Voyage Charter

THE VOYAGE CHARTER PARTY
What is a voyage charter party?
 A voyage charter party is a charter party under which the shipowner

charters out and the charterer charters in the whole or part of the ship’s
space for the carriage by sea of the intended goods from one port to
another and the charterer pays the agreed amount of freight.
 The relation between the parties is determined by the voyage charter

party.
 The shipowner and charterer are quite free to make their contract in any
form that they choose. But usually they use charter parties in a standard
form.
The significant parts in voyage charters
 Description of the voyage and the cargo
 The allocation of duties and cost in connection with loading and

discharging
 The specification of the freight and the payment of the freight
 The laytime rules and demurrage and despatch.
Main clauses in voyage charter party
1. Preamble 11.Both to blame collision
2. Owner’s responsibility 12. G/A and New Jason
3. Deviation 13. Taxes and dues
4. Payment of freight 14. Agency
5. Loading and discharging 15 Brokerage
6. Laytime 16 General strike
7. Demurrage 17 War risks
8. Lien 18 General ice
9. Canceling 19 Law and arbitration
Compiled by : Capt. Naveen C Tewari, ARI Saket. New Delhi. (1/16) 1

Section 1. Preamble
 Written contracts often start with a preamble, in which the parties and the
main contents of the agreement presented. It gives the description of the
shipowners, the charterers and the vessel. Further, it stipulates that the
vessel indicated by its name, with all the relevant information given shall
load a given cargo in a port that is indicated in the present charter party.
 In the Gencon form 1994 much of what may be found in preambles of

certain forms is contained in clause 1.
1. Preamble Clause in Gencon Form 1994
 “It is agreed between the party mentioned in Box 3 as the Owners of the
Vessel named in Box 5, of the GT/NT indicated in Box 6 and carrying
about the number of metric tons of deadweight capacity all told on
summer loadline stated in Box 7, now in position as stated in box 8 and
expected ready to load under this charter party about the date indicated
in Box 9, and the party mentioned as the charterers in Box 4 that:
 The said vessel shall, as soon as her prior commitments have been
completed, proceed to the loading port or place stated in Box 10 or so
near thereto as she may safely get and lie always afloat, and there load a
full and complete cargo (if shipment of deck cargo agreed same to be at
the charterers’ risk and responsibility) as stated in Box 12, which the
charterers bind themselves to ship, and being so loaded the vessel shall
proceed to the discharging port or place stated in Box 11 as ordered on
signing Bills of Lading, or so near thereto as she may safely get and lie
always afloat, and there deliver the cargo.”
2. Description of the vessel
2.1 Named vessel
 Named vessel means that the shipowner nominate a specific vessel to

perform the voyage stipulated in the charter party.
 A basic feature of the charter is that the nominated vessel shall be put at
the disposal of the charterer.
 When a certain ship is fixed for a charter the existence of the agreement
is also dependent on the existence of the vessel.
 If the vessel is lost or declared a constructive total loss the charter is

frustrated, which means that it is terminated automatically and no longer
exists.

2.2 Substituted Vessel
 In practice, it is often agreed that the vessel may be substituted by

another vessel. It means that the shipowner with right of option
nominates a substituted vessel to perform the voyage instead of a specific
vessel. It is essential to specify how far this right to substitute goes. The
parties may also agree that the substitution be made at any time, whether
before the start of charter period, during it, or after the loss of the named
or any substituted ship.
2.3 Vessel to be named
 Vessel to be named means that the shipowner would nominate a certain

vessel after the commencement of implementation of the charter party
within a reasonable period and notify the charterer the situation.
 If the vessel named by the owner, she became the named vessel.
2.4 Vessel’s details
 The name of the vessel
 Vessel’s class
 The year of build
 The flag of nationality
 Deadweight
 Gross and net tonnage
 The number of hatches
 The type of hatch covering
 Length and breadth of hatch openings
 Vessel’s LOA and BM
 Cubic capacity
3. Description of port
3.1 Nomination of ports
(1) Ways of nominating ports
 A fixed berth, e.g. berth 2 at Kobe
 A fixed port, e. g, 1 safe port Sydney

 A fixed area, e.g. 1 safe port/1 safe berth Japan
(2 )The time for nominating the port
 It is normally to nominate the port or ports when concluding the charter.

