Master and CP

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The master's role in charterperformanceNorman Lopez*

In this paper Norman Lopez discusses the master's responsibilitiesand discretion in performing time and voyage charters. The conclusionreached is that everyone is best served by masters having a definiteinterest in the charters they perform.I. INTRODUCTION

Who really operates the vessel? The person in the shore office ismore concerned with minimising operating expenses. Despite the titlehe or she may hold, he or she does not really operate the vessel in itsday-to-day activities. It is the master of the vessel who does. Who isthis person? Without becoming involved in semantics the master is theperson whose name usually appeared on certificates of registry issuedto ships.

In the United Kingdom since the Merchant Shipping Act 1988 cameinto effect, however, the name of the master is no longer required onthe certificate of registry. The new Shipping Register in Hong Kongalso excludes the master's name from the certificate of registry. Isthat yet another nail in the coffin of the position of the shipmaster?Perhaps the first nail was hammered in nearly a century ago. In 1896 ayoung Italian obtained a patent from England that sealed the fate ofshipmasters. He was only 22 years old and his name was Marconi. Sixyears later ships began to be connected to "controllers" in the shoreoffice by radio and the master's autonomous position virtually died. Itis significant that in 1992, -almost the centenary of the death of themaster's autonomy, the GMDSS option will also begin the demise of theradio officer.The master of old was really the master of everything that happenedon the ship, as indeed the master of today must be, because of theship's distance from physical control on the shore. Legislation regu-lates the master's role and ensures that the master's responsibilities

Extra Master, FRSA, FNI, FAIN, MICS, MCIT, Member of MLAANZ, ACIArb,Principal Lec turer, Depar tment of N autical Studies, Hong Kong Poly technic.


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4 (1991) 8 MLAANZ Journa l - P a r t 2are many: amongst others safety, pollution prevention and discipline.We sha ll not deal with those responsibilities here.

This paper will examine the master's role which will affect theshipowner's commercial success or failure. This is not governed bylegislation, because legislation is mainly concerned with safety andprotection of the ma rine environm ent, not protecting sh ipowner'sprofits. The only regulatory link with the vessel's commercial activi-ties is tha t under some good administrations, the examination sy llabusof masters includes a subject dealing with "Business and Law".Masters a re required to learn the fundam entals of c harte rpartie stogether with many other aspects of shipping law that have littleconnection with ca rriag e by sea. The tim e spent on this segm ent of thesyllabus has to be brief and therefore restricted to attempting to givethem a basic knowledge of these aspects. If m ore tim e was spen tteaching them about important issues concerning charter perform-ance, they would never be able to learn about other matters in their"Business and Law" syllabus. And yet, the perfo rm ance of c ha rte rcon tractua l obligations is so dependent on the mas ter of the ship. Thisdoes not even take into account the many systems where app licants forcertification as master do not have to undergo the above form ofeducation.

If the legislation does not govern the master 's role in the vessel'scommercial operation, except rather indirectly, what does? The an-swer lies in the words used in the documents which comprise thecontracts for the vessel's use, the charte rpartie s. It is the charterp artywhich determines the master's role in many ways, but he is supposedto play th is role without proper education about the implications of hisactiv ities or omissions. If these implications lead to disputes betweenthe charterer and the shipowner someone will have to pay eventually,whether the charterer , owner or P & I Association. Solutions for thesedisputes are not found in legislation. Arbitrators and the courts mustfind them.The master's role is to ensure that he does everything required bythe charte rparty in the way the charterparty requires it. This is whathe is employed to do, to e arn money for the owner. However, he lackscom mercial control of the vessel. He does not fix the vesse l or look forcargo.

Perh aps the ma ster of old, with the considerable power to controlthe vessel's com me rcial activities, was in the "da rk ages" of modernshipping. Even now, however, it must be incontrovertible that themaster is still responsible for ensuring not only that the ship canperform so tha t it can ea rn money for the shipowner, but also that heperforms his own functions correctly and validly as laid down in thecharterparty.


