The Standard Voyage - Case Study Example

Abstract It can observed from the study that, The contract between the ship-owner and the charter party provides an assortment of normal voyage charter forms customized for diverse trading routes as well as the carriage of diverse cargoes. The study farther enlighten that, the parties to a contract can also create their personal agreement and in some circumstance can adapt the terms and condition of the prevailing forms (United Nations Conference on Trade and Development 1990). Non-compliance of the parties’ obligation would lead to compensation in form of deadweight since, the breach of contract by a party to a contract would create some inconveniences to the other party and as a result, the remedy to breach of contract is compensation for loss suffered at the time of contract Introduction The standard voyage forms distinguish the contracting parties, the vessel as well as the contracted voyage. The only feature of the vessel’s details that is of whichever concern to the charter is the capacity of the cargo in voyage since, any deficiency that may arouse in the vessel’s performance is at risk of the ship-owner. In this regards, cargo capacity will usually be expressed by way of deadweight tonnage which when converted implies the weight of the cargo that the vessel is capable of shipping when weighted down to its utmost allowed draught (Institute of Chartered Shipbrokers (ICS) 2005). This study strive to analyze, make comparison as well as contrast the dissimilarities between the two charter parties, and as such note the responsibilities of the ship-owner as well as those of the charters under both forms. Ship owner’s obligations under AMWELSH 93 charter party There are four phases of a charter voyage: the initial voyage, loading at port, carrying voyage as well as the discharge at port (Wilson 2008). Within this progression, the stages inclusive of the ship-owner as well as the charters will try to come up with diverse accountability. If they are not in a position to do so, the charter party attains and a promising result. In the initial voyage, the accountability is simply on the ship proprietor to get the vessel to the loading port within a specific ETA, Moreover, the Amwelsh 93 charter party do not provide for such provision to stipulate where the vessel present position is. This may be relevant for the charter to be in a good position to more precisely ascertain the vessel arrival more specifically if the master deviate from the right path of routing, even though is not imperative since, both charter parties have a cancellation date. The chatterers are held accountable of choose a secure port of handling the investment cargo. The clause providing the procedure of handling the venture between both parties is provided in detail below. Freight clause The charter party shall specify the freight charges, unit of measurement, place of destination as well as the time and place of payment. Where a cargo is put on scale both at loading point and at charge point, the variance are consequential of weighing machine error or natural calamity. In this regards, some cargo will be subject to spillage or evaporation and consequently, it will reduce the weight (Baatz 2008). It is for this reasons that many cargo are quoted at a lumpsum for the voyage regardless of their quantity of cargo shipped. By doing so, the problem weight decrease/increase in transit will be reduced. A small benefit will be realized when lump sum rules is appreciated where the cargo is shipped in bulk and responsibility for providing entire cargo lies with the charters since, in the event that there is occurrence of lose, the amount will be compensated by way of dead freight. At the time of entering the contract, the parties ensures whether freight is payable in advance at the date of signing the bill of lading or at the point of delivery of cargo at their destination. Consequence of non-fulfillment of obligation Even where the gross terms are quoted, handling charging rates are accounted on the ship-owner and thus the ship-owner will frequently secure himself from such liability provided that such cargo do not exceeds certain specified rate per cargo. Where the goods exceeds the agreed rate per cargo, then the charter will be liable to pay the excess Lay time provision This is one of the relevant clauses in voyage charter party since; the clause clarifies the amount of time for loading and unloading the cargo. The time is free of charge to the charter since, the charter is considered to have paid it in the freight. where the agreed laid days is exceeded ,the charter will have to pay the ship-owners the agreed amount as damages .An agreement leading to signing the charter ,as a result, however will make the charter anxious to secure number of days to cover up for the unknown risk that will be consequential during the loading and unloading period. Consequence of non-fulfillment of obligation Where the charter do not comply to this clause, he will be required to pay compensation as deadweight since, the owner of the ship consider that the ship is delayed for other business which is not catered for under the contract. Cargo clause Where a seller for chipping of goods chatters a vessel, the description of goods must be specific, where the cargo is that of a general trading venture, the charter may therefore be allowed to choose more than one from a specified assortment of cargoes (Institute of Chartered Shipbrokers (ICS) 2005). Consequence of non-fulfillment of this obligation Where the charter do not provide the fully quantity of cargo, then he will be held liable for the compensation for the shortfall by way of dead freight. Lay day /cancelling The charter will have the right of cancelling the contract not later than one week from the time the notice was tendered. The canceling date and time shall extend by days where the chatter fails to give the loading port orders as provided in the article 3 devoid of owners prejudice claim for detention. Where the owner warrant that despite due diligence on the side of the owner, the vessel will not be prepared to tender notice of readiness by cancelling date. In addition, the owner will be in a good position to state with relevant certainty the date and time in which the vessel will be ready. They can require the charter within a week from the time the vessel is anticipated to be ready to declare whether or not they will cancel the charter. DESPATCH CLAUSE Dispatch