LAW

QUESTIONS ASKED:
1. WHAT IS NOR AND WHAT ARE THE MASTER’S DUTIES IN RESPECT OF IT? (MAY 08)
2. WRT TO NOR EXPLAIN AN ARRIVED SHIP AND READY TO LOAD IN ALL RESPECTS?
3. DIFFERENTIATE BETWEEN “DEMISE CHARTER”, “TIME CHARTER”, “VOYAGE CHARTER”
4. WRITE SHORT NOTES ON INDEMNITY CLAUSE, DEVIATION CLAUSE AND ICE CLAUSE.
(AUG 08)
5. DEFINE BAREBOAT CHARTER. (NOV 08)
6. EXPLAIN NEW JASONS CLAUSE. (JAN 09)
7. WRT VOYAGE CHARTER PARTY EXPLAIN:
1. CHARTERERS RESPONSIBILITY IN LOAD PORT (INCLUDING SAFELY AFLOAT / SAFE
BERTH).
2. DEMURRAGE AND DISPATCH.
3. COMMENCEMENT OF LAYTIME FOR LOADING AND DISCHARGING (SEPARATE) AND
LOADING AND DISCHARGING (TOTAL). (JUL 09)
8. WRT VOYAGE CHARTERES EXPLAIN EXPECTED READINESS TO LOAD AND NOR. (JAN 10)
9. EXPLAIN LAYTIME AND LAYDAYS. (JAN 10)
10. WRITE SHORT NOTES ON ICE CLAUSE, P & I BUNKER CLAUSE, CESSER CLAUSE,
REDILIVERY CLAUSE (FEB 10)

THERE ARE 4 TYPES OF CHARTER PARTIES:

1. VOYAGE CHARTER: VESSEL CHARTERED FOR A PARTICULAR VOYAGE.
2. TIME CHARTER: VESSEL CHARTERED FOR A SPECIFIC PERIOD OF TIME.
3. DEMISE – BAREBOAT CHARTER: CHARTERER RUNS THE SHIP AS HIS OWN SHIP.
4. CONTRACT OF AFREIGHTMENT: IS CARGO RELATED.

COMPARISON BETWEEN VOYAGE CHARTER, TIME CHARTER AND DEMISE CHARTER

VOYAGE CHARTER TIME CHARTER DEMISE CHARTER
1 BUNKERS – OWNERS CHARTERERS CHARTERERS
2 LUB OIL – OWNERS OWNERS CHARTERERS
3 F.W. – OWNERS OWNERS CHARTERERS
4 H & M INSUR - OWNERS OWNERS OWNERS
5 P & I INSUR – OWNERS OWNERS CHARTERERS
D/DOCK, REPAIRS,
6 OWNERS CHARTERERS
MAINTENANCE – OWNERS
7 PORT DUES – OWNERS CHARTERERS CHARTERERS
8 CANAL DUES – OWNERS CHARTERERS CHARTERERS
STEVEDOR COST – MAY BE
9 BY OWNERS/CHARTERERS CHARTERERS CHARTERERS
OR SHIPPERS
COMMUNICATION – TO BE SPLIT BETWEEN
10 CHARTERERS
OWNERS OWNERS AND CHARTERERS
OPERATIONAL CONTROL –
11 OWNERS CHARTERERS
ONWERS
COMMERCIAL CONTROL –
12 CHARTERERS CHARTERERS
OWNERS
COMMERCIAL COST –
13 CHARTERERS CHARTERERS
OWNERS
RIGHT OF REMOVAL OF
14 SENIOR OFFICERS – CHARTERERS CHARTERERS
OWNERS