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Masters and charters 511. PERFORMANCE OF THE CHARTERPARTY

The charter is a contract for the use and/or hire of the ship. We (andthe master) should never forget this. Indeed, Mustill L J said recently inThe M exico I.-'

It is not the role of the Court to impose its own notions of what is prac tica lcommon sense, or of what technical term s may signify, or of what conduct isreasonable, and so on. Nor should the Court wave the dictionary aloft, if thecommercial men know well enough what a clause was intended to mean. At thesam e time , a co ntract is a con tract. If the consequence of reading the con tract a sif i t mea nt what i t said is that, for instance, a mas ter who is uncertain whether hisship is "arrived" or whether it is "ready" may find it prudent to give more thanone notice - an inconvenient consequence - this comes about, not becauseCourts are more pedantic than commercial men, but because the commercialmen who wrote the charter-par ty chose to make lay time refe r to the happening ofa particular event.If "commercial men", including shipowners, charterers and arbitra-

tors, are supposed to know what a clause means and when laytimecommences, did anyone think of telling the master about this? Or washe also supposed to be a commercial man and know about it?Therefore, when the master arrived at the port and issued by telex adocument which he called a "notice of readiness" but which was in factnot a valid notice of readiness, this was not the "particular event"chosen by commercial men to trigger off the laytime.

The shipowner was very lucky in The M exico I. If the discharge ofthe cargo took place without a valid notice of readiness being given,this would not have used up the charter's allowed laytime and theentire discharge would have taken place in "free time". When thedischarge was completed, the charterer could have released the vesselto the owner and then been entitled to claim despatch money for thewhole of the laytime. In this case, counsel for the charterers concededthat laytime began to run when the discharge of the contractual cargoactually commenced, despite the fact that no valid notice had everbeen given to trigger off the laytime. In the English Court of AppealMustill L J agreed that this may have made "good sense" but that itwas not easy to work out precisely how that conclusion could havebeen reached. In future cases courts may well refuse to accept such aconcession by charterers.

So, the owner escaped having to pay despatch. In the future,however, if owners want to avoid paying despatch they may have toinstruct their masters to tender document after document, each calleda "notice of readiness" until all the characteristics of "arrived ship"and "readiness" exist and the document is finally a valid notice ofreadiness. Because The M exico I may not be appealed to the House ofI [l9901 1 Lloyd's Rep 507, 513. Emphasis added.


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6 (1991) 8 MLAANZ Jo urna l - P a r t 2Lords, we have to accept the Court of A ppeal's decision and m as te rswill have to learn how to tender valid notices so that laytime istriggered. If the master is uncertain when a "notice" becomes "valid",he m ay have to tender such documents at frequent intervals.Owners could argu e that, although an invalid notice of readiness w astendered and "accepted", the very fact of th e cha rter ers ' arranging forcargo operations to commence indicates that the charterers waivedtheir right to laytime commencing on an event such as the master'sissuing a fresh and valid notice of readiness. It is subm itted th at theown ers would fail.

In Pteroti Compania Naviera, SA v National Coal Bo ar#, thecharter provided that laytime would commence 24 hours after thevessel was ready to discharge and written notice had been given.Discharge commenced before the ma ste r gave a notice of readiness. Itwas held that notice was essential to the commencement of laytime.The owners argued in tha t cas e that by requiring "earlier" delivery ofcargo (before a valid notice was given and accepted) the charterershad waived their right to a notice of readiness before they began todischarge the vessel. They also argued in the alternative that therewas an implied agreement that laytime was to start from the instantthe cargo operation commenced. Both argum ents w ere rejected by thecourt.

If the shipowner finds it difficult to instru ct the m as te r to give noticeafter notice and expects him to act in a way that would be practicaland legally correc t, the owner may have to amend the t er m s of thecharterparty to insist on an appropriate "time waiting" clause, or aclause providing that laytime is to commence after the tendering andacceptance of a document named "notice of readiness", even if such adocument is not valid. The charterers could always bring an actionaga ins t the owner for breach of the ch ar te r if the vessel is not readybut this should not affect the commencem ent of laytim e.In The Mexico P the charterparty was for a voyage of a dry cargoship. Masters are required to perform similar obligations under timecharterparties and charterparties for tankers. In a dry cargo voyagech arte rpa rty the m aster's tender of the notice of readiness triggers thecomm encement of la ytim e and this will be an im portan t role. Otherterm s in the charterpa rty, such a s "reachable on arriva l" a re externalto the master's role. He cannot berth if the berth is unavailable orunreachable because of som e condition outside his control. If, however,the berth is availab le, accessible and reach able, but the mas ter decides

not to berth the vessel because of fog, despite the harbour pilot's off er-[l95811 Lloyd's R e p 245.See above nl.


