Safe Port in Ship Chartering | HandyBulk (2023)

Safe Port in Ship Chartering | HandyBulk (1)

Definition of a safe port given by Sellers L.J. in The Eastern City the danger must be one which cannot be avoided by good navigation and seamanship. If the danger can be avoided in this manner it does not render the port unsafe.

What the Shipowners must show in order to establish liability is that the danger causing damage required more than ordinary skill in seamanship to avoid it. A case in which the charterers were found liable because more than ordinary skill was required in the navigation of the ship was The Polyglory [1977]The ship was berthed at Port La Nouvelle taking on ballast when the weather deteriorated and the decision was taken to move from the berth. A local pilot was taken but the ship had difficulty in manoeuvring partly because of the weather but also because she was not fully ballasted. As a result of one of the anchors dragging because of the problems with control of the ship, an underwater pipeline was damaged. There was also found to be negligence on the part of the pilot. The Shipowners eventually accepted liability for the damage to the pipeline and paid a substantial sum to settle the claim. The Shipowners then made a claim against the charterers to recover what they had paid on the basis that the port was unsafe. In an arbitration the port was found to be unsafe and, despite the pilot’s negligence, the charterers were liable to indemnify the owners for the pipeline claim.

The decision was appealed and Parker J. upheld the arbitrator’s award on the basis that the port was unsafe because the danger to the ship could only be avoided by exceptional navigation skills and not the good and ordinary standard required in the test applied under The Eastern City principles.

Another interesting example of negligent navigation was in The Carnival [1992] but in this case it was not by the chartered ship but another ship in the vicinity. The chartered ship was berthing but, because of the negligent handling of the other ship, she was pushed up against a damaged fender which put a hole in the hull. Whilst it may have been the case that, if the passing ship had not caused the incident, there would not have been a claim, both the Admiralty Court and the Court of Appeal decided that the port was unsafe and as a result the charterers were liable for the damage incurred.

However, the passing ship was also sued in the action and found to be liable for the results of her negligent navigation thereby reducing the charterers’ overall liability. There is another aspect of unsafe port cases which often involves the master. This is the argument about causation.

Unsafe Port in Ship Chartering

Frequently, if a ship is damaged and a claim made by the Shipowners that the port was unsafe, the response from charterers is that the real cause of the loss was not the condition of the port but the negligent action of the master or crew. If the charterers can prove this to be the case then the chain of causation is broken by the negligence. As result they have a good defence to the claim.

On other occasions charterers may say that the actions of the master were partly to blame with the consequence that their liability should be reduced.The most difficult decision for the master is whether to proceed to enter the port if there appears to be a potential danger to his ship. If the ship master refuses to go to berth the charterers may claim that he is refusing to obey their lawful orders but, if the ship master does and the ship is damaged, they may claim that he was negligent by ignoring the danger. In these type of circumstances the ship master may be persuaded by the charterers’ local agent or representative that it is safe to use the port.

A good example of this situation is shown in the case of The Stork [1954] 2 Lloyd’s Rep 397 and [1955] 1 Lloyd’s Rep 349. The ship was to load logs in Newfoundland at a very rocky inlet which was subject to storms. Because of the restricted size of the loading place the ship was unable to lay anchor chain to protect her from the consequences of the weather. The master was well aware of the problems but was persuaded to berth and load by the local pilot sent by the charterers. The inevitable happened during a storm and the ship was damaged.

Safe Port Definition

In the subsequent court case the ship master was cleared of any blame and the charterers held liable for breach of the safe port warranty. In the Court of Appeal, Sellers L.J. (who was subsequently, of course, to give the classic definition of a safe port in The Eastern City said: “Master is sometimes on the horns of a dilemma. The material question is, I believe, whether he acted reasonably. The learned judge was of the opinion that the master, in accepting the assurances given to him, acted reasonably, and I share his view”.

Negligent Pilot

A point to look out for is that in this case the pilot was employed by the charterers; usually it is the owners who employ the pilots as a matter of navigation of the ship. If the latter is the case and the pilot is negligent it may be that the chain of causation is broken by that negligence and, as a result, the charterers will not be responsible for any damage arising.

Actions of the Ship Master and Crew

The actions of the ship master and crew, both in deciding what action to take and in executing the navigation and seamanship of the ship, will be tested on the basis that they have to be reasonable and of a standard expected of competent seamen.

Charterers Order Ship to Unsafe Port

An order is given by charterers that the ship is to proceed to a port that is unsafe:

Can the Ship Master refuse to call at Unsafe Port?

If the Ship Master and the Shipowners do agree to call at Unsafe Port, what are their remedies if the ship is damaged or delayed?

Usually, an order to proceed to a port will be considered legitimate and the Ship Master and Shipowners are entitled to act on it without making their own enquiries about the port’s safety. The Ship Master must act reasonably and must not place the ship in a position of peril if the danger is known and can be avoided.

In some cases, the danger will not be known until after the ship arrives and berths. For instance, if there is a violent storm and the port’s security warning system does not work, with the result that the ship is damaged, the Charterers will be liable for the Shipowners’ losses.