If a port is to be nominated later, and thus is not in the charter party, it is
advisable to state the latest time at which the charterer can nominate the
port.
 Also, when no such clause is inserted into the charter party the charterers
should nominate the port or ports in such a good time in advance that no
extra cost for waiting time and deviation is caused to the vessel.
 When the charter party contains several loading ports or discharging ports
it is common that the shipowners try to introduce a clause saying that the
ports shall be called “in geographical rotation”. The intention is to avoid
extra steaming time.
3.2 Safe port
Meaning
 A “safe port” means a port to which a vessel can get laden as she is and
at which she can lay and discharge, always afloat.
 The safety of the port should be viewed in respect of a vessel properly

manned and equipped, and navigated and handled without negligence and
in accordance with good seamanship.
 The port must be safe for the particular vessel carrying the cargo she has
on board. It must be politically as well as physically safe.
Liability for safe port
 As a general rule it can be said that the earlier the shipowners are
informed about intended ports and berths, the more liability rests on them
as regards investigation of the safety. This means that when the
shipowners, during the negotiations, and in the charter party, have
accepted a certain port or a certain berth they have little chance of getting
damages from the charterers if the port or the berth turns out to be
unsafe.
 On the other hand, the charterers have little chance of escaping liability
for damage to the ship when the port or berth has been nominated after
the negotiations and the fixture. In the later case, the shipowners have
little or no possibility to influence the choice of port or berth.

3.3 The near clause
 There is an obligation on the shipowner to take the vessel to the agreed

loading or discharging place. In order to protect the shipowners against
unforeseeable difficulties, a so-called near clause is often inserted in the
voyage charter party. The clause “or so near thereto as she may safely
get and lie always afloat” is often added after the name of the port of
loading and discharge.
 The intention of the clause is to protect shipowners against such

hindrances that arise after the negotiation and the fixture. The clause
relates only to obstacles which are regarded as permanent, not to such as
ordinary incidents of the voyage.
 A temporary obstacle, such as an unfavorable state of the tide or

insufficient water to enable the ship to get into dock, will not make the
place unsafe so as to discharge the shipowner from liability to unload
there.
4. Description of the cargo
The description of the cargo for the transportation is important for several
reasons. Shipowners, who during the negotiations and in the fixture, accept a
certain cargo are also obliged to carry out the transportation of the cargo. This
means that the shipowners have to get all necessary details of the cargo from
the charterer or from someone else, in order to be able to find out whether the
cargo is suitable for the vessel and to be able to estimate the costs of handling
and transportation.
In the absence of express stipulations it is the absolute duty of the charterer to

furnish a cargo according to the charter. If the cargo delivered to the vessel is
not in accordance with the description, the shipowners might be entitled to
compensation and, in some cases, when the cargo delivered differs on essential
points from the previous description, the shipowners may also be entitled to
cancel the contract and to claim compensation for loss of freight.
The quantity of the cargo
(1) Important for both parties
 It is important both for the charterers and for the shipowners that the
cargo quantity is specified. The freight is often calculated on the cargo
quantity and the shipowners must therefore certain that at least a
minimum quantity is stated in the charter party.
 For the charterers, the specification of a cargo quantity in the charter

party is important as the shipowners’ acceptance of the quantity also

means that the charterers have a chance to claim damages if the

shipowners fail to load the accepted quantity.
(2) Ways for fixing quantity of the cargo
 A full and complete cargo
 10,000 MT, about 10,000 MT, between 9,000 and 10,000 MT, not less
than 10,000 MT
 10,000 MT 5% MOLOO. MOLCHOPS, MOLMO
 A full and complete cargo 10,000MT MOLOO
(3) Types of ton
When quantities are stated, the type of ton referred to should always be
mentioned explicit, i.e. metric tons or long tons (1MT = .984 LT)
(4) Stowage factor
 The stowage factor is a figure usually expressed in cubic feet/meter

indicating the amount of space one ton of cargo will occupy. It is then a
simple matter of dividing the available space by the stowage factor of the
cargo to determine the weight of cargo the ship can accommodate.

Section 2. Owner’s Responsibility
1. Gencon form
2. General clause paramount
3. Seaworthiness
4. Deviation
5. Laydays and canceling day
Owner’s responsibility clause
1. “The owners are to be responsible for loss of or damage to the goods or

for delay in delivery of the goods only in case the loss, damage or delay
has been caused by personal want of due diligence on the part of the
owners or their Manager to make the Vessel in all respects seaworthy and
to secure that she is properly manned, equipped and supplied, or by the
personal act or default of the Owners or their Manager.
2. And the Owners are not responsible for loss, damage or delay arising from
any other cause whatsoever, even from the neglect or default of the
Master or crew or some other person employed by the Owners on board
or ashore for whose acts they would, but for this clause, be responsible,
or from unseaworthiness of the Vessel on loading or commencement of
the voyage or at any time whatsoever”.
General Clause Paramount
Sometimes the charter parties contain a Paramount clause which makes the
Hague Rules or Hague-Visby Rules applicable to the liability for cargo under the
charter party or to the whole charter party as the case may be.
This clause takes its wording from BIMCO’s Standard General Clause Paramount,
which was issued in October 1997, and which make the Hague Rules or the
Hague-Visby Rules as the case may be, also applicable to the charter party.
Applying the Hague or Hague-Visby Rules in the charter party means that as far
as the owners’ responsibilities and immunities are concerned they shall be the
same under the charter party and the bill of lading.
The International Convention for the Unification of Certain Rules of Law relating
to Bills of Lading signed at Brussels on 25 August 1924 ("the Hague Rules") as
amended by the Protocol signed at Brussels on 23 February 1968 ("the Hague-
Visby Rules") and as enacted in the country of shipment shall apply to this
Contract.

