In a Charterparty, who is responsible for securing the cargo? The MV PRIVOCEAN

In a Charterparty, who is responsible for securing the cargo? The MV PRIVOCEAN

In a Charterparty, who is responsible for securing the cargo? The MV PRIVOCEAN

It is maybe one of the most common disputes in a charterparty between charterers and owners: to argue about securing the cargo on board and to determine who is responsible for it.

Can the Master impose further securing, lashing, trimming, etc. requirements on the Charterers? If so, who pays for the extra costs incurred?

 The Charterers will no doubt try to put those costs on the Master, but the Master and the Owners will no doubt say that the overall security of the adventure is the sole responsibility of the Master and that as such it can ask the Charterers to employ further securing efforts on the cargo.

 The precise answer to those questions will of course depend on the form of the Charterparty employed, and to the actual factual circumstances surrounding each case and it may be dangerous to set a general rule.

In a very recent case, the MV PRIVOCEAN (reported by Quadrant Chambers in London), Charterers in a NYPE 1946 form loaded a cargo of soyabeans from New Orleans to China. The Master insisted in requiring the cargo in one of the holds of the vessel to be strapped for the sake of security. Charterers were of course not quite happy for such a decision, but went ahead to later claim it from the Owners. Owners claimed first however, as the extra time taken by Charterers cost them 400,000USD in hire. Charterers of course then counterclaimed a similar amount for the extra costs incurred following the request of the Master.

 At Court, the Charterers established that the strapping was unnecessary. The stability which the Master was after could have been achieved by other more reasonable means, such as by using the ballast tanks. The Court (both in first instance and at the Appeal) decided that the Master had been negligent.

 But the Court did not decide in favour of the Charterers, which was confirmed at the Appeal: it was decided that such negligence felt within the meaning of the Hague Rules exception in Article IV.2.a, which reads:

 “Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from: (a) Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship.”

This meant that despite the negligence of the Master being proved, it was also decided that the decision of the Master was one of “management of the ship” and as such Charterers had to bear the costs incurred and Owners could scape responsibility.

It is also interesting to note that should the Rotterdam Rules had been in force by now, Owners would have not been able to rely in such clause, as the international community has decided that allowing Owners to scape responsibility for the negligent act of the Master is nowadays not acceptable.

There is no other mode of transport in which this can happen: road hauliers are responsible for the acts of their drivers. So are air carriers with those of their pilots. And rail operators. Not at sea though.

One may no doubt sympathise with the Charterers, but the current status of the law stands where it stands and Owners did well in relying in such a provision, in the face of which Charterers’ attention is brought to protect its position as much as possible in such circumstances, for example, by adding additional rider clauses covering situations like the one here discussed.

Dr. Miquel Roca

Solicitor, Managing Partner

LMA Legal