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VOYAGE CHARTER TIME CHARTER DEMISE CHARTER
APPOINTMENT OF OFFICER
15 OWNERS CHARTERERS
AND CREW – OWNERS
DETERMINATION OF SAFE
16 CHARTERERS CHARTERERS
PORT – OWNERS
17 SAFE CARGO – OWNERS CHARTERERS CHARTERERS
ANY SALVAGE MONEY OWNERS AND CHARTERERS
18 CHARTERERS
BELONGS TO OWNERS HAVE EQUAL SHARE
OWNER IS LIABLE TO
19 DAMAGE TO MARINE OWNERS CHARTERERS
ENVIRONMENT
SHIP NAME, PAINT ETC
20 OWNERS CHARTERERS
ACCORDING TO OWNERS
FREIGHT IS PAID AT
21 DESTINATION, ADVANCE IN ADVANCE IN ADVANCE
FREIGHT MAY BE PAID
IN CASE THE CHARTERER
SHORT LOAD THE SHIP HE
22 NO SUCH PROVISION NO SUCH PROVISION
HAS TO PAY FOR
DEADFREIGHT
LAYTIME CALCULATIONS
ARE DONE FOR
23 NO SUCH CALCULATIONS NO SUCH CALCULATIONS
DEMURRAGE AND
DISPATCH PAYABLE
THE SHIPOWNER HAS A THE SHIPOWNER HAS A
24 LIEN ON THE CARGO FOR LIEN ON THE CARGO FOR NO SUCH PROVISION
HIS HIRE MONEY. HIS HIRE MONEY.
THERE ARE NO PROVISIONS IN CASE OF BREAKDOWN
25 OF OFF HIRE ONCE THE SHIP OF VESSEL’S EQUIPMENTS NO SUCH PROVISION
IS CHARTERED THIS CAN BE DONE.

VOYAGE CHARTER
1. SAFE PORT / BERTHS: IT IS THE CHARTERERS RESPONSIBILITY TO MAKE SURE THAT THE
PORT / BERTH IS SAFE FOR THE VESSEL. THE VESSEL SHALL BE DIRECTED TO SAFE
PORTS / BERTHS WHERE SHE MAY LIE SAFELY AFLOAT (OR, IF AGREED, SAFELY
AGROUND)(NAABSA-NOT ALWAYS AFLOAT BUT SAFELY AGROUND). A PORT IS
CONSIDERED SAFE IF A VESSEL CAN, WITHOUT SOME EXTRA-ORDINARY INTERVENING
EVENT, REACH IT, ENTER IT, STAY IN IT AND LEAVE IT IN A SAFE MANNER WITH THE
EXERCISE OF GOOD NAVUGATION AND SEAMANSHIP. NAABSA CLAUSE APPLIES ONLY
WHEN THE VESSEL IS STATIONARY ie AT ANCHOR OR AT BERTH.
2. DEMURRAGE: IF A VESSEL IS DELAYED IN PORT BEYOND THE STIPULATED LAYDAYS.
CHARTERERS PAY A PENALTY TO THE OWNERS FOR THAT MANY DAYS. THIS IS KNOWN AS
DEMURRAGE.
3. DISPATCH: IF THE VESSEL COMPLETES CARGO EARLIER THAN THE LAYDAYS THEN THE
OWNERS PAY A BONUS TO THE CHARTERERS, THIS IS KNOWN AS DISPATCH.
4. DEADFREIGHT: WHEN THE CARGO THAT HAS BEEN STIPULATED IN THE CONTRACT IS
NOT LOADED THEN THE DIFFERENCE BETWEEN THEM IS KNOWN AS DEADFREIGHT. ‘S
ACCORDINGLY THE FREIGHT WILL BE DEDUCTED FROM THE OWNER’S OR CHARTERER’S
ACCOUNT DEPENDING UPON WHOM THE PENALTY OCCURS.