However, if it is clear that the port or place to which the ship has been ordered is unsafe, then the Ship Master may properly refuse to proceed and request alternative orders.

One theory for why the Shipowners and the Ship Master have this right is that the Charterers have given an Uncontractual Order or, in effect, No Order.

Also the Charterers’ Order takes the ship outside of the limits of her legitimate employment. The leading case on the issue of the Shipowners’ and the Ship Masters’ rights to refuse or accept orders to go to an unsafe port is “The Kanchenjunga’ [1990]” House of Lords brief facts of the case were as follows: “The ship was chartered on a voyage charter but a range of ports was given to which the charterers could order the ship with an obligation that the ports were safe. The parties were therefore in the same position as if it had been a Time Charter. There was an additional clause which gave the Ship Master and the Shipowners the right to refuse to load or discharge in places where there was a war or warlike activities.

Charterers’ Order was given for the ship to load at Kharg Island, off Iran, despite the fact that war had broken out between Iraq and Iran shortly before. The Shipowners knew that the port was unsafe but despite that they agreed to go there and gave Notice of Readiness (NOR) to load.

After a few days waiting, a berth became available but there was then a substantial air raid on Kharg Island which caused the Ship Master to leave the port. The following day the Shipowners asked the charterers for orders to a new and safe port. The Charterers insisted that the ship return to Kharg Island.

An arbitration in London followed in which the Shipowners argued that the port was unsafe. The arbitrators found that the port was prospectively unsafe when the order was given to go there by the Charterers.

The Charterers appealed and the case went before Mr Justice Hobhouse. Mr Justice Hobhouse found that, whilst the port was unsafe, the Shipowners had waived their right to object by calling at the port with the knowledge that it was unsafe and also giving a Notice of Readiness (NOR) to load.

Shipowners could not therefore reject the port as unsafe. Despite the apparent victory of the Charterers on this point, the Shipowners were protected from any damages claim by the War Clause.

The judgment of Hobhouse J was upheld both by the Court of Appeal and the House of Lords.The judgments of all three courts are reported and make interesting but quite dense reading. It may be helpful to set out one or two observations made by the various judges.

Hobhouse J said: “Generally speaking a person is entitled to act in the faith that the other party to a contract is carrying out his part properly. Even if the breach of contract is clear it is vital to the proper conduct of business that the relevant party should be able, if he considers the breach a minor one, to proceed without sacrificing his right to be indemnified. But this does not mean that he can enter ports that are obviously unsafe and then charge the charterers with the damage done.

In the House of Lords, Lord Goff said: “if, with the knowledge of the facts giving rise to his rights to reject he nevertheless unequivocally elects not to do so, his election will be final and binding upon him and he will have waived his right to reject the tender as uncontractual.

In considering the consequences of going to the port Lord Brandon said: “the only right which the owners waived was the right to reject the nomination as uncontractual. “They did not lose the protection of the right to damages or the shield against the charterers’ claim.” There is another aspect to the issue of refusing to obey or accepting the charterers’ orders which relates to the employment of the ship. Prima facie, the charterers have the right to employ the ship in all legitimate trade but if, in the course of that employment, the ship suffers damage, then the owners may have the right to be indemnified for their losses by the charterers. This principle could apply to cases where there was no safe port obligation or the owners had waived their right to her protection. A case where the owners went so far as treating the charterers’ orders to go to an unsafe port as acceptable and complied with them, resulting in their loss of the right even to claim damages for losses suffered, was “The Chemical Venture’ [1993]” the facts of which are set out earlier. One of the main points in that case was that the owners accepted and paid bonuses for the crew to go to the unsafe port.

It is vital that the vessel must be able to approach the port to which she has been ordered safely. An interesting and leading case on safe ports case which illustrates this aspect of safety is ‘The Sussex Oak’ (1950). The facts are as follows: “In January 1947 the Sussex Oak was ordered to proceed to Hamburg. The ship had been chartered under the then Baltime form with an express term of safe ports. The ship took on a pilot to navigate the River Elbe on the approach to Hamburg. There was ice in the river but the pilot said that it was safe to navigate. Eventually, on the approach to the port, the vessel met a large ice floe. As she could not turn, anchor or go astern, the vessel had to force her way through. she suffered damage as a result of forcing the ice. A claim was made by the owners for the costs of repairs and other losses suffered.

The case was heard in the English High Court and one of the great judges of the time Devlin J who later became Lord Devlin, made the following statement in giving judgment. ‘In my judgment there is a breach of the safety warranty if the vessel is employed upon a voyage to a port which she cannot safely reach. It is immaterial in point of law where the danger is located, though it is obvious in point of fact that the more remote it is from the port the less likely it is to interfere with the safety of the voyage.

The charterer does not guarantee that the most direct route or any particular route to the port is safe, but the voyage charterers order must be one which an ordinarily prudent and skillful Ship Master can find a way of making in safety.”

Again, what this case shows is that while a port may often be considered safe in usual circumstances there will be events, which are not abnormal, that can make it unsafe in particular conditions or for a specific part of the call.There have been other examples of ports where an approach may cause unsafety but which may overlap with the previous category of ‘particular ship’.

