2

Contents
Contents 3
Abbreviations 7
1. Introduction 9
1.1. Background 9
1.2. Purpose 9
1.3. Disposition 9
2. Method 11
2.1. General 11
2.2. The relevant legal sources 11
2.3. The Swedish maritime code 12
2.3.1. The modern code 12
2.3.2. The rules concerning time chartering 12
2.3.3. The principle of freedom of contract 13
2.4. Other legal sources 14
2.4.1. The use of Scandinavian law 14
2.4.2. The use of English law 15
2.4.3. Standard charterparty forms 16
2.5. The method and process of construction 17
2.5.1. The construction of statutes 17
2.5.2. The construction of time charterparties 17
3. The nature of the time charterparty 19
3.1. The characteristics of a time charterparty 19
3.2. The practical use of time charterparties 21
3.3. The master’s position 21
3.3.1. General 21
3.3.2. The legal position 22
4. General on orders 23
4.1. The master’s duties 23
4.1.1. The duty to obey orders 23
4.1.2. The duty to render customary assistance 24
4.2. The different types of orders 25
4.3. The master’s response 25
4.4. Factors to take into account when acting on a given order 27
4.4.1. General 27
4.4.2. Safety factors 27
4.4.3. Commercial factors 28
4.4.4. Legal factors 29
4.5. Consequences of an initial refusal 29
4.5.1. The master’s possibility to seek instructions 29
4.5.2. The master’s delay in obeying the given order 30
4.5.3. The Houda Case 30
4.5.4. Conclusions 32
4.6. Legal consequences 32
3

5. Orders concerning the ship’s destination 35
5.1. General 35
5.2. Nomination of the port of call 35
5.2.1. General 35
5.2.2. The obligation to nominate a safe port 35
5.2.3. The relevant period of time 37
5.2.4. Definition of a safe port 37
5.2.4.1. General 37
5.2.4.2. The core meaning of a “safe port” 38
5.2.4.3. Extended definition of a “safe port” 39
5.2.4.4. Conclusions 40
5.2.5. The legal consequences of ordering the ship to an unsafe port 40
5.2.6. The master’s position 42
5.3. Limitations in the charterparty 43
5.3.1. General 43
5.3.2. Trading limits 43
5.3.3. Ice clauses 44
5.3.4. War clauses 44
5.3.5. The master’s position 45
6. Orders concerning the voyage itself 47
6.1. General 47
6.2. The charterer’s authority to give voyage orders 47
6.3. The separation between commercial and navigational orders 49
6.3.1. General 49
6.3.2. The Hill Harmony case 49
6.4. The master’s position 51
7. Orders concerning the loading and discharging process 53
7.1. General 53
7.2. The loading and discharging process 53
7.2.1. The charterer’s control 53
7.2.2. The definition of seaworthiness 54
7.2.3. The master’s position 55
7.3. Orders concerning the disposal of the ship’s transport capacity 55
7.3.1. General 55
7.3.2. Unlawful cargo 56
7.3.2.1. General 56
7.3.2.2. Various situations when cargo can be classified as unlawful 57
7.3.2.3. Conclusions 59
7.3.3. Dangerous cargo 60
7.3.3.1. General 60
7.3.3.2. Different types of dangerous cargo 61
7.3.4. The master’s position 62
8. Orders concerning the signing of the bill of lading 64
8.1. General 64
8.2. The master’s obligation to issue a bill of lading 64
8.3. Orders concerning the content of the bill of lading 66
8.3.1. General 66
8.3.2. A request to sign a clean bill of lading 66
4

8.3.3. Other misstatements in the bill 67
8.3.4. Bills containing clauses which are inconsistent with the charterparty 68
8.3.5. Bills incorporating a “manifestly inconsistent” term 69
9. Orders concerning the delivery of the cargo 70
9.1. General 70
9.2. Delivery to a receiver who does not posses a bill of lading 70
9.2.1. The special nature of the bill of lading 70
9.2.2. An order to deliver to an unauthorized receiver 71
9.2.3. The Houda case 73
9.2.4. The master’s position 75
9.3. Orders concerning changes in the port of discharge and in the bill of lading 76
9.3.1. General 76
9.3.2. Changes in the bill of lading 76
9.3.3. The issuance of a new set of bills 77
9.3.4. Changes of the port of discharge 78
10. Redelivery of the ship 80
10.1. General 80
10.2. Time of redelivery 80
10.3. Last voyage orders 82
10.4. The master’s position 83
11. String charters 84
11.1. General 84
11.2. The charterer’s right to sublet the ship 85
11.3. The legal consequences of the ship being sublet 85
11.4. The master’s position 86
12. Conclusions 87
List of sources 89
5

6

Abbreviations
Acts
The Swedish Maritime Code
MC old MC
Sjöloven
Preparatory works
SOU
Prop.
Law journals and law reports
AfS
Ll. L. Rep.
Lloyd´s Rep.
LMCLQ
ND
NJA
Standard charterparties
Baltime
Gentime
7
Sjölag 1994:1009 (i.e.: the maritime code).
The Swedish Maritime Code.
The 1891 Swedish Maritime code. The old code that was replaced by the new code from
1994.
Lov om sjöfarten (Sjöloven) (i.e.: the maritime code). The Norwegian Maritime Code, from
1994.
Svensk Offentlig Utredning (i.e.: reports from commissions appointed by the government).
Proposition (i.e.: a government proposal to the parliament regarding enactments).
Arkiv for Sjörett.
Lloyd’s List Law Reports (1919-1950).
Lloyd’s List Law Reports (1951-1967),
Lloyd´s Law Reports (1968- ).
Lloyd’s Maritime and Commercial Law
Quarterly.
Nordiske Domme I Sjöfartsanliggender (i.e.: law report containing maritime law decisions from Scandinavian countries).
Nytt Juridiskt Arkiv (i.e.: law report containing Swedish Supreme Court decisions).
Uniform Time-Charter. A time charterparty form issued by BIMCO. The original version was issued in 1939, but was last time revised in 1974.
General Time Charter Party. A time charterparty form issued by BIMCO. Issued in
September 1999.

NYPE 1946
NYPE 1993
Shelltime 4
Other abbreviations
BIMCO
FONASBA
UN
8
New York Produce Exchange Form. A time charterparty form which were replaced by the
NYPE 1993 form. Revised, Revised October
3 rd 1946.
New York Produce Exchange Form. A time charterparty form issued by the Association of
Ship Brokers and Agents (U.S.A.), Inc.
Revised, September 14 th
1993.
A time charterparty form issued by Shell in
December 1984. The form is designed to be used for the leasing of tank ships.
Baltic and International Maritime Council. An international organisation based in
Copenhagen.
Federation of National Associations of Ship
Brokers and Agents. An U.S. organisation.
United Nations.

9
1. Introduction
1.1. Background
There are, initially, two parties to the time charter, the shipowner and the charterer.
They are the ones that agree to the contract. However, once the ship has been delivered to the charterer, and the hire continues to run, a third party, the master, appears. The master’s position can be described as unique and ambivalent. He is forced to divide his loyalty between the shipowner, who employs him, and the charterer, whose orders he is obliged to obey. To this comes that the master, as the highest authority on the ship, is responsible for the security of the ship, her crew and cargo. The master will, because of his position, often face uncertain situations and must, even though he usually have some discretion, act prudent.
A time charterparty grants the charterer an extensive of control over the ship and its crew. This extensive control tends to make it hard to determine the exact scope of the charterer’s general authority to use the ship and, in the end, his right to give orders to the master.
To this comes the master whose position complicates the relationship further. The master is obliged to obey the legal orders that the charterer gives, i.e. such orders which the charterer has authority to give. It can be problematic to determine whether an order is legal or not since there are a number of factors that limits the charterer’s authority which must be accounted for. There is not always a straightforward and clear-cut answer to the question whether an order is legal or not. To this comes that the charterer may not always require that a given order shall be carried out immediately. In certain situations the master is granted some time for consideration and consultation with the shipowner.
1.2. Purpose
The purpose of this paper is to examine, and discuss, the relationship between the time charterer and the ship’s master. I will try to determine what authority the charterer, according to Swedish law, has to give orders to the master. The different types of orders which the charterer may give and the master’s possible responses will be examined.
1.3. Disposition
The paper’s disposition is as follows: Chapter two is about the method used. It takes the form of an account of the relevant legal sources and how I intend to use those sources in the paper. Chapter three examines the nature of the time charterparty. To examine and discuss this is important since it is possible to base an argument in that nature. The master’s position will also be examined. Chapter four contains a general survey of the different orders which the time charterer can give to the master. After this chapter follows an account of the different types of orders that the time charterer may give.
Chapter five examines the charterer’s right to nominate different ports of discharge.
The charterer’s obligation only to order the ship to safe ports is examined. Also, three common charterparty clauses (the agreed trade are, ice clauses and war clauses) are discussed. These four limitations of the charterer’s right to dispose of the ship are considered to be of a so called “guarantee character”. Chapter six examines orders which concern the voyage. The difference between orders as to the ship’s employment and as to the ship’s navigation is examined. Chapter seven is about the loading and discharging process. The charterer’s authority to give orders concerning the processes’ themselves and what kind of goods the charterer is allowed to transport onboard is

10 examined. Chapter eight will deal with the questions that arise when a bill of lading is issued. Chapter nine examines orders as to the discharge of cargo. Chapter ten concerns the question of the ship’s redelivery and to what extent the master is obliged to obey the so called last voyage orders. Basically the question is to what extent the charterer may order the master to undertake a last voyage before the ship is to be redelivered to the shipowner.
After this account, of the different types of orders, follow two concluding chapters.
Chapter eleven deals with the question of sub-letting. I will examine what kind of orders, given by a subcharterer, the master is obliged to obey. The final chapter, chapter twelve, contains a short summary of the paper.

11
2. Method
2.1. General
The starting-point for my examination will be the Swedish maritime code and the relevant Swedish case law. Since the maritime code does not provide a comprehensive solution to all aspects of a time charter other circumstantial law must also be taken into account. Other Scandinavian precedents will, because of the common Scandinavian maritime law, also be used. The discussion will be widened by looking at English law and English cases. This comparative study is necessary since I believe that the English solutions may be quite useful when one is trying to determine what applies according to
Swedish and Scandinavian law. Such comparative studies also have a purpose of its’ own. It is a way to widen the discussion and to get ideas and arguments which may be applied when discussing Swedish law. Further, since there is, in the business, a wide spread use of standard charterparty forms I will exemplify the discussion with these forms.
To these sources comes the nature of the time charterparty itself. The relationship between the parties must be viewed upon and, consequently, interpreted in the light of the special type of legal figure which the time charter represents. The provisions in the
Swedish maritime code and the clauses in the standard forms are, after all, based upon this legal figure.
2.2. The relevant legal sources
In order to determine the legal order one must examine the relevant and available legal sources. It is, for the purpose of this paper, possible to categorize the relevant legal sources into four groups.
1
The first relevant legal source is the charterparty itself. Since the principal of freedom of contract prevails in this area of law the contract itself is important. The relationship, between the charterer and the shipowner, rests upon the charterparty and the charterer acquires his right to give orders to the master through it. The second source is the existing mandatory rules. Even though they are few, some mandatory rules exist.
These rules must be obeyed; they may not be set aside through a contract. Naturally such rules will limit the parties’ authority, i.e. the charterer’s right to give orders to the master. The third category is the existing supplemental rules. Due to the prevailing principle of freedom of contract other rules provided by law are, by necessity, supplemental. There are essentially two types of supplemental rules, legislation and precedents. To this comes, in Swedish law, the preparatory works. Finally, standards of good seamanship and customary commercial practice are of importance. These factors must, for two reasons, be taken into account. First, the charterparty must be construed in the light of the relevant business practice. Second, the relevant supplemental rules may be based on this practice. Also, when it comes to customary commercial practice it has, in Swedish law, the same effect as optional legal rules when a court fills out a commercial contract.
Since the Swedish legal system is a code based one an inquiry such as this must, quite naturally, start in the Swedish maritime code and the preparatory works that preceded the code. Other, circumstantial codes may also be of importance. The maritime code contains some rules which concerns time charters. Since the provisions in the code, in principal, are optional they may be set aside by the parties to the
1 Cf. Falkanger, Introduction to Maritime Law, p. 374.

12 charterparty. Because of this the standard forms which are used will therefore, in principal, decide the relationship between the parties. However, even though optional, the maritime code will affect Swedish courts when they construe the different clauses in the charterparty (see 2.5.2.). A clause will be construed in the light of the corresponding regulation in the code.
2 Thus, the starting-point of my inquiry will be in the relevant sections of the maritime code.
The maritime code, as all Swedish legislation, is based upon preparatory works. The purpose of these works is to, in detail, discuss and explain the proposed legislation. The preparatory works are considered to be of utmost importance and they are heavily relied on by a court when construing a statute. This reliance is based on, and should be viewed in the light of how the legislative process is designed. Most of the legislative work is done within the ministry that initiated the legislative process and by appointed legislative commissions. When the proposed legislation finally is presented to the parliament the debates concerning it are mostly very short and, in principle, of no legal importance. It is only in exceptional cases that the members of the parliament introduce last-minute amendments in a proposed bill. Thus, all the relevant aspects of the legislation have been considered in the written preparatory works. I will, therefore, use the relevant preparatory works in order to construe specific sections in the maritime code and to examine and discuss the more general, underlying principles of the code
(see 2.5.1.).
2.3. The Swedish maritime code
2.3.1. The modern code
The Swedish maritime code dates back to 1994. The Nordic countries, Norway,
Denmark, Finland and Sweden, then implemented a common maritime code. Iceland is, however, excluded. A series of meetings and conferences took place during the 1980’s and 90’s.
3
This common work made way for a common maritime code. There are some differences in the code’s individual rules, but in general the rules are the same in all four countries. It is, at least partly, because of the common code possible to speak about a common Scandinavian maritime law (see 2.4.1.).
The old maritime code, which was replaced by the 1994 code, dated back to 1891.
The old time charter rules were updated and adapted to fit the modern charter market.
When drafting the code the legislative committee aimed to make the code’s rules consistent with the prevailing time charter practice. It is, in the preparatory works, expressly stated that, the rules concerning the chartering of ships, should be regarded as a composite of rules, gathered from various important standard forms.
4
2.3.2. The rules concerning time chartering
The rules concerning time charters are contained in chapter 14 of the code. According to
MC 14:1 paragraph one the chapter has a wide scope of application. The section states:
“The provisions on chartering apply to whole vessel chartering and part chartering.”
Thus, chapter 14 regulates all forms of chartering. Both voyage- and time charters are covered by the regulations therein.
2 Cf. SOU 1990:13, pp. 85-6.
3 Cf. SOU 1990:13, p. 70.
4 SOU 1990:13, pp. 12, 16.

13
Before the modern code was implemented there were few statutory rules concerning time chartering in Swedish maritime law, and those statues that existed were worded in general terms.
5
According to the preparatory works, there were two reasons for implementing such rules in the code. First, attention was, during the Nordic deliberations that preceded the MC, called to the increasing significance of the practice of time chartering in the modern maritime business. An underlying purpose of the provisions is that they should provide a well though-out solution. The solution in the code is to be viewed as a “normal” solution. Since this “normal” solution applies unless the parties have agreed to contrary, passivity becomes an option. The code’s regulation of time charters can be seen as a service to the Nordic shipowners and charterers.
Instead of regulating one or more aspects of the time charter in the charterparty they can instead rely upon the code’s “normal” solution.
6
Second, the implementation of these regulations was also believed to facilitate the possibility to hold arbitration proceedings in the Nordic countries. The majority of time charterparties names London or New York as the place of arbitration. This practice has, over time, become increasingly costly and time-consuming for Nordic shipowners and time charterers. The creation of these modern rules, the “normal” solution, would then facilitate for such proceedings to be held in one of the Nordic countries.
7
However, even though the purpose was to create a “normal” solution, the regulations in chapter 14 does not form a comprehensive set of rules. The regulations do not cover all situations which may arise during the charter period. This was, however, acknowledged in the preparatory works. It is expressly stated that circumstantial law may be used as a supplement to the code’s rules.
8
2.3.3 The principle of freedom of contract
The overriding principle that governs chapter 14 of the Swedish maritime code is the principle of freedom of contract. The principle is expressly established in MC 14:2 paragraph one. It states:
“The provisions of this chapter are not applied to the extent that anything else follows from the contract, any practice developed between the parties or any custom of the trade or other usage which must be considered binding upon the parties.”
Thus, the principal rule is that the code’s provisions are optional. According to MC 14:2 the rules concerning time charters may be set aside in three ways. First, an express agreement between the parties can set aside the optional rules. Such an agreement is, most easily, done through the charterparty itself. It is done by using one of the standard forms or by making an individual agreement. Second, if any practice, which deviates from the rules in the code, has developed between the parties this practice substitute the code’s rules. In other words, if such practice evolves it is considered to have become a part of the agreement between the parties.
9
Third, an existing custom of the trade or other such usage will, if deviating, also apply instead of the code’s rules. An additional prerequisite is that only custom or usage which is considered to be binding set aside the code’s optional rules. When determining the validity of such custom or usage one must
5 SOU 1990:13, pp. 200-1.
6 SOU 1990:13, pp. 85-6, 200-1.
7 SOU 1990:13, p. 201.
8 SOU 1990:13, pp. 200-1.
9 SOU 1990:13, p. 172. Cf. Lehrberg, Praktisk juridisk metod, pp. 82-4.

14 always consider the circumstances in each individual case. Examples of such circumstances are the custom’s firmness and prevalence, the parties’ knowledge of it, the custom’s origin and its suitability.
10
If such deviating rules exist the consequence is then, quite naturally, that they substitute the code’s rules and applies to the time charter.
There are, however, some limitations to the principle of freedom of contract. In the
Swedish maritime code a number of such limitations are expressly stated. For the parties to a time charterparty it is only MC 14:5, which MC 14:2 paragraph four refers to, that is of interest. The section states:
“If the carrier issues a bill of lading for goods carried on the ship, the bill of lading determines the conditions for the carriage and delivery of the goods as regards the relationship between the carrier and the third party holder of the bill of lading. Provisions in the charterparty which have not been inserted in the bill of lading may not be invoked against the third party unless the bill refers to them.
The provisions on bill of lading in chapter 13 sections 45-47 apply also to such a bill of lading as is mentioned in the first paragraph. Where the provisions of chapter 13 apply to a bill of lading by virtue of section 3 of that chapter, the carrier’s liability and rights in relation to the third party are determined by appropriate application of the rules of chapter 13 sections 4 and 24-40.”
As can be seen from the text the parties’ possibility to form their own solutions is limited by the rules that concern the bill of lading. The reason for this is that these rules, which originate in The Hague- and The Hague-Visby Rules, are mandatory. As will later be discussed, these mandatory rules will indirectly affect the time charterer’s authority to give orders to the master (see 4.4.4.).
Another limitation to the principle of freedom of contract derives from an underlying, general legal principle. A rule or regulation which purpose is to protect the interest of a third party is deemed to be mandatory. The parties involved in an agreement may not deprive a third party from such a protection.
11
An example of this principle is the express ban in MC 14:5. This principle also limits the charterer’s possibilities when he sub-charters the ship (see 11).
These limitations of the principle of freedom of contract are of importance for this paper. If follows, quite naturally, that the parties behaviour, when being subjected to
Swedish law, must comply with the mandatory rules that exists in the maritime code.
These situations will be thoroughly discussed below (see 4.4.4.).
2.4. Other legal sources
2.4.1. The use of Scandinavian law
It is possible to talk about a Scandinavian maritime law. There are, in principal three reasons for this. First, there is a common Scandinavian legislation in the maritime area.
12
The maritime codes that are currently in use in the Scandinavian countries have a common origin. There has been a conscious effort from the Nordic legislative assemblies to create this common legislation. Second, there is a common Scandinavian case law in the area of maritime law. This common practice is, of course, based on the common legislation. Since the maritime codes, and the preparatory works which are used when construing the codes, have a common origin the case law has become similar. However, the roots of the common practice goes deeper than so. The respective countries Supreme Courts look at, refer to and, usually, follow each others decisions on
10 SOU 1990:13, p. 172. Cf. Lehrberg, Praktisk juridisk metod, pp. 84-6.
11 SOU 1990:13, p. 84.
12 Cf. Grönfors, Sjölagens bestämmelser om godsbefordran, p. 13, cf. NJA 1978 p. 24.