When the Hague-Visby Rules are not enacted in the country of shipment, the
corresponding legislation of the country of destination shall apply, irrespective of
whether such legislation may only regulate outbound shipments.
When there is no enactment of the Hague-Visby Rules in either the country of

shipment or in the country of destination, the Hague-Visby Rules shall apply to
this Contract save where the Hague Rules as enacted in the country of shipment
or if no such enactment is in place, the Hague Rules as enacted in the country of
destination apply compulsorily to this Contract.
The Protocol signed at Brussels on 21 December 1979 ("the SDR Protocol 1979")
shall apply where the Hague-Visby Rules apply, whether mandatorily or by this
Contract.
The Carrier shall in no case be responsible for loss of or damage to cargo arising
prior to loading, after discharging, or while the cargo is in the charge of another
carrier, or with respect to deck cargo and live animals."
SEAWORTHINESS
The concept of seaworthiness
The concept of seaworthiness can be described as having three aspects:
 seaworthiness from the technical point of view;

Technical seaworthiness includes the ship’s design and condition in hull
and machinery and also her stability.
 cargoworthiness;
Cargoworthiness means that the vessel shall be suitable for the intended
cargo.
 seaworthiness for the intended voyage.
Seaworthiness with respect to the intended voyage means that she will be
satisfactorily equipped, bunkered, etc., for the intended voyage.
The effect of unseaworthiness
 If the charterer discovers that the ship is unseaworthy before the voyage
begins, and the defect cannot be remedied within a reasonable time, he
may throw up the contract. After the voyage has begun, the charterer is
no longer in a position to rescind the contract, but can claim damages for
any loss caused by initial unseaworthiness.
 Further, although the vessel is unseaworthy, the shipowner can still rely
on the exception clauses in the charter party, if the loss has not been
caused by unseaworthiness.
 Examples of unseaworthiness include: insufficient bunkers; inefficient
crew; defective or inadequate equipment; improperly cleaned or prepared

holds; maps and charts not on board or out of date; and/or poor stowage
that endangers the safety of the ship.
Seaworthiness by statute
 The charter parties usually contain a Paramount clause which makes the
Hague Rules or Hague-Visby Rules applicable to the liability for cargo
under the charter party or to the whole charter party as the case may be.
 Therefore the express obligation for the shipowners regarding

seaworthiness is that “ The carrier shall, before and at the beginning of
the voyages, exercise due diligence to make the ship seaworthy, properly
man, equip and supply the ship and to make the holds, refrigerating and
cool chambers and all other parts of the ship in which goods are carried,
fit and safe for their reception, carriage and preservation.”
Deviation Clause
Deviation clause in Gencon form

 The vessel has liberty to call any port or ports in any order, for any
purpose, to sail without pilots, to tow and/or assist vessels in all
situations, and also to deviate for the purpose of saving life and/or
property.
Lawful deviation and Unlawful deviation
The distinction between lawful deviation and unlawful deviation is important. The
borderline between these two concepts is not always so easy to find. Generally,
it can be said that deviation for the purpose of avoiding danger to crew, vessel
and cargo and deviation for the purpose of saving life or property, are lawful
deviations. Naturally, the deviation must be reasonable and when judging
whether the deviation is reasonable, not only the interests of the shipowners,
but also the interests of the charterers, must be considered.
Unlawful deviation is a breach of contract and the charterers can entitled to

damages as well as, in some cases, to cancel the charter agreement.
Laydays and Canceling Day
Meaning of laydays
Laydays refers to the period when the chartered vessel shall arrive in the port of
loading and be ready for the loading of cargo. Laydays could also be
comprehended as the period during which the chartered vessel could arrive in
the port of loading, either on the first day or on the final day of it, and she
should also be ready for the loading of the cargo.
Meaning of canceling day