In a case involving the port of Manchester a vessel would have had to dismantle her mast in order to pass under a bridge on the approach; the court found it to be unsafe for that ship. Where a bar has to be passed on entry to a port and a ship cannot do so without lightening then again the courts have held this to be unsafe.But the danger does have to be real.

In ‘The Saga Cob’ case, there was guerrilla activity in the port area and there had been one attack on a vessel a few months before the Saga Cob was ordered to the port. In that case, because the adverse activity had been sporadic and there was a naval protection system for vessels entering and leaving the port it was held not to be unsafe.

Ship Safety in Port

Ship has been able to enter the port safely but she cannot use the port safely and there may be various reasons why she cannot use it safely for the operation intended.

The use of the port is at the time in question so, if an obstruction which would have caused danger has been cleared while the vessel is on passage to it, then the port will be safe for use on her arrival. The port must also remain safe while the vessel is there.

The port does not have to be safe the whole time that the vessel is there as long as she can leave safely when danger arises and return once the danger has passed.

In one old case ships had to keep steam ready for the engines in order that they could put to sea promptly if a known danger arose; it was held that this did constitute a safe port. The test was that the need to depart was predictable and that the ships could take the action needed in order to depart, in good time.

It is under this particular category of danger that ‘The Eastern City’ case was decided. The facts of the case were: “The ship was ordered to the port of Mogador in Morocco in winter. The holding at the port could be unreliable in certain conditions for a ship of that size but also, and rather more importantly, departure from the berths to sea was hazardous. The conditions which made staying at the port dangerous were unpredictable and change could be sudden.

As these factors all raised real danger for ships such as the Eastern City, the port was found to be unsafe. Before the case was finally decided in the Court of Appeal, the judge in the lower court, Pearson J, said “A port is not safe for the ship unless there is reasonable assurance that the imminence of such weather conditions will be recognised in time and that ship will be able to leave the port safely”.

Ship Safety in Port Departure

Ship arrived and stayed at the port in safely the chartered ship must also be able to depart from it safely.

In this respect it is interesting to note that quite apart from being unsafe in arrival the port of Manchester has been held to be unsafe in departure. In the case of the Inissboffin the ship discharged at Manchester with the consequence that the draught was less and freeboard greater. The result was that the ship could not safely clear the canal bridges on the return to the Mersey.

Furthermore, in The Sussex Oak case, the ship not only sustained ice damage on the inward passage on the Elbe but also on the return from Hamburg. In the same manner that the charterers were held liable for the damage on theapproach they were also responsible for and had to pay for the additional damage on the return passage.

The main question which has arisen in respect of the danger in the departure from a port is when does the charterers’ responsibility end?

This difficulty arises particularly in the case of long river passages from a port to the sea. In two cases the problem arose and the results are slightly different.

In The Hermine (1979) case, which concerned a passage on the Mississippi River. The main question that had to be decided in this case related to a period of delay in which the ship was trapped by silting of the River. In order to answer this question it was assumed by the court that the departure was unsafe but the judges expressed some doubt that an obstruction 100 miles down the river from the berth could be considered to have caused unsafely in departure.

In The Mary Lou (1981) case, a long departure passage was again considered in the context of a safe port claim. It should be pointed out that this was, in fact, a claim under a voyage charter but with a range of ports rather than a named one; it is unlikely that a Time Charterparty case would be treated differently. Again, the ship was damaged as result of silting whilst on the departure voyage down the Mississippi. The grounding that caused the damage took place in the Southwest Pass which ships of this particular size had to navigate. The arbitrators who first heard the case found that the port of New Orleans was unsafe despite that the fact that the incident giving rise to the losses had taken place 100 miles from the port.

The charterers appealed The Mary Lou (1981) case to the High Court where Lord Mustill upheld the decision of the arbitrators. Lord Mustill said: “Certainly it is not easy to accept at first sight the idea that hazards existing nearly one hundred miles away can be treated as features of the port. But, logically, the distance should make no difference, although the further away the obstacle, the less likely it will be that there is no alternative route which will enable the ship to reach the port in safety.

In the present case, however, there was no such alternative; the Southwest Pass provided the only means of access.” These decisions leave some doubt as to whether all cases of damage during river passages will be decided in favour of owners.

They also raise questions about the adoption of alternative routes to and from ports. If a particular port has two means of access, one of which is shorter but potentially hazardous and another which is longer but generally safe, then if a ship takes the first alternative and suffers damage as result, will the port be considered unsafe? The answer may well depend on the identity of the party which gives the order to use the shorter route. If it is the charterers then they would almost certainly be liable for any damage suffered. If, on the other hand, it is the ship owners who order the more risky passage then it may be arguable that they must accept the consequence of their action because they had a safe option available.

Charterers’ Obligation for Safe Port

It is for the charterers to give orders for the employment of the ship including which ports she will call at. Subject to temporary dangers and abnormal occurrences, the ports to which the ship is ordered must be prospectively safe for the Approach to them, the Use of them and the Departure from them at the time the charterers give those orders.