15 maritime matters. This has, of course, reinforced the development of such common case law. Finally, it is also important to remember that the legal traditions and systems of the
Scandinavian countries are quite similar. It is, after all, possible to distinguish a separate, Scandinavian legal family.
Of course the laws in the different Scandinavian countries are not completely homogenous. Despite the effort to create a common legislation some differences exists between the different codes. The case law will, in some cases, differ as well. It lies in the subjective nature of case law that deviations, however slight, will always arise between different decisions. Case law can never form a perfect, homogenous, noncontradictory set of rules. These deviations are further enhanced since there, after all, are four independent judiciaries. However, these variations and differences are slight indeed. Thus, it is possible to talk about a common Scandinavian maritime law.
I will, in the paper, therefore use other Scandinavian legal sources. Foremost
Scandinavian case law and the works of legal writers will be used. What has been established in another Scandinavian country will, unless otherwise has been proved, be regarded as Swedish law.
2.4.2. The use of English law
I will also, in the paper, refer to a number of English cases which I believe are of interest. One must then ask the question how relevant such cases are to Swedish law.
Can such cases be used at all? I believe so. It is apparent that Scandinavian and English law, on many points, are similar. These similarities are, of course, not a coincidence.
There are, at least, four various explanations for this.
First, the legal figure, the time charterparty, is the same in both legal systems. It is the same type of contract and the parties’ purposes for using the contract is the same.
There is also a corresponding view on the division of functions and risk allocation between the parties. In other words, the nature of the time charter is considered to be the same in both Scandinavia and England. Second, the principle of freedom of contract applies in both legal systems. It leaves it up to the parties to determine their respective rights and obligations. As a consequence of this there is a wide spread use of standard forms. Thus, it is the same contracts which are construed by both Scandinavian and
English courts. Third, the maritime business is a highly international market. From this follows that it is the same parties who act on both the Scandinavian and the English market and that these parties use the same standard forms. There are, however, numerous standard forms which are used by the parties on the market. Due to this internationality these different forms are designed in a similar way though. Thus, the parties using these forms naturally wants the same rights and obligations to apply each time they use these forms, they do not intend their contractual relationship to differ in different countries. Finally, one must keep in mind that, in the field of maritime law,
England and English law has had a great influence on Scandinavian law (as well as the laws in other countries world wide). A lot of the general rules and principles which are acknowledged world-wide come from English law.
In the light of this I believe that English cases could be most useful as a reference when examining Swedish and Scandinavian law. However, two caveats are in place.
First, the underlying law which is used by the courts to fill out the time charterparty differ. Even though the principal rule is freedom of contract, there exists an underlying law. If a charterparty is silent on a disputed question, it must be filled out. In the
Scandinavian countries the respective maritime code, together with general legal

16 principles, are used to for this task. In England, on the other hand, the common law is used. Even though most of the general principles and some of the actual, specific rules may be in concordance, one must keep in mind the differences between the two legal systems. Second, the theories behind and the processes used when construing a business contract, like a charterparty, differ. Since Scandinavian and English courts do not construe a contract in the same way similar clauses may, as a consequence, be construed in different ways.
13
Apparently one can not use English law or an English case as a blueprint when one wishes to determine what applies according to Swedish and
Scandinavian law. Nevertheless, I believe that English law might be most useful. Since there, after all, is a great deal of similarities one could look to English law for inspiration. Even though one must bear in mind that a Swedish court may reach a different conclusion on a maritime question, English cases are still well worth their time studying.
2.4.3. Standard charterparty forms
I will, also, in the paper refer to some of the standard forms that are used on the market.
They will be used as examples and compared to corresponding provisions in the
Swedish maritime code. I have chosen to focus on the Gentime, the NYPE 1993 and the
Shelltime 4 forms as examples. The reason I chose to use the Gentime and the NYPE
1993 is that they are the forms that are latest issued by their respective drafting organisation (see abbreviations). They can therefore be considered to be the most modern forms, i.e. the forms that are most up to date with the prevailing business practice. The Gentime and the NYPE 1993 forms should therefore also be the forms that are mostly in concord with the 1994 Swedish maritime code. A problem is, however, that the two forms are not widely used in practice. The shipping business still, to a large extent, uses the two older forms, i.e. the Baltime and the NYPE 1946 forms.
14
Due to this practice I will, in the discussion below, try to take at least the NYPE 1946 form into account. In some cases the old form contains a different solution than the solution found in the new form. Such deviating solutions may be of interest when comparing the
Swedish code to the existing standard forms.
The time charterparty has been known for quite a long time, and its use has increased over the last hundred years.
15
The time charterparty has, as so many other
English documents, developed slowly over time. Today, the standard forms that exist are used in the vast majority of time charters. These forms are internationally used and there are a number of different forms which are adapted for different trades. The use of these standard forms involves both advantages and disadvantages.
16
The advantage is that the document itself is well known by the people who works with it and comes in contact with it. Shipowners, brokers, charterers, lawyers and judges are familiar with it.
The uncertainties that exist in the documents find, over time, their interpretation. There are, however, also some disadvantages with the usage of standard forms. A time charterparty is, after all, a business contract. Such a document should, in order to avoid conflicts, be drafted in a plain and clear way. Its clauses should be coherent and placed in a natural sequence. The standard forms which exist today are, for two reasons, not drafted in such a way. To begin with, their evolution over time has contributed to this.
13 Cf. Falkanger, AfS 9, pp. 537-66.
14 Cf. Michelet, Håndbok i tidsbefraktning, pp. 2-3.
15 Cf. SOU 1990:13, pp. 200-1.
16 Cf. Michelet, Håndbok i tidsbefraktning, pp. 1-2.

17
The meaning, the interpretation of the forms’ clauses has constantly been disputed.
Over time, such disputes have been settled and the clauses have got their meaning. The problem is that the wording of the clauses may not, necessarily, be in concordance with the meaning which is put in them. Further, it is, after all, a standardised form. Even though the parties have a wide range of forms to choose from such forms does not take the parties’ individual factors into account. In order to make the form fit their specific relationship or situation, the parties may need to fill out or change the form’s clauses.
Such changes and amendments may complicate the construing process.
2.5. The method and process of construction
2.5.1. The construction of statutes
The starting-point of a process to construe a statute must be the text itself, i.e. the language of the statute in question. The statute is, after all, edified by the text.
17
It is not possible to stop here though. The language of a statute can never provide an answer to what the statute actually lays down. Words and language are by their nature ambiguous and vague.
18
A purely linguistic construction of a statute would therefore lead to both an unpredictable and undesirable result of the construing process. The key to statutory interpretation is instead to determine the purpose of the statute in question. Since the words of a statute rarely gives a straightforward and clear solution to a legal problem, statutes can only become meaningful if their words fit a meaningful purpose. If the statute’s purpose can be determined, that purpose can be used to solve the legal problems which arise.
19
When construing Swedish statutes an additional complication exists. The preparatory works that precedes the legislation are considered to be of utmost importance for the construction of the statute in question. There are a number of reasons why one should rely on these works.
20
Since the text statute itself is, by necessity, briefly written the preparatory works can be used as a guide in order to find the underlying purpose of the statute in question. The works can contain information about the situations which the statute aims to regulate and linguistic uncertainties may be straightened out by statements in the works. Further, another reason to pay regard to the works lies in the fact that the persons who have written them usually are highly skilled within the subject.
2.5.2. The construction of time charterparties
The question of how to construe a time charterparty was discussed in the preparatory works of the Swedish maritime code. It was stated that the comprehensive model which the optional rules fashions should be considered to be a well thought-out and a wellbalanced “normal” solution. Since this solution is an expression of legal political considerations it should not be easily set aside by the parties. Thus, a court should not construe a “common intention of the parties”, based on external circumstances only, which would deviate from this “normal” solution. Instead, there are good reasons to, in the first place, apply the “normal solution” when construing a charterparty. Only when
17 Lehrberg, Praktisk juridisk metod, pp. 79-80.
18 Carter, Reason in Law, pp. 23-4, 69-70, 84, Lehrberg, Praktisk juridisk metod, pp. 79-80.
19 Carter, Reason in law, pp. 83-85.
20 Cf. Lehrberg, Praktisk juridisk metod, pp. 86, 92-96.

18 the parties clearly have agreed on a deviating solution that solution should be recognized by a court.
21
It might, at first glance, seem like a far-reaching rule of construction. However, it was further stated that if a court was construing an English form that the parties had used on the international market the traditional English interpretation of its clauses should be applied. If the Swedish, optional solution would provide a different interpretation of a clause in the charterparty, the Swedish solution must yield to the traditional English interpretation.
22 Apparently, the parties, as a rule of construction, is then considered to have implicitly agreed to the English interpretation of the form’s clauses. Such use is considered to be such expressed behaviour that set aside the code’s optional rules.
So, where does this discussion lead to then? When a Swedish court is faced with the task to construe a charterparty clause it shall construe it in the light of the maritime code. The rules concerning time charters may be optional, but the parties are expected to clearly manifest any intentions to deviate from these rules. How the optional provisions may be set aside by the parties was discussed above (see 2.3.3.).
21 SOU 1990:13, pp. 85-6. It should be mentioned that the discussion in the preparatory works were held on a general level. Such a rule of construction is considered to be generally applied in Swedish law, not just to the maritime code.
22 SOU 1990:13, p. 86.

19
3. The nature of the time charterparty
3.1. The characteristics of a time charterparty
The rights and obligations of the shipowner and the time charterer are laid down in the contract, i.e. the charterparty. The charterparty reflects the nature of the time charter and, thus, it reflects the relationship between the parties to it. To quote Gaskell,
“(c)harterparties are examples of contracts in which one party, the charterer, is entitled to exercise some control over the conduct of an employee of the other party, the shipowner.” 23 It is in the charterparty where the shipowner and the charterer agree on their respective rights and obligations. Essentially, the scope of the charterer’s right to dispose of the ship is laid down in the charterparty. It follows that the charterer’s right to give orders to the master also is determined, explicitly or implicitly, therein. Thus, the starting-point, when examining the relationship between the charterer and the shipowner, must be the charterparty. First when one has examined and clarified this relationship, it is possible to bring the master into the equation. The charterer’s authority to give orders and the master’s position when receiving such an order must be viewed in the light of the charterparty. It is then possible to examine the different types of orders the charterer may give and how the master may respond to such orders.
The charterparty is, quite naturally, agreed to before some time before the charterer is entitled to take control of the ship. When the ship is delivered to the charterer the contract begins to apply, i.e. the ship goes on charter. It is at this moment that the charterer’s right to, in accordance with the charterparty, dispose of the vessel and give orders to the master sets in.
24 It has been stated that the nature and purpose of a time charter “is to enable the charterers to use the vessels during the period of the charters for trading in whatever manner they think fit.” 25
It is possible to account for some general characteristics that all time charterparties have in common. It is these general characteristics or qualities which makes the charterparty a time charterparty. If these are changed one would instead end up with a hybrid form or a totally different type of charterparty. In other words, these characteristics are the essence of the legal figure which is called the time charterparty.
When one discusses the nature of the time charterparty, that nature is a result of these characteristics. They can, roughly, be categorized into four groups.
First, the charterer leases the commercial capacity of the ship. Since he, through the charterparty, obtains the commercial control of the ship the charterer decides, for example, what cargo is to be loaded, when the loading operation and the laden voyage shall commence. The time charterer’s right to use the full commercial capacity of the ship is considered to be one of his fundamental rights under a time charter. It has been stated that the time charterer shall have the “full reach and burden” of the ship.
26
Second, the shipowner retains the navigational control of the ship. The division between the commercial and navigational control is inherent in the nature of time charterparties. If the charterer also would obtain the navigational control of the ship, it
23 Gaskell, Master and Charterer, p. 49, Gaskell, Charterers’ liability and damage to the vessel, pp. 3-4.
24 Falkanger, Introduction to Maritime Law, p. 426, Michelet, AfS 11, p. 592.
25 The Nanfri [1979] 1 Lloyd’s Rep., p. 206.
Cf. Time Charters, p. 327
26 Honka, Fartygets skick och egenskaper, pp. 405-407. Cf. Grönfors, Sjölagens bestämmelser om godsbefordran, pp. 257-8.

20 would become a bareboat charter instead of a time charter. A part of this navigational control is that it is the shipowner who appoints the ship’s master and crew.
27
Third, the division of the incurred expenses distinguishes a time charterparty from other types of charter. In principal, all charterparties contain one or more clauses which regulate the division of expenses.
28 The principal rule is that the shipowner shall bear the “fixed costs” while the charterer bears the “variable voyage costs”.
29
Thus, the shipowner is responsible for keeping the ship properly equipped, properly manned and maintained in a seaworthy condition. Capital costs is also be borne by the owner. The charterer must pay such expenses which are associated with his orders, i.e. port expenses, loading and discharging costs, bunkers and other voyage costs.
Finally, the concept of risk allocation is an important feature of a time charter. The division of the risk allocation between the shipowner and the time charterer is laid down in the regulations concerning off-hire and indemnity. The underlying principle in
Scandinavian law is that the hire runs continuously from the time when the ship is delivered to the charterer. The exception, i.e. when the ship goes off-hire, is when time is lost due to “hindrances on the part of the owner”. It is not a question of fault. If the cause rests with the charterer, or anyone he is responsible for, the underlying reason is irrelevant. It follows that the principal rule is that it is the shipowner who stands the risk of the ship being damaged due to normal, nautical events, the so called “perils of the seas”. When it comes to claims for damages or indemnity the underlying principle, in
Scandinavian law, is that the loss falls on the party on whose side the responsibility for the damage lies. The shipowner or the time charterer is liable for the damages he, or any person he answers for, causes through fault or neglect (see 4.6.).
These four, general characteristics deal with the relationship between the shipowner and the charterer. Since they apply to all time charterparties they have both a theoretical and practical use. The general legal principles that apply to time charters are based upon these characteristics. When discussing a legal question it is possible to support an argument with these principles. It is, when doing that, common to refer to the nature of the time charter. It follows from these characteristics that a time charterparty is not considered to be neither a lease nor a contract for hire. It is more correctly described as a contract for a provision of services.
30 The shipowner provides a service for the time charterer. He undertakes to, in return for hire, let the charterer use his ship, including the master and crew, for an agreed period of time. A summary of this view was stated in an
English case, The London Explorer . It was stated that:
31
“Under such a charter there is no hiring in the true sense. It is not disputed that throughout the chartered vessel remains in the possession of the owners, and the master and crew remain the owners’ servants.
What the charterer gets is a right to have the use of the vessel.”
27 Grönfors, Sjölagens bestämmelser om godsbefordran, p. 254.
28 Cf. Gentime cl. 13, NYPE 1993 cl. 6,7 and 9, Shelltime 4 cl. 6 and 7.
Cf. MC 14:67. It states: “The time charterer shall bear such expenses for the performance of voyages as are not borne by the carrier according to the provisions of this chapter.”
29 Cf. Falkanger, Introduction to Maritime Law, pp. 434-5, cf. Grönfors, Sjölagens bestämmelser om godsbefordran, p. 255, cf. Michelet, Håndbok i tidsbefraktning, pp. 142-147, cf. Time Charters, p. 217-
222.
30 Time Charters, p. 530.
31 The London Explorer [1971] 1 Lloyd’s Rep., p. 526.

21
A similar statement was made in The Madeleine case. It was stated that:
32
“An owner delivers a ship to a time charterer under this form of charter-party by placing her at the charterers’ disposal and by placing the services of her master, officers and crew at the charterers’ disposal, so that the charterers may thenceforth give orders (within the terms of the charter-party) as to the employment of the vessel to the master, officers and crew, which orders the owners contract that their servants shall obey.”
These two statements summarize the nature of the time charter quite well.
3.2. The practical use of time charterparties
Today, a significant proportion of the world’s, and the Nordic, fleet operates on time charter.
33
What are then the motives behind using such a charter type? From the charterer’s point of view, the principal advantage is that he, through time charter, may secure transport capacity without incurring the risks and burdens of having a fully owned fleet. This is useful when a temporary need of increased transport capacity arises. Another advantage with using chartered ships is that it is easier to phase-out a chartered ship than an owned one if the freight market turns sour or the charterer’s need of transport capacity for other reasons decreases.
From the shipowner’s point of view, the principal advantage is economic security.
Compared to voyage charter, which is the other major charter type, time charters has traditionally being considered to grant a larger economic security. The reason for this lies in the risk allocation that applies, i.e. the time charterer assumes a number of risks which the shipowner otherwise would bear. Since the shipowner assumes relatively few risks in a time charter it is possible for him to calculate the economic outcome of the charter period to a great extent. There are, essentially, three such risks that the time charterer assumes. First, the charterer carries the risk of delay. It is up to him to decide how the ship is used and how the voyages are to be performed during the charter period.
The drawback with such an extensive right of disposal is that he must pay the hire continuously even though he might not be able to use the ship as planned. For example, if the ship is held up in a port because the port is congested the hire continues to run.
The charterer can not make a claim against the shipowner for such losses. Second, the charterer is also obliged to pay a number of expenses as, for example, bunkers and port fees. The consequence of this is that the charterer carries the risk of a future increase of these expenses. Especially bunkers may, from time to time, be subject to steep rises in price. Third, the charterer carries the risk of arranging trips for the ship. It is up to the charterer to put the ship in use. Even if the market for carriage by sea drops and it is not possible to find employment for the ship the hire continues to run.
3.3. The master’s position
3.3.1. General
The master has a particular and an ambiguous position. On one hand, he is the shipowner’s employee and is expected to look after his interests. On the other hand, he is obliged to obey the charterer’s orders and assist him during the charter period. The problem, for the master, is that the shipowner’s and the charterer’s interests will, from time to time, be in conflict with each other. To this comes the fact that the master is
32 The Madeleine [1967] 2 Lloyd’s Rep., p. 238.
33 Cf. SOU 1990:13, pp. 200-1.