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Masters and charters 7to take the vessel alongside the be rth, and evidence from port author-ities that visibility was reasonable, laytim e m ay not comm ence duringthe waiting time and the charterers may claim damages from theshipowners for delay.The charterparty clauses themselves determine the master's role inthe charter's performance, and whether or not the shipowner, whoseagent he is, will be disadvantaged by his not playing the required rolein an acceptable, legal manner. To explore this role, it is thereforenecessary to examine particular charterparties and their clauses toexamine what the master is supposed to do and then, for owners, toinstruct him how to do it.111. VOYAGE CHARTER PARTIESA. The Master's Responsibilities

In a voyage char ter, while the cha rterer ma y be responsible for the"safe port" warranty, the owner is still responsible for causing thevessel to ar riv e a t its co ntractual destination. Lord Diplock listed thefour stages of the voyage charte r in The Johanna Oldendorff' asfollows:(a) the loading or approach voyage to the agreed loading place;(b) the loading operation;(c) the carrying o r loaded voyage; and,(d) the discharging operation.The two voyage stages are under the control of the maste r becausehe is the agent of the shipowner. Therefore the master's role is toobserve the obligation implied in the comm on law, if not expressed inthe charterparty, and proceed with reasonable dispatch.To this general responsibility of the m as ter (and shipowner) can beadded another g enera l obligation: that the ow ner must generally load,handle, stow, carry and discharge the goods on the vessel in a careful

ma nner. This duty is usually considered to be delegated to the m aste rand the cargo-related operations are under his supervision. Indeed,clause 2 of the GENCON cha rterp arty sta tes that which dea ls with theowners' responsibility:Owners ar e to be responsible for loss of or dam age to the goods or for delay indelivery of the goods only in cas e the loss, dam age or delay has been caused bythe imp roper o r negligent stowage of the goods (unless stowage perform ed byshipperslcharterers or their stevedores or servants). . .And the o wners ar e responsible for no loss or dam age or delay arising from anyother cause whatsoever, even from the neglect or default of the cap ta in . . .Ch arterers m ay insist on the deletion of the words in brackets andalso the second para grap h, depending on the streng th of the marke t. In(197312 Lloyd's Rep 285, 304.


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8 (1991) 8 MLAANZ Journal - P a r t 2any case, a rider m ay be added tha t the cargo ' l . . . is to be loaded anddischarged a t the risk and expense of the ch art ere rs but always underthe supervision of the master."

This "supervision" will be discussed below5but the principles ar e thesam e. However, even if "supervision" by the mas te r is not expresslystated, the owners will be vicariously liable for the master's careless-ness concerning stowage of the cargo .When the maste r signs bills of lad ing issued under a cha rte rpar ty hedoes so as shipowner's agen t and carelessness on his part, or failure tostand up to pressure from th e shipper m ay cau se the owner to becomeliable to the bill of lading holder. Obvious exam ples a r e pressu re toissue "clean bills", when the condition of the cargo or its packaging is

doubtful but the shippers offer a fraudu lent document which they call a"letter of indemnity"; ante-dating bills of lading - another fraudulentaction; and "switch ing" a bill of lading, by agreeing to a change of th ename of the por t of sh ipm ent on the bill.This carelessness (or sometim es shee r ignorance) on the pa rt of themaster can affect owners under dry cargo voyage charters and alsotanker voyage cha rters. In The Mobil Couragp the ma ster was clearlya t faul t. This caused the ow ners' claim for over US$202,000 to fail.The vessel was a tanker on a voyage charter. The dispute was

between one oil major and another. The owner of the vessel, Mobil,chartered it to Shell for a voyage from Singapore to Madras. Thech arte r w as in the Shellvoy 4 form. It contained an indem nity clause,clause 3, which provided that if the origina l bills of lading issued underthe cha rter were not available when the vessel arrived a t the discharg-ing port, the charterers would have a right to demand that the ownersdischarge the cargo without the ch artere rs' a nd lor receivers' present-ing the origina l bills of lading. Fo r this right, the cha rte re rs undertookto indemnify the owners against claims made against the latterbecau se of such delivery. Two other significant clauses provided asfollows:

14. Time shall not count against l ay tim e. . .when spent or lost ...(c) a s a resu lt of (i) breach of this ch ar te r by owners.29 ... Charterer may require the master to sign lawful bills oflading for any carg o in such form a s Charterers direct.After loading and before sailing the papers were presented for themaster's signa ture and one set included the original triplicate of thebill of lading to be car rie d on board fo r the consignee, delivered to theSeePart IV C below.See Mobil Shipping & Transportation COv Shell Eastern Petroleum (Pte) Ltd (TheMobil Courage)[I98712 Lloyd's Rep 655.