This obligation on the charterers was considered in detail by the House of Lords in, The Evia No. 2 (1981) case, a case that is essential reading in the context of Unsafe Ports. Put briefly, the facts were as follows. The charterers ordered the ship to Basrah to discharge a cargo which had been loaded in Cuba. The port and berth were reached in complete safety and the cargo was discharged. That discharge was completed on 22 September 1980, the day that Iraq declared war on Iran and fighting started. In order to leave the port the ship had to navigate the Shatt-al-Arab waterway but this was impossible. The ship was trapped and lost.

The Shipowners sued the charterers on the basis that the latter had breached the safe port obligation. Lord Roskill stated, in giving judgment, the following: Since Basrah was prospectively safe at the time of nomination, and since the unsafely arose after her arrival and was due to an unexpected and abnormal event, there was at the former time no breach of Clause 2 (the safe port warranty) by the charterers.The charterers are therefore under a primary obligation to nominate a safe port at the time when they give the orders to proceed there.

The event which causes the unsafely of the port may only become known after the order has been given by the charterers but before the ship arrives at or while she is at the port and may be able to leave.

If that is the case then “The Evia'” decides that a secondary obligation on the part of the charterers arises. This new obligation is to cancel the original order and give a new one which is to a port that is prospectively safe all the time is given. If, as in the case of The Evia it is loo late lo give new orders because the danger has arisen and can not be avoided then the secondary obligation does not arise.

Charterers can also give an order lo a port which is unsafe all the time the order is given if it is likely that the danger will have been removed by the time that the ship arrives. If, in fact, the danger is not removed then, because the secondary obligation exists throughout the voyage, the charterers will have to give orders lo a safe port as soon as they know that it will not be possible to avoid the danger. If they do not they will be in breach of the safe port obligation and liable for any damage to the ship that may occur.

In The Count (2008) case, a ship was ordered to Beira where the navigation buoys were out of position and there was no system to monitor the access channel which suffered from changes in configuration. The judge found that the characteristics of the port all the lime of nomination were such as to create a continuous risk of danger and, as a result the order was and continued lo be one lo an unsafe port. The Shipowners suffered losses as a result of delay because another ship grounded in the access channel and slopped operations. The arbitrators awarded damages for the detention which were upheld by the court.

Charterers’ Orders to Safe Port

There have been some cases in which, for one reason or another, the express term obliging the charterers to send the ship to a safe port has been omitted. That raises the following question – will the English courts imply a term into a time charterparty that any ports or places to which the ship is sent on the charterers’ orders must be safe?.For a term to be implied into a contract under English law there are certain tests which have to be met.

One is that the term will give the contract what is called‘business efficacy’, that is, make the contract work; another is that it must have been the obvious but unexpressed intention of the parties to the contract. How does this work in the context of safe ports? There was a very old case called‘The Moorcock’ which considered the matter in the context of berths.

The leading case on ports and places is ‘The Evaggelos [1971]. The brief facts are as follows:The ship was fixed on a time charterparty and one of the areas where she was to trade was the Red Sea. There was no warranty about the safety of ports. The ship was ordered to Suez when there was a ceasefire in the then existing Middle-East war. However, after the ship arrived to discharge, hostilities flared up and during shelling of the port the ship was so badly damaged as to become a constructive total loss. The judge decided that, at the time the order was given by the charterers to discharge at Suez, it was a safe port and might have been expected to remain so. Therefore, although a term should be implied that the nominated port should be safe at the time of nomination and remain so until the departure from it, there was no breach by the charterers in this case. However, he did go on to state that there was an alternative claim under the employment and indemnity clause and that the charterers would be liable under that since the order to go to the port was the proximate cause of the loss.

Although the decision in the ‘Evaggelos Th’ has been approved since, there may still be some doubt as whether such an implied term would always be allowed. The reason for this is that there have been decisions dealing with the safety of ports under voyage charters which have cast some doubt on the proposition if a particular port has been named in the charterparty. In the case

‘The A P J Priti’ [1987] Bingham L.J. said, of an argumentthat a named port should be implied to be safe, as follows: “There is no good ground for implying a warranty that the port declared was prospectively safe because the omission of an express warranty may have been deliberate, because such an implied term is not necessary for the business efficacy of the charter and because such an implied term would at best lie uneasily beside the express terms of the charter.”

So, if a port was named for some reason in a time charterparty and an express term of safety was omitted then it is arguable that the owner would not be protected by an implied term in the case of the named port. The most likely possibility of this happening is in relation to named ports of delivery and redelivery (an Australian case on this point is ‘The Houston City’ [1954].There is even some doubt that a named port in a time charterparty is covered by an express warranty of safety if it is generally known to be unsafe – see ‘The Mary Lou’ [1981].

A very recent case “The Livanita” [2008]” has considered the issue of whether an expressly named port in a charterparty with a safe port warranty can be unsafe. In this particular case a voyage charter was involved but he same principles apply in the case of time charters. In the judgment Langley J. said that there was no inherent inconsistency between a safe port warranty and a named loading port as it limited the owners’ place of performance.