22 responsible for the security of the ship, her crew and cargo. He must make sure that the ship, continuously, is seaworthy and that no other dangers threaten this safety (see
4.4.2.). Such safety concerns may, from time to time, come in conflict with the charterer’s interests.
It is important for the master to act prudent. He must try to conciliate these different interests and concerns when a conflict arises. However, the master’s particular and exposed position has been acknowledged and he has been granted certain relief. The master is, if the charterer gives an order which the master is hesitant to obey, not expected to immediate determine how to act. He is, in such situations, allowed to contact the shipowner in order to get instructions from him (see 4.5.).
3.3.2. The legal position
One might, when considering the master’s peculiar position, ask what his legal position and status is. In other words, when the master acts, in what position does he act? In the
Swedish maritime code there is one provision, MC 14:52 paragraph two, which is of interest. It states that:
“On delivery the carrier shall ensure that the vessel’s … manning … fulfil the requirements of ordinary carriage in the sailing range stated in the time charterparty.”
The paragraph indicates that the master is the shipowner’s employee.
34
Nothing else can be construed from reading the text and nothing in the preparatory works indicates that a different interpretation ought to be made.
Further, Michelet has stated that the master, in all situations, should be considered to be the shipowner’s employee. There is nothing in Scandinavian case law or legal literature that indicates that the master in some situations should be considered to be acting on the time charterer’s behalf. Thus, even when the master executes the charterer’s orders he does that in the capacity as the shipowner’s employee.
35
A consequence of this is that the shipowner may be held liable for the wrongs and mistakes that the master commits when he executes the charterer’s orders.
36
34 Michelet, Håndbok i tidsbefraktning, p. 67.
35 Michelet, Håndbok i tidsbefraktning, p. 68.
36 Cf. MC 6:11, paragraph two which refer to section 4:1 of the Tort Liability Act (1972:207). According to the section in question, the employer is responsible for such damages which his employee causes through fault or neglect. An employee may only be held personally responsible for such damage if
“particular reasons” exist.

23
4. General on orders
4. 1. The master’s duties
4.1.1. The duty to obey orders
As been stated above, the charterer acquires, through the charterparty, a right to give orders to the master. However, all rights have a corresponding duty. Quite naturally the master has, during the charter period, a duty to obey the charterer’s orders. The rights of the charterer and the duties of the master form an intertwining relationship. To quote
Gaskell, “(c)harterparties are examples of contracts in which one party, the charterer, is entitled to exercise some control over the conduct of an employee of the other party, the shipowner.” 37
In the standard forms, such as the Gentime and the NYPE 1993, the charterer’s right to give orders to the master is explicitly stated. Gentime cl. 12 paragraph one states:
“The Master… shall at all times during the currency of this Charter Party be under the orders and directions of the Charterers as regards employment, agency or other arrangements. The Master shall prosecute all voyages with due dispatch…”
NYPE 1993 cl. 8 (a) states:
“(a) The Master shall perform the voyages with due despatch and shall render all customary assistance with the Vessel’s crew. The Master… shall be under the orders and directions of the Charterers as regards employment and agency… “
There is no corresponding clause, which explicitly states that the master is under the
“orders and directions” of the charterer, in the Swedish maritime code. However, the charterer’s general right to dispose of the ship is stated in MC 14:58 paragraph one. It states:
“During the period of the charter the carrier shall perform the voyages which the time charterer orders in accordance with the charterparty. …”
The paragraph lays down the shipowner’s principal obligation during the charter period.
38 In the Swedish code it is expressly stated that it is the charterparty itself which determines the limits for the charterer’s authority to give orders. In the two charterparty clauses this is implied.
39
When comparing MC 14:58 paragraph one with the Gentime and NYPE 1993 clauses it is apparent that the master’s duty to take orders from the charterer is not expressly stated in the code’s section. However, such a duty must be considered to be implied in the maritime code. There are two reasons for this. First, it follows from the nature of the time charter that the charterer should be entitled to give orders directly to the master. After all, he leases the commercial capacity of the ship.
This capacity includes the master and crew. The commercial use of the ship would be hampered if he would not be able to give orders directly to the master. Second, it is an existing custom of the trade that a time charterer acquires a right to give orders to the master. Since it is such a wide spread practice it ought to, in accordance with MC 14:2
37 Gaskell, Master and Charterer, p. 49, Gaskell, Charterer’s liability and damage to the vessel, pp. 3-4.
38 Prop. 1993/94:195, p. 313, SOU 1990:13, p. 206. Cf. Grönfors, Sjölagens bestämmelser om godsbefordran, pp. 253, 262.
39 Cf. Michelet, Håndbok i tidsbefraktning, pp. 62-3.

24 paragraph one, be considered an implied right in the charterparty which are binding upon the parties (2.3.3.).
4.1.2. The duty to render customary assistance
Besides the duty to obey the charterer’s orders the master is also under a duty to render so called “customary assistance”. A provision laying down such duty is found in MC
14:61 paragraph two. The paragraph states:
“The time charterer may require such assistance by the master and crew as is customary in the trade in question. Compensation for overtime work and other special expense for such work shall be paid by the time charterer.”
The paragraph seems to state a clear enough rule, the master seems to have a general duty to render customary assistance. However, MC 14:61 deals with loading and discharge (7.2.1.). One must ask then the question whether the paragraph applies to the whole relationship or just to the loading and discharge process.
It is, in the preparatory works, stated that the paragraph is modelled after the basic division of functions between the shipowner and the time charterer which is considered to be the prevailing practice in time charterparties. Thus, the purpose of the section was to codify the prevailing practice.
40 Since the common practice is that the crew are to render customary assistance through out the charter period, the paragraph ought to reflect this general principle. Despite its editorial placement, the paragraph should be given a wide scope of application. It lays down the basic duty of the ship’s master to render the charterer assistance during the entire charter period. Such an interpretation also seems to be in line with other legal writers. Michelet seems to consider that the corresponding paragraph in the Norwegian maritime code (Sjöloven § 381) has such a wide scope of application.
41
The next question that arises is then what kind of assistance the charterer can expect from the master. The section states that the charterer may require such “assistance… as is customary in the trade in question”. Apparently the question must be answered in each individual case. It all depends on, for example, the type of ship that are chartered, the type voyage which is performed and the type of trade that the charterer intendeds to undertake.
42
The charterer has, due to this provision, the authority to require that the master shall help him perform such tasks that, due to the division of functions, falls upon the charterer to execute. In practice this assistance is usually connected with the handling of the cargo. The charterer may require that the master shall assist during the loading or discharge operations or during the cleaning of the cargo holds.
43 Anyway, when the charterer instructs the master to perform a task which is considered to be such a “customary” assistance, it is obvious that the master has a duty to obey that order.
40 Prop. 1993/94:195, p. 315, SOU 1990:13, p. 208.
41 Michelet, Håndbok i tidsbefraktning, p. 71.
42 Cf. Time Charters, p. 286.
43 Cf. Grönfors, Sjölagens bestämmelser om godsbefordran, pp. 258-9.
Cf. The Bela Krajina [1975] 1 Lloyd’s Rep., pp. 144-5. The master and crew were considered to be obliged to help the time charterer to clean the holds of the ship. This obligation did not, however, stretch as far as removing rust from the hold.

25
4.2. The different types of orders
In a time charter the charterer may give a wide range of orders to the master. Since the ship is under the complete commercial control of the charterer it is necessary for him to be able to issue orders covering all situations that arise during the commercial use of the ship. Gaskell has divided the types of orders which the charterer may give into six groups.
44
Those groups are the following:
1. The nomination of ports. Both loading and discharge ports.
2. The conduct of the voyage itself.
3. The loading and discharge itself. The order can relate to both the method and the time for the process.
4. The signing of bills of lading.
5. The delivery of cargo to a third party.
6. The time and place of the ship’s redelivery.
Each of these different types of order will be discussed and examined in detail below. A short summary of the different types of orders and their further examination may be in order though.
Point 1 and 2 are connected to each other. They both concerns orders which states how the voyage as such is conducted. For example, to which ports and to which areas may the charterer order the ship? What limitations exist implicitly and explicitly? To what detail may the charterer control the conduct of the voyage itself? Under point 3 all questions which concerns the loading and discharge process are gathered. The first question is if, and to what extent, the master is obliged to participate in these operations.
The second question is to what extent the charterer may dispose of the ship. What types of cargo may he order the master to load and transport on the ship? Point 4 and 5 are also connected with each other. The problem under both points originates in the bill of lading. The special nature of the document and the mandatory rules which apply affects the charterer’s authority to give orders concerning a bill. Point 6 concerns the so called last voyage order.
4.3. The master’s response
When receiving an order from the charterer the master have certain choices. These choices can be summarized as follows:
45
1. He can accept and obey the order.
2. He can refuse the order.
3. He can, initially, refuse the order and ask the charterer if he is sure about his order.
4. He can, initially, refuse the order and contact the shipowner in order to get instructions.
When the master receives an order he must chose how to respond. When making this choice he must consider the shipowner’s position and how his actions will affect him.
44 Gaskell, Master and Charterer, p. 51. C f.
Gaskell, Charterer’s liability and damage to the vessel, pp. 4-
5.
45 Gaskell, Master and Charterer, p. 52-53.

26
The master is, after all, the shipowner’s employee, not the charterer’s. The initial four responses will give rise to a number of sub-choices and legal consequences.
46
1. The master accepts and obeys. It does not matter if the order is accepted immediately or if it is accepted after an initial refusal, the same legal consequences arises. a. The order is correct. There are no problems. b. The order is incorrect. The charterer issued, if this is the case, an illegal order. There are, in principal, four possible outcomes of such an order that may give rise to a legal responsibility for the charterer. First, the vessel could be damaged. Second, a delay could arise. Third, there could be a cargo loss.
Fourth, a liability to a third party could arise. The charterer may be held legally responsible for these occurrences.
2. The master refuses the order. a. The order is correct. A number of different legal consequences could, depending on the circumstances, arise for the shipowner. The charterer may, for example, terminate the charterparty, claim damages or claim that the ship went off-hire. b. The order is incorrect. Since the order was illegal the master was entitled to refuse to obey it. In this case, the shipowner may hold the charterer legally responsible for the illegal order. He may claim indemnity for damages that arose because of the order or he may, in some cases, terminate the charterparty.
3. The master initially refuses the orders, waits and seeks new orders. a. It was the correct choice to wait. There are two situations where such action is correct. First, if the initial order was an incorrect one. The master is under no obligation to obey such an order. Second, if the master had a well-founded, legitimate cause to seek confirmation from the charterer or the shipowner. This could, for example, be the case if the order itself was unclear or if it was unclear whether the person giving the order had the authority to do so. The master is, in certain situations, considered to have a certain room for delay (see
4.5.). b. It was the incorrect choice to wait since the initial order was correct. The charterer then has, depending on the circumstances, a number of choices. First, he could terminate the charter and claim indemnity for the damages that arose due to this. Second, he could declare the ship to be off-hire until the order is complied with. Finally, he has the alternative to change his orders, even though his initial order was correctly issued. If he does this the master, again, have the initial four choices of response. Despite that the charterer changes his orders he may still claim damages which arose due to the delay.
46 Cf. Gaskell, Master and Charterer, p. 52-53.

27
These different responses and their consequences will be discussed in detail below.
4.4. Factors to take into account when acting on a given order
4.4.1. General
When the master receives an order he must, when considering an appropriate response, take a number of factors into account. There are, in principal, three different types of factors the master must consider.
47
These are: safety factors, commercial factors and legal factors. Each of these factors may affect the charterer’s right to dispose of the ship and, consequently, order the master. What the master needs to do is to determine whether the order is legal or illegal, i.e. within or without the charterer’s authority to request.
4.4.2. Safety factors
Questions of safety are often a relevant issue when it comes to ships. Since safety questions, when at sea, is the responsibility of the master they must be taken into account when the charterer issues an order. If a given order raises questions of safety a conflict may arise between the charterer’s commercial interest and the master’s safety interest. Such conflicts are mostly manifested when an order concerns nautical matters or the nominating of ports. The principal rule is, however, that the safety of the ship, her crew and cargo takes precedence before the commercial interests of the charterer.
48
There are, in principal, two distinct types of safety factors. The first is the concerns for the general seaworthiness of the ship. The second is the need to avoid such severe dangers that may, even though the ship is considered to be seaworthy, endanger the ship, her crew and the cargo. It is the master who, at the end of the day, is responsible for the seaworthiness of the ship. Since the master physically is onboard the ship it is reasonable to put such responsibility on him. In the Swedish maritime code this responsibility is laid down in MC 6:1. It states:
“Before a voyage begins, the master shall ensure that the vessel is seaworthy, in accordance with chapter
1 section 9.
During the voyage the master shall ensure that the vessel is maintained in seaworthy condition as above.
If any defect or lack of seaworthiness cannot be immediately remedied, the master shall promptly notify the owner or operator.”
Besides the general seaworthiness of the ship, the master must also make sure that other dangers do not endanger the safety of the ship. Such dangers could, for example, be storms, shoals, sand banks, ice or war. It may sometimes be more difficult to correctly judge the situation at hand when being onboard the ship. However, the master may very well contact the shipowner, the time charterer or some public- or private agency to seek advice. That the master has such responsibility to keep the ship safe is explicitly stated in MC 6:2 paragraph one. It states:
“The master shall ensure that the vessel is navigated and managed in a manner consistent with good seamanship.
47 Gaskell, Master and Charterer, pp. 51, 56, 59.
48 Cf. The Anastasia [1971] Lloyd’s Rep., p. 379, cf. The Houda [1994] 2 Lloyd’s Rep., pp. 547, 554.

28
That the ship is kept safe are both in the interest of the shipowner and the charterer.
Neither of them is interested in the ship being damaged. However, even though the charterer may not wish to put the ship in danger he does wish to use the ship in a normal trade. A sea voyage can never be completely without any risks, risks are inherent in the nature of sea voyages. Disputes may therefore arise if the charterer believes that the master is acting over-cautious. The master must be able to justify a decision to override the charterer’s order. Unless the master’s safety concerns are legitimate the charterer is likely to protest or take legal actions. He may claim that the ship went off-hire during the delay, claim damages for any consequential losses or, if the master’s refusal is lengthy, terminate the charterparty (see 4.6.).
An example of such an over-cautious master is found in ND 1952.442 NA
Hakefjord.
The facts of the case were the following: The time charterer complained to the court that the ship had been withdrawn from his control a number of times during the charter period. The ship had, on several occasions, been lying in port despite the fact that it was ready to depart. The reason stated by the master was that the weather had been too bad. Since the weather had been quite normal for the season the charterer claimed that the ship had gone off-hire during the delays and claimed damages for the extra costs that these delays had caused. The shipowner, on the other hand, claimed that the weather objectively had been so bad that the master’s delays were justified.
The Norwegian court stated that during a time charter the master is, within certain limits, sovereign when it comes to making nautical decisions. If he finds that the ship should lie still in a port awaiting better weather such decision must usually be respected.
The principal rule is that the charterer can not override the master’s decision. However, there is a limit to the master’s authority. The time charterer must be protected against an over-cautious and tardy master. First, the master’s decision must only be respected if a reasonable master under the same circumstances would have made the same decision.
Second, when the master refuses to obey an order he, or the shipowner, must be able to show, on the balance of probabilities, that the refusal were reasonable. If the master can not show this the charterer may claim that the ship went off-hire during the unreasonable delay and claim compensation for any other damages which arose due to the master’s refusal.
49
4.4.3. Commercial factors
Since the time charterparty is built upon the idea that the charterer is to control the commercial use of the vessel, it is natural that the charterer may issue a wide range of orders based on commercial judgements. As long as the orders, and its consequences, purely have commercial consequences, there are no problems. The master must then obey the order. However, these clear-cut situations are not always the case. Even though the charterer may base his order upon commercial considerations, the order might have legal and safety consequences for the master and/or the shipowner.
49 ND 1952, pp. 447-8, 456-62. After examining the different situations the court granted parts of the charterer’s claims.

29
4.4.4. Legal factors
There are two different legal aspects which the master must consider. First, he must consider mandatory laws, rules and regulations that are imposed by public authorities.
Second, he must consider the charterparty itself.
The master can never be obliged to obey an order which is unlawful in itself, i.e. he may not be ordered to commit a criminal act or infringe some mandatory law or regulation. The master may, for example, not be ordered to issue a so called clean bill of lading if it is apparent that the cargo is damaged. Such fraudulent behaviour is not part of the job description. He may neither be ordered to commit less severe acts as, for example, violate a harbour regulation. One aspect which is necessary to consider is according to which law the act is unlawful, i.e. where the act is unlawful. This issue will be discussed more extensive below in connection with the question of unlawful cargo
(see 7.3.2.).
Further, the master is, in principal, neither obliged to obey an order which is in violation with the charterparty itself. It is, after all, upon this document that the charterer bases his right to give orders to the master. It follows, from general legal principles, that the master is not obliged to obey an order that the charterer is not entitled to give under the terms of the charterparty. This principle was explicitly stated in an English case, The
Sussex Oak . It was stated that:
50
“I cannot think that the clause in a time charterparty which puts the master under the orders of the charterers as regards employment is to be construed as compelling him to obey orders which the charterers have no power to give.”
Thus, the master may refuse to obey an order if it can be considered to be unlawful.
4.5. Consequences of an initial refusal
4.5.1. The master’s possibility to seek instructions
The master will, when given an order, not always know how he should act. He may not be able to evaluate the situation if he is not able to fully asses the three relevant factors, i.e. the safety, the commercial and the legal factor. One must remember that the master, after all, is onboard the ship. In some situations, for example when the ship is about to call at a port or during the loading or discharging operation, it may be preferable to be onboard when evaluating the situation. In other situations the master may instead be in a poor situation to estimate the wisdom of a given order. This is, for example, the case when he is confronted with the task to determine if a questionable order is within the limits fixed in the charterparty or to decide if he should accept a guarantee from the charterer.
Therefore, a prudent master will in such situations, if it is possible to do so, seek instructions from the shipowner. He is, after all, the shipowner’s employee and is suppose to look after his interests. In this context MC 6:8 paragraph three may be of interest. It states:
“The master shall inform the owner of any steps of importance which he finds necessary for the safety of the vessel or those on board, of the progress of the voyage and any transactions undertaken in the course of it, as well as any other facts which may be useful for the owner to know of. Before taking any important step, the master should seek instructions from the owner or his appointed agent. …”
50 The Sussex Oak [1950] 83 Ll. L. Rep., p. 307.