 The vessel must have arrived at the first loading port and be ready to
receive the cargo on a certain day or within a certain period of time.
 If the vessel has not arrived at the loading port on the canceling day,
most charter parties give the charterer an absolute right to cancel the
contract.
 The ordinary canceling clauses are applicable also when the ship has been
delayed for reasons which cannot be controlled by the shipowner and
when the shipowner and the master have done their utmost to speed up
the vessel.
Declaration
 When it is obvious to the shipowner that he has no chance of arriving at

the first loading port before the canceling date, it is important for him to
get the charterer’s declaration whether or not he will cancel.
 Under English law the charterer is not obliged to give such a declaration
unless this is expressly stated in the charter party. In order to protect
shipowner’s interest, the interpellation clause ofen added into the voyage
charter party. The purpose of the interpellation provisions is that the
vessel should not have to proceed on a long ballast voyage towards the
loading port not knowing whether or not the charterers will accept the
vessel once it arrives.
Canceling clause in Gencon form 94
(a) Should the vessel not be ready to load (whether in berth or not) on the
canceling date the charterers shall have the option of canceling this charter
party.
(b) Should the owners anticipate that, despite the exercise of due diligence, the
vessel will not be ready to load by the canceling date, they shall notify the
charterers thereof without delay stating the expected date of the vessel’s
readiness to load and asking whether the charterers will exercise their option of
canceling the charter party, or agree to a new canceling date.
Such option must be declared by the charterers within 48 running hours

after the receipt of the owners’ notice. If the charterers do not exercise
their option of canceling, then this charter party shall be deemed to be
amended such that the seventh day after the new readiness date stated
in the owners’ notification to the charterers shall be the new canceling
date.
The provisions of sub-clause (b) of this clause shall operate only once, and in
case of the vessel’s further delay, the charterers shall have the option of
canceling the charter party as per sub-clause (a) of this clause”.

Section 3. Freight
 Freight is the consideration paid to the shipowner for performing his part
of carriage of goods by sea under the voyage charter party.
 Typically this means that an agreed rate is payable according to the

weight or volume of cargo carried to and delivered at its destination.
 In general, it is open to the parties to make whatever agreement they

wish about how freight shall be calculated, earned and paid.
General Rules
1.1 Payment of freight and delivery of the cargo at the port of discharge are
concurrent condition.
The principal rule is that the freight is earned when the shipowners have fulfilled
their obligation to carry the cargo and are ready to deliver it to the receiver. This
means that if, for some reason, the shipowners cannot deliver the cargo they are
not entitled to freight. The freight risk lies with the shipowners.
1.2 Nevertheless the shipowner is entitled to freight if either he is ready, willing

and able to deliver in accordance with the contract of carriage or if he is only
prevented from delivering by some act or omission of the cargo owner.
1.3 No freight is payable if the shipowner cannot deliver the goods because they
have been lost or destroyed. It does not matter how or why the goods are lost or
destroyed, or even if they destroy themselves through inherent vice. No freight
is payable even where the loss occurs without fault on the part of the shipowner
and even if the cause of the loss is an excepted peril. Excepted perils may
prevent the shipowner being sued for losing or damaging the cargo, but they do
not normally give a right to freight.
1.4 Where only part of a cargo is delivered, freight is payable on that part, the
shipowners are, according to this rule, only entitled to proportionate freight for
the cargo actually delivered.
1.5 Freight is payable in full on cargo which is delivered damaged. No deductions

can be made from or set-off against freight which is payable on goods delivered,
for the value of other goods which are lost or damaged; but a separate action
may be brought to recover damage for which the ship owner is responsible,
provided liability is not excepted perils.
1.6 The shipowners’ right to collect freight must not be mixed with their
obligation to pay compensation for the damaged cargo. Nor also that the
charterers have no right to deduct counterclaims for damaged cargo or other
counterclaims from the freight. According to English law freight is payable in full
even if the charterers have a justified counterclaim against the owner.

1.7 If a lump sum freight is agreed the shipowners are entitled to full freight if
some part of the cargo reached the port or place of destination. If all cargo is
lost the shipowners are not, according to the above-described principle, entitled
to freight.
1.8 The rules about when the freight is earned and payable are often modified
by the parties in the charter party. Clause like “Freight earned and payable upon
shipment, ship and/or cargo lost or not lost” is frequently found in voyage
charter parties and means that the shipowners are entitled to freight at the
loading port and the freight is not repayable if part of the cargo, or the whole
cargo and the vessel, does not reach the destination.
Types of freight
 Freight prepaid
 Freight payable on delivery
 Lump sum freight
 Pro rata freight
 Dead freight
Advanced freight
Voyage freight may be payable in advance which means that freight is payable
on or around the date of shipment of the voyage. Freight can either be fully paid
on release of signed bills of lading or paid in part within a certain number of days
after signing bills of lading. Voyage freight is also frequently paid in stages. It is
common for a majority of the freight –say 90%-- to be paid during a voyage,
with the balance within a set period after discharge has been completed,
together with adjustment for demurrage or despatch. For example: “Ninety
percent of freight to be paid within five banking days of signing and releasing
bills of lading marked ‘freight payable as per charter party’ balance to be paid
within one month of completion of discharge, duly adjusted for laytime used
during loading and discharging operations”.
Freight payable on delivery
Freight payable on delivery means that freight is payable on the delivery of

goods or at the destination but prior to discharge. Payment of freight and
delivery of the goods at the port of discharge are, unless otherwise agreed,
concurrent conditions. The principal rule is that the freight is earned then the
shipowners have fulfilled their obligation to carry the cargo and are ready to
deliver it to the receiver. This means that if, for some reason, the shipowners
cannot deliver the cargo they are not entitled to freight. The freight risk lies with
the shipowners.