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5. NEW AMMENDED JASON CLAUSE: THIS CLAUSE WAS BROUGHT UP DUE TO THE
DIFFERENCE IN RULES BETWEEN THE US LAWS AND BRITISH LAWS. BRITISH LAW STATES
THAT IN CASE OF A LOSS ARISING DUE TO THE FAULT OF THE MASTER OR CREW IN
NAVIGATION OR MANAGEMENT, THE SHIP OWNER SHALL NOT BE HELD RESPONSIBLE
BUT CAN DECLARE A GENERAL AVERAGE. THE US LAW OPPOSES THIS SAYING THAT WHY
SHOULD OTHERS PAY FOR A MISTAKE DONE BY THE OWNER’S SERVANT. THUS SHIP-
OWNERS TRADING TO US STARTED TO PUT A CLAUSE IN THE C/P THAT THE SHIP-OWNER
COULD RECOVER A GENERAL AVERAGE IF DUE DILIGENCE HAS BEEN EXERCISED. THE
VALIDITY OF THIS CLAUSE WAS CHALLENGED BY THE US COURTS FOLLOWING THE
ACCIDENT OF A VESSEL NAMED JASONM THUS IS WAS CALLED AS JASON’S CLAUSE.
AFTER A NUMBER OF SUBSEQUENT DECISIONS CERTAIN CHANGES WERE MADE AND IT
WAS THEN CALLED AS THE NEW JASON CLAUSE. IT STATES THAT IN THE EVENT OF ANY
LOSS RESULTING FROM ANY CAUSE FOR WHICH THE CARRIER IS “NOT RESPONSIBLE BY
STATUTE, CONTRACT OR OTHERWISE” A GENERAL AVERAGE SHALL BE CONTRIBUTED BY
THE CARGO-INTERESTS. IT FURTHER ADDS THAT IF A SALVING SHIP IS OWNED /
OPERATED BY THE CARRIER, SALVAGE SHALL BE PAID FOR AS FULLY AS IF THE SALVING
SHIP BELONGED TO STRANGERS.
6. WAR RISK CLAUSE: USUALLY, THE VESSEL’S HULL AND MACHI NERY ARE INSURANCED
AGAINST RISK OF WAR. BUT IF THE VESSEL IS TO TRADE IN AN AREA WHERE ACTUAL
WAR MAY HAVE BROKEN OUT OR WHERE THERE IS A RISK OF WAR THEN THE OWNERS /
MASTER HAVE THE OPTION TO DECLINE TO PROCEED TO THAT PORT OR IF ALREADY IN
THAT PORT TO LEAVE IT IMMEDIATELY. IF THE OWNERS / MASTER DO CONSENT TO
PROCEED TO THAT PORT OR REMAIN IN THAT PORT THEN THE CHARTERERS WILL HAVE
TO PAY FOR THE ADDITIONAL INSURANCE PREMIUM AGAINST WAR-RISKS.
7. DEVIATION CLAUSE: THIS CLAUSE GIVES THE VESSEL LIBERTY TO PROCEED TO OTHER
PORTS FOR BUNKERING (IN CASE OF VOYAGE C/Ps) TO SAIL WITH / WITHOUT PILOTS, TO
TOW AND BE TOWED, TO ASSIST VESSELS IN DISTRESS AND TO DEVIATE FOR THE
PURPOSE OF SAVING LIFE AND PROPERTY.A
8. BOTH TO BLAME CLAUSE: AS PER THE U.S. RULES IF THERE IS A COLLISION BETWEEN
SHIP A AND B SUCH THAT BOTH VESSELS ARE TO BLAME FOR THE COLLISION THEN THE
CARGO OWNER OF SHIP A CAN RECOVER IN FULL AGAINST SHIP B REGARDLESS OF THE
DEGREE OF FAULT / BLAME. SHIP B CAN IN TURN RECOVER THE SUM FROM SHIP A TO THE
EXTENT OF THE FAULT OF SHIP B. BUT AS PER THE A SHIP-OWNER HAS NO LIABILITY FOR
ANY LOSS OF CARGO ARISING OUT OF A ERONOUS / NEGLIGENT NAVIGATION. THE U.S.
LAW THUS CREATES AN ANOMALOUS SITUATION. IF SHIP A IS SOLELY TO BE BLAMED FOR
A COLLISION THEN SHE HAS NO LIABILITY TO THE CARGO OWNER BUT IF BOTH ARE TO
BE BLAMED THEN HE IS INDIRECTLY LIABLE TO CARGO OWNERS BY THE VIRTUE OF HIS
LIABILITY TO SHIP B. TO OVERCOME THIS PROBLEM A “BOTH TO BLAME COLLISION
CLAUSE” IS INSERTED IN THE C/Ps. THE OBJECT OF THIS CLAUSE IS THAT THE OWNERS OF
SHIP A CAN RECOVER SUCH SUM FROM THE CARGO OWNERS WHICH THEY MAY HAVE
PAID TO SHIP B. LIKE THE NEW JASON CLAUSE THIS CLAUSE IS ALSO INVOKED WHEN A
U.S. COURT IS INVOLVED.
9. GENERAL ICE CLAUSE: THIS CLAUSE GIVES THE OWNERS AN OPTION TO WAIT OUTSIDE
AN ICE-BOUND PORT UNTIL THE PORT IS OPEN. IT IS UPON THE DISCRETION OF THE
MASTER AND THE OWNERS TO PROCEED TO THAT PORT. AN ICE-BREAKER ATTENTION
SHOULD BE AVAILABLE AT SUCH PORTS.
IF THE VESSEL IS NOT ABLE TO ENTER SUCH PORT DUE TO ICE, THEN N.O.R. WHICH IS
GIVEN MUST BE TREATED AS COMMENCEMENT OF LAYTIME EVEN THOUGH THE VESSEL
IS OUTSIDE PORT LIMITS.
IF THE CHARTERERS DO NOT AGREE TO THIS THEN THEY HAVE AN OPTION TO SEND THE
VESSEL TO SOME OTHER DISCHARGE PORT PROVIDED THAT IF THE EXTRA DISTANCE IS
MORE THAN 100NM THEN THE VESSEL IS TO RECEIVE EXTRA FREIGHT. THIS IS KNOWN AS