30
Thus, it has been expressly acknowledged that the master should seek instructions from the shipowner. The paragraph does not necessarily entitle the master to seek such instructions on the charterer’s expense though. One must therefore examine if such a delay in obeying an order may be acceptable vis-à-vis the time charterer as well.
4.5.2. The master’s delay in obeying the given order
The master must, when given an order, decide how he shall respond. However, at the end of the day there are only two possible outcomes of his considerations. Either he obeys the order or he refuses to obey it. Even though he may consult the charterer or the shipowner he is, sooner or later, bound to act. After all, even total passiveness is considered to be an act. If the order was legal such passivity will, after a while, be viewed as a flat-out refusal. The question is then how much time the master may dispose before he has to act. When will he be considered to be in delay in obeying the order?
4.5.3. The Houda Case
A recent case, The Houda case
51 , dealt with the issue of delay in obeying the charterer’s orders. The case is, for English law, important since it extensively deals with the question of delay. I believe that it may, besides to serve as a good illustration to the problematic situation, be valid to Scandinavian law as well.
The relevant facts of the case were the following: The Houda was chartered on a Shelltime 4 form. The
Ship operated under standing instructions which had been issued by the charterer. These instructions stated that “(a)ll instructions relating to the voyages of your vessel will be issued by Kuwait Petroleum
Corp. in Kuwait.” However, on August 2 nd 1990 Iraq invaded Kuwait. After the invasion the management of the charterer moved to London. Subsequently, the London office then began to give orders relating to the ship’s voyages. On August 8 th the charterer ordered the ship to proceed to the Red Sea for orders. The shipowner did not obey the given order. The reason for this was the confused situation which arose as a consequence of the invasion. The shipowner was concerned whether the order was legal or not. First, he was doubtful about the ownership of the cargo onboard the Houda. Second, he was doubtful whether the given orders would result in a breach of any of the imposed U.N. sanctions. Thirdly, he was doubtful who had the authority to give orders on behalf of the charterer. Because of this, the shipowner was not prepared to obey the given order until he had obtained legal advice. This was the starting-point for an extensive legal brawl. However, on September the 27 th the parties finally reached an agreement and the
Houda resumed performing the service required by the charterer.
The charterer contended that the shipowner, in breach of contract, refused to obey the charterer’s legal orders. As a consequence of that breach the charterer lost the services of the Houda for a period of 36 days. The charterer claimed that the ship had been off-hire for this period or, alternatively, damages for breach of contract.
One of the issues raised in the case were then whether the shipowner under a time charter is obliged to comply with a given order immediately or, if he has reasonable doubts about the order’s legality, if he is entitled to a reasonable time to carry out the order. Lord Justice Neil wrote the leading opinion. He stated that: 52
“I am unable to accept that the right, or indeed the duty, to pause can safely be confined to specific categories of cases. I consider that it is necessary to take abroad a comprehensive view of the duties and responsibilities of the owners and the master and to ask… How would a man of reasonable prudence have acted in the circumstances? …It will depend on the circumstances.”
51 The Houda [1994] 2 Lloyd’s Rep., p. 541.
52 The Houda [1994] 2 Lloyd’s Rep., p. 549.

31
Lord Justice Leggatt stated further:
53
“It is obvious that lawful orders have to be obeyed, unless to do so would imperil the safety of ship, crew or cargo. It is not obvious that they have to be obeyed unthinkingly. …In my judgement when a master receives an order relating to the cargo his duty… is to act reasonably. Orders ordinarily require immediate compliance. But the circumstances in which an order is received or the nature of it may make it unreasonable for the master to comply without further consideration or enquiry. When an order is reasonably regarded as ambiguous, it must be clarified. When the lawfulness of an order is reasonably called into question, it must be established. When the authenticity of an order is reasonably doubted, it must be verified. The delay introduced by any of these processes will usually be brief.”
Lord Justice Millet stated further:
54
“In my judgement the authorities establish two propositions of general application: (1) the master’s obligation on receipt of an order is not one of instant obedience but of reasonable conduct; and (2) not every delay constitutes a refusal to obey an order; only an unreasonable delay does so.”
After these principal discussions the judges examined the facts of the case. They found that the circumstances constituted reasonable grounds for delay.
Further, there was, in the judgement, a discussion about different categories of situations where the master’s delay in complying with the charterer’s orders was justified. Previous case law had established three such categories.
55
The first is where the instructions were unclear, and the master must seek clarification before proceeding.
This exception, from the principal rule of immediate obedience, was easily explained. If the charterer wants his orders to be obeyed immediately, he must make them plain and unambiguous. The second is where the master was in possession of information not available to the charterer which might reasonably be expected to affect his wishes. The master could then seek confirmation of their instructions before proceeding. This exception derives from the community of interests of the shipowner and the charterer.
Both parties wish to see the voyage to be successfully completed. The third exception is where there was reasonable apprehension for the safety, whether physical or otherwise, to the ship, her crew or cargo. This exception derives from the overriding responsibility of the master to ensure that the voyages are conducted safely. This responsibility arises from the master’s position and it is independent of the charterer.
The outcome of the case might, if following this line of reasoning, establish a fourth category where the master’s delay is justified. Thus, when the master has reason to doubt the authority of the person giving the order he may seek confirmation before he obeys the order. However, in the light of the case, and the statements made by Lord
Justice Neil and Lord Justice Millet, there is apparently no reason to suppose that these four categories of exceptions in any way should be considered to be exhaustive. There might be other such situations as well.
53 The Houda [1994] 2 Lloyd’s Rep., pp. 552-3.
54 The Houda [1994] 2 Lloyd’s Rep., p. 555.
55 The Houda [1994] 2 Lloyd’s Rep., pp. 547, 554.

32
4.5.4. Conclusions
Thus, it is not up to the master to, unduly, question an order as to the employment of the ship. He is, however, not always obliged to obey the order immediately. It may, in certain situations, be unreasonable to demand that the master shall comply with the order. It may be necessary to grant him time for consideration or enquiry. The circumstances of each individual case will determine whether such a delay is acceptable, and if so, the length of it. The starting-point, for an English court, is how a person of reasonable prudence would have acted in the circumstances.
56 The principal rule should be in line with Lord Justice Millet statement that was quoted above. First,
“the master’s obligation on receipt of an order is not one of instant obedience but of reasonable conduct.” Second, “not every delay constitutes a refusal to obey an order; only an unreasonable delay does so.” The consequence of such a view is that one, when determining if a delay is acceptable, must be look at the circumstances of each individual case.
I see no reason why these principles should not be the same according to
Scandinavian law. The principle rule and its underlying reasons are valid in there as well.
4.6. Legal consequences
When a dispute arises over whether one of the charterer’s orders was legal or not, legal consequences may arise as a result of this dispute. It is possible to categorize these consequences into three main areas, cancellation of the time charter, off-hire and damages. Even though it is not the purpose of this paper to discuss and examine the legal consequences of the charterer’s orders and the master’s response, these consequences are still important. The master must, when acting and making his decisions, take the legal consequences of his actions into account. To some extent they will determine how he acts.
Delay and other breaches on the shipowner’s side are regulated in MC 14:64 paragraph one. It states:
“If… there is delay on her [the ship’s, my note] voyages or other breach on the carrier’s side, the time charterer may cancel the charterparty, if otherwise the purpose of the charterparty would be essentially frustrated. …”
The paragraph states that the charterer may terminate the charterparty in case of delay on the ship’s voyages or because of other breaches by the shipowner, or someone he answers for. However, such termination is only possible if the purpose of the charterparty is, because of the breach, considered to be “essentially frustrated”. This precondition means, in principal, that the contract ceases to be of use for the charterer.
57
In practice, all charterparty forms contain an off-hire clause.
58
The purpose of these clauses was discussed in an English case, The Mareva A.S.
It was stated that:
59
56 Time Charters, p. 291.
Cf. The Anastasia [1971] Lloyd’s Rep., p. 379. Mr. Justice Donaldson’s statement about the master’s position summarizes the nature of a reasonable master. This statement was also noted in the Houda case.
57 Prop. 1993/94:195, p. 318, SOU 1990:13, p. 211.
Grönfors, Sjölagens bestämmelser om godsbefordran, p. 269.
58 Cf. Gentime cl. 9, NYPE 1993 cl. 17 and Shelltime 4 cl. 21.
59 The Mareva A.S.
1977] 1 Lloyd’s Rep., p. 382.

33
“But I think that the objective is clear. The owners provide the ship and the crew to work her. So long as these are fully efficient and able to render to the charterers the service then required, hire is payable continuously. But if the ship is for any reason not in full working order to render the service then required from her, and the charterers suffer loss of time in consequence, then hire is not payable for the time lost.”
In Scandinavian law the rules concerning off-hire are based on a system of risk allocation. The rules are found in MC 14:72. The section states:
“Hire shall not be paid for time lost to the time charterer in salvage operations, maintenance of the vessel and repair of damage for which the time charterer is not liable nor for any other occurrences on the carrier’s side.
The time charterer’s liability for expenses in the operation of the vessel shall be limited in a corresponding manner.”
The first paragraph states the underlying principle in Scandinavian law. It originates from the basic division of functions that applies between the parties. The principle simply states that the hire runs continuously from the time when the ship is delivered to the charterer. Thus, the economic risk of not being able to use the ship lies on the time charterer. The exception, i.e. when the ship goes off-hire, is when time is lost due to
“hindrances on the part of the owner”. It is not a question of fault. If the cause rests with the owner, or anyone he is responsible for, the underlying reason is irrelevant. It is, after all, a system of risk allocation.
60
The second paragraph is, compared to the old code, completely new. The paragraph simply states that the time charterer is not obliged to pay the ship’s operational costs during the off-hire period. The rule should be viewed as a system of risk allocation between the shipowner and the charterer. It is a consequence of the rule concerning the freight in the first paragraph.
61
Even though the different standard form always contain an off-hire clause they does not show a uniform practice when it comes to off-hire regulations. The agreed risk allocation may vary considerable between different forms. Due to this lack of uniform practice the legal situation may be considered to be somewhat unclear. The regulation in
MC 14:72 may therefore be useful in cases where these clauses are incomplete, unclear or not sufficiently detailed. The purpose of the regulation is to give the parties and the courts a paragraph to fall back upon in such cases.
62
The time charterer’s right to claim damages is regulated in MC 14:64 paragraph two. It states:
“The time charterer is entitled to compensation for… loss arising through any fault or neglect in such assistance by the master or crew as is mentioned in section 61 second paragraph, in the execution of the time charterer’s instructions or through other breach than such mentioned in the foregoing sentence.”
The shipowner is liable for damages that he, or any person he answers for, causes through fault or neglect. No rule of presumption applies, it is up to the charterer to show that damage occurred and that causality exists between the damage and the alleged fault or neglect.
63
It is expressly stated that the shipowner answers for the fault or neglect of the crew when they perform work for the time charterer. This rule follows the basic
60 Grönfors, Sjölagens bestämmelser om godsbefordran, p. 266. Cf. Falkanger, Introduction to Maritime
Law, pp. 443-5.
61 Prop. 1993/94:195, p. 325, SOU 1990:13, p. 218.
62 SOU 1990:13, p. 218. Cf. Falkanger, Introduction to Maritime Law, p. 443.
63 Prop. 1993/94:195, p. 318, SOU 1990:13, p. 211.

34 division of functions that, according to Scandinavian law, applies between the parties in a time charter.
64
The shipowner’s right to claim damage is regulated in MC 14:65. It states:
“The carrier is entitled to compensation for damage to the vessel due to fault or neglect of the time charterer or any one for whom he is responsible.
If the time charterer has ordered the vessel to an unsafe port, he shall be liable for any resulting damage to the vessel unless he shows that there has been no fault or neglect.”
The first paragraph reflects the basic division of responsibility and the burden of risk that applies according to Scandinavian law. Thus, the principal rule is that the shipowner stands the risk for damages to the ship unless he can show that the time charterer, or anyone who he is responsible for, has caused the damage through fault or neglect.
65
The second paragraph, which regulates the charterer’s responsibility to nominate safe ports only, is somewhat special. It is extensively discussed below (see
5.2.2.).
I will return to these legal consequences below when I believe that they are of interest for the master’s approach to a given order.
64 Prop. 1993/94:195, pp. 318-9. Cf. Grönfors, Sjölagens bestämmelser om godsbefordran, p. 272.
65 Prop. 1993/94:195, p. 319, SOU 1990:13, pp. 211-2.

35
5. Orders concerning the ship’s destination
5.1. General
There are two questions which must be answered here. First, what is the charterer’s authority to order the ship to a port that may not be considered safe? Second, what other limitations may the charterparty contain that limits the charterer’s authority to order the ship to different ports?
5.2. Nomination of the port of call
5.2.1. General
Since the charterer has the commercial control of the ship he has, quite naturally, the right to nominate a port of call. The principal rule is that the charterer has an obligation to nominate only safe ports.
66
As long as the nominated port is safe the master is obliged to obey the charterer’s order. If the port, on the other hand, is clearly unsafe, the master may refuse to obey the order. It is, of course, possible for the shipowner and the charterer to explicitly agree to otherwise. If the charterer wishes to take the ship to an unsafe port, an express clause stating such right could be brought into the charterparty.
When receiving an order to take the ship to a certain port, there are, from the master’s perspective, three different starting-points. First, the nominated port is safe.
Second, the nominated port is unsafe. Third, it is a doubtful situation; the master does not know whether the port is safe or unsafe. As long as the port is safe or the order otherwise is consistent with the charterparty the master is, in principal, obliged to obey it. The problems arise when the situation is doubtful, i.e. the master does not know whether the port is safe or not.
5.2.2. The obligation to nominate a safe port
Most charterparties contain a clause that states that the charterer only may order the ship to safe ports. Examples of this can be found both in the Gentime and the NYPE 1993 forms. Gentime cl. 2 (a), states:
“…The Vessel shall be employed in lawful trades… between safe ports or safe places where she can safely enter, lie always afloat, and depart.”
NYPE 1993 cl. 5 states:
“The Vessel shall be employed in such lawful trades between safe ports and safe places… as the
Charterers shall direct.”
However, even if there is no clause explicitly stating that the charterer only may order the ship to safe ports, a court is likely to, by construing the charterparty, impose such a duty.
67
The reason for this is that such a duty usually can be considered to be an implied condition between the parties. Since the charterer only has the commercial control over the ship it lies in the nature of the charterparty that he may not expose the ship to unreasonable dangers. A port that is classified as “unsafe” could per se be considered to be such an unreasonable danger.
66 Cf. Gaskell, Master and Charterer, p. 57, cf. Michelet, Håndbok i tidsbefraktning, p. 74.
67 Michelet, Håndbok i tidsbefraktning, p. 74.

36
That such a duty exists in Scandinavian law can also be concluded from the maritime code. The relevant provision is found in MC 14:58 paragraph two. It states:
“The carrier is not obliged to perform a voyage on which the vessel, persons on board or the cargo may be exposed to danger as a consequence of… any other danger… which he could not reasonably have contemplated when the contract was concluded.”
MC 14:58 is also discussed extensively elsewhere in the paper (see 6.2.). Here it is the term “any other danger” that is of interest. The master may, due to the provision, refuse to obey an order on how to perform a voyage. The scope of the term ought to be construed so widely that it comprises any type of physical danger to the ship. Thus, it should comprise unsafe ports.
68
Consequently, the master may then, by referring to MC
14:58 paragraph two, refuse an order to take the ship to an unsafe port. The paragraph must also bee read in its context. MC 14:65 paragraph two, which regulates the consequences of damage to the ship, is therefore of interest. It states:
“If the time charterer has ordered the vessel to an unsafe port, he shall be liable for any resulting damage to the vessel unless he shows that there has been no fault or neglect.”
Since the charterer, under MC 14:65 paragraph two, can be held liable, he must be under an implied duty not to consciously order the ship to a port which he knows, or suspects, is unsafe. If he issues such a conscious order he may be held liable.
One should also note that the “any other danger” exception in MC 14:58 also is dependent on a precondition. The master may not refuse the order if the shipowner, when he agreed to the charterparty, reasonably should have contemplated that such a danger was likely to arise due to a specific voyage or cargo.
69
However, I believe that this provision ought to, in these situations, be construed restrictively. The shipowner must have known, or should have understood, that the charterer intended to order the ship to a specific port and that the port in question was dangerous. The nature of the danger and its extent should have been obvious. If these facts were not clear, it would not be reasonable to consider that the shipowner implicitly have agreed to expose the ship to the dangerous port in question.
70
However, the provision in MC 14:65 paragraph two is not only of importance when there is no clause in the charterparty regulating safe and unsafe ports. The purpose of the paragraph is to contribute to the construction of charterparty clauses, foremost clauses of a guarantee character. Thus, a Swedish court will take the rule and its purpose in consideration when interpreting such clauses as Gentime cl. 2 (a) and NYPE 1993 cl.
5. The consequence is these clauses will be construed restrictively to the benefit of the charterer.
71
68 Grönfors, Sjölagens bestämmelser om godsfefordran, pp. 254-5.
69 SOU 1990:13, p. 206.
70 Cf. Michelet, Håndbok i tidsbefraktning, p. 75.
71 SOU 1990:13, p. 212.

37
5.2.3. The relevant period of time
The relevant period of time, when the port must be considered to be safe, is during the time when the ship will be using it. The safety of a port, for a particular ship, may vary from time to time. Situations may arise where the ship, due to the weather conditions or other reasons, may not be able to enter the port immediately when it arrives there. Such temporary obstacles do not make the port unsafe.
72
In an English case, The Stork , a statement was made concerning such temporary obstacles.
73
“The law does not require the port to be safe at the very time of the vessel’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 the one than the other.”
The natural thing for the master to decide whether to obey or refuse the order is at the point in time when it is given. However, if the port, after the charterer has issued his order, becomes unsafe at a time when the ship can still avoid the danger, the master is not obliged to carry out the order. The master may stop the ship before it has entered the port or leaving the port in order to avoid the dangerous situation.
74
5.2.4. Definition of a safe port
5.2.4.1. General
The first question one might ask is whether the place where the ship was ordered to actually is a port or not. What does it take before a construction becomes a port? That question is mostly of an academic nature though.
75
Looking at the Gentime cl. 2 (a) and
NYPE 1993 cl. 5 they state that the charterer may bring the ship to “safe places” as well. Under those charterparties it is the factual situation that matters.
76
The important thing is that the ship is ordered to safe places, if the place fulfils the definition of a port or not is of no real importance to the shipowner. The same applies according to the provisions in the Swedish maritime code. MC 14:58 paragraph two states that the master may refuse an order due to “any other danger”. It is not the place itself that is important, it is the danger which the place presents that gives the master the right to refuse the order. Thus, when defining what a “safe port” one is, usually, in practice trying to determine the definition of a “safe place”.
It is not easy to provide a clear-cut and straightforward definition of the term “safe port”. The term is wide; there are many circumstances that can make a port unsafe. In principal there are two types of circumstances which can give rise to dangers that may affect the ship.
77
First, there are natural and navigational hazards which may directly damage the ship. Second, there are other hazards, such as political unrest and epidemics, which may expose the ship, her crew and cargo to danger. These hazards are always relative. For example, a large tanker needs a different kind of port than a small freighter.
72 Cf. The Sagoland [1932] 44 Ll. L. Rep., p. 138, cf. The Eastern City [1958] 2 Lloyd’s Rep., p. 172.
73 The Stork [1954] 2 Lloyd’s Rep. 415.
74 Cf. Time Charters, pp. 178, 187-8.
75 Cf. Michelet, Håndbok i tidsbefraktning, p. 74.
76 The NYPE 1946 form is not as clear though. It is, at line 27, stated that the charterer may order the ship
“between safe ports and/or ports”. However, it is stated, at line 68, that the charterer may load or discharge cargo “in any dock or at any wharf or place”. It seems that the NYPE 1946 form leaves less room for the charterer to bring the ship to such “safe places” that the Gentime and NYPE 1993 forms prescribes.
77 Cf. SOU 1990:13 p. 212, cf. Michelet, Håndbok i tidsbefraktning, pp. 74-5.