But freight will not be payable unless the goods are delivered in such a condition
that they are substantially the same goods as those shipped.
Lump sum freight
A lump sum freight is one which is not directly to the quantity of cargo actually
carried. It is a definite sum agreed to be paid for the hire of a ship for a specified
voyage. This may be the easiest way to define the freight obligation when the
charterer does not know the exact quantity of cargo which will be loaded or
when it is difficult to measure the quantity actually loaded.
Pro rata freight
Sometimes pro rata freight is payable, i.e. a payment proportionate to the part
of the voyage accomplished or to the part of the cargo delivered.
Dead freight
All the major charters make provision for the payment of deadfreight if the
agreed quantity of cargo is not supplied.
When the charterers fail to deliver the agreed quantity of cargo to the vessel,
the shipowners will normally be entitled to compensation for their loss of freight.
This compensation is called deadfreight and is calculated by deducting what is
saved in costs from the freight that should be paid for that part of cargo which
has not been delivered.
Back freight
The owners of a ship are entitled to payment as freight for merchandise returned
through the fault of either the consignees or the consignors. Such payment is
called back freight.
Fixing of freight
One way is to base it on the cargo quantity or volume. It is important to specify

how the cargo quantity is to be established. Sometimes there are disputes about
the question whether the freight shall be based on intake or delivered quantity
and if it shall be based on the gross or the net weight of a cargo. Concerning the
latter problem, it is usually said that the freight will be based on the gross
weight unless otherwise agreed or customary in the trade. As regards the first
question, the basic rule under English law is that the freight is payable only on
so much cargo as has been both shipped, carried and delivered and this means
that the smallest of the two quantities is the base for the calculation of freight.
Another way is to fix the freight at a certain amount independent of the cargo
quantity. This is usually called lump sum freight.

Deductions from freight
Other than the right to pay pro rata freight, the charterer does not have any
right to make deductions from freight for amounts he believes may be due to
him.
The reason why deductions from freight are not permitted without a clause is
because the amount due for freight is an amount which is easily determined
whereas a deduction in support of a claim is not easily ascertained and may or
may not be legally due.
Most voyage charter parties will have the Hague Rules or Hague-visby Rules
incorporated into them and an often repeated mistake on the part of charterers
in case of an apparent cargo shortage is to deduct the value of the alleged short
delivery from the payment of freight. The wise shipowners, in such
circumstances, waits for just over a year from the date of delivery of the cargo,
i.e. until the prescription period under above rules has expired and then applied
for summary judgement. When the charterer seeks leave to defend he finds he
has no defence, as any claim he has is time barred.

Section 4. Loading and discharging
 As the costs for handling the cargo at loading and discharging ports are
often an important part of the total costs for the voyage, both parties
should, during the negotiation, carefully investigate what costs will be
involved in the intended voyage.
 It is, of course, also important that the clauses dealing with loading and
discharging make sufficiently clear the allocation of costs, duties and
liabilities.
Explanation of some terms
 FI : It means that cargo to be loaded free of expense to the shipowners.
 FO: It means that the cargo to be discharged free of expense to the

shipowners.
 FIO: It means that cargo to be loaded and discharged free of expense to

the shipowners.
 FIOS: It means that cargo to be loaded, stowed and discharged free of

expense to the shipowner.
 FIOST: It means that none of the loading, discharging, stowing or

trimming expense will be for the account of the shipowner.
 FAS: It means that goods to be brought alongside the carrying vessel at

the port of loading, free of expense to the shipowner.
 Gross Terms: It means that the shipowner has to arrange and pay for
cargo handling (loading/discharging).
 Liner Terms: The responsibility and cost of loading, carrying and

discharging cargo is that of the shipowner from the moment the goods are
placed alongside the carrying vessel in readiness for loading, until
discharged alongside at their destination. Time spent cargo handling is
also at the shipowner’s risk.
 LIFO: It means that the shipowner pay for the loading of the goods but
free of discharging.
 FILO: It means that the shipowner pay for the discharging of the goods
but free of loading.
Cost for opening and closing the hatches
 As to whether the shipowner or the charterer is to be bear the cost of

loading and discharging will depend on the terms of the charter party.