Safe Port Vs Safe Berth

Safe Ports: It is usual for the charter party to provide that the ship shall go to a safe port nominated or ordered by the charterers. The characteristics of a safe port are that it must be reasonably safe for the ship to enter, to remain, and to depart without suffering any damage so long as she is well and carefully handled. Reasonably safe, that is, in its geographical configuration on the coast or waterway and in the equipment and aids available for her movement and stay. In short, it must be safe in its set up as a port. (per Lord Denning M. R. in The Evia [no. 2] 1982) The port must be physically, meteorologically, and politically safe. A temporary danger will not render the port unsafe, unless the danger continues for a period that, given the nature of the adventure, will involve undue delay. The port to which a ship is ordered must be safe for that particular ship on that particular occasion-it is irrelevant that other ships have safely used the port previously.

Safe berth:If the ship is ordered to proceed to one safe berth, the same parameters that apply to the case of the “safe port” stand.

The question of temporary dangers has been considered by the courts in London. The mere fact that a ship may be delayed by having to wait for a temporary danger to be cleared or weather to change does not mean that the port will be considered unsafe.

One other example which is often given of a temporary danger which does not make a port unsafe is that a ship may have to await a high tide in order to reach or depart from the port because of a bar; the mere fact that if the ship attempted to clear the bar at the wrong state of the tide it would cause her damagedoes not render the port unsafe.

In dealing with such matters Devlin J said in his judgment in The Stork (1954). The law does not require the port to be safe at the very time of the ship’s arrival. Just as she may encounter wind and weather conditions which delay her on her voyage to the loading port, so she may encounter similar conditions which delay her entry into the port, and the charterer is no more responsible for one than the other. Remember the charterer will continue to pay for the ship whilst she is waiting and, unless the market has risen and the ship is on her last voyage under a time charter, the owner is unlikely to be concerned that there is a delay in entering or leaving port as long as it protects the ship from potential damage.

Unsafe Port or Unsafe Berth

There are Temporary Dangers which can make a port or berth unsafe. If, unknown to the master, a navigational aid is not in place for some reason and the ship is damaged as a result, then it may well be that the port would be considered unsafe as a matter of law.

Also if a storm blew up and damaged ships at berth or anchor in the port because they were not given adequate or any notice then the port is again likely to be considered unsafe as there should be a system in place for giving such warnings.

There has been discussion over whether dangers which merely delay a ship for a considerable time may constitute unsafely. The answer to this question is that they may, but the delay would have to be for such a length of time that it would legally frustrate the Charterparty.

In The Hermine Case, the ship was delayed by 30 days but, in the context of the length of the charter, the judges of the Court of Appeal decided that that this was not an inordinate delay which frustrated the charter. In other words it was merely a temporary delay and the charter could continue after the ship had been able to navigate the passage.

In The Sussex Oak case, the court indicated that the ice was not a mere Temporary Danger in view of the length of the charter and the shortness of the voyage. It is therefore very difficult to predict exactly what will be delay that frustrates a charter but essentially it must make the continuation of it impossible.

Safe Port Warranties under Time Charter and Voyage Charter

1- Absolute and Qualified Safe Port Warranties

It is imperative to ascertain whether the guarantee regarding the safety of a port in a charterparty is expressed as an absolute or conditional commitment. The NYPE 46 form succinctly states that the ship shall be utilized “between secure port and/or ports” (line 27). If the charterparty includes this type of provision, the principles established in the Eastern City (aforementioned) are applicable. Nevertheless, if the safety warranty is qualified, additional considerations must be taken into account, diminishing the owners’ safeguard. The Shelltime 3 form encompasses a qualified warranty of a secure port, as follows:

“The charterers shall diligently ensure that the ship is solely engaged in activities between secure ports, locations, berths, docks, anchorages, and submarine lines where she can also rest assured afloat, yet notwithstanding anything contained within this or any other clause of this charter, the charterers shall not be deemed responsible for the safety of any port, location, berth, dock, anchorage, or submarine line, and shall bear no liability in respect thereof, except for loss or damage caused by their failure to exercise due diligence as aforementioned…”

Within the context of this provision, the “due diligence” obligation merely necessitates the charterers to demonstrate “reasonable care,” and this duty is discharged if “a reasonably cautious charterer would, based on the known facts, have concluded that the port was potentially secure” (as stated in the “Saga Cob” case).

2- The paramount obligation of the charterers to order a port that is prospectively safe in time and voyage charterparties

The crucial moment at which the port must be potentially secure is when the ship approaches, utilizes, and departs from it. In determining this, the specific characteristics (including length, width, and draft) of the respective ship must be taken into consideration.

2a- Approaching the Port

A port is deemed unsafe if the ship cannot enter the port due to its physical and/or climatic attributes when combined with the ship’s characteristics. Nevertheless, it is essential to acknowledge that a temporary obstacle that renders the approach to a port hazardous, while it persists, does not render the port unsafe unless the hazard:

1- cannot be evaded through skillful navigation and seamanship or
2- causes a delay of a duration sufficient to thwart the commercial objective of the charter.