38
Thus, the port must be safe for the particular ship in question.
78
A statement concerning the necessity of putting a relative view upon the danger which makes a port unsafe is found in an English case, The Sagoland . It was therein stated that:
79
“…the Port of Londonderry in Northern Ireland was not a safe port within the meaning of the charterparty for the particular ship which was the subject of the charter-party. Let not the finding of the umpire be misunderstood. It was not a finding that the Port of Londonderry was not an entirely safe port for 99 out of 100 or even a larger proportion of the ships which may seek to resort thereto, but merely that it was not a safe port for the ship on question, the Sagoland …”
When discussing and examining this subject there are reasons to look towards English law for guidance. There are numerous English cases which deal with the question whether a port should be classified as safe or not.
5.2.4.2. The core meaning of a “safe port”
Michelet has expressed the view that one should define a “safe port” as a port that at least protects the ship against such natural dangers which a good port normally should protect a ship against.
80
In other words, there is then, in a sense, an objective definition of a safe port. In the individual situation one must look at the ship in question and then determine whether the port in question provides such a protection for the ship. The core meaning of the term “safe port” is then that the ship should, when lying in the port, be safe from such dangers which are usually connected with the sea. The harbour should, to begin with, be deep enough, i.e. the ship should be able to lie in the port without being in danger of grounding. Shallows and sandbanks may also damage the ship when it moves to a particular berth in the port. The port should also be able protect the ship from the elements, foremost rough waves and hard winds.
A port is not expected to protect the ship in every conceivable situation though. If a ship is damaged after being exposed to an exceptional storm or some other abnormal event the damage is not considered to have arisen due to the port being unsafe. The danger, which renders the port unsafe, must arise out of the port’s own qualities or attributes, i.e. the port must be inherently unsafe.
81
Further, it is not uncommon that there, within a certain port, are certain regulations which must be followed in order for the ship lie safely. Such regulations do not prevent a port from being considered safe. An example of this is founding The Sagoland . It was there stated that:
82
“…if it were established also that ships can and do pass through with assistance of tugs and that is an ordinary method of navigation… then the fact that the entrance to the harbour or port was to narrow to be passed through by a ship under its own steam would cease to render the port unsafe.”
Thus, if the port’s safety depends on navigational aids, such as pilots, buoys and lights, such aids may neutralize a hazard which would otherwise constitute a danger to navigation. However, the aid in question must be adequate, i.e. if it does not neutralize
78 Michelet, Håndbok i tidsbfraktning, pp. 74-5, Time Charters, p. 179.
Cf. The Terneuzen [1935] 52 Ll. L. Rep., p. 148.
79 The Sagoland [1932] 44 Ll. L. Rep., p. 137.
80 Michelet, Håndbok i tidsbefraktning, p. 75.
81 Michelet, Håndbok i tidsbefraktning, p. 75, Time Charters, p. 184.
Cf. [1935] 52 Ll. L. Rep., p. 148, cf. The Evia (No. 2) [1982] 2 Lloyd’s Rep., p. 319.
82 Cf. The Sagoland [1932] 44 Ll. L. Rep., p. 138.

39 the hazard the port is still considered to be unsafe.
83
A port may be considered unsafe for other reasons as well. For example, mooring facilities may be inadequate or the berth to which the ship is ordered may be dangerous.
84
It follows that a danger which may be avoided by ordinary good navigation and seamanship does not cause the port to be considered unsafe.
85 It was stated in The Polyglory that “the port will be safe if an ordinarily prudent and skilful master can find a way of reaching it in safety”.
86
5.2.4.3. Extended definition of a “safe port”
However, the definition of a “safe port” becomes wider than so if one puts more criterions in the term than purely navigational hazards. The classical, English definition of a “safe port” is found in
The Eastern City . It was stated that:
87
“If it were said that a port will not be safe unless, in the relevant period of time, the particular ship can reach it, use it and return from it without, in the absence of some abnormal occurrence, being exposed to danger which cannot be avoided by good navigation and seamanship, it would probably meet all circumstances as a broad statement of law. Most, if not all, navigable rivers, channels, ports, harbours and berths have some dangers from tides, currents, swells, banks, bars or revetments. Such dangers are frequently minimized by lights, buoys, signals, warnings and other aids to navigation and can normally be met and overcome by proper navigation and handling of a vessel in accordance with good seamanship.”
This definition has, compared to the Scandinavian view, lead to a narrow definition of a
“safe port”. To begin with, it has been established that the ship must be able to reach the port in safety. In practice this usually means that the navigable channel or fairway which leads up to the port in question must be safe.
88 If follows, from this line of reasoning, that the port will not be considered safe if the ship can not depart from it without being exposed to a danger. It is not clear how far away, after the departure, the ship must be free from such exposure. However, as long as there is only one possible route the ship may take when departing, that rout must be free from dangers.
89
It has also been established that other perils which endangers the ship may make the port in question unsafe. It has been held that the risk of hostile seizures or attack en route to a port may make the port unsafe. It follows that the port also must be considered to be politically safe. There must no be an absolute political safety though.
The risk of attack or seizure must be sufficiently serious.
90
83 Time Charters, p. 183.
84 Time Charters, p. 182.
Cf. The Houston City [1956] 1 Lloyd’s Rep., p. 6.
85 Time Charters, p. 186.
Cf. The Eastern City [1958] 2 Lloyd’s Rep., p. 131.
86 The Polyglory [1977] 2 Lloyd’s Rep., p. 362.
87 The Eastern City [1958] 2 Lloyd’s Rep., p. 131.
88 Time Charters, p. 180.
Cf. The Sussex Oak [1950] 83 Ll. L. Rep., pp. 304-5.
89 Time Charters, p. 183.
Cf. The Sussex Oak [1950] 83 Ll. L. Rep., pp. 308.
90 Time Charters, pp. 180-1.
Cf. The Saga Cob [1992] 2 Lloyd’s Rep., pp. 550-1.

40
5.2.4.4. Conclusions
As can be seen, the English view is quite far from the point of departure, i.e. that one should define a “safe port” as a port which will protect the ship against natural dangers.
As can be seen from the discussion above, the English definition of a “safe port” is quite narrow. The scope of the definition is considered to be wider in Scandinavian law. The difference lies in the fact that it is, according to English law, easier to make the charterer liable for any damages that arises due to the port. Thus, political and other such risks are included in the Scandinavian definition.
91
A possible explanation to the different scope of the term lies in the legal consequences of an order to take the ship to an unsafe port (see 5.2.5.). According to
Scandinavian law, the charterer is, if he orders the ship to an unsafe port, only is liable if his fault or neglect has caused the damage. The underlying reason for this is that it is, according to the principal rule of risk allocation, the shipowner who stands the risk of natural and navigational damages. Michelet has suggested that the effectiveness of this principal rule ought to increase outside the port itself.
92 The reason for this is that it is harder to prove fault or neglect on the charterer’s side when the ship is approaching the port, i.e. when it sails in navigable channels and fairway. It would be even harder to prove such fault or neglect when the ship is still on the open sea. Thus, the fact that the ship may be exposed to dangers on its way to the port, or on its way from it, does not necessarily make the port itself unsafe.
93
5.2.5. The legal consequences of ordering the ship to an unsafe port
It may then, since they will affect the master’s behaviour, be of interest to examine the legal consequences of ordering the ship to an unsafe port. The legal consequences, of ordering the ship to an unsafe port, differ between Scandinavian and English law. If the charterer issues such an order and the ship, as a consequence of this, suffers damage, he may become liable according to MC 14:65 paragraph two (see 4.6.).
This provision reflects the fact that the time charterer, according to Scandinavian law, does not have a strict liability for ordering the ship to an unsafe port. Unless he has given an express guarantee he does not have such strict liability.
94
An underlying purpose of the provision is to contribute to the construction of such charterparty clauses, i.e. the clause shall be construed in the light of the statutory rule (see 2.5.2.). Thus, a Swedish court will take the provision and its purpose in consideration when interpreting clauses as
Gentime cl. 2 (a) and NYPE 1993 cl. 5. The practical consequence is then that such clauses will be construed restrictively to the benefit of the charterer.
95
An order to go to a particular court will then not be considered to contain a guarantee that the port in question is safe. The order itself is not enough; if such a guarantee shall arise the charterer must agree to it explicitly. When is the charterer, according to Scandinavian law, liable then? Liability may, for example, be claimed when the charterer orders the ship to a port which he knows is or may be unsafe for the ship to call at.
91 Michelet, Håndbok i tidsbefraktning, pp. 82-3, Grönfors, Sjölagens bestämmelser om godsbefordran, p.
263.
92 Michelet, Håndbok i tidsbefraktning, p. 84.
93 Cf. ND 1928.108, p. 111, cf. ND 1935.436, p. 437
94 Prop. 1993/94:195, p. 319, SOU 1990:13, p. 212.
Cf. ND 1972.183, p. 202.
Cf. Michelet, Håndbok i tidsbefraktning, pp. 82-3.
95 SOU 1990:13, p. 212.

41
According to English law the charterer is considered to have warranted the safety of the port once he has ordered the ship there. The principal rule is then that the charterer is liable for damages to the ship which arises due to a nominated port being unsafe. Thus, the master or the shipowner does not, in principal, have a duty to check the safety of the nominated port before proceeding to it. The charterer is not strictly liable though.
96 A statement of the master’s responsibility is found in the Sussex Oak . It was stated that:
97
“…the master should not follow the instructions of the charterers if they led to obvious danger. …The giving of an order does not necessarily cause the damage that flows from an act done in pursuance of it.
Put more specifically, the decision of the master to obey the order may in certain circumstances amount to a novus actus interveniens
.”
One might ask the question how these differences between Scandinavian and English law is justified.
98
In principal, the difference is based on different beliefs on how the risk should be allocated. In other words, is it the shipowner or the charterer who shall bear the risk for a port being unsafe? The principal rule, under a time charter, is that the shipowner shall bear all nautical risks (see 3.1.). Accordingly, it is the shipowner who, according to Scandinavian law, bears the risk of damage to the ship unless it was the charterer’s incautious act that caused the damage. Further, it is the shipowner who insures the ship and it is the master who makes the final decision to expose the ship for the danger that is connected with the port in question.
99
The fact that it is the charterer who nominates the port has not been considered to justify an exception from the principal rule of risk allocation.
The reasoning behind the English solution is different though. Since it is the charterer who actually orders the ship to the port in question it is considered reasonable that he bears the risk of the port being unsafe. Thus, the charterer should examine the port before he orders the ship there. The charterer is also believed to be in a better position to examine the port than the shipowner or the master. A factor which may have contributed to the English view is their readiness to include political and other dangers in the definition of a “safe port”. The nature of these dangers is such that the charterer may examine the situation in the port in question before ordering the ship there. It follows, from this view, that it is easier to place the risk of damage on the charterer.
These different legal solutions affect the master’s position. Since an order to go to a particular port, according to English law, is considered to contain a guarantee that the port in question is safe, the charterer’s liability is, in principal, strict. This relieves some of the pressure and responsibility that is usually put upon the master. He knows that the shipowner, in principal, may make the charterer liable for any damages that will occur due to the calling at the port in question. If the situation is doubtful, i.e. the master can not determine whether the port is safe or not, he may satisfy himself by protesting against the order. That is usually considered to be enough, the charterer can then, in most cases, be held liable for any consequential damages that arise. The Scandinavian solution, on the other hand, puts more responsibility upon the master. Since the charterer only can be made liable if his order constitutes fault or neglect, the master
96 Time Charters, pp. 189-90.
Cf. The Evia (No. 2) [1982] 2 Lloyd’s Rep., pp. 317-20.
97 The Sussex Oak [1950] 83 Ll. L. Rep., p. 308.
98 Cf. Michelet, Håndbok i tidsbefraktning, p. 83.
99 SOU 1990:13, pp. 211-2.
Cf. MC 14:65 paragraph two. The provisions in the paragraph reflect this view.

42 must act prudently during the whole act of calling at the port. Thus, even if the master would protest against the order, he must still, if obeying it, consider the perceivable risks when calling. Even though the charterer’s liability is not strict according to
English law, the scope of the master’s responsibility is larger according to Scandinavian law.
5.2.6. The master’s position
The principal rule is then that the charterer has an obligation only to nominate safe ports. As long as the nominated port is safe the master is obliged to obey the charterer’s order. If the port, on the other hand, is clearly unsafe, the master may, unless otherwise has been agreed, refuse to obey the order. Problems arise when the situation is doubtful, i.e. the master does not know whether the port is safe or not. In such situations the master has two principal courses of action. The first is to obey the order. He then continues to the port and risk, if the port turns out to be unsafe, damage to the ship. If damage occurs the master must rely on that the shipowner, in some way, is able to make a successful indemnity claim against the charterer. As was discussed above (see 5.2.5.),
Scandinavian and English law differs on this point. This difference affects the master and his behaviour. The second course of action is to refuse the order. If he refuses the order he must contact the charterer and state his reasons for refusing the order.
If the master refuses the given order, the charterer has two courses of action available to him. The first is to accept the master’s initial refusal, and renominate a port.
If such a renomination is made, and the master accepts the new order, the charterer may still make a legal claim against the shipowner. He may claim that the ship went off-hire during the delay and he may claim damages if he has suffered an economic loss due to the refusal. The second course of action is to insist on the original nomination. If the charterer does this the master is put back into his original position. The master must, once again, choose whether he shall accept or refuse the given order. If the master, once again, refuses to obey the charterer may have enough cause to terminate the charterparty.
The master’s position, when confronted with such a doubtful situation, is not an easy one. In certain types of situations, especially when confronted with natural and navigational hazards, the master is, usually, in a good position to determine the course of action. He is, after all, onboard the ship. In other situations it may be necessary for the master to completely leave the decision on how to act to the shipowner. A master may, for example, not be in a good position to judge the severity and magnitude of an approaching storm or the political situation in an area. The shipowner, who is a shorebased observer, is usually able to estimate such situations quicker and more correctly.
Thus, he may give instructions to the master in an early stage, before the situation becomes acute.

43
5.3. Limitations in the charterparty
5.3.1. General
There are three common limitations on the charterer’s right to dispose of the ship. Those are a limited trading area, an ice clause and a war clause. Since the purpose of these clauses is to limit the charterer’s freedom to use the ship it is up to the shipowner to demand that such limitations is agreed upon. After all, it lies in his interest to impose them. Without such limitations the charterer would, in principal, have the authority to order the ship anywhere it could safely go.
These clauses are somewhat similar to the “safe port” clauses that were discussed above (see 5.2.2.). They are all considered to be clauses of a so called guarantee character, i.e. the charterer is considered to have guaranteed that he will not give an order that will violate the clause in question. It is because of this similarity I have chosen to deal with the three clauses in the same chapter as the discussion about safe ports.
5.3.2. Trading limits
It is common to provide the charterparty with a clause that limits the permissible geographical scope where the charterer may order the ship.
100
This is called the trading area and the clause limits the charterer’s authority, he may not order the ship outside of this area.
101
The trading area, and its particular limitations, is individually agreed upon in each charterparty. When coming to this agreement the shipowner’s foremost consideration is the safety of the ship. If damage occurs the ship is likely to go off-hire.
The owner must also make sure that the ship’s insurance cover is not lost due to that the ship being ordered outside the geographical scope of the policy. The charterer must, on his side, consider what type and scope of trade he wishes to employ the ship in before he agrees on a limited trading area. Thus, when determining the scope of such trading area it is necessary to draft the clause carefully. Examples of such trading clauses can be found both in the NYPE 1993 and the Gentime forms. NYPE 1993 cl. 5 states:
“The vessel shall be employed in such lawful trades between safe ports and safe places within… excluding… as the Charterers shall direct.”
As can be seen the clause is very open. It leaves it up to the parties to agree on a general trade area and exclusions therein. The Gentime form limits the trading area in more detail. Gentime cl. 2 (a) states:
“…The Vessel shall be employed in lawful trades within Institute Warranty Limits (IWL) and within the trading limits as stated in Box 13 between safe ports and safe places…”
The reference to the Institute Warranties the trading area that is allowed according to ordinary English insurance conditions. The reason for this reference is that the shipowner shall not, because of the charterparty, be obliged to let his ship go to an area which his insurance does not cover.
102
100 Cf. Falkanger, Introduction to Maritime Law, pp. 430-1, cf. Michelet, Håndbok i tidsbefraktning, p.
72, cf. Time Charters, p. 141.
101 Grönfors, Sjölagens bestämmelser om godsbefordran, pp. 253, 262.
Cf. The Temple Moat [1945] 79 Ll. L. Rep., p. 10.
102 Cf. Grönfors, Sjölagens bestämmelser om godsbefordran, p. 262, cf. Michelet, Håndbok i tidsbefraktning, p. 72.

44
However, what limitations the parties agree upon is, for the purpose of this paper, not important. What matters are the consequences of such a clause being inserted in the charterparty. Since the clause limits the charterer’s dispose of the ship it also, quite naturally, limits the charterer’s authority to give orders concerning the ship’s destination to the master. Since the charterer is under an obligation not to take the ship outside the allowed geographical area the master may refuse to obey such an order (see 8.3.5.).
103
5.3.3. Ice clauses
The basic idea behind an ice clause is that the master shall not be under a duty to take the ship to an icebound port. Under the term also falls the situation where the ship, while entering or leaving the port, would be endangered due to ice.
104
In the Swedish maritime code a corresponding provision is found in MC 14:58 paragraph two. It states:
“The carrier is not obliged to perform a voyage on which the vessel, persons on board or the cargo may be exposed to danger as a consequence of… ice… which he could not reasonably have contemplated when the contract was concluded.”
Since the time charterer has the commercial control of the ship the principal rule is that the master is obliged to obey an order to perform a certain voyage.
105
The paragraph states an exception to that rule though. If the ship, her crew or cargo would be endangered due to ice the master may refuse to obey the order. There should be no room for subjective considerations when the master refuses an order due to such a situation. It is not enough that the master believed, even though on excellent reasons, that the ship was in danger because of ice. If it later turns out that they misjudged the situation the refusal was incorrect. The time charterer may then, towards the shipowner, invoke those legal sanctions which are available (see 4.6.). The exception is also dependent on another precondition. An order may not be refused if the shipowner, when he agreed to the charterparty, reasonably should have contemplated the danger (see 5.2.2.).
106
Thus, ice clauses are, according to Scandinavian law, considered to be a limitation of the area which the charterer may order the ship to. The problems that arise are viewed upon in the same way as the problems which are connected with the charterer’s obligation to only order the ship to safe ports.
107
5.3.4. War clauses
Most charterparties contain a war clause.
108
The meaning of these clauses are somewhat shifting and it is not possible to speak of a uniformed practice. However, the point of departure of these clauses is that the ship shall not be exposed to any serious danger of war.
109
The different charterparties have different definitions of war, and the term is usually defined by enumerating different situations which are likely to arise. If such
103 Michelet, Håndbok i tidsbefraktning, p. 73, Time Charters, p. 141.
Cf. Todd [2000] LMCLQ, p. 409.
Cf. The Sussex Oak [1950] 83 Ll. L. Rep., p. 307.
104 Michelet, Håndbok i tidsbefraktning, p. 84.
Cf. Gentime cl. 2 (c) and NYPE 1993 cl. 33. These two clauses may exemplify such ice clauses.
105 Grönfors, Sjölagens bestämmelser om godsbefordran, p. 253.
106 SOU 1990:13, p. 206.
107 Michelet, Håndbok i tidsbefraktning, p. 86.
108 Cf. Gentime cl. 21 and NYPE 1993 cl.32. These clauses may exemplify such a war clauses. It is woth pointing out that the Gentime clause is, by far, more comprehensive than the one in NYPE 1993.
109 SOU 1990:13, p. 219.