Section 5. Demurrage and Despatch
Demurrage
According to VOYLAYRULES 93, the definition of demurrage is that an agreed

amount payable to the shipowner in respect of delay to the vessel beyond the
laytime for which the shipowner is not responsible. Demurrage shall not be
subject to laytime exceptions.
Nature of demurrage
 A demurrage clause is merely a clause providing for liquidated damages

for a certain type of breach. It is presumably the parties estimate of the
loss of prospective freight which the shipowner is likely to suffer if his ship
is detained beyond the laytime.
 An agreement to pay demurrage is normally treated as preventing the

shipowner from recovering from the charterer more than the agreed sum
for the wrongful detention of his ship.
 Unless the demurrage period is fixed, the demurrage rate applied not just
for a reasonable time but for as long as the ship in fact detained under the
contract. In such a case the shipowner is entitled to the demurrage rate
and no more as compensation for detention.
1.3 Once on demurrage always on demurrage
 Once laytime has been fully used, demurrage should normally run
continuously, night and day, weekend and working period, with no
interruptions until cargo work is completed unless the contract expressly
provides otherwise – e.g. ‘shifting time from anchorage to berth not to
count as laytime or as time on demurrage’. Normally, however, laytime
interruptions such as bad weather, weekends and holidays, will not
interfere with demurrage time, although breakdowns on a vessel affecting
discharge will interrupt demurrage time. Given these exceptions, it can
usually be said that the much used shipping expression: ‘once on
demurrage, always on demurrage’ means what it says.
Damages for Detention
 If charterers fail to abide by the provisions of a contract and, as a result,

permitted laytime is exceeded, shipowners are normally entitled to
reimbursement for their loss, if any. One method of reimbursement could
be by claiming ‘damages for detention’, however this could be a lengthy
and costly legal exercise. Consequently, most parties to a shipping
contract avoid the problem by negotiating a daily level of ‘liquidated
damages’ – i.e. ‘demurrage’ – for the time spent in excess of agreed
laytime. The difference between demurrage and damages for detention is

that demurrage is only be paid for an agreed number of days and

damages for detention is to be paid for further delay takes place. So
damages for detention become payable either: on the expiration of a
reasonable time for loading or unloading when no laytimes are specified;
or on the expiration of the fixed number of days for which demurrage has
been stipulated.
Demurrage and Shipowner’s Default
 When once a vessel is on demurrage no exceptions will operate to prevent

demurrage continuing to be payable unless the exceptions clause is clearly
worded so as to have that effect. One question is that if due to the fault of
shipowner during the time on demurrage, does the charterer have a
obligation to pay the demurrage for that period?
Despatch
 ‘DESPATCH MONEY’ or ‘DESPATCH’ shall mean an agreed amount payable

by the owner if the vessel completes loading or discharging before the
laytime has expired.

Section 6.
Other Clauses
1. Lien Clause
2. Law and arbitration
3. General strike clause
4. War risks clause
5. General Ice clause
Lien clause
Lien on cargo
 The shipowner may have a lien on goods carried on board the vessel for
charges like freight, deadfreight, demurrage, expenses for the cargo,
general average contribution, etc. Lien on goods can be based on the
general law, on express agreement in the charter party or bill of lading.
Cesser clause
 In voyage chartering it is not unusual that the charter party contains a

clause which relieves the charterers from liability from the moment the
vessel has been loaded. The intention is that the shipowners shall turn to
the cargo owners with any additional claims as, for instance, demurrage
at the discharging port. It is not unusual that this cesser clause and lien
clause is combined which has the heading “ lien clause”.
The co-existence principle
 Under such clause, the shipowners cannot simply go to the charterers

afterwards, without first having claimed from the receivers by exercising
of a lien. The co-existence principle applies to this clause which means
that it is only capable of protecting the charterers from liabilities that the
shipowners can effectively resort to against the consignees by way of a
lien on cargo.
 Before the shipowners lien the cargo, they must find out legal and
practical possibilities and difficulties in the actual country and port. In
some countries it is not at all legally possible to exercise a lien over cargo.
Law and arbitration
 To avoid discussion and disputes about what law is applicable to the

charter party, all charter party forms should contain a clause dealing with
the law applicable to and the procedure for handling of disputes between

the parties. The charter parties usually have reference to arbitration while
bill of lading more often are referring to procedure in the courts.
 An arbitration clause should not only have a reference to the applicable

law but also rules about the procedure when arbitrators are nominated,
etc. When English law is applicable the arbitration clause sometimes has a
reference to the arbitration Act 1950 and 1979, which deals with the
procedure.
General Strike Clause
 Considerable delay and costs may be the result of strikes in loading or

discharging ports or in seaways through which the vessel has to pass on
her voyage. The voyage charter party therefore usually contains a strike
clause where the various problems and costs connected with strikes are
dealt with. The strike clauses are often complicated to construe and to
interpret.
Neither Charterers nor Owners shall be responsible for the consequences of any
strikes or lock-outs preventing or delaying the fulfillment of any obligations
under this contract.
If there is a strike or lock-out affecting the loading of the cargo, or any part of it,
when vessel is ready proceed from her last port or at any time during the
voyage to the port or ports of loading or after her arrival there, Owners may ask
Charterers to declare, that they agree to reckon the laydays as if there were no
strike or lock-out. Unless Charterers have given such declaration in writing
within 24 hours Owners shall have the option of canceling this contract. If part
cargo has already been loaded, Owners must proceed with same, (freight
payable on loaded quantity only) having liberty to complete with other cargo on
the way for their own account.
If there is a strike or lock-out affecting the discharge of the cargo on or after

