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CHARTER PARTIES
Time Charter Party
Operating Restrictions of the Vessel
Under a time charter, the Owner only takes care of the technical and nautical operation of the vessel, while the Charterer takes care of the commercial operation of the vessel. The commercial operations are, however, attached to some conditions; See for instance the GENTIME, Clause 2, Trading Areas and the BALTIME, Clause 3, Trade.
- Geographical limits, excluded ports and places. These are the so-called “Institute Warranty Limits” i.e. regions or areas which are excluded by the “Underwriters” to prevent damage to the vessel or even its loss.
- The vessel must be used for lawful trades.
- The vessel may only carry lawful merchandise. The vessel may e.g. not carry weapons or drugs.
- The vessel may not carry excluded commodities. Every time charter agreement has a clause (and usually also an additional clause) showing a list of “cargo exclusions” e.g. livestock, explosives, scrap, sulpher, pitch-in-bulk. It is the Owner who specifies these “excluded cargoes” and the Charterer must apply this to the letter because excluded commodities may cause a lot of damage to the vessel which will have to be paid by the Charterer.
- The vessel may only call at safe ports. The vessel must always remain afloat except if “naabsa”-ports are allowed. Harbours where there’s an epidemic or which are unreachable due to ice are also excluded.
- In normal circumstances the vessel has to sail at the usual cruising speed without damaging the engines.
If the vessel sails outside the allowed limits, the master must immediately inform the Owner, who will then contact the Charterer in order to arrive to an agreement such as the payment of an extra insurance premium.
If the Charterer obliges the master to go to a harbour which lays in an excluded area, then he must refuse this categorically. If the Charterer insists, then the master must inform the Owner at once and wait for his instructions. It is possible that the Owner and the Charterer entered into a new agreement without the master’s knowledge.
The master may, under no circumstance, refuse to load the vessel and after completion to leave the harbour and sail to the (so-called) excepted harbour, because the Charterer may than put forward that the vessel has been unnecessary held up under the pretence that he was negotiating to indicate another (allowed) port of discharge. The days during which the master may have refused to load or during which he remained in the harbour will be considered as “off-hire” by the Charterer and the Owner will not receive any hire money for these days.