45 situation arises the war clauses grants the shipowner the right to conduct certain measures to protect the ship. Without a war clause such measures might be considered to be an illegal deviation.
However, not all standard forms contain such a war clause. A good example of a form lacking such a clause is NYPE 1946. A Swedish court will, normally, fill out such a charterparty with the relevant provisions in the maritime code. Only if it is clear that the parties do not wish to apply the code’s supplemental rules the court will refrain from applying the so called “normal solution” 110 (see 2.5.2.).
The Swedish maritime code contains two sections which are of interest when one wishes to determine the limitation of the charterer’s right to dispose of the ship in war situations. The first provision, in MC 14:58 paragraph two, limits the charterer’s right to give voyage orders. It states:
“The carrier is not obliged to perform a voyage on which the vessel, persons on board or the cargo may be exposed to danger as a consequence of war, warlike conditions… which he could not reasonably have contemplated when the contract was concluded.”
The provision is written in a negative way. It limits the charterer’s right to expose the ship to war and warlike conditions. The discussion above concerning the paragraph is relevant here as well (see 5.2.2.).
The rule in MC 14:74 paragraph one instead grants a positive right, to the shipowner and the master, to remove the ship from such a danger. It states:
“If the vessel is at a port or in any other area where war breaks out, warlike conditions occur or the danger of such conditions increases essentially, the carrier is free to take the vessel immediately from the vicinity into safety.”
As can be seen the two provisions are in harmony. The master may, with the support of the former, refuse to take the ship into such area, while the latter conveys a positive right to remove the ship from the area in question. The two rules complement each other and grant the shipowner a fairly comprehensive protection against war situations.
Further, the provision in MC 14:74 paragraph one is based upon an appraisement between the two parties’ different interests. The underlying purpose was to make the appraisement reasonable and to form the provision so it did not contradict the prevailing charterparty practice.
111
5.3.5. The master’s position
The master must, when receiving a voyage order from the charterer, determine whether it violates any of the limitations that are put upon the charterer’s right of disposal. In clear cases there is usually no problem. If the order is legal, i.e. within the charterer’s authority as stated in the charterparty, he must obey the order. If it is illegal he may refuse to obey it. Problems arise, quite naturally, when the situation is doubtful. There are, in principal, two factors which may cause such uncertainty and doubt. First, the master must classify the situation at hand. He must, for example, determine whether the ice coverage pose an objective danger to the ship. Second, the master must determine whether the danger is severe enough to allow him to refuse the given order. It is important to remember that the master, and the shipowner, is obliged to expose the ship
110 Michelet, Håndbok i tidsbefraktning, p. 11.
111 Prop. 1993/94:195, pp. 326-7, SOU 1990:13, p. 219.

46 to certain risks. No voyage can be completely free of risk. What is apparent is that the master must act with great caution. How other ships in the same area acts is of great importance. The behaviour of other ships will, without doubt, be used as evidence in a possible later legal examination.
112
The most natural way for the master to act, when in doubt, is to standby and contact the shipowner. The shipowner may be in a better position to judge the situation and then issue instructions to the master. One solution, when the situation is unclear, is that the shipowner instructs the master to give the charterer an oral or written protest. If the charterer persists the master is further instructed to obey the given order and proceed despite that the ship may be exposed to danger. If it later turns out that the situation was dangerous and the ship is damaged due to such a peril, the protest may have legal significance for the shipowner. The protest may be used as evidence that it was the charterer’s fault or neglect that caused the damage.
113
However, it is important to remember that the charterer, according to Scandinavian law, is not considered to have guaranteed the ship’s safety just because he has ordered the ship to a particular place or area. The principal rule is, after all, that the shipowner, despite the charterer’s order, stands the risk of the ship being damaged.
114
Thus, the master must all the time proceed with caution. This risk allocation may affect the usefulness of issuing a protest to the charterer. The apparent drawback with issuing such a protest is that the charterer later may claim that the master knew about the danger since he, after all, protested against the order. However, it is, at the end of the day, probably better for the master to issue a protest than not.
115
112 Michelet, Håndbok i tidsbefraktning, p. 86.
113 Cf. MC 14:65 paragraph one.
114 Cf. ND 1928.11, pp. 11, 14.
115 Michelet, Håndbok i tidsbefraktning, p. 87.

47
6. Orders concerning the voyage itself
6.1. General
In the chapter concerning voyage orders I will deal with the type of orders that concerns the performance of the individual voyage itself. The principal rule is that the charterer is free to give orders as to the ship’s voyages within the parameters set out in the charterparty. There is, in a time charter, a fundamental division between the authority of the charterer and the master concerning the control over the ship. The charterer only controls the commercial use of the ship while the master and shipowner retain the control over the navigational aspects (see 3.1.). The problem is, not surprisingly, to determine what a commercial and what a nautical decision is. The questions and disputes that arise over the charterer’s voyage orders usually reflect the inherent conflict of interest which exists between the parties to the time charter.
6.2. The charterer’s authority to give voyage orders
There is, in most charterparties, a clause that states that the master is under the time charterer’s orders. Such clauses are found in both the Gentime and the NYPE 1993 forms. Gentime cl. 12 paragraph one states:
“The Master… shall at all times during the currency of this Charter Party be under the orders and directions of the Charterers as regards employment, agency or other arrangements. The Master shall prosecute all voyages with due dispatch…”
NYPE 1993 cl. 8 states:
“(a) The Master shall perform the voyages with due despatch and shall render all customary assistance with the Vessel’s crew. The Master… shall be under the orders and directions of the Charterers as regards employment and agency… “
As can be seen, the two clauses are worded in a similar way. The language may, at first sight, appear to give the charterer a wide-range authority over the master and the ship.
However, these clauses must, due to the nature of the time charter, be interpreted restrictively.
116 Both clauses uses the terms “employment and agency” in order to describe the time charterer’s authority. That expression is considered to refer to commercial orders only.
The principal rule in Scandinavian law is in concordance with the developed time charter practice which is reflected in the Gentime and NYPE 1993 clauses. The charterer acquires, after the initial delivery, the commercial control over the ship while the shipowner maintains the nautical control.
117
This may, indirectly, be concluded from the regulation in MC 14:52 paragraph one. It states:
“The time carrier shall place the vessel at the time charterer’s disposal at the place and time agreed.”
The delivery of the vessel constitutes the boundary line, in place and time, where the basic division of functions, between the parties to the time charter, begins to apply (see
3.1.). A consequence of this is that the charterer assumes the commercial risks of the
116 Falkanger, Introduction to Maritime Law, pp. 432-33.
117 Prop. 1993/94, p. 307, SOU 1990:13, p. 202, Grönfors, Sjölagens bestämmelser om godsbefordran, pp.
253-4.

48 ship’s operations.
118
There is one section in the Swedish maritime code that is directly concerned with such types of voyage orders. MC 14:58 paragraph one and two states:
“During the period of charter the carrier shall perform the voyages which the time charterer orders in accordance with the charterparty. …
The carrier is not obliged to perform a voyage on which the vessel, persons on board or the cargo may be exposed to danger as a consequence of war, warlike conditions, ice or any other danger or essential inconvenience which he could not reasonably have contemplated when the contract was concluded.”
As can be seen, the two paragraphs contain distinct rules. The first paragraph, which is quite general and straight forward, states the principal obligation. The master must obey the time charterer’s voyage orders as long as these orders are in concordance with the concluded contract. The second paragraph admits, in certain specific situations, an exception this principal obligation.
119 It is the fourth exception, “any other danger”, that is of interest here. It is a broad exception, any physical danger, outside the first three named dangers, ought to be covered by the expression. Thus, the master may, out of safety considerations, refuse to obey an order. The safety of the ship, her crew and cargo, takes precedence over the charterer’s right to dispose of the ship (see 4.4.2.).
However, the exceptions in paragraph two are also dependent on another precondition. If the shipowner, when he agreed to the charterparty, reasonably should have contemplated that such a danger or inconvenience was likely to arise due to a specific voyage or cargo, the shipowner may not refuse to obey the order in question.
120
The consequence of this is that the shipowner must bear any economic losses that arises, for example due to that the crew resigns or that the insurer denies to cover the particular risk that arises.
There should be no room for subjective considerations when the shipowner or the master invokes one of the exceptions in MC 14:58 paragraph two. If the refusal objectively falls under one of the exceptions it is correct. It should not be enough that one of them believed, even though for excellent reasons, that one of the situations in question were at hand. If it later turns out that they misjudged the situation and refused to obey a given order, the refusal was incorrect. The time charterer may then, towards the shipowner, invoke those legal sanctions which are available (see 4.6.).
It is apparent that the master’s conduct must be different depending on the situation.
The master may be well suited to determine if the ship is endangered due to some navigational and elemental hazards as, for example, a reef, a channel or a storm. The master is, after all, both experienced in these matters and he is the one that is actually onboard the ship. However, some form of communication with the shipowner is usually in place. A shore-based observer has a general view of the situation that the master may not be able to obtain.
118 Prop. 1993/94:195, p. 307, SOU 1990:13, p. 202.
119 SOU 1990:13, p. 206, Grönfors, Sjölagens bestämmelser om godsbefordran, pp. 254, 262.
120 SOU 1990:13, p. 206.

49
6.3. The separation between commercial and navigational orders
6.3.1. General
The boundary line between commercial orders, i.e. orders concerning the employment of the ship, and navigational orders is not fixed in the Swedish maritime code. The provision in MC 14:58 is of no help when one examines and tries to determine this boundary line. It is possible to look towards English law for guidance though.
6.3.2. The Hill Harmony case
A recent case, The Hill Harmony
121 , dealt with the issue of the charterer’s voyage routing orders. The case was, quite naturally, important when looking at, and classifying, routing orders alone. However, it deals extensively with the nature of voyage orders in principle and it may serve as a good illustration to the problematic situation.
The facts of the case were the following: The ship, the Hill Harmony, was chartered on an amended
NYPE 1946 time charterparty, which incorporated the Hague-Visby Rules. The dispute related to two trans-Pacific voyages. The charterer had ordered the master to take the northerly, more direct “Great
Circle Route”. These instructions were based on an advice which the charterer had received from a weather routing service, the Ocean Routes. However, the master decided instead to take the southerly, less direct “Rhumb Line Route”. This resulted in longer voyages and an increase in the bunker consumption. In total, the voyages took nine days longer than it would, had the master taken the “Great
Circle Route”. The master’s decision was based on the fact that he had experienced bad weather the two previous times he had taken the northerly route. However, the charterer was not satisfied with the master’s explanation and they deducted their calculated loss from the hire due to the shipowner. The shipowner denied liability and commenced an arbitration proceeding in London.
The majority of the arbitrators decided the case in favour of the time charterer. They found that the charterer’s order was legal. The master had no, or at least not established any, satisfactory reason that justified his decision to disobey the given order. Thus, the charterer won the arbitration proceeding. The decision was appealed to the High Court where judge Clarke, J. preceded. The judge came to the conclusion that such a routing instruction was an order as to navigation rather than employment. Thus, he reversed the arbitrators’ decision. Clarke, J. justified his decision in the following way:
“In my judgement an order as to where the vessel was to go, as for example to port A or B to load or discharge or to port B via port C to bunker would be an order as to employment of which the master would be bound to follow, subject of course (as all parties agreed) to his overriding responsibility for the safety of the ship. An order as how to get from where the ship was to port A, B or C would not, however, be an order as to employment but an order as to navigation. …In my judgement these considerations lead to the conclusion that a decision to whether to proceed across the Pacific by taking the great circle route or the rhumb route or course would also be a decision in and about navigation of the vessel and not in and about her employment.”
The Court of Appeal quoted the essence of Clark, J.’s decision and the court unanimously upheld his decision. The routing instruction was considered to be an order as to navigation rather than employment. If this decision had been upheld by the House of Lords the legal consequences had, from the time charterer’s point of view, been remarkable.
122
If the choice of route would be considered to be an order as to the navigation the master would not have to justify a decision to take a longer, more time-
121 The Hill Harmony [2001] 1 Lloyd’s Rep, p. 147.
122 Davies [1999] LMCLQ, p. 461.

50 consuming route than the one requested by the charterer. The master’s discretion on how to perform the voyages would be wide and the price of such discretion would have been gained on the charterer’s expense. However, the master and the shipowner are under an underlying obligation to perform the voyages with “due despatch”.
123
This obligation would, unless the charterparty states otherwise, protect the charterer to some extent.
124
The decision was, however, appealed to the House of Lords.
Lord Bingham stated there that “(i)t is not hard to think of orders which plainly relate to the employment of the vessel and others which plainly relate to its navigation. It is much less easy to formulate any test which clearly distinguishes between the two. The charterer’s right to use the vessel must be given full and fair effect; but it cannot encroach on matters falling within the specialised professional maritime expertise of the master, particularly where safety or security of the vessel, her crew and cargo are involved. He is the person, on the vessel, immediately responsible. Technical questions concerning the operation of the vessel are for him. …I am clear of the opinion that the majority of arbitrators were right to hold that the orders which the charterers were entitled to give and which (on the arbitrator’s findings) the owners were bound to comply. This does not mean that the charterers usurped the owners’ navigational responsibility.
…The responsibility for making good, so far as practicable, whatever course is chosen of course remain with the master and crew, as does that for navigating the vessel safely into and out of port, and responding to maritime problems encountered in the open sea. But subject to safety considerations and the specific terms of the charter, the charterers may not only order a vessel to sail from A to B but may also direct the route to be followed between the two.”
As can be seen from the above the House of Lords came to the conclusion that such a routing instruction from the charterer should be considered to be an order as to employment, and not an order as to navigation.
If one compares the House of Lord’s decision with that of the High Court and the
Court of Appeal it is apparent that they came to different conclusions as to where the boundary line between employment and navigation orders ought to be drawn. The first two courts drew the distinction between the voyage as such, ordered by the charterer, and the route chosen by the master to accomplish it. The House of Lords, on the other hand, regarded seamanship as the crucial factor.
125
Lord Hobhouse developed the point in the following way: “The meaning of any language is affected by its context. …‘Employment’ embraces the economic aspect – the exploitation of the earning potential of the vessel. ‘Navigation’ embraces matters of seamanship. …What is clear is that to use the word
‘navigation’ in this context as if it includes everything which involves the vessel proceeding through the water is both mistaken and unhelpful. …where seamanship is in question, choices as to the speed or steering of the vessel are matters of navigation, as will be the laying off a course on a chart. But it is erroneous to reason… from the fact that the master must choose how much of a safety margin he should have between his course and a hazard or how and at what speed to proceed up a hazardous channel to the conclusion that all questions of what route to follow are questions of navigation.”
As can be seen from the quote, Lord Hobhouse defined the concepts of employment and navigation in their context. To use the concepts without considering the context in which they are to be used, as he believed Clark, J. had done, would be erroneous. In the
123 Cf. MC 6:5, 14:64, 14:72, cf. Gentime cl. 12 paragraph one and NYPE 1993 cl. 8.
124 In The Hill Harmony case the charterparty in question incorporated the Hague-Visby Rules. The shipowner is not, according to Art. IVr. 2 (a), liable for loss or damage which arises due to deviation. The consequence of this is that the charterer may only claim damages which have arose due to “unreasonable” deviations.
125 Cf. Baughen [2001] LMCLQ, p. 178.

51 case of voyage orders Lord Hobhouse believed that the concepts of “employment” and
“navigation” must be related to issues of seamanship. If the order concerns seamanship it should be categorized as an order that relate to navigation, if not it would consequently would fall under employment.
This seems to be a reasonable view on how to use the two concepts of employment and navigation. To use them without paying heed to the context would, in most cases, lead to an inexpedient construction of statutes and charterparties. I also believe that a
Swedish court would see it in the same way. If the aim is to discover what purpose a statute have or what intention the parties to a contract had with a certain clause, it is necessary to construe words and concepts in the light of the context in which they are used (2.5.2.). Thus, I believe that The Hill Harmony case is relevant to Scandinavian law as well. I see no reason why a Scandinavian court would come to the conclusion that a routing order would be anything else than an order as to the employment of the ship.
6.4. The master’s position
When receiving an order on how to perform or execute the voyage itself, the master must first determine whether it is an order as to employment or as to navigation. If the order can be considered to be an order as to the employment of the ship the principal rule is that the master is obliged to obey the order. However, there are exceptions to this rule. The master may justify a contrary position on, for example, the grounds of safety.
These exceptions limit the charterer’s authority (see 4.4.). If the order, on the other hand, concerns the navigation of the ship it follows, since the charterer has no authority to give such an order, that the master is not obliged to obey the request. The navigational decisions are reserved for the master and the shipowner. This is, under a time charter, the furthest limit of the charterer’s authority (see 3.1.).
It is, as can be seen from the discussion above, not an easy task to draw the boundary line between the two types of orders. In order to separate the two categories of orders Donald Davies has expressed the view that “(e)mployment… should be looked upon as the “strategy”, while strict navigation matters should be considered as “tactics” which are relevant to the implementation of the strategy.” 126 The former is the overall decisions that are part of the commercial background to the charter. Examples of such decisions are to take the ship from port A to B and what general route the ship shall take during the voyage. The latter has to do with decisions on route, i.e. decisions on how to accomplish the charterer’s order. Examples of such decisions are how the ship shall pass a reef, avoid a severe storm or call at the port of destination. The House of Lords referred to, in their decision in The Hill Harmony case, the concept of “seamanship”.
This was considered to be the crucial factor when the court categorized a routing order as an order of employment. It was stated that it is only possible to categorize the master’s decision as a navigational decision when it includes some element of
“seamanship”. If there is no such element the master’s refusal to obey an order would encroach upon the charterer’s right to use the commercial capacity of the ship. These two sets of guidelines well reflect the commercial nature and the underlying purpose of the time charter. The basic division of functions between the parties and the risk allocation which follows from that division are, through the guidelines, considered.
126 Davies [1999] LMCLQ, p. 463. Even though concerning routing orders the statement has a general applicability. Thus, it can be used as a yardstick when examining other types of voyage orders as well.
The article was referred to by the House of Lords in The Hill Harmony case.

