The Ukraine Crisis and charterparties – commonly asked questions

The views expressed below are general and the contractual, cargo and factual circumstances will be different in each case. This note is therefore intended for general guidance only and should not be relied upon as legal advice. Should you require specific advice on a situation please contact us.

1) Can an owner refuse to sail to a Ukranian or Russian port and, if the vessel is already at a Ukranian or Russian port, can an owner leave the port/berth?

a) Unsafe berth/port:
Under English law there is no implied or common law obligation upon charterers to ensure that the berth/port they nominate is safe for the vessel, her crew and her cargo. However, owners will still have legal obligations to the crew, to cargo interests and to H&M and P&I insurers, to ensure their interests are safeguarded.

Because no implied or common law obligation is imposed upon charterers under English law, an express safe port/berth warranty is usually included in the charterparty as an express contractual obligation, eg NYPE 2015, cl 1 (“Trading limits – The Vessel shall be employed in such lawful trades between safe ports and safe places within the following trading limits …”). It may also be extended to included anchorages and places.

The need for factual enquiry and evidence: Members should gather as much contemporaneous evidence as possible to show what the situation is locally and what the anticipated risks are of the vessel calling to the port in question. For example, Members should ask local correspondents and agents about local port restrictions and the crew may wish, if possible, to take photos/videos of conditions at the port and gather information from other ship operators about what steps they are taking and whether any damage has been suffered by other vessels and, if so, where this occurred.

b) War risks
In addition to any rights under unsafe berth/port charter party clauses, owners may have rights under war risks clauses in their charterparties and bills of lading.

2) If an owner refuses to sail to a Ukranian port or leaves a Ukranian port and requests new orders, will the ship remain on hire?

Where owners legitimately request alternative voyage orders and these are followed by the vessel, owners will be complying with charterers’ orders and the vessel is likely to remain on hire.

This position is made clearer where the charterparty includes wording similar to the BIMCO CONWARTIME 2013 clause which provides that “(j) When acting in accordance with any of the provisions of Sub-clauses (b) to (h) of this Clause anything is done or not done, such shall not be deemed a deviation, but shall be considered as due fulfilment of this Charter Party.”

4) What are the implications for bills of lading and contracts of carriage?

Since bills of lading are contracts relating to the carriage of goods as between the vessel owner/carrier and cargo interests, they may incorporate the same terms and conditions which are contained in the charterparty. If so, the comments above regarding war clauses may be applicable.

Equally, contracts of carriage are also capable of frustration under English law, although where there is cargo on board owners/carriers may be placed in a difficult position due to the duty of bailment owed to the cargo interests safely to carry the cargo to destination.

In the event that a vessel is delayed, particularly if she has a perishable cargo on board, the Club’s advice should be sought to ensure that adequate steps are being taken to take care of the cargo. Each incident will be considered on its own particular facts to determine what may need to be done; for instance, whether the owner should make an application to sell the cargo or, alternatively, to discharge it elsewhere.
Source: West of England