money is the reimbursement compensated to charterers provided the charter party entails a specification to this effect if the loading or discharging operations are finished within the lay time allowable by the charter party, that is, prior to the approved lay time has run out. The dispatch money is the contrary of demurrage (Institute of Chartered Shipbrokers (ICS) 2005). The cause for the reimbursement is to repay charterers, shippers or consignees for any operating cost they may have sustained in order to save time to the ship. Dispatch is not billed if the charter party does not enclose a clause providing for its imbursement. Where the charterers in reality incur operating cost in order to organize for a faster turn round, it is necessary to charge send off cash for working time saved, as evidently it is moreover in the ship owners’ awareness to have their vessels turned around promptly. The key point is that the definite rate of loading or discharge estimates the standard capability of the ports in query. If the rates of loading and discharge have been set at an idealistically low level, which in no way match up with the standard services of the ports, such accomplishment can only be look upon as a device to earn an extreme sum of dispatch cash. Consequence of non-fulfillment of the obligation Where the obligation is not fulfilled under the contract, the customs usages or practices of the trade as well as the circumstances of carriage, supply could probable be anticipated. B. Charter’s obligations under ASBATANKVOY charter party A.WARRANTY-VOYAGE-CARGO The acknowledged ship as exact in the contract shall with all expedient send the cargo as prearranged to loading harbor identified in the agreement entered to between the ship-owner and the chatterer. Having the ship in good condition, then the contract should specify the capacity to be shipped and it should not be more than what the ship can rationally store and take over. The fresh food, reservoir feed, cooking, drinking water, and complement as well as their consequence and being so loaded, shall immediately continue as prearranged on signing Bill of Lading direct to the releasing Port or so close to thereunto (United Nations Conference on Trade and Development 1990). As the ship might carefully get (always afloat) and transport the supposed freight. Whether the Charter demands the heating of the consignment, the proprietor shall put into effect due diligence to uphold the temperatures demanded by the charter B.FREIGHT shipment shall be at the rate predetermined in The contract agreed and shall be worked out on intake magnitude apart from dead freight as per the section 3 as depicted on the supervisor’s official document of examination. Imbursement Of cargo shall be made by Charters devoid of markdown upon release of consignment at end of shipment take away any payment or advances made to the Master or proprietor representative at offloading port as well as the relevant charge of indemnity thereon. No assumption of shipment shall be made for water and/or residue enclosed in the freight. The Charters who shall supply the proprietor with a duplicate of the inspector’s credential shall examine the services of the oil examiner as well as salaried for. C. DEMURRAGE The Charters shall take the liability of paying for demurrage on per hour basis as well as pro rata for a Part thereof at the rate specified in the contract between the ship-owner and the chatterer (Institute of Chartered Shipbrokers (ICS) 2005).This will be effective from the loading time to time of discharge. If only where the demurrage shall be expensed at ports of loading and/or offloading by circumstances of fire outburst, hurricane or by a hit, wildcat strike or self-control of labor or by breakdown of equipment, the rate of demurrage shall be cut one-half of the sum stated in the contract per hour of work or pro rata for part of an hour for demurrage that was expensed (Wilson, 2008). The Charters shall not be legally responsible for any demurrage for holdup consequential by hit, lockout, wildcat strike or self-control of labor for Master, bureaucrat as well as crew of the Vessel or pilots. Conclusion Charter party ought to comply with the contract to ship goods from the loading port to the discharge point under the terms agreed upon at the time of contract. The charter and the ship-owner are bound to observe the obligation under the article provided in order to minimize consequences of misunderstanding as well as the risk of goods in voyage (Baatz 2008). In this regard, the charter must provide the ship owner with the lay time period, deadweight of goods as well as the demurrage rate if any in order to avoid the risk of paying the owner of the ship compensation for extra time that they undertook in either loading or discharging goods. There is a definite regularity in the fundamental structure of a voyage charter. The most important fundamentals of which it might be constructive to recognize so that there is a clear understanding between the parties to a contract some of the definite regularity are; details of goods, the lay time, circumstance that might lead to cancellation as well as the berthing port(Institute of Chartered Shipbrokers (ICS) 2005). . The charter is also allowed to decide the loading and offloading port that he deem safe since, this will reduce misunderstanding that might arose with its effect leading to compensation to ship owner due to delay in offloading and or route taken that took long time beyond the agreed voyage period in the contract. In addition, the vessel must dock in a port that can safely float and as a result, the charter must consider the destination port and its effectives to the vessel prior to completion of the contract. Reference list Baatz, Y 2008, ' excerpt from ‘Charter parties’, in Southampton on shipping Law, Institute of Maritime Law, Informa Law', pp. 44-48. Baatz, Y 2008, excerpt from ‘Charter parties’, in Southampton on shipping Law, Institute of Maritime Law, Informa Law, John Willey's, london. Institute of Chartered Shipbrokers (ICS), 2006, Dry Cargo Chartering, Witherby & Company Ltd, john willey's, london. Institute of Chartered Shipbrokers (ICS) 2005, ‘The Baltic and international maritime council. United Nations Conference on Trade and Development 1990, ' working group on International Shipping Legislation,', Item 3 of Agenda, p. p. 80. Wilson, JF 2008, Carriage of goods by sea, 6th edn, Pearson Education Limited, , Harlow. Read More

