in convoy, ports of call, stoppages, destinations, discharge of cargo, delivery as given by the Government of the Nation under whose flag the Vessel sails. These are also subject to the other Government to whom the Owners are subject, or any other Government which so requires. It is also obliged to any body or group acting with the power to compel compliance with their orders or directions; (b) to be strict enough in the process of following the orders, directions or recommendations of any war risks underwriters. The follow up is important as these underwriters have the authority to give the same under the terms of the war risks insurance; (c) to be strict enough in the process of following the terms of any resolution of the Security Council of the United Nations. It is also meant to any directives of the European Community, the effective orders of any other Supranational body which has the right to issue and give the same. These are all with national laws aimed at enforcing the same to which the Owners are subject, and to obey the orders and directions of those who are charged with their enforcement; (d) to be strict enough in the process of following the act of discharge at any other port any cargo or part thereof which may render the Vessel liable to confiscation as a contraband carrier; (e) to be strict enough in the process of following the call at any other port to change the crew or any part thereof or other persons on board the Vessel. It depends on the reliability of the reason to believe that they may be subject to internment, imprisonment or other sanctions; (f) under any provisions of this Clause, in case of the sequences where the cargo has not been loaded or discharged by the Owners to load other cargo for the Owners' own benefit and carry it to any other port or ports. It may be either backwards or forwards or in a contrary direction to the ordinary or customary route. (6) in the process of following the compliance with any of the provisions of sub-clauses (2) to (5) of this Clause anything is done or not done, will not be deemed to have deviation, however it shall be considered as due fulfillment of the Contract of Carriage. 18. General Ice Clause General Ice Clause is to clarify the terms related to the Port of loading and Port of discharge. The motive is to make some clear statements to avoid confusions in these two stated situations. These are the rules that stand safeguarding all possible tugs. Port of loading (a) For the port of loading, the port has to be being accessible. It gets in accessible for the reason of ice when the Vessel is ready to proceed from her last port or at any time during the voyage or on the Vessel's arrival or in case frost sets in after the Vessel's arrival. In these situations, the Owner gets the fear of being frozen and is in liberty to leave without cargo, and Charter Party remains null and void. (b) While loading, if the Owner, due to the fear of the Vessel being frozen, then he has liberty to deem it to leave. He can proceed to any other port with completing cargo for his own benefit. Any part cargo thus loaded under this Charter Party to be forwarded to destination at the Vessel's expense. However, it is totally against the payment of freight, provided and thus no extra expenses be thereby caused to the Charterers. The freight being paid on quantity delivered, under all other conditions as per this Charter Party. (c) It there are more than one loading port, and if one or more of the ports are closed by ice; the Owners has the liberty to load the part cargo at the open port and fill up elsewhere for their own account as under section (d) The owner also gets the liberty to declare the Charter Party null and void only if the Charterers agree to load full cargo at the open port. Port of discharge (a) In case of ice, the cargo can get prevented from reaching port of discharge. In such phases the Charterers can keep the Vessel waiting until the re- opening of navigation and paying demurrage or of ordering the Vessel to a safe and immediately accessible port without risk of detention by ice. All these types of orders must be given within 48 hours after the Owners have given notice to the Charterers of the impossibility of reaching port of destination. (b) During discharging, if the Owner, due to the fear of the Vessel being frozen in deem sit, he has liberty to do so with what cargo he has on board and to proceed to the nearest accessible port where she can safely discharge. (c) On delivery of the cargo at the frozen port, all conditions of the Bill of Lading shall apply and the Vessel shall receive the same freight. The exception gets prevailed, if the distance of the substituted port exceeds 100 nautical miles. In such phases the freight on the cargo delivered at the substituted port to be increased in proportion. 19. Law and Arbitration According to the Law and Arbitration (a) this Charter Party shall be governed and construed in accordance with English law. In case of any dispute arising out of this Charter Party it will be directly referred to arbitration in London in accordance with the Arbitration Acts 1950 and 1979. For any kind of statutory modification or re-enactment thereof for the time being in force, it will be subject to the same. It is also conditional to the agreements between the parties upon a sole arbitrator. In such situation, one arbitrator shall be appointed by each party and the arbitrators so appointed shall appoint a third arbitrator, the decision of the three-man tribunal. Eventually it will get constituted or any two of them, shall be final. The receipt forwarded by one party of the nomination in writing of the other party's arbitrator, that party shall appoint their arbitrator within fourteen days. If somehow this appointment fails then the decision of the single arbitrator appointed shall be final. In any dispute, the total amount claimed by either party should not exceed as in Box 25. The arbitration shall be conducted in accordance with the Small Claims Procedure of the London Maritime Arbitrators Association. (b) This Charter Party will be governed and construed in accordance with Title 9 of the United States Code and the Maritime Law of the United States. For any kind of dispute that might arise out of this Charter Party, it shall be referred to three persons at New York. Among the three, one will be appointed by each of the parties hereto, and the third by the two so chosen. Their decision in majority by that of any two of them shall be final. As for the purpose of enforcing any award, this agreement may be made a rule of the Court. Proceedings will specifically conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc. if any kind of dispute comes up for the total amount claimed by either party does not exceed the amount as in Box 25, the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators, Inc. (c) For any kind of disputes that is a result of this Charter Party; shall be referred to arbitration at the place indicated in Box 25. These disputes will be held in subject to the procedures applicable there. The laws of the particular place gets indicated in Box 25, are the terms that shall govern this Charter Party. (d)in case of Box 25 in Part 1, not filled in, sub-clause (a) of this Clause, then the application will follow (a), (b) and (c) are alternatives; indicate alternative agreed in Box 25. for the prevalent sequence where there is no figure supplied in Box 25 in Part 1, this provision only shall be void. There will be no variation for the other provisions of this Clause shall have full force and remain in effect. 20. CONCLUSION These entire clauses are mandatory to follow for smooth proceedings. The laws are all needed to be followed and get obliged by the Charterers and the Owners. It is not all about the client and seller relationship, but about sharing liabilities of the Vessels. The relation between Charterers and the owner is very important in order to serve each other the best. No transaction is possible without each other’s cooperation. It is there fore best to follow the aforesaid clauses and to maintain a better relation. These are the clauses that are balanced and are very much in favour of both the sides. The disputes are dealt best through all these clauses. The legislatures are all made supporting both the sides and the parties. These clauses are made with the motive to create healthy and prosperous situations for both the Owners and the Charterers. These are all supported and backed by the respective laws of the prevalent countries and are made with all speculative aspects of smooth deals and refunds wherever legal. REFERENCE THE BALTIC AND INTERNATIONAL MARITIME COUNCIL UNIFORM GENERAL CHARTER (AS REVISED 1922, 1976 and 1994), 2001, [retrieved on May 10, 2008] http://www.bimco.org/Corporate%20Area/idea/~/media/Documents/Document%... Read More