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CENTROCON CLAUSE. IF IN A LOAD PORT, IT STARTS TO SNOW DURING LOADING
OPERATION AND ICE STARTS TO ACCUMULATE THEN THE MASTER CAN SAIL OUT OF THE
PORT AND WAIT FOR CHARTERERS INSTRUCTIONS OUTSIDE THE PORT. THE CHARTERER
CAN THEN ASK THE VESSEL TO PROCEED TO DISCHARGE PORT WITH WHATEVER CARGO
IS ONBOARD OR CAN SEND HER TO SOME OTHER PORT FOR LOADING PROVIDED THAT IF
THE EXTRA DISTANCE SAILED IS MORE THAN 100NM THEN THE FREIGHT APPLICABLE
WILL BE PAID BY THE CHARTERER, THIS IS KNOWN AS GENCON CLAUSE. IF THE
CHARTERER DOES NOT AGREE TO ANY OF THE ABOVE THEN THE C/P CAN BE CANCELLED
BY THE OWNERS AND THE CHARTERERS WILL BE LIABLE TO OWNERS FOR ABY
EXPENSES.
10. EXCEPTION CLAUSE: WHEN CLAUSE PARAMOUNT OR HAGUE / HAGUE VISBY RULES
ARE INCORPORATED IN THE C/P THEN EXCEPTION CLAUSES ARE SUPERFLUOUS.
OTHERWISE EXCEPTION CLAUSE IS INCLUDED IN THE C/P. THIS CLAUSE STATES THAT THE
VESSEL WILL NOT BE HELD LIABLE TO CHARTERERS OR CARGO OWNERS FOR ANY LOSS
ARISING DUE TO THE FOLLOWING REASON, PROVIDED THAT THE VESSEL EXERCISES DUE
DILIGENCE.
1. ACT OF GOD,
2. PERILS OF THE SEA,
3. NEGLIGENCE OF MASTER / MARINER / PILOTS ETC.
4. FIRE,
5. JETTISONING,
6. PIRACY,
7. BARRATORY (INQUILLAB)
8. INHERENT VICE,
9. SHIFTING OF BUNKER / STORES CAUSING DAMAGE TO THE SHIP.
11. INDEMNITY CLAUSE: THE MASTER SHALL BE UNDER THE ORDERS AND DIRECTION
FROM THE CHARTERERS AND THE CHARTERER AGEES TO INDEMNIFY THE OWNERS OF
ANY CONSEQUENCES OR LIABILITIES ARISING FROM THE MASTER OR OFFICERS SIGNING
THE B/L OR OTHER DOCUMENT. THE MASTER IS STILL RESPONSIBLE TO THE OWNER FOR
THE SAFENAVIGATION OF THE SHIP AND SAFE STOWAGE AND CARRIAGE OF CARGO. THIS
CLAUSE ALSO GIVES THE CHARTERERS THE RIGHT TO CHANGE ANY OF THE SHIP’S
OFFICER OR ENGINEER INCLUDING THE MASTER OF THE SHIP.
12. P & I BUNKERING CLAUSE: GIVES LIBERTY TO THE SHIP TO DEVIATE FOR TAKING
BUNKERS FROM A PLACE WHERE BUNKER COSTS ARE LESS. IT ALSO ALLOWS THE SHIP
TO TAKE FULL ROUNDTRIP BUNKERS. FILLING BUNKERS IS ADVANTAGEOUS FOR BOTH
OWNERS (WHO MAY SAVE ANOTHER BUNKER CALL) AND CHARTERERS (WHO MAY HAVE
FREIGHT CHARGES ON THE HOMEWARD VOYAGE REDUCED AS A RESULT OF OWNERS
SAVING).
13. CESSER CLAUSE: A CESSER CLAUSE IS GENERALLY INSERTED WHEN THE CHARTERER IS
ALSO THE SHIPPER AND WISHES TO ENSURE THAT TE CHARTERER’S RESPONSIBILITY
CEASES ON COMPLETION OF LOADING. THUS TRANSFERRING LIABLITY OF DISCHARGE
PORT DEMURRAGE TO THE RECEIVERS. IN SUCH CASE THE CHARTERER CUM SHIPPER
SETTLES LOAD PORT DEMURRAGE / DISPATCH. THE CARRIER THEN HAS THE RIGHT TO
EXERCISE LIEN OVER THE CARGO AT DISCHARGE PORT. THIS CLAUSE DOES NOT RELIEVE
THE CHARTERER FROM CONTRIBUTING TOWARDS SALVAGE OR GENERAL AVERAGE IN
CASE OF ANY INCIDENT.
14. LIEN: A SHIP-OWNER HAS THE RIGHT TO EXERCISE POSSESSORY LIEN ON THE CARGO
FOR FREIGHT BUT NOT FOR CHARTER HIRE (IN CASE OF TIME CHARTER) OR FOR
DEADFREIGHT, DEMURRAGE AND DETENTION (IN CASE OF VOYAGE CHARTER). BY
INSERTING A SUITABLE CLAUSE, THE SHIP-OWNER ACQUIRES A CONTRACTUAL RIGHT TO
EXERCISE LIEN IN RESPECT OF CHARTER HIRE, DEMURRAGE OR DETENTION AND
DEADFREIGHT.