vessel’s arrival at or off port of discharge and same has not been settled within
48 hours, Receivers shall have the option of keeping vessel waiting until such
strike or lock-out is at an end against paying half demurrage after expiration of
the time provided for discharging, or of ordering the vessel to a safe port where
she can safely discharge without risk of being detained by strike or lock-out.
Such orders to be given within 48 hours after Owners have given notice to
Charterers of the strike or lock-out affecting the discharge. On delivery of the
cargo at such port, all conditions of this Charterparty and of the Bill of Lading
shall apply and vessel shall receive the same freight as if she had discharged at
the original port of destination, except that if the distance of the sub-stituted
port exceeds 100 nautical miles, the freight on the cargo delivered at the
substituted port to be increased in proportion.

War Risks Clause
 In time of war, revolution or other disturbances the crew, the vessel and
the cargo may be exposed to certain risks. The personnel on board may
be injured or killed and cargo and ship damaged or lost. Furthermore,
there is a risk of delay and extra costs. In order to make sure the rights
and the obligations of the parties, it is usual to have a special war clause
in the charter parties.
(1) In these clauses “War Risks” shall include any blockade or any action which
is announced as a blockade by any Government or by any belligerent or by any
organized body, sabotage, piracy, and any actual or threatened was hostilities,
warlike operations, civil war, civil commotion, or revolution.
(2) If at any time before the Vessel commences loading, it appears that
performance of the contract will subject the Vessel or her Master and crew or her
cargo to war risks at any stage of the adventures, the Owners shall be entitled
by letter or telegram dispatched to the Charterers, to cancel this Charter.
(3) The Master shall not be required to load cargo or to continue loading or to
proceed on or to sign Bill(s) of Lading for any adventure on which or any port at
which it appears that the Vessel, her Master and crew or her cargo will be
subjected to war risks. In the event of the exercise by the Master of his right
under this Clause after part or full cargo has been loaded, the Master shall be at
liberty either to discharge such cargo at the loading port or to proceed therewith.
In the latter case the Vessel shall have liberty to carry other cargo
for Owners’ benefit and accordingly to proceed to and load or discharge such
other cargo at any other port or ports whatsoever, backwards or forwards,
although in a contrary direction to or out of or beyond the ordinary route. In the
event of the Master electing to proceed with part cargo under this Clause freight
shall in any case be payable on the quantity delivered.
(4) If at the time the Master elects to proceed with part or full cargo under
Clause 3, or after the Vessel has left the loading port, or the last of the loading
ports, if more than one, it appears that further performance of the contract will
subject the Vessel, her Master and crew or her cargo, to war risks, the cargo
shall be discharged, or if
the discharge has been commenced shall be completed, at any safe port in
vicinity of the port of discharge as may be ordered by the Charterers. If no such
orders shall be received from the Charterers within 48 hours after the Owners
have dispatched a request by telegram to the Charterers for the nomination of a
substitute discharg-ing port, the Owners shall be at liberty to discharge the
cargo at any safe port which they may, in their discretion, decide on and such
discharge shall be deemed to be due fulfillment of the contract of affreightment.

In the event of cargo being discharged at any such other port, the Owners shall
be entitled to fright as if the discharge had been effected at the port or ports
named in the Bill(s) of Lading or to which the Vessel may have been ordered
pursuant thereto.
(5) (a) The Vessel shall have liberty to comply with any directions
or recommendations as to loading, departure, arrival, routes, ports of call,
stoppages, destination, zones, waters, discharge, delivery or in any other wise
whatsoever (including any direction or recom-mendation not to go to the port of
destination or to delay proceeding thereto or to proceed to some other port)
given by any Government or by any belligerent or by any organized body
engaged in civil war, hostilities or warlike operations or by any person or body
acting or purporting to act as or with the authority of any Government or
belligerent or of any such organized body or by any committee or person having
under the terms of the war risks insurance on the Vessel, the right to give any
such directions or recommendations. If, by reason of or in compliance with any
such direction or recom-mendation, anything is done or is not done, such shall
not be deemed a deviation.
(b) If, by reason of or in compliance with any such directions or re-

commendations, the Vessel does not proceed to the port or ports named in the
Bill(s) of Lading or to which she may have been ordered pursuant thereto, the
Vessel may proceed to any port as directed or recommended or to any safe port
which the Owners in their discretion may decide on and there discharge the
cargo. Such discharge shall be deemed to be due fulfillment of the contract of
affreightment and the Owners shall be entitled to freight as if discharge had
been effected at the port or ports named in the Bill(s) of Lading or to which the
Vessel may have been ordered pursuant thereto.
(6) All extra expenses (including insurance costs) involved in discharg-ing cargo
at the loading port or in reaching or discharging the cargo at any port as
provided in Clause 4 and 5 (b) hereof shall be paid by the Charterers and/or
cargo owners, and the Owners shall have
General Ice Clause
Port of Loading
 In the event of the loading port being inaccessible by reason of ice when
vessel is ready to proceed from her last port or at any time during the
voyage or on vessel’s arrival or in case frost sets in after vessel’s arrival,
the Captain for fear of being frozen in is at liberty to leave without cargo,
and this Charter shall be null and void.