In the Stork Case, Mr. Justice Devlin asserted, “The law does not demand that the port be safe at the precise moment of the ship’s arrival. Just as she may encounter adverse wind and weather conditions that delay her voyage to the loading port, she may encounter similar conditions that delay her entry into the port, and the charterer is no more responsible for one than the other.”

The guarantee of a secure port also extends to the means of accessing a port that the ship is compelled to utilize based on the geographical characteristics of the port and/or the ship’s attributes. For instance, in the case of an up-river port, the river and the route to the river must also be safely navigable by the ship (the “Mary Lou” case). Moreover, the risk of hostile attacks en route to a port may render it unsafe for political reasons (as demonstrated in the “Saga Cob” case).

2b- Use of the Port

A port must possess physical safety in terms of its location, size, layout, and its inherent and artificial features. It is not obligatory for the port to be secure for uninterrupted usage, provided that the ship can safely depart from it when temporary unsafety arises. In the Eastern City case (previously mentioned), Mr. Justice Pearson stated, “Suppose that a port can be considered secure for a ship even though the ship may

Suppose that a port can be considered secure for a ship even though the ship may have to leave it when certain weather conditions are imminent. Nevertheless, such a port cannot be deemed secure for the ship unless there is a reasonable assurance that the impending weather conditions will be timely recognized, and the ship will be able to depart from the port without jeopardizing its safety.

2c- Departing the Port

The same principles apply to the departing voyage as those applied to the approaching voyage.

2d- Good Navigation and Seamanship

The charterers will not be in breach of their secure port warranty if the direct and immediate cause of the loss is the negligence of the captain, owners, or their personnel.

2e- Extraordinary Events

The charterers will not be in breach of their secure port warranty if the loss is caused by an exceptional event. Thus, a port is not considered unsafe, for instance, if the ship sustains damage due to an extraordinarily severe storm or a negligently navigated ship. In the “Evia” (No. 2) case, Lord Denning explained the position as follows: “If the setup of the port is sound, but nonetheless the ship suffers damage due to an isolated, abnormal, or external event—unrelated to the port’s setup—then the charterer is not in breach of their warranty. This includes instances when a competent docking master makes a singular mistake or when the ship is collided with by another ship…”

3- Breach of the charterers’ primary obligation to designate a port that is prospectively safe in time and voyage charterparties

The shipowners are granted a reasonable period within which to evaluate whether the charterers have nominated a secure port. If the owners explicitly or implicitly accept an order to proceed to an unsafe port, they will be deemed to have waived their right to refuse compliance with the order. However, the owners will not be deemed to have waived their right to claim damages from the charterers if they suffer losses due to the port’s unsafety, unless they have expressly waived their right to claim such damages (the “Kanchenjunga” case).

3a- Safe Port Warranties under Time Charter

If the nominated port ceases to be prospectively secure between the nomination and the ship’s arrival, the time charterers then have a secondary obligation to re-nominate an alternative port that is prospectively secure at that time (as established in the “Evia” [No. 2] case, mentioned previously). This secondary obligation also arises if the port becomes unsafe while the ship is utilizing it and the danger can be avoided by sailing away.

No distinction appears to have been made between long-term time charters and one-time trip charters, where the charterers are obligated to elect a designated discharge port(s) and cannot retract their election. It is understandable why charterers under an ongoing long-term time charterparty should bear such a secondary obligation since they have a continuous right and obligation to issue orders regarding the ship’s utilization. However, it is more perplexing why time trip charterers, who have exhausted their right to elect an alternative discharge port(s), should also be obligated to designate another secure port, as they have no ongoing authority to direct the ship to discharge elsewhere. Nevertheless, it appears that this secondary obligation is applicable to all time charterers.

3b- Safe Port Warranties under Voyage Charter

Presently, it remains unclear whether voyage charterers have a similar secondary obligation to nominate an alternative secure port. It has been argued that this secondary obligation can only be imposed on time charterers, who possess a continuous right and/or obligation to issue orders regarding the ship’s utilization. However, this perspective overlooks the fact that a voyage charterparty is more akin to a time trip charterparty

Safe Berth Warranties under Time Charter and Voyage Charter

The principles delineated in the Eastern City (supra) pertain to secure berth assurances, with the caveat that the berth’s characteristics determine its safety. The judgment in the APJ Priti (supra) illustrates the primary disparities between a safe port and a safe berth warranty.

1- Approaching the Berth and Departing the Berth

In the APJ Priti case, the ship was contracted to transport cargo to “one/two secure berths in Bandar Abbas, one/two secure berths in Bandar Bushire, one/two secure berths in Bandar Khomeini at the charterers’ discretion.” While en route to Bandar Bushire, the ship incurred damage from an Iraqi missile. The owners contended that this constituted a violation of the secure berth warranty. The Court of Appeal determined that the only explicit undertaking within the charter terms was that the designated berth, at the time of ordering, would be prospectively secure. This pledge did not encompass the voyage leading to the port. In the words of Lord Justice Bingham:

“The charterers’ subsequent obligation was to designate a berth or berths within the stated port for the ship. It appears evident to me that, based on the explicit language of this charter, the charterers assured that the nominated berth or berths would be prospectively safe for the ship…. Since, according to my preferred interpretation, the charterers had not pledged the safety of the declared port, I disagree with the notion that the ship’s transit to and from a designated berth should be regarded as encompassing any segment of the journey to or from the port. It would solely encompass movement within the port, to and from a nominated berth.”