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(1991) 8 MLAANZ Journal - Part 2lower. The loading berth also had depth restrictions and the vessel wastouching bottom. It was not possible to carry out a proper draft surveyto ascertain the quantity actually loaded. The master had doubts aboutthe weight loaded and felt that, because the stowage factor given tohim earlier was incorrect, the vessel could not have loaded more grain.

The negotiable bill of lading was prepared by the shippers showing aquantity based on the original, assumed stowage factor which wasmore than the quantity actually loaded. The master signed the billwithout noting his doubts and reservations, thereby confirming thequantity declared by the shippers. He did present a separate letter ofprotest to the shippers but it was held that this did not exempt himfrom the obligation to alter the clauses on the bill of lading. He hadcommitted a serious breach, resulting in a loss suffered by thecharterers, who had to indemnify the buyers under the negotiable bill.The charterers could claim damages from the owners.

The charterer's obligation to nominate a "safe port" will not be dealtwith in this paper. However, in another recent tanker voyage chartercase, The Kanchenjunga,' the master's role (and discretion) withregard to nomination of a safe port came into question. The Iran-Iraqwar caused many disputes after September 1980 dealing with frustra-tion of charters and breaches of the safe port warranty.

In this case, which eventually went on appeal to the House of Lordqgthe vessel was on the Exxonvoy form of charter and the trading optionwas "112 safe ports Arabian Gulf excluding Fao and Abadan". Thecharterers ordered the vessel to load a cargo of crude oil a t KhargIsland. On 21 November 1980 the owners instructed the master toproceed to Kharg Island. The vessel arrived, anchored on 23 Novemberand gave notice of readiness. By 1 December the vessel had notberthed. On the same day Iraq bombed Kharg Island. The masterweighed anchor immediately and proceeded 25 miles out to sea.

On 2 December the owners informed the charterer of the bombingand requested them to nominate a safe port. The charterers replied,repeating their orders and insisting that the master proceed to Kharg.After the owners found they were unable to change the nomination,they instructed the master to comply with the voyage instructions andgo to Kharg Island. The master rejected these instructions.

When the dispute was referred to arbitration, the arbitrators foundthat the charterers were in repudiatory breach and that the ownerswere entitled to treat the charter as a t an end and claim damages. Onappeal at first instance, Hobhouse J in the Commercial Court held that

See Motor Oil (Corinth) Refineries SA v Shipping Corporation of India (TheKanchenjunga)[l9891 1 Lloyd's Law Rep 354 (CA).See The Kanchenjunga [l9901 1 Lloyd's Rep 391 (HL).


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Masters and charters 11proceeding to a nominated port did not deprive the shipowner of anyrights, but that the duty to mitigate or avoid loss did require that themaster should refuse to enter the port or, if already there, leave it tosafeguard the vessel. The owners had demonstrated that they werewilling that the vessel should proceed to Kharg Island.

In the Court of Appeal, it was confirmed that the owners hadaccepted Kharg Island as a nomination and had lost their right torefuse to load at Kharg Island. They failed in their claim for damagesfor the charterers' alleged wrongful repudiation. However, nothing theowners did could be construed as waiver of the master's discretionunder clause 20(iv)(b),which stated?

. . . If owing to any war, hostilities e t c . . . entry to any such port of loading. . . orthe loading. . . of carg o a t any such port be considered by the M aster or Owners inhis or their discretion dangerous or prohibited . . . the Charterers shall have theright to order the cargo . . . to be loaded . . . at any other safe po rt . . .The owners appealed to the House of Lords on the issue of the

waiver. The House dismissed their appeal. The master gave notice ofreadiness on arrival. Thereafter, the owners were asserting that thevessel was available to load. The House of Lords held that they werethereby asserting a right inconsistent with their right to reject thecharterers' orders. This resulted in their choosing not to reject thenomination.In The Kanchenjunga" the charterers ordered the vessel to berth ina particular place which was unacceptable to the master. He was usinghis discretion in refusing to go to Kharg. By comparison, in anotherrecent voyage charter case, T h e U l y a n o v ~ k , ~ ~the charterers orderedthe vessel not to berth and load a cargo but the master ignored thatorder, proceeded to the berth and loaded.