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15. ARBITRATION CLAUSE: IN ORDER TO AVOID EXPENSIVE LITIGATION MOST OF THE C/P
CONTAINS AN ARBITRATION CLAUSE, SO THAT DISPUTES CAN BE SETTLED THROUGH
ARBITRATION. THE CLAUSE MAY PROVIDE FOR THE NOMINATION OF A SINGLE
ARBITRATOR OR BOTH PARTIES TO HAVE SEPARATE ARBITRATORS AND FOR THE TWO TO
APPOINT AN UMPIRE IN THE EVENT OF THEIR DISAGREEMENT.
16. CANCELLATION DATE: WHEN A CHARTERPARTY IS FIXED, IT IS REQUIRED FOR THE
VESSEL TO ARRIVE AT THE LOAD PORT BEFORE A CANCELLATION DATE OTHERWISE THE
CHARTER HAS THE AUTHORITY TO CANCEL THE CONTRACT. IF THE VESSEL ARRIVES
BEFORE A STIPULATED DATE, AND BE READY TO LOAD CARGO IN ALL RESPECTS, THE
LAYDAYS MAY NOT START UNTIL AFTER A STIPULATED DATE.
17. LAYDAYS OR LAYTIME: WHEN A VESSEL ARRIVES AT A LOAD PORT OR BERTH (AS IS
AGREED IN THE CHARTER PARTY), AND IS READY TO RECEIVE THE CARGO, ANY DELAYS
IN LOADING ARE GENERALLY AGREED TO BE ON THE CHARTERER’S ACCOUNT. THIS IS
DONE BY AGREEING THE PERIOD OF LAYTIME OR LAYDAYS WITHIN WHICH THE CARGO
WILL BE LOADED ON THE VESSEL WITHOUT ANY EXTRA PAYMENY OTHER THAN THE
AGGRED FREIGHT. LAYTIME OR LAYDAYS CAN BE VARIABLE, FIXED OR CALCULABLE
DEPENDING ON THE PORT. IF THE VESSEL TAKES MORE TIME TO LOAD, THE CHARTERERS
HAVE TO PAY A DEMURRAGE TO THE SHIP-OWNERS. IF THE VESSEL IS LOADED BEFORE
THE EXPIRY OF LAYTIME, SHIP OWNERS WILL PAY A DISPATCH TO THE CHARTERERS. IF
DUE TO SOME REASONS, THE LAYTIME HAS EXPIRED AND NO CARGO IS COMING FOR
QUITE SOME TIME AFTER THAT, THE SHIP OWNER IS ENTITLED TO CLAIM ACTUAL LOSS
CAUSED BY THE VESSEL’S DETENTION AND MAY ALSO BE ENTITLES TO RESCIND THE
CONTRACT IF THE DETENTION CONTINUES FOR AN INAPPROPRIATE PERIOD.
18. NOTICE OF READINESS: ONCE THE AMOUNT OF LAYTIME IS AGREED. IT IS NOW
IMPORTANT TO KNOW WHEN THE LAYTIME ACTUALLY STARTS. A LAYTIME ACTUALLY
STARTS AFTER THE ELAPSE OF A CERTAIN PERIOD (GENERALLY 24 HRS) AFTER THE