52
The principal rule, when the master is faced with an order as regards the employment of the ship, is then that he is obliged to obey it. However, as has been mentioned above, the master may justify a refusal, i.e. he may always show that it was not reasonable for him to follow the order.
127
The security of the ship, her crew and her cargo always take precedence before an order as to the employment of the ship. It is the shipowner, and the master, who has the burden of proving that the refusal was reasonable though. If they, on the balance of probabilities, can justify such a decision the charterer is prevented from invoking any legal sanctions. However, the master may not, as the master in The Hill Harmony case did, use an unjustifiable excess of caution.
128
The master is, after all, expected to expose the ship to certain perils; such perils are inherited in the trade. Thus, a voyage can never be completely without any risk. When determining what kind of risks the master is expected to accept one must look at the circumstances in each individual case. If the master can not establish such reasonable grounds, i.e. to show that compliance with the charterer’s voyage order would have endangered the ship, the shipowner will be exposed to the charterer’s legal claims (see 4.6.).
127 Cf. Davies [1999] LMCLQ, p. 461, Baughen [2001] LMCLQ, p. 179, Davenport [1998] LMCLQ, p
504.
128 An example of such an overcautious master is found in The Hakefjord case (see 4.4.2.).

53
7. Orders concerning the loading and discharging process
7.1. General
There are, in principal, two questions which arise in these situations. First, what kind of orders may the charterer give concerning the loading and discharging processes?
Second, what kind of cargo may the charterer order the master to transport onboard the ship? I will deal with these two questions separately.
7.2. The loading and discharging process
7.2.1. The charterer’s control
The question that is important here is to what extent the charterer may direct and control the loading and discharge processes. The charterer’s and the master’s different positions during these processes may be regulated in the charterparty. Such clauses are found in both the Gentime and the NYPE 1993 forms. Gentime cl. 12 paragraph one states:
“The Master… shall at all times during the currency of this Charter Party be under the orders and directions of the Charterers as regards employment, agency or other arrangements. The Master shall… supervise loading and discharging operations to ensure that the seaworthiness of the Vessel is not affected.”
NYPE 1993 cl. 8 (a) states:
“The Master shall… render all customary assistance with the Vessel’s crew. The Master shall… be under the orders and directions of the Charterers as regards employment and agency; and the Charterers shall perform all cargo handling, including but not limited to loading, stowage, trimming, lashing, securing, dunnaging, unlashing, discharging and tallying, at their risk and expense, under the supervision of the
Master.”
These clauses establish three things. First, the loading and discharge operation is the charterer’s responsibility.
129
Second, the charterer may demand that the master and the ship’s crew render him customary assistance and participates in these operations. This obligation was discussed above (see 4.1.2.). Third, the master shall supervise the loading and discharge operations. It is only the third point that is of interest here. The
Gentime clause expressly states that the master shall ensure that the ship remains seaworthy after the cargo operation. Thus, the master must, if there is a risk that the ship becomes unseaworthy, step in and direct the operation himself. Such an overriding right is not expressly stated in the NYPE 1993 clause. It is, however, considered to be implied in the charterparty that the master may stop the operation if there is such a risk.
The consequence of this is, of course, that the charterer’s right to give orders concerning the loading and discharge operation is limited. He may not give an order if there is a risk that the ship, as a consequence of the order, becomes unseaworthy.
129 This is not expressly stated in the NYPE 1946 form (see line 76-9). However, a court will usually construe the charterparty is such a way that it puts the responsibility for the loading and discharge operations on the charterer.
Cf. Michelet, Håndbok i tidsbefraktning, pp. 127-8, cf. Time Charters, p. 303.

54
The Swedish maritime code regulates this type of order in MC 14:61 paragraph one and two.
130
The section concerns both the loading and the discharge operation. It states:
“The time charterer shall be in charge of reception, loading, stowage, trimming, securing, discharge and delivery of the cargo. Stowage shall be so performed that the vessel is safely stabilised and the cargo secured. The time charterer shall follow instructions of the carrier concerning the distribution of the cargo on board as far as required for the vessel’s safety and stability.
The time charterer may require such assistance by the master and crew as is customary in the trade in question. Compensation for overtime work and other special expense for such work shall be paid by the time charterer.”
The principal rule, as stated in paragraph one, is that the charterer is in charge of the loading and discharge operations. He may also, according to paragraph two, require that the master and the ship’s crew to assist him during the operations (4.1.2.). However, this right to give orders has expressly been limited. The ship’s “safety and stability” may not be endangered by the charterer’s orders. The underlying reason for this limitation is that the shipowner, throughout the charter period, retains the nautical responsibility of the ship.
131
7.2.2. The definition of seaworthiness
Apparently the master may refuse to obey an order on how to conduct the loading or discharge operation if the ship’s safety is endangered. What limits the charterer’s right to give an order then depends on how “seaworthiness” or “safety and stability” is defined. Seaworthiness is a relative term; its definition varies according to the context.
When defining it one has to consider the type of voyage, the type of cargo to be transported and the time of the year.
132
It should be noted that seaworthiness also can be a narrow or a broad concept. The narrow, technical sense means that the ship shall be in a condition to perform the planned voyage without endangering human life. The broad sense means that the ship shall also be cargoworthy, i.e. the ship shall be in such a condition that the cargo is expected to reach the planned port of discharge undamaged.
133
Looking at the expression “the vessel’s safety and stability” in MC 14:61 one can conclude that it means that the ship shall be seaworthy. The question is, however, whether it is seaworthiness in the broad sense or just in the narrow that is covered by the section. It is possible to argue that the charterer shall, since he has the commercial control over the ship, be able to, if he wishes, endanger the cargo. The charterer may, for example, wish to leave a port quickly. If this means that the cargo risk being damaged during the voyage he may believe it is worth it. This was the legal order according to the old maritime code.
134
However, the paragraph in the new maritime code should be read to mean seaworthiness in the broad sense. There are two reasons for this. First, the shipowner is, according to MC 13:24, responsible for the goods while it is
130 Prop. 1993/94:195, p. 315, SOU 1990:13, p. 208. The two paragraphs are formed after the basic division of functions between the shipowner and the time charterer which is considered to be common practice. Thus, the purpose of the paragraphs is not to change the prevailing practice.
131 Prop. 1993/94:195, p. 315, SOU 1990:13, p. 208.
Grönfors, Sjölagens bestämmelser om godsbefordring, pp. 257-8.
132 SOU 1990:13, p. 136.
Cf. ND 1919.364, pp. 366-7, cf. ND1975.85, pp. 91-2, cf. ND 1987.229, p. 233.
133 SOU 1990:13, pp. 135-6. Cf. Falkanger, Introduction to Maritime Law, pp. 290-1.
134 Grönfors, Sjölagens bestämmelser om godsbefordran, p. 258.

55 in his custody. If the goods are damaged he may, according to 13:25, be held liable towards a third party. These rules are, due to the reference in MC 14:5, mandatory.
Since the shipowner may be held liable for any damage to the cargo it seems reasonable that the master may make sure that the cargo is distributed in such a way that the risk of damage is acceptable. Second, further support for this view is found in the preparatory works. It is stated that the purpose of the term “seaworthiness”, in the new code, shall cover seaworthiness in the broad sense. The previous distinction between seaworthiness in the broad sense and the narrow, technical sense had ceased to serve its purpose. Thus, the term is relative.
135
7.2.3. The master’s position
The master’s part in the loading and discharging process is important. Even though these operations are the charterer’s responsibility it is the master’s duty to supervise it.
Both the Gentime and the NYPE 1993 forms explicitly state that the master shall perform such supervision. However, since the there are safety aspects involved the master is entitled to such supervision irrespective of the clauses in question. This right is expressly stated in MC 14:61, but it would otherwise follow from the nature of the time charterparty.
136
Thus, when receiving an order which concerns the loading or discharge of the cargo the master must determine whether the order may affect the seaworthiness of the ship. If there is an evident risk that the ship, because of the operation, risks becoming unseaworthy the master may refuse the order.
7.3. Orders concerning the disposal of the ship’s transport capacity
7.3.1. General
The ship itself, for example its’ type, condition, and internal lay-out, will set certain restrictions on what type of cargo the ship in question can transport. For example, oil must be carried in a tanker and fresh fruit can only be carried on a reefer vessel.
137
However, the charterparty itself usually sets further limitations on what type of cargo the charterer is allowed to transport. It is common to provide the charterparty with a clause stating that the charterer shall not be allowed to transport unsuitable, dangerous or illegal goods. Such clause limits the charterer’s right to dispose of the ship’s transport capacity.
138
The consequence for the relationship between the time charterer and the master is given. The master is not obliged to obey an order that would lead to that such excluded cargo is transported on the ship. If the charterer, despite this, orders the master to undertake such a transport and the shipowner either are unaware of this or instructs the master to obey the order under protest, the shipowner may later claim damages. Such damages would consist of an additional remuneration based on the difference between the agreed hire and the current market rate for carriage of the excluded cargo.
139
However, even though the consequence may seem clear-cut and straightforward enough there are numerous problems. To begin with, the master must classify the cargo that the charterer wishes to carry onboard the ship. He must also determine whether the cargo in
135 SOU 1990:13, pp. 135-6.
136 Time Charters, p. 305. Such a right to supervise cargo operations exists in English law as well.
Cf. The Panaghia Tinnou [1986] 2 Lloyd’s Rep., p. 591.
137 Cf. Falkanger, Introduction to Maritime Law, p. 431.
138 Cf. The Sussex Oak [1950] 83 Ll. L. Rep., p. 307.
139 Time Charters, p. 166.

56 question is unlawful, dangerous or otherwise excluded by the charterparty. The master must then determine how he shall act. As usual, problems arise in uncertain situations, i.e. when the master faces a situation where he is unsure of how the cargo shall be classified.
7.3.2. Unlawful cargo
7.3.2.1. General
The majority of charterparties also contain a clause that states that the charterer only may carry lawful goods onboard the ship. His right to dispose of the ship’s transport capacity is limited to such goods. An example of such clauses is Gentime cl. 2(a) and 3
(a).
140
The clauses states:
“The vessel shall be employed in lawful trades within…”
“…The Vessel shall be employed in carrying lawful cargo. …”
It also follows from general legal principles that he may not order the master to undertake to transport unlawful cargo. The charter can, after all, not demand that the master, or the shipowner for that matter, shall commit an unlawful act. In the Swedish maritime code there is one paragraph, MC 14:58 paragraph two, which concerns these situations. It states:
“The carrier is not obliged to perform a voyage on which the vessel, persons on board or the cargo may be exposed to danger as a consequence of… or any other… essential inconvenience which he could not reasonably have contemplated when the contract was concluded.”
The exception, “any other essential inconvenience”, aims at situations where the ship is not in any direct danger of sustaining physical damage. It is applicable if the ship, due to the charterer’s order, is put in an economic peril. Examples of such perils is if the ship would risk being withheld or arrested in a port, become subjected to an embargo or being subjected to a future boycott or embargo due to the political conditions in an area.
141 The foremost use of this provision is in situations where the charterer orders the master to load and transport cargo which is considered to be unlawful (see 4.4.4.). If that is the case the master may, with the support of MC 14:58 paragraph two, refuse the order. The provision is dependent on another precondition though. If the shipowner, when he agreed to the charterparty, reasonably should have contemplated that such a danger or inconvenience was likely to arise due to a specific voyage or cargo, the shipowner may not refuse to obey the order.
142
Thus, in certain situations the master may not refuse to transport unlawful cargo.
140 Cf. NYPE 1946 line 24-5 and NYPE 1993 cl. 4.
141 Prop. 1993/94:195, p. 313, SOU 1990:13, p. 206, Grönfors, Sjölagens regler om godsbefordran, pp.
262-3.
142 SOU 1990:13, p. 206.

57
7.3.2.2. Various situations when cargo can be classified as unlawful
The problem is then how to define lawful and unlawful cargo. There are a number of different situations where the goods, or the transport of it, could be considered to be unlawful. These situations could be classified into the following categories:
143
1. It is illegal according to the law in the country where the loading port is situated.
There could, for example, be a ban on the export of the goods.
2. It is illegal according to the law in the country where the planned port of discharge is situated. There could, for example, be a ban on the import of the goods.
3. It is illegal according to the law of the ship’s flag.
4. It is illegal according to the law in the country domicile of the shipowner or the charterer.
5. It is illegal according to the law of the country which law shall apply according to the charterparty.
6. A court may consider that some types of goods always should be considered to be unlawful, despite the relevant laws and regulations.
The first and second situations have a reasonable straightforward solution. If the goods itself, or the export of it, is unlawful according to the laws, rules or regulations in the country where the port of loading is situated, the goods should be considered to be unlawful.
144
The same applies if the goods itself or the import of it is unlawful in the planned the port of discharge. The charterer can not demand that the shipowner shall undertake such a transport. It will not make a difference if the charterparty explicitly states that a particular type of cargo, which is unlawful in these situations, shall be transported. A Swedish court would not uphold such a clause since it follows, from general legal principles, that a contract that states that one of the parties shall commit an unlawful act can not be enforced in courts.
145
A good example of the second situation is found in The Dodecanese .
146
The facts of the case were the following: The time charterer used the ship, the Dodecanese, to transport military stores and ammunition to the British expeditionary forces in Egypt in 1951. Because of this transport the ship was black-listed by the Egyptian authorities. On its way from the port of discharge the ship’s engine broke down. Because of the previous black-listing the Egyptian authorities refused to allow any repairs to be done in any Egyptian port. It took, due to this, thirty days to repair the ship. The charterer claimed that the ship went off-hire during this delay while the shipowner demanded hire to be paid for the whole period.
The court ruled in favour of the shipowner. The court stated:
147
“It is clear that if any real meaning is to be given to the words “lawful merchandise” which are, of course inserted into the charter-party for the protection of the owners, the goods loaded without breach of the law in force at the port of loading. Inasmuch as the master is under the general orders of the charterer as to where a cargo shall be carried within the charter limits, it is at least logical to suppose that the charterer undertakes that the cargo shall also be the type of cargo which can be lawfully carried and discharged at
143 Michelet, Håndbok i tidsbefraktning, pp. 88-91.
144 Michelet, Håndbok i tidsbefraktning, p. 88, Time Charters p. 165.
Cf. Shelltime 4, cl. 40. The clause explicitly exempts such transports.
145 Adlercreutz, Avtalsrätt I, section 10.1, Lehrberg, praktisk juridisk metod, pp. 101-4.
146 The Dodecanese [1953] Lloyd’s Rep., p. 47.
147 The Dodecanese [1953] Lloyd’s Rep., pp. 55-6.

58 the port to which he has ordered the vessel to proceed. …If the cargo could not lawfully be discharged at the port where the charterers ordered it to be discharged it was not, in my opinion, lawful merchandise.”
This line of reasoning is valid according to Scandinavian law as well.
The third and fourth situation may be examined jointly. A country which the parties to the contract or the ship itself is connected too may pass a general law that deems the cargo, or the handling of it, to be unlawful. The two situations may be illustrated by two questions.
148 First, the law according to the ship’s flag may state that ships which are registered in the country are forbidden to undertake certain types of transports. Such a law could be, and most likely is, part of a sanction measure. That such law makes the cargo unlawful for the shipowner to handle is clear. The question is whether the shipowner is able to refuse to undertake a transport because of the law of the ship’s flag.
Second, the law of the charterer’s or the shipowner’s home country could in, a similar way, lay down that the particular types of transports are unlawful. The question is then whether the shipowner is able to invoke such a law in order to refuse the transport in question, i.e. is he able to avoid the charterparty because of the laws in the parties’ respective home countries? The prevalent position, in Scandinavian law, seems to be that the shipowner, legally, can refuse to undertake the transport in all of these three situations. Michelet has justified this position by suggesting that, besides strict legal aspects, commercial factors shall be taken into account when one determines whether a particular type of goods is lawful or not.
149
Thus, one should, in order to determine whether a particular cargo is classified as unlawful, look at the consequences for the shipowner if he undertakes the transport. This should be the principal rule and this view is in line with the provision in MC 14:58 paragraph two (see 7.3.2.1.).
The most common situations where these problems arise are in cases of boycotts, i.e. economic sanctions against one or more countries. A boycott could either be purely national or more wide-spread and, thus, international. The most wide-spread, and probably most efficient, boycotts are those imposed by the UN. If a shipowner violates an imposed sanction he may suffer severe economic consequences. The shipowner is, if the violation becomes known, likely to risk being fined or getting his property confiscated. The most typical measure would be to arrest the ship if it enters a port in a country which laws has been violated. Even if the shipowner does not suffer any immediate consequences the violation may still affect him. If a country is aware of the violation and its authorities are determined to punish the shipowner, that country and its ports would be effectively blocked to the shipowner. He could not trade in the country’s ports since he would risk getting his ship arrested if he did. Because of these consequences it may seem reasonable that the shipowner may refuse to let the charterer undertake a transport that is likely cause such consequences.
This line of reasoning may not be taken too far though. Even if violating a boycott may have economic or legal consequences for the shipowner he may not always be able to avoid the charterparty because of it. One must bear in mind that the shipowner, after all, has agreed to put the ship’s commercial capacity at the charterer’s disposal. From the time charterer’s point of view, it would seem unreasonable if the shipowner had, by referring to different boycotts, too much discretion to avoid the charterparty. Michelet seems to believe that there are situations when the shipowner no longer can refer to the law of his own country in order to undertake a transport. If the ship is owned by
148 Michelet, Håndbok i tidsbefraktning, pp. 89-90.
149 Michelet, Håndbok i tidsbefraktning, p. 89.

59
Swedish interests but registered in a foreign country, the shipowner should not be able to refuse a transport due to a purely national boycott.
150
That a Swedish shipowner strives after abiding Swedish law is quite naturally. He may in fact, under a boycott law, also come under a legal obligation to abide the national law. Such an obligation may, by the home state, be laid upon the shipowner despite that the whole charter operation takes place outside the country. However, such a legal obligation does not necessarily release the shipowner from his obligations according to the charterparty. The prevalent position, in Scandinavian law, seems to be that if a shipowner agrees to a charterparty, in which he puts the ship at the charterer’s disposal, he can not avoid the contract by referring to a purely national boycott. Such boycott does not set aside the clauses in the charterparty.
151
However, if a boycott is declared by the UN, it must be respected. A transport in violation of such a boycott would always be considered to be unlawful.
152
In principal, it all comes down to risk allocation. Which party shall stand the risk of the goods being classified as unlawful? In cases of purely national boycotts it seems reasonable to let the shipowner stand the risk. The event can be considered to take place on the shipowner’s side and the charterer is, after all, in no position to foresee such a boycott. Since an international boycott is an event that affects the world’s entire merchant fleet it seems, in that situation, reasonable to let the charterer stand the risk for that event. It would, after all, not have mattered for the charterer if he had chartered a ship from a different shipowner, all time charters are affected by such an event.
The fifth situation does not have an easy answer. Should one, when determining whether the transport is lawful or not, consider the law that governs the charterparty?
The view in English law seems that the master may refuse the cargo if it is unlawful under the proper law of the charter. This is probably the true in Scandinavian law as well, at least if the ship risks such an economic peril as is covered by the provision in
MC 14:58 paragraph two.
153
That leaves the sixth situation. It is possible that certain types of goods always, by the courts, may be considered as unlawful.
154 Narcotics, contraband goods, NBCweapons are examples of such goods. There are no Scandinavian or English cases on that subject though.
7.3.2.3. Conclusions
As can be seen from the discussion above, it is hard to exactly pin down what the
Scandinavian law prescribes on this subject. Especially the third and the fourth situations may seem to be a bit unclear. To separate between boycotts issued by the shipowner’s home state and the UN may seem to be a bit arbitrary and inconsistent.
However, it all comes down to risk allocation. One must determine whether it is the shipowner or the charterer who shall stand the risk of certain types of goods or trade being declared to be unlawful.
150 Michelet, Håndbok i tidsbefraktning, p. 89.
151 Michelet, Håndbok i tidsbefraktning, p. 89.
Cf. Time Charters, p. 165. It should be noted that the prevailing view in English law seems to be that the master may refuse the cargo if it is, for any reason, unlawful under the proper law of ship’s flag.
152 Michelet, Håndbok i tidsbefraktning, p. 89.
153 Time Charters, p. 165. Cf. Michelet, Håndbok i tidsbefraktning, p. 90.
154 Cf. Michelet, Håndbok i tidsbefraktning, p. 90.