The charterers had to pay their cargo suppliers, the shippers, byreference to a formula based on the averages of the prices on the billof lading date and two days before. They anticipated a falling marketand it suited them to delay berthing orders despite possible demurrage.The charterers therefore ordered the master not to berth until instruct-ed. The master disregarded the instructions, berthed, tendered noticeof readiness and commenced loading on 6 December. The loading wascompleted and the bill of lading issued on 7 December. From 6December, the market price had dropped drastically. The chartererscould not re-sell the cargo a t the price they had had to pay.

They claimed damages for breach of contract. The owners counter-claimed for demurrage for delay before discharge because the char-

'"Above n8, 359. Emphasis added.l' Above n8.Novorossisk Shipping COv Neopetro COLtd (The Ulyanovsk) [l99011 Lloyd's Rep 425.


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12 (1991) 8 MLAANZ Journal - P a r t 2ter ers could not sell the cargo a t an acceptable price. The dispute wasreferred to arbitrators who held that the charterers were entitled tomore than US$865,500 because of the breach of con trac t caused by themaster's disobedience of the cha rte rer 's instructions.On app eal the judge held th at until loading had been com pleted thevessel was at the charterers' disposition concerning loading and thecomm encement of loading. The arb itrator s were therefore co rrec t inconcluding th at the o rders given to the vessel to w ait and not to berthwe re lawful and should have been obeyed.B. The Maste r's D iscretion

While the discretion of the master was recognised in The Kanchen-junga,13 it is up to the m aste r to exe rcise that discretion appropria telyand reasonably. For example, even if not expressed in thechart erp arty itself, there is an implied obligation tha t there mu st be nounjustified deviation from the usual and customary route for thevoyage contemplated in the charter . The m aster must be very carefulnot to deviate. However, he has the discretion to choose the routewhich in his opinion, and a t the tim e he m ake s his decision, will givethe best passage, taking the safety of the vessel and c argo and thecharte rer s' inte rests into account. Otherwise, the "reasonableness" ofhis deeision ma y come into question.Two other essential clauses in a voyage charterparty give them as te r considerable discretion and freedom of action. These a r e the"War Clause" and the "Ice Clause".The best solution for modern situations involving war risks is theVoywar 1950 published by BIMCO. Clause 3 of Voywar 1950 states:The Master shall not be required to load cargo or to continue loading or toproceed on or to sign bill(s) of lading for any adventure on which or any port atwhich it appears that the vessel, her Master and crew or her cargo will besubjected to war risks. In the event of the exercise by the Master of his rightunder this Clause after part or full cargo has been loaded, the Master shall be atliberty either to discharge such cargo at the loading port or to proceed therewith. . . In the event of the Master electing to proceed with part cargo under thisClause freight shall in any case be payable on the quantity delivered.This app ears to give the m aster considerable discretion in perform-ing the cha rter if w ar risks threaten . Clause 4 of V oyw ar 1950 providestha t if the ma ste r chooses to proceed with part or full car go under theabove clause, and it app ears that f urth er performan ce of the charterwill subject the vessel, master , crew and c argo to w ar risks, the cargoca n be discharged a t another po rt, chosen by the cha rter ers or, if they

fail to do so, by the owners. The typewritten words "to the master inhis absolute discretion" may be added to this clause after the wordAbove 118-9


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Masters and cha rters 13"appears". The effect of these words is not as wide-ranging a s it mayseem , a s the exercise of the ma ster's discretion m ust not be arbitr ary .I t must be fa ir and reasonable.

The BIMCO Special Ice Clause (Nordice) and the GENCON Gene ralIce Clause tak e into account the da ngers of navigation in ice conditionsand m inimise exposure of the vessel to ice risks. These clauses allowm aste rs the choice of whether o r not to proceed to the contractualdestination if ice is a threat. Some other char terp artie s have no printedice clauses thus increasing the potential for costly delays or icedamage and heavy repair costs.The GENCON Ge neral Ice Clause provisions illustrate the m aster'sdiscretion in this regard:(a) In the event of the loading port being inaccessible by reason of ice when vesselis ready to proceed from her last port or at any time during the voyage or onvessel's arrival or in case frost sets in after vessel's arrival, the Captain for fearof being frozen in is at liberty to leave without cargo, and this Charter shall benull and void.(b) If during loading the Captain, for fear of vessel being frozen in, deems itadvisable to leave, he has liberty to do so with what cargo he has on board and toproceed to any other port or ports including port of discharge. . .

