CHARTERING


Obligations of Parties


OBLIGATIONS OF THE OWNER


  1. The Ship Owner must provide the agreed ship as indicated in the charter party.
    The Ship Owner cannot replace the agreed ship by another ship unless the name of the ship is followed by the terms "or substitute". In that case the other ship must have the same characteristics and class (with the classification society) as the agreed ship.
    Some charter parties contain a clause called substitution clause, which gives the possibility to the Ship Owner to provide another ship than the agreed one. BIMCO drafted a typical substitution clause that reads as follows:

    "Owners have the option of substituting another vessel of same class (or equiva­lent) and similar size and, at the time of substitution expected ready to load within same laydays and cancelling dates".

    (See Clause  no. 98 in the Forms or Approved Documents issued by BIMCO.)



  2. The Ship Owner must make the ship available in the indicated port and on the indicated date.

    If at the departure the Ship Owner holds up the ship through his own fault (or through the fault of the master) because for instance:

    • there is insufficient victualling on board;
    • a number of documents are not in order (e.g. the Cargo Ship Safety Construction Certificate has expired and has not been renewed in time);
    • the Ship Owner paid insufficient funds to the agent to pay the harbour dues so that the ship does not receive a "clearance"
    • etc.

    Then, the Charterer has right on an indemnity in pursuance of non-compliance of one of the warranties namely that before and at the commencement of the voyage, the ship must be seaworthy (see also paragraph c below). If the stoppage or the delay is due to an Act of God, (e.g. fog or a heavy storm) or to a fault of which he has no knowledge, then the Ship Owner owes nothing at all. A delay in putting the ship at the disposal can have the breaking of the contract as a consequence in pursuance of non-fulfilling of a "condition". (See further Cancelling Clause.)

    To protect oneself against a possible delay, the delivery date in the charter party is given with a certain margin. If e.g. 15 - 21 October is mentioned then the Charterer is not obliged to accept the ship before 15 October and the charter party can, if need be, be cancelled if the ship is delivered after 21 October. This is the so-called lay/can (see paragraph Lay/can).

  3. The ship must be in a good state of seaworthiness.
    The law does not say exactly what must be understood under good state of seaworthiness. 

    Article III, paragraph 1, sub a of the Hague-Visby Rules writes the following:
    1.   The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to:

    (a) Make the ship seaworthy.
    (b) ..............

    According to the jurisdiction, under seaworthiness must be understood, the state in which the finds itself, which must be able to face the normal dangers of the sea and to undertake the planned voyage without obstacles. This includes especially:

    • the nautical capacity of the ship;
    • the technical capacity of the ship (engines, auxiliary engines, deck equipment, etc.);
    • the stores;
    • the crew;
    • the fuel;
    • the aptitude to transport the agreed goods (the so-called cargoworthiness);
    • the ship’s documents;
    • etc.

    The ship must follow the shortest route (see also the Gencon, Clause 3, Deviation clause) and at a convenient speed or at the minimum speed which is mentioned in the charter party (exclusively under the time charter or the bareboat charter).

    All those obligations, which in fact are obvious and must therefore be applied tacitly, are called the implied warranties.

    Sometimes those "implied warranties" are incorporated explicitly in the contract of affreightment:

          “… that the said vessel being tight staunch and in every way fitted for the voyage, shall with convenient speed proceed to….”

    The ship must always be delivered back in the same state as the state in which it was received, ordinary wear and tear excepted. This is especially important under the time charter and the bareboat charter. To materialize this, at the delivery of the ship a description of the condition of the vessel (the on-charter survey report) will be established by two surveyors, one for the Ship Owner and one for the Charterer (the so-called defended survey). When the ship is delivered back to the Ship Owner an "off-charter" survey report will then be established. The possible incurred damage during the chartering period will be compensated for by a fixed sum. At the "on" and "off-charter survey", the remaining fuel on board must also be taken into account.

  4. The Ship Owner must place the agreed tonnage at the disposal of the Charterer.

  5. The Ship Owner is not allowed to load other goods without the consent of the Charterer.






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