2- All the Berths within the Port

The Court of Appeal in the APJ Priti case also expounded on the notion that a secure berth warranty is confined to an assurance that the nominated berth will be prospectively safe from perils that do not impact the entire port or all berths therein. Consequently, there would be no breach of a secure berth warranty by the charterers if every berth or the entire port was prospectively unsafe in the same manner and to the same degree. The Court of Appeal elucidated the rationale behind this determination as follows:

“The charterers’ assurance, in my view, should be construed as limited to a guarantee that the nominated berth or berths would be prospectively secure from risks that do not affect the entire port or all berths therein. To interpret otherwise would undermine the intended and meaningful distinction between berths and ports. I cannot help but sense that the pledge primarily aims to ensure that the nominated berth or berths (including the passages to and from within the port) remain free from maritime hazards that are reasonably foreseeable and perilous to the ship…. Therefore, I am convinced that the charterers’ pledge must be understood to encompass physical and political unsafety, yet I concede to the charterers’ argument that the aforementioned unsafety must pertain specifically to the nominated berth or berths and not encompass the entire port or all berths within it. Even if a nominated berth is prospectively unsafe, the charterers will not be in breach if every berth or the entire port is prospectively unsafe in the same manner and to the same extent. When all berths or the entire port are prospectively unsafe, the owners should not have agreed to the discharging port initially….”

Safe Port under Bill of Lading (B/L)

Whereas the proprietors assume the role of carriers responsible for transporting the cargo in accordance with the issued bills of lading, it becomes imperative for them to ascertain the extent of their entitlements as outlined within the contractual provisions. This necessity arises due to the potential breach of the bill of lading contract that the proprietors may inadvertently commit by invoking the charterparty’s safeguarding provisions pertaining to a secure port or berth. It is plausible that the bill of lading contract encompasses an inherent assurance of safety, either explicitly stated or through the successful incorporation of charterparty terms. However, if the bill of lading contract lacks such safety provisions, the proprietors must resort to a) any other applicable clauses that may assist their cause in the prevailing circumstances (such as a clause concerning wartime contingencies) or b) the overarching rights bestowed upon them by the governing law that regulates the bill of lading contract (such as the English legal doctrine of frustration).

What is a 1/2 SP in Ship Chartering?

In ship chartering, a “SP: Safe Port” is a location where a ship can safely moor, unload or load cargo, and is free from threats such as piracy, political instability, and extreme weather conditions. The assurance of a safe port is often part of the contractual agreements in chartering.

1/2 SP in Ship Chartering indicates that the charterer has the right to send the ship to one or two safe ports.

What is a 1/2 SB in Ship Chartering?

In ship chartering, a “SB: Safe Berth” is a place where a ship can be securely moored without the risk of being damaged. It’s a spot that is safe from navigational and operational hazards, and where the ship can be safely reached, stayed at, and departed from.

1/2 SB in Ship Chartering indicates that the charterer has the right to send the ship to one or two safe berths.

What is NAABSA in Ship Chartering?

NAABSA stands for “Not Always Afloat But Safe Aground.” It is a term used in ship chartering and maritime logistics. NAABSA refers to a chartering condition or clause that allows a vessel to call at a port or terminal where it may not always remain afloat due to tidal variations or water depth.

When a vessel is chartered under NAABSA terms, it means that the vessel can safely rest on the seabed or remain aground during low tide without causing any damage or compromising its safety. This flexibility allows the vessel to access ports or terminals that have restrictions on water depth or tidal conditions.

NAABSA clauses are commonly used in the shipping industry when vessels need to access ports with shallow waters or tidal variations. It ensures that the vessel can still operate efficiently and safely, even in locations that may have limited water depths or where the vessel may need to temporarily rest on the seabed during certain periods.

Overall, NAABSA provides greater flexibility in ship chartering by allowing vessels to access a wider range of ports and terminals, expanding their operational capabilities in diverse marine environments.

BIMCO NAABSA Charter Party Wording

Note: This wording to be added to the existing berthing provisions in charter parties

Always subject to the Owners’ approval, which is not to be unreasonably withheld, the Vessel during loading and/or discharging may lie safely aground at any safe berth or safe place where it is customary for vessels of similar size, construction and type to lie, if so requested by the Charterers, provided always that the Charterers have confirmed in writing that vessels using the berth or place will lie on a soft bed and can do so without suffering damage.

The Charterers shall indemnify the Owners for any loss, damage, costs, expenses or loss of time, including any underwater inspection required by class, caused as a consequence of the Vessel lying aground at the Charterers’ request.

We kindly suggest that you visit the web page of BIMCO (Baltic and International Maritime Council) to learn more about NAABSA and to obtain the original Charter Party forms and documents.