IV. TIME CHARTERPARTIESIce clauses, war clauses and discretion on deciding passage routesare as significant for time charters as they are for voyage charters.While under voyage charters laytime provisions as to "arrived ship"and "notice of readiness" determ ine the maste r's role, these ar e notcritical for time charters. However, two other time charter clausesand obligations under these clauses are influenced greatly by them ast er's role. These a r e the "employment clause" and the "off-hireclause".There are also other clauses which require the master to perform

specific roles such as supplying the ' l . . . Charterers, their agents orsupercargo, when required , with a tru e copy of daily logs, showing thecou rse of the vesse l and distance run and the consum ption of fuel"."The re is a sim ilar clause in the Baltime fo rm, BIMCO's uniform tim echarterparty.Of course , the ult imate sanction lies in the hands of the tim echarterer. This is found in clause 9 of the widely used NY PE fo rm ,which states:. . . if the charterers shall have reason to be dissatisfied with the conduct of theCaptain, Officers or Engineers, the Owners shall on receiving particulars of thecomplaint, investigate the same, and, if necessary, make a change in theappointments.

Clause 11of the New York Produce Exchange (NYPE) form.


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14 (1991)8 MLAANZ Journal - Part 2A similar clause is found in Baltime. Other clauses state that:12. The Captain shall use due diligence in caring for the ventilation of the cargo .26. Nothing herein stated is to be construed as a demise of the vessel to the timecharterers. The owners to remain responsible for the navigation of the vesse l . . .as when trading for their own account.

A. The "Off-Hire Clause"This last clause implies that the master, as an agent of the owner, is

responsible for the vessel's navigation. If the navigation is faulty forreasons over which he has control and there is a delay, the off-hireprovisions may begin to operate. If the vessel grounds, this could bedue to faulty navigation. If there is loss of time because of thegrounding the time charterer may contend that the vessel is off-hirefrom the moment of grounding until berthing when the performance ofthe vessel is reinstated under the time charter. This question wasconsidered in The Marika M.15- The vessel was on an NYPE charter. She arrived at the loading portbut grounded about a day before the scheduled berthing. When refloat-ed 10 days later, she had to wait for a berth to become available andfinally berthed another 10 days later. TheNYPE off-hire clause allowsthe charterer to cease payment of hire for time lost in the event ofgrounding. In this case, the charterers attempted to claim that thevessel was also off-hire from refloating to berthing, because the "timelost" provision in the clause could extend to consequent loss of time.Fortunately for the owners, both the arbitrators and the CommercialCourt held that a s soon as the vessel refloated she was once again a tthe charterers' disposition, was fully efficient as a ship and was not,therefore, off-hire until berthed.

Another recent case examined the charterers' claim that the vesselwas off-hire, for a very different reason, although the master was alsoinvolved. In The Roachbank,'"he owners chartered their vessel on aNYPE form. The vessel loaded some cargo on delivery a t Singaporeand then sailed for Kaohsiung to load further cargo. A week afterdelivery, on the way to Taiwan, the master embarked Vietnamese"boat people" in the South China Sea and continued his voyage toKaohsiung. The boat people were in a very pitiful condition. Mastersar e expected - and indeed required - to aid people in distress a t sea.

On arrival at Kaohsiung, the authorities refused to allow the boatpeople to land there and required the vessel to remain outside the port.Nine days later, the vessel was allowed to enter and berth, various

l5 Eastern Mediterranean Maritime (Liechtenstein) Ltd v Unimarine SA (The Marika M)[l9811 2 Lloyd's Rep 622." CA Venezolana de Navegacion v Bank Line Ltd (The Roachbank) [l9881 2 Lloyd's Rep337.