Freight clause The charter party shall specify the freight charges, unit of measurement, place of destination as well as the time and place of payment. Where a cargo is put on scale both at loading point and at charge point, the variance are consequential of weighing machine error or natural calamity. In this regards, some cargo will be subject to spillage or evaporation and consequently, it will reduce the weight (Baatz 2008). It is for this reasons that many cargo are quoted at a lumpsum for the voyage regardless of their quantity of cargo shipped.

By doing so, the problem weight decrease/increase in transit will be reduced. A small benefit will be realized when lump sum rules is appreciated where the cargo is shipped in bulk and responsibility for providing entire cargo lies with the charters since, in the event that there is occurrence of lose, the amount will be compensated by way of dead freight. At the time of entering the contract, the parties ensures whether freight is payable in advance at the date of signing the bill of lading or at the point of delivery of cargo at their destination.

Consequence of non-fulfillment of obligation Even where the gross terms are quoted, handling charging rates are accounted on the ship-owner and thus the ship-owner will frequently secure himself from such liability provided that such cargo do not exceeds certain specified rate per cargo. Where the goods exceeds the agreed rate per cargo, then the charter will be liable to pay the excess Lay time provision This is one of the relevant clauses in voyage charter party since; the clause clarifies the amount of time for loading and unloading the cargo.

The time is free of charge to the charter since, the charter is considered to have paid it in the freight. where the agreed laid days is exceeded ,the charter will have to pay the ship-owners the agreed amount as damages .An agreement leading to signing the charter ,as a result, however will make the charter anxious to secure number of days to cover up for the unknown risk that will be consequential during the loading and unloading period. Consequence of non-fulfillment of obligation Where the charter do not comply to this clause, he will be required to pay compensation as deadweight since, the owner of the ship consider that the ship is delayed for other business which is not catered for under the contract.

Cargo clause Where a seller for chipping of goods chatters a vessel, the description of goods must be specific, where the cargo is that of a general trading venture, the charter may therefore be allowed to choose more than one from a specified assortment of cargoes (Institute of Chartered Shipbrokers (ICS) 2005). Consequence of non-fulfillment of this obligation Where the charter do not provide the fully quantity of cargo, then he will be held liable for the compensation for the shortfall by way of dead freight.

Lay day /cancelling The charter will have the right of cancelling the contract not later than one week from the time the notice was tendered. The canceling date and time shall extend by days where the chatter fails to give the loading port orders as provided in the article 3 devoid of owners prejudice claim for detention. Where the owner warrant that despite due diligence on the side of the owner, the vessel will not be prepared to tender notice of readiness by cancelling date. In addition, the owner will be in a good position to state with relevant certainty the date and time in which the vessel will be ready.

They can require the charter within a week from the time the vessel is anticipated to be ready to declare whether or not they will cancel the charter. DESPATCH CLAUSE Dispatch money is the reimbursement compensated to charterers provided the charter party entails a specification to this effect if the loading or discharging operations are finished within the lay time allowable by the charter party, that is, prior to the approved lay time has run out. The dispatch money is the contrary of demurrage (Institute of Chartered Shipbrokers (ICS) 2005).

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