 If during loading the Captain, for fear of vessel being frozen in, deems it
advisable to leave, he has liberty to do so with what cargo he has on board
and to proceed to any other port or ports with option of completing cargo
for Owners’ benefit for any port or ports including port of discharge. Any
part cargo thus loaded under this Charter to be forwarded to destination at
vessel’s expense but against payment of freight, provided that no extra
expenses be thereby caused to the Receivers, freight being paid on
quantity delivered (in proportion if lumpsum), all other conditions as per
Charter.
 In case of more than one loading port, and if one or more of the ports are
closed by ice, the Captain or Owners to be at liberty either to load the part
cargo at the open port and fillup elsewhere for their own account as under
section(b) or to declare the Charter null and void unless Charterers agree
to load full cargo at the open port.
 This Ice Clause not to apply in the Spring.
Port of discharge
(a) Should ice (except in the Spring) prevent vessel from reaching port of
discharge Receivers shall have the option of keeping vessel waiting until the re-
opening of navigation and paying demurrage, or of ordering the vessel to a safe
and immediately accessible port where she can safely discharge without risk of
detention by ice.
Such orders to be given within 48 hours after Captain or Owners have given
notice to Charterers of the impossibility of reaching port of destination.
(b) If during discharging the Captain for fear of vessel being frozen in deems it
advisable to leave, 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 such port, all conditions of the Bill of Lading shall
apply and vessel shall receive the same freight as if she had discharged at the
original port of destination, except that if the distance of the substituted port
exceeds 100 nautical miles, the freight on the cargo delivered at the substituted
port to be increased in proportion.

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THE VOYAGE CHARTER PARTY

What is a voyage charter party?

 A voyage charter party is a charter party under which the shipowner

 The relation between the parties is determined by the voyage charter

The significant parts in voyage charters

 Description of the voyage and the cargo

 The allocation of duties and cost in connection with loading and

 The specification of the freight and the payment of the freight

 The laytime rules and demurrage and despatch.

Main clauses in voyage charter party

1. Preamble 11.Both to blame collision

2. Owner’s responsibility 12. G/A and New Jason

3. Deviation 13. Taxes and dues

4. Payment of freight 14. Agency

5. Loading and discharging 15 Brokerage

6. Laytime 16 General strike

7. Demurrage 17 War risks

8. Lien 18 General ice

9. Canceling 19 Law and arbitration

Compiled by : Capt. Naveen C Tewari, ARI Saket. New Delhi. (1/16) 1

 In the Gencon form 1994 much of what may be found in preambles of

1. Preamble Clause in Gencon Form 1994

2. Description of the vessel

2.1 Named vessel

 Named vessel means that the shipowner nominate a specific vessel to

 If the vessel is lost or declared a constructive total loss the charter is

Compiled by : Capt. Naveen C Tewari, ARI Saket. New Delhi. (1/16) 2

2.2 Substituted Vessel

 In practice, it is often agreed that the vessel may be substituted by

2.3 Vessel to be named

 Vessel to be named means that the shipowner would nominate a certain

2.4 Vessel’s details

 The name of the vessel

 The year of build

 The flag of nationality

 Gross and net tonnage

 The number of hatches

 The type of hatch covering

 Length and breadth of hatch openings

 Vessel’s LOA and BM

3.1 Nomination of ports

(1) Ways of nominating ports

 A fixed berth, e.g. berth 2 at Kobe

 A fixed port, e. g, 1 safe port Sydney

Compiled by : Capt. Naveen C Tewari, ARI Saket. New Delhi. (1/16) 3

 A fixed area, e.g. 1 safe port/1 safe berth Japan

(2 )The time for nominating the port

 It is normally to nominate the port or ports when concluding the charter.

3.2 Safe port

 The safety of the port should be viewed in respect of a vessel properly

Liability for safe port

Compiled by : Capt. Naveen C Tewari, ARI Saket. New Delhi. (1/16) 4

3.3 The near clause

 There is an obligation on the shipowner to take the vessel to the agreed

 The intention of the clause is to protect shipowners against such

 A temporary obstacle, such as an unfavorable state of the tide or

4. Description of the cargo

In the absence of express stipulations it is the absolute duty of the charterer to