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Masters and charters 15guarantees having been provided by the owners. The charters relied onthe off-hire clause in NYPE and claimed that the vessel was off-hirefor the 9 days. The dispute was referred to arbitration and themajority of the arbitrators held that the vessel remained on hire. Onappeal, the Court of Appeal held that the carriage of the boat peopledid not make the vessel inefficient and unable to render the serviceunder the charter. The lack of port facilities was outside the master'scontrol. The arbitrators' decision was therefore upheld.B. The "Stevedore Damage Clause"

In the Asbatime charterparty, which is derived from, and is a much-needed updating and modernisation of the 1946NYPE form, suggested"rider clauses" deal with the master's other roles such as his responsi-bilities if there is stevedore damage. The "Stevedore Damage Clause"in Asbatime states:

Any dama ge caused by stevedores during the curre ncy of this Charter shall bereported by Captain to Cha rterers o r their age nts in writing, within 24 hours of~ the occurrence o r a s soon a s possible thereafte r. The Captain sh all use his bestefforts to obtain written ackn owledgement by responsible p arties causing dam ag eunless dam ag e should have been mad e good in the m eantim e . . .Stevedore damage is repaired at the charterer's cost and in the

charterer's time. This seems to clarify the owner's remedies under the"employment clause" of the NYPE form, which includes the wordsthat ". . . Charterers are to load, stow and trim the cargo at theirexpense under the supervision of the Captain". I t is submitted thatdamage to the vessel caused by the stevedores may be recoverable bythe owners unless the charterers can raise the issue of the master'ssupervision. Accordingly, the Asbatime rider clause seems to improvethe owner's position.

The Baltime charterparty also requires the charterers to pay for allcargo operations and makes them responsible for loss or damagecaused to the vessel by improper or careless cargo operations. Thereis, however, no "stevedore damage clause" specifying the master'srole.C The "E mploy ment Clause"

The 1946 NYPE form states clearly that:. . . the Captain shall prosecute his voyages with the utmost despatch, and shallrende r all custom ary assistan ce with ship's c rew and b oats. The Captain (althoughappointed by th e Owners), shall be under the ord ers and d irections of theCharterers a s regards employment and agency . . .The Baltime form contains a similar clause but differs from NYPEin two respects. It contains an "indemnity" provision in case the owner

faces claims because of errors in signing bills of lading.'? Baltime alsoThe Asbatime fo rm also contains an indemnity provision.


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16 (1991)8 MLAANZ Jour na l - P a r t 2contains in the sam e clause a provision dealing with the rem ova l of themaster on a complaint by the charterer. In NYPE, removal is dealtwith under a separate clause which means that the master canprobably be removed for any failure to perform his role under thech art erp arty. The "employment" specified in the clauses is, of course,not the master 's emp loyme nt, but tha t of the vessel.

The NYPE clause also contains a provision requiring the ch arte rersto "load, stow and trim the cargo . . . under the supervision of thecaptain." If the cargo is damaged by bad stowage caused by themaster's interference or arrangements, the charterers will not beresponsible. In Canadian Transport CO Ltd v Court Line L t d q o r dAtkin said that:lgThe supervision of t he stowag e by the cap tain i s in any cas e a m at te r of course; hehas in any even t to protect his ship from being m ade unseaworthy; and in otherrespects no doubt he has the right to inte rfer e if he considers tha t the proposedstow age is likely to impose a liability upon his owners. If it could be proved by thech arte rer s that the bad stowage wa s caused only by the captain's orders, and thattheir own proposed stowage would have caused no da mag e no doubt that migh t

- enable them to escape liability.In the sam e case,20Lord Wright noted th at this clause would relievethe shipowners of:. . . liability for bad stowage, except as qualified by the words "under thesuperv ision of th e cap tain " . . . These words expressly give the master a rightwhich I think he mu st in any case have, to supervise the operation s of th ech arte rer s in loading and stowin g. . .I t fol lows that to the extent that the masterexercises supervision and lim its the chartere rs' control of the stowa ge, thecha rter ers' liability w ill be limited in a corresponding degree.Some charterers insist on the words "and responsibility" beinginserted after "supervision" in the employment clause. This wouldtran sfer the en tire liability of the cargo operations from the char terer sto the owners unless there is clear evidence that the charterersinterfere d in the ca rgo handling. This responsibility of the owner would

cover d am ag e not only to the carg o but also to the vessel. The positionof the m ast er, as the owner's ag ent, is cle ar in this situation. His role iseven mo re specific if words such a s "the m ast er s hall supervise thestowage of the c arg o thoroughly and let one of his officers control al lloading, handling, stowage and discharge of the cargo" a r e insertedinto the tim e charterpa rty.Such an addition was made to the charterparty in The ShinjitsuMaru No 5.='The vessel was time chartered to load cargo in New

" [l940 1 AC 934.Above n18, 937-938.l0 See ab ove 1118,934-944.I' A B Marintrans v Com et Shipping CO Ltd (The Shinjitsu Maru No 5) [l9851 1 Lloyd'sRep 568.