What is NAABSA Clause in Ship Chartering?

NAASBA term, duly recorded within the charter party, grants the charterer the privilege of utilizing certified ports of such denomination, where the vessel can periodically rest its hull against the seabed, free from any peril of harm.

“In the realm of navigation, there exists a practice in certain ports wherein the ship remains securely grounded during low tide rather than afloat at all times,” expounds Larry. “Thus, this term is employed to characterize ports where the ocean floor provides a suitable resting place for the vessel during low tide, without inflicting any damage upon its hull. However, this practice must be customary for both the pier in question and vessels of similar size, construction, and type,” he concludes.

Ports that receive authorized NAABSA vessels possess distinct attributes: typically, they boast soft beds composed of mud or sand, with minimal presence of stones.

“It constitutes an agreed-upon clause between the concerned parties, deviating from the standard protocol of ‘1SPB AAAA (1 Safe Port/Berth Always Afloat Always Accessible)’,” elucidates Johann, “wherein a customary UKC (Under Keel Clearance) of 0.50m or free space below the keel is typically required.”

The primary impetus behind the inception of NAABSA stemmed from the desire to optimize operations within ports characterized by substantial tidal fluctuations. By ensuring the safety of the berth, devoid of any potential harm to the vessel’s hull, a greater degree of flexibility arises under the most opportune circumstances for cargo loading at these terminals.

Johann presents two illustrations of historical ports embodying this resoluteness: one situated along the River Thames and another along the River Plate. “Its paramount objective revolves around the enhancement of ship loading/unloading, thwarting disruptions during low tide and enabling the vessel to maximize its cargo capacity within ports harboring draft restrictions (regarding water depth) and notable tidal variations.”

In instances where NAABSA cannot be implemented due to the bed’s inherent characteristics, the berthing/unberthing of laden ships may exclusively take place during high tide, and/or the ship may solely receive a limited volume that adheres to the UKC (Under Keel Clearance).

To put it differently, this provision was primarily formulated to permit vessels to accommodate a larger cargo load while affording the port an extended duration of operation within those locations boasting the ideal conditions for such undertakings.

When is a Port deemed to be Safe?

Regarding the two distinct types of charter parties, namely time and voyage, the safe port warranty holds significant importance as an essential component for both agreements. Its primary purpose is to shield shipowners against the possibility of being directed to an insecure port during a charter. By exercising this warranty, owners gain the authority to decline instructions that would lead them to an unsafe location. Moreover, they can seek compensation from charterers if any losses are incurred due to the charterers’ decision to proceed to an insecure port. Therefore, comprehending the safety clauses that protect their own interests is crucial for individuals working in the maritime and legal sectors, enabling them to operate with safety and efficiency. With that said, a pertinent question arises: “When can a port be considered safe?”

In any course on Maritime law, students are instructed that whenever a charterer has the privilege of designating a port as per an agreed charter party, it implicitly guarantees the safety of that port.

The traditional definition of a safe port, as provided in the case of “Eastern City” [1958] 2 Lloyds Rep 127, states:

“A port will only be deemed safe if, during the relevant time period, a specific vessel can reach it, utilize its facilities, and depart from it without being exposed to avoidable hazards, assuming normal navigation and seamanship practices.”

These principles are equally applicable when considering the safety of berths, as the underlying doctrine remains the same. The obligation of the charterers is to nominate a port or berth that, at the time of issuing the order, is projected to be safe. Consequently, it implies that the port or berth should be reasonably expected to be secure when the vessel arrives, except in cases of unforeseen abnormal circumstances.

Requirements for a Port to be considered Safe Port

The significance of safety has been subjected to numerous interpretations, each of which has been debated and adjudicated in arbitrations and courts. The physical composition of the port is the most conspicuous factor determining its safety or lack thereof. However, there are additional factors that contribute to a port being considered safe. The prerequisites for a port to be acknowledged as a “safe port” are as follows:

  1. Unrestricted access to the port must be ensured.
  2. Vessels must be able to securely float at all tide levels.
  3. Sufficient facilities must be in place to facilitate trade.
  4. Political stability is essential. Once a ship has arrived at the port (and unloaded its cargo), it should be able to depart safely without the need to lower or sever its masts in order to pass beneath a bridge.

Safe access to the port entails unimpeded entry that is free from permanent hindrances. Instances of permanent obstruction include inadequate water depth, periodic accumulation of sediment, presence of ice, uncharted reefs, an underwater buffer that damages a ship due to its design and construction, or an underwater obstruction within a dredged channel that forms the designated route to the port. Failure to identify and eliminate such obstacles before admitting vessels to the port could result in vessel damage, thereby compromising safety. However, temporary obstructions, such as neap tides, do not render a port unsafe.

To capitalize on commercial advantages, ports nowadays accommodate a greater volume of shipping and experience a higher number of vessel movements compared to a decade ago. This increased traffic, often in constrained environments, poses a heightened risk of ship-to-ship or ship-to-infrastructure collisions. Consequently, ports must have the capacity to accommodate such intensive vessel traffic while ensuring the absence of any obstructions within the port.

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