VESSEL IS READY TO ALOAD CARGO IN ALL RESPECTS AND HAS TENDERED HER NOTICE
OF READINESS TO THE CHARTERERS IN A WRITTEN FORMAT. A NOR WILL BE VALID ONLY
IF SERVED AFTER:
1. A VESSEL IS AN ARRIVED SHIP: IF SHE HAS ARRIVED AT AN AGREED PLACE (i.e. A
PORT/BERTH ETC) AND IS AT THE EFFECTIVE DISPOSAL OF THE CHARTERERS. TO
AVOID ANY DISPUTES, CHARTERPARTIES GENERALLY PROVIDE WITH CONDITIONS
(GEOGRAPHICAL POSITION AND LEGAL READINESS OF THE VESSEL) TO BE MET
BEFORE THE VESSEL IS CONSIDERED AN ARRIVED SHIP. THIS IS DONE BY THE USE OF
WORDS SUCH AS WIBON – WHETHER IN BERTH OR NOT, WIPON – WHETHER IN PORT
OR NOT, WIFPON – WHETHER IN FREE-PRATIQUE OR NOT, WCCON – WHETHER
CUSTOMS CLEARED OR NOT.
2. A VESSEL IS READY TO LOAD: TO ACCOMPLISH FOR THIS HER EQUIPMENT (PUMPS,
DERRICKS, CRANES ETC) AS WELL CARGO COMPARTMENTS SHOULD BE CLEAN AND
READY TO RECEIVE THE INTENDED CARGO. THE CHARTER PARTIES GENRALLY
PROVIDE FOR A CHARTERER’S SURVEYOR OR AN INDEPENDENT SURVEYOR TO
INSPECT THE HOLDS AND CERTIFY THEM FIT FOR RECEIVING CARGO.
19. IF THE CHARTERER’S DO NOT ACCEPT NOR: SOMETIMES IT IS POSSIBLE THAT THE
SURVEYOR REJECTS THE HOLDS/TANKS AND THE CHARTERERS DO NOT ACCEPT THE
NOR. CHARTERERS GENERALLY DO THIS WHEN THE CARGO IS NOT READY AND THEY DO
NOT WANT THE LAYTIME TO COMMENCE. THE MASTER MUST DEAL FIRMLY WITH THIS
SITUATION, IF HE IS CONVINCED THAT HIS HOLDS/TANKS ARE READY AND IN A GOOD
CONDITION AND THE CHARTERERS AND SURVEYORS HAVE INTENTIONALLY DONE THIS
THEN THE MASTER MUST:
1. POLITELY POINT OR AND PUT ON RECORDS THE TRUE STATE OF THE HOLDS OR TANKS
(IF POSSIBLE TAKE PHOTOGRAPHS),

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2. POINT OUT TO THE CHARTERERS THAT IN THE FINAL ANALYSIS THE RESPONSIBILITY
FOR THE RECEPTION, CARRIAGE AND DELIVERY OF THE CARGO IS HIS,
3. CALL FOR AN INDEPENDENT SURVEYOR – PREFERABLY A P & I CLUB LOCAL
CORRESPONDENT AND OBTAIN HIS REPORT (SUPPORTED BY PHOTOGRAOHS TAKEN
BY THE SURVEYOR),
4. INFORM THE OWNERS, AND
5. ISSUE A NOTE OF PROTEST.