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Masters and charte rs 17Zealand for West Africa. There was a conflict between the shippers,m aste r and stevedores about the stow. Indeed, the stevedores ignoredthe master's protests. They employed a surveyor who certified tha t thestow would be secure with certain lashings. In fact it was not and thevessel was unseaworthy on sailing. The cargo shifted and the vesselhad to return to re-stow the ca rgo with loss of time and expense. Thearbitrators held that the master was negligent but apportioned liabil-ity between the owners and ch arte rers as a t 60 per cent to 40 per cent.On appeal Neill L J held that the dominant and effective cause of theloss was the master's negligence, having regard to his responsibilityfor stowage and the seaworthiness of the vessel. Accordingly, theowners were completely liable.

In The Argonaut," reported in the same year, the vessel was timechartered, and a similar clause specifying the "responsibility andsupervision" of the m aste r w as inserted in the char terp arty . Therewere two discharging ports. The vessel was damaged by cargo han-dling methods and equipment used by stevedores at both ports. Whenthe dispute was referred to arbitration, it was held th at a t the first portthe m aste r was not responsible because the stevedores' equipm ent wasinadequate and this was outside his "province". This may be taken as areference to the master's "sphere of control". The arb itra to rs decidedtha t he should have insisted on better precautions a t the second port.However, on appeal Leggatt J held that the primary duty of cargooperations was placed on the owners and tha t, in the absence of ac tualinterference by the charterers themselves, the owners were responsi-ble for all cargo operations whether or not within the master's"province". The charterers were therefore not liable for damage ateither discharging port.The above two decisions and their ef fects on the shipowner's positionwere followed in The Alexandros P.Z3

V.CONCLUSIONThe role of the maste r in the perform ance of the voyage ch ar ter ortime charter is crucial to the vessel owner's success or failure. In theold days, before excessive shore-office control of ships, the m as terprobably had the correct attitude to be a com mercial man as well as tobe in real com mand of his vessel. In Rodney Elden's Ship Management,written in 1962, he says:To be objective w e should ask why . . . the captain cannot be his own man ag er . . .when we know that most ship captains were eminently qualified to do so in the

22 MSC Mediterranean Shipping CO SA v Alianca Bay Shipping CO Ltd (The Argonaut)[l98512 Lloyd's Rep 216.AIexandros Shipping CO o f Piraeus v MSC Mediterranean Shipping CO SA o f Geneva(The Alexandros P) [l98611 Lloyd's R ep 421.


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(1991) 8 MLAANZ Journal - Pa r t 21860s. This is particularly so of the Yankee shipmaster of the clipper era whoseshrewdness as a trader was legend . . . Shipmasters of the early nineteenthcentury were often either part owners or full owners of their vessel and notinfrequently their cargo. The incentive to conserve expenditure with such anequity in the venture cannot be duplicated.In the 1860s it was said by a person from another m aritim e country,when discussing Am erican ma sters: "We have no maste rs who canmatch the mas ters of Am erican vessels, and until we do, and allowthem full control of our vessels, we cannot comp ete successfully."Some Greek and German m aster s m ay be in the category of theAm erican m as ters of the 19th century. They have a de finite interest inthe success - and therefore the reduc tion of costs and liability - ofthe cha rte rs which they a re required to perform.How many other ma sters c an enjoy such praise? How m any owners,employing these masters who have no personal or financial interest intheir charters, will find themselves losing P & I cover because ofdamage o r claims under charte rs where the ma sters have not playedtheir pa rt correctly in the perform ance of the contra ct? P & I andothe r "audit" sys tem s ar e beginning to take off but it is bound to be awhile before standards are raised. In the meantime, standards aredropping and it is necessary to attempt to show shipowners andshipping professionals how to make p rac tica l decisions tha t w ill assist

in protecting themselves despite falling crewing standards.

Master and CP

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