60
As was stated in the section above, Michelet has suggested that, besides strict legal aspects, commercial factors shall be taken into account when one determines whether a particular type of goods is lawful or not. In other words, the master may refuse to transport unlawful cargo if the shipowner may suffer economic damages thereof.
155
This statement is in line with the provision in MC 14:58 paragraph two. Thus, the master may refuse to transport goods on two grounds. First, if the goods would expose the ship and the shipowner to direct intervention from the authorities, for example that the ship risks being arrested in a port. Second, if the goods would expose the ship or the shipowner to other economic sanctions, for example a boycott. However, this risk should be serious and the economic risk should be perceptible, i.e. the economic sanction should have a sufficiently connection to the time charter.
As was stated above, a purely national boycott could then, if laid down by the shipowner’s home country, never constitute a valid reason for the shipowner to refuse a transport. However, if the shipowner violates such a boycott he may very well both expose himself to direct intervention from the authorities or other economic sanctions.
The consequence of the Scandinavian solution is that such risks are always considered to be borne by the shipowner. One may then ask the question why the laws issued by the ship’s flag state constitute a valid reason for the shipowner to refuse to undertake a transport. The underlying reason for this should, as follows from the discussion, be that the laws of the ship’s flag state always is considered to be so closely connected to the charterparty that the shipowner is able to refuse a transport by referring to such a law.
7.3.3. Dangerous cargo
7.3.3.1. General
The Swedish maritime code contains one paragraph which regulates the shipowner’s obligation to transport dangerous goods. The issue is covered by MC 14:58 paragraph three. It states:
“The carrier is not obliged to load goods of an inflammable, combustible or corrosive nature on board or the cargo or other dangerous goods, unless delivered in such condition that they can be carried and delivered in accordance with the requirements and recommendations prescribed by the authorities of the country where the vessel is registered, of the country where the managing owner has his main office and of the ports called at on the voyage. Nor is the carrier obliged to bring live animals on the voyage.”
The corresponding rule in the old MC, 142 §, simply stated that the shipowner could refuse to transport dangerous goods onboard the ship. The current regulation gives the charterer the right to transport such goods if it can be done safely. The reason for this change, in favour of the charterer, is the development that has occurred in the industry.
Today, the modern industrial society requires transports of such goods in a much higher extent than was the case earlier in the century. With the increasing need of these types of transports a comprehensive system of, both national and international, security regulations has developed. Since such goods today may be transported safely it is not unreasonable to require that a chartered ship shall transport them.
156
The principal rule is therefore that the shipowner is obliged to carry dangerous goods if the time charterer has made sure that the goods can be transported safely. In principal, the charterer fulfils this requirement by making sure that the goods are packaged in such a way that there is
155 Michelet, Håndbok i tidsbefraktning, p. 89.
156 Prop. 1993/94:195, pp. 313-4, SOU 1990:13, pp. 206-7.

61 no risk that the goods, for example through leakage or spontaneous combustion, may damage the ship in any way.
However, in order to make sure that the shipowner shall not come into a conflict with any official rules and regulations it is stated that the carriage shall be performed in accordance with those requirements and recommendations prescribed by three different authorities.
157
These are: the authorities of the country where the vessel is registered, the authorities of the country where the managing owner has his main office and the authorities of those ports that will be called at during the transport. Even though MC
14:58 is worded in a general way, it is only such official, mandatory decrees that the shipowner is bound to obey which are considered. The shipowner can not refuse to transport the cargo by referring to a purely voluntary recommendation.
158
The consequence of the code’s regulation is that the master must, if the time charterer has fulfilled the code’s requirements, accept an order to transport dangerous goods. If the shipowner further wishes to limit the time charterer’s authority to carry certain types of cargo he must make an explicit reservation in the charterparty.
159
7.3.3.2. Different types of dangerous cargo
If one construes MC 14:58 paragraph three it is obvious that the purpose of the paragraph is to allow the shipowner to refuse to transport cargo that may cause damage.
There are two types of damage which may arise as a consequence of dangerous goods.
First, damage may occur to the ship itself, her crew and other cargo. Second, damage may occur to the surrounding environment, other property or people. Such damage will, in one way or another, affect the shipowner.
There are, in principal, two types of dangerous cargo. The type that is inherently dangerous and the type that may, under certain circumstances, become dangerous.
However, to establish an adequate definition of the term “dangerous cargo” is quite difficult. This is because of the second type of dangerous cargo. Most types of cargo may, for some reason, be considered to be dangerous. For example, a simple barrel of syrup may, if it springs leak, cause damage to other cargo. However, such risk is not enough for a barrel of syrup to be classified as dangerous. The risk of damage must be more severe than an everyday risk; the potential damage must be severe. Thus, it is necessary, when determining whether a particular cargo should be classified as dangerous, to look at the circumstances in each individual case.
160
Since it is stated that the shipowner do not have an obligation to carry “other dangerous goods” the scope of the paragraph is very broad. Thus, a Swedish court is, because of this broad scope, permitted to compare the situation, i.e. the cargo and the applicable rules and recommendations, to the provision’s purpose. Thus, a Swedish court would look at the possible consequences of transporting the goods in question. If there is a perceptible risk that damage would occur, the goods would be classified as dangerous.
157 Prop. 1993/94:195, pp. 313-4, SOU 1990:13, p. 207.
158 Ibid.
159 Cf. Prop. 1993/94:195, p. 314, SOU 1990:13, p. 207.
160 Falkanger, Introduction to Maritime Law, pp. 297-8.
Cf. The Agios Nicolas [1968] 2 Lloyd’s Rep., pp. 60, 62.

62
A statement made by Stephen Girvin illustrates the modern approach to dangerous cargo quite discerningly.
161
“…(W)e all would be well advised to adjust our terminology and think in terms of dangerous situations rather than dangerous cargo , and thus to recognise that the nature of the cargo is only one of the elements in the complex of facts giving rise to the rights and liabilities of the parties to the adventure.”
7.3.4. The master’s position
As can be seen from the discussion above (see 7.3.2. and 3) it can be quite difficult to determine whether a cargo shall be classified as unlawful or dangerous. It is even more difficult to establish when a master may refuse to transport such unlawful or dangerous cargo. A master will rarely come in direct contact with the cargo before the loading process begins. He may, however, sometimes receive information at an early stage concerning what kind of cargo the charterer is planning to transport on a coming voyage. It might then, on that initial information, be possible for the master to determine whether he is obliged to transport the goods or not. It is usually not until the loading commences that it is possible for the master to determine the cargo’s status, i.e. whether it is unlawful or dangerous. That is, of course, rarely an easy task.
162
The master’s choices and possible actions, when receiving the order to load a particular cargo, may be summarized as follows: First, he must determine whether the cargo is lawful or unlawful. If the cargo is unlawful he may refuse to transport it. The master is only obliged to obey such orders that concerns lawful goods. Thus, he may refuse to load the goods or he may, if the goods all ready have been loaded, unload the goods. Second, if the goods in question are lawful he must then determine whether it is dangerous or not. As been stated above (see 7.3.3.1.), the master may not refuse to transport the goods just because the goods may be considered to be inherently dangerous.
163 If the charterer has followed the prescribed rules and recommendations which concerns transports of the type of goods in question, the master is obliged to transport the goods. The master may only refuse the goods if these rules and recommendations have not been followed. He is neither obliged to load such cargo onboard the ship or transport it.
It is important that the master acts prudently when making his decision whether to refuse the goods or not. If the master refuses to take the cargo, and the refusal later turns out to be unjustified, it may have legal consequences for the shipowner.
164 First, the charterer may claim that the ship went off-hire during the time it is delayed. Second, the charterer may also claim damages if he has suffered an economic loss because of the master’s refusal. If the charterer accepts the refusal and decides to transport some other cargo he may, if the new cargo pays less, claim damages due to the economic loss.
The master must have good reasons for refusing to load a particular cargo or to execute a transport. However, the master may be put under a substantial amount of pressure to, nevertheless, load and transport cargo in question. Even the shipowner himself may sometimes put such pressure on him. The shipowner is not, after all, keen on the idea of the ship going off-hire. If the master gives in to the pressure and, despite the unlawful or dangerous nature of the cargo, undertakes the transport that action might
161 Girvin [1996] LMCLQ, p. 487.
162 Cf. Michelet, Håndbok i tidsbefraktning, p. 95.
163 Cf. Michelet, Håndbok i tidsbefraktning, p. 93.
164 Cf. Michelet, Håndbok i tidsbefraktning, pp. 94-6.

63 have repercussions. The charterer may then, in a later legal proceeding, claim that the master should have prevented the transport. The charterer will make that claim in order to avoid becoming liable to the shipowner for any damaged caused by the goods. Since the master, according to Swedish law, is considered to be the shipowner’s employee during the time charter period such defence is a valid one. If it succeeds it will effectively put the whole responsibility for the damage upon the shipowner.
165
165 Cf. ND 1915.61, pp. 62-3, cf. ND 1959.55, p. 62.

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8. Orders concerning the signing of the bill of lading
8.1. General
The handling of the bill of lading may give rise to numerous conflicts between the shipowner and the charterer. The bill of lading is a vital element in today’s international trade and it is, for the charterer, necessary that this handling works properly. If it does not, the charterer may not be able to use the full commercial capacity of the ship. The charterer’s problem lies in the fact that the issuance and content of the bill of lading lies within the master’s control.
166 One must, after all, remember that the purpose of a normal timecharter is “to enable the charterers to use the vessels during the period of the charters for trading in whatever manner they think fit.” 167
The charterer’s primary concern is two things: First, he needs a bill of lading to begin with. Without the bill he is not able to use the full commercial capacity of the ship. Especially when trading outside of Europe the bill of lading is an integral part of the commercial transaction.
Second, he may wish to determine the content of the bill in detail. He may, for example, wish to obtain a so called “clean” bill of lading. The question is then what authority the charterer has, in different situations, to determine the content of the bill itself.
However, it is not necessarily the master who signs the bill of lading. The charterer may be granted the authority to sign the bill himself or let one of his agents sign it. Such right can be expressly stated in the charterparty or it could be granted during the charterperiod.
168
However, that situation lies outside the scope of this paper. Since I am, for the purpose of this paper, only interested in examining the charterer’s right to give orders to the master I will leave that situation outside the discussion.
8.2. The master’s obligation to issue a bill of lading
That the master has an obligation to, on request, issue a bill of lading is clear. In the
Swedish maritime code this issue is regulated in MC 14:62 paragraph one. It states:
“The carrier shall issue bills of lading for loaded cargo as ordered by the time charterer in respect of the voyage he is to perform, on conditions customary in the trade in question. If thereby he incurs liability to the holder of the bill of lading in excess of what follows from the charterparty, the time charterer shall indemnify him therefor.”
This paragraph corresponds to the old MC 141 § and there were, when the new maritime code was implemented, no intention to change the purpose of the section.
169
As can be seen the statutory text states that the charterer can order the master to issue a bill of lading. However, the master is only obliged to issue bills which comprise
“conditions customary in the trade in question”. It follows that the master may refuse to sign a bill that contains a clause that is not customary in the relevant trade. What is customary must be decided in each individual case. There is a similar prerequisite in
English law. According to English law a master may refuse to sign a bill if an
“extraordinary term” has been inserted therein.
170
166 Cf. Gaskell, Master and Charterer, p. 59.
167 Time Charters, p. 327.
168 Cf. Michelet, Håndbok i tidsbefraktning, pp. 374-377.
169 Prop. 1993/94:195, p. 316, SOU 1990:13, p. 209.
Cf. Grönfors, Sjölagens bestämmelser om godsbefordran, p. 260.
170 Cf. Michelet, Håndbok i tidsbefraktning, p. 373.
Cf. The Berkshire [1974] 1 Lloyd’s Rep., p. 188.

65
The usual standard forms expressly state that the time charterer shall have the right to demand that a bill of lading is issued.
171
Both the Gentime and the NYPE 1993 forms contain such a clause. The relevant part of Gentime cl. 17 states:
“(a) …(1) The Master shall sign bills of lading or waybills as presented in conformity with mate’s receipts. …”
(e) …The Charterers shall pay for and/or indemnify the Owners against any loss, damage or expense which results from any breach of the provisions of this Clause 17.”
The relevant part of NYPE 1993 cl. 30 states:
“(a) The Master shall sign the bills of lading or waybills for cargo as presented in conformity with mates or tally clerk’s receipts. …
(b) All bills of lading or waybills shall be without prejudice to this Charter Party and the Charterers shall indemnify the Owners against all consequences or liabilities which may arise from any inconsistency between this Charter Party and any bills of lading or waybills signed by… the Master at their request.”
The two clauses are very similar and they lay down an obligation for the master to sign those bills that are presented to him. The bill must, however, be in conformity with the receipt issued by the mate or the tally clerk. Even though the clauses may seem to grant the charterer wide powers to order the master to sign a bill, there are certain limits. The words “as presented” do not mean that the master is obliged to sign any bill which is presented to him. A statement concerning the effect of such charterparty clauses are found in The Berkshire . It was there stated:
172
“The effect of such clauses in a charter-party is well settled. In the first place, the clause entitles the charterers to present to the master for signature by him on behalf of the shipowners bills of lading which contain or evidence contracts between the shippers of the goods and the shipowners, provided always that such bills of lading do not contain extraordinary terms or terms inconsistent with the charter-party; and the master is obliged, on presentation to him of such bills of lading, to sign them on the shipowners’ behalf.”
Thus, the master may, due to the nature of the bill of lading and the time charter, refuse to sign a presented bill in certain situations.
173
171 Cf. Falkanger, Introduction to Maritime Law, p. 451.
172 The Berkshire [1974] 1 Lloyd’s Rep., p. 188.
173 Michelet, Håndbok i tidsbefraktning, p. 368, Time Charters, p. 325.

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8.3. Orders concerning the content of the bill of lading
8.3.1. General
The charterer may have a number of different requests when ordering the master to sign a bill of lading. It follows, from the nature of the time charter, that the charterer has quite an extensive authority to determine the form and content of the bills which he requests the master to sign. A good starting-point of this discussion and a statement concerning the charterer’s need of bills of lading is found in
The Nanfri . It was there stated: 174
“It is important in this connection to have in mind that the present charters are time charters, the nature and purpose of which is to enable the charterers to use the vessels during the period of charters for trading in whatever manner they think fit. The issue of bills of lading in a particular form may be vital for the charterers’ trade… Furthermore… as is usual in time charters, contains an indemnity clause against all consequences or liabilities arising from the master signing bills of lading. This underlines the power of the charterers, in the course of exploiting the vessel, to decide what bills of lading are appropriate for their trade and to instruct the masters to issue such bills, the owners being protected by the indemnity clause.”
I will, below, examine and discuss some of the more common requests that the charterer may have when it comes to the content of the bill of lading. The discussion is far from exhaustive though.
8.3.2. A request to sign a clean bill of lading
The charterer may have an interest to obtain a so called clean bill of lading. The reason for this is that if the master would clause the bill the document may not be commercial negotiable. To sign such a clean bill might not, from the shipowner’s point of view, be such a good idea. If the master fails to clause the bill the shipowner can, because of the
Hague-Visby Rules, be held liable by a subsequent third party holder of the bill.
175
According to the Swedish maritime code such responsibility is laid upon the shipowner and he may be held liable according to MC 13:49 and 50. These rules are, due to the reference in MC 14:5, mandatory. MC 13:50 paragraph one state:
“If a third party suffers loss through the negotiation of a bill of lading on the faith of the statements therein being correct, the carrier is liable if he realised or ought to have realised that the bill of lading was misleading to a third party. In such situation there is no right to limitation of liability under this chapter.”
A possible solution in this situation would be if the charterer agreed to indemnify the shipowner for any economic loss he would suffer because of an issued clean bill. Such an agreement is called a “back letter” or a letter of indemnity. However, such solution is not permissible according to Scandinavian law. MC 14:51 paragraph two
176
, which also is a mandatory provision, states:
“If the sender has undertaken to indemnify the carrier for loss which arises from the issue of a bill of lading with incorrect statements or without reservations, he is nevertheless not liable if this has been done with intent of misleading a holder in due course of the bill of lading. Nor is the sender liable in such cases according to the first paragraph.”
174 The Nanfri [1979] 1 Lloyd’s Rep., p. 206.
175 The Hague-Visby Rules art. III r. 4.
176 The paragraph is modelled after the Hamburg Rules art. 17.

67
In principal, the paragraph states that all of the shipowner’s claims against the charterer will be lost if such claim derive from any criminal collaboration when issuing the bill of lading. Thus, if the master signs a clean bill of lading, knowing that the cargo is damaged, such behaviour would be considered fraudulent. Thus, the shipowner may not rely on a “back letter” or a letter of indemnity in order to claim indemnification from the charterer. Such an agreement can not be invoked in a Scandinavian court. Nor can the shipowner base such a recourse action on any statute. Thus, the shipowner has no means to, through a legal action, claim indemnity from the charterer.
177 Since the shipowner, due to the mandatory rules, may become liable for such an issuing, the charterer can not demand that the master shall sign a clean bill of lading. The master may refuse to sign such a presented bill if the goods are damaged or in an unfit condition. The same applies according to English law.
178
8.3.3. Other misstatements in the bill
The charterer may also request that the master shall sign a bill of lading that contains other misstatements than the condition of cargo. There are a number of such possible statements. To begin with, the charterer may present a bill in which the wrong date of loading is stated. The master may, because of the commercial function of the document, refuse to sign such a bill.
179
It can be stipulated in the sales contract that the goods shall be loaded before a particular date. This date may be of significance if the sales price is determined according to the prevailing market price, but it may also be of importance for the quality of the goods. It is in such situations important for the receiver of the goods that the bill of lading is correctly dated since the bill usually is the only way in which the buyer may check the date of loading. If the master would sign such a bill he would commit a fraudulent behaviour against the receiver. If the receiver would suffer any damages due to such behaviour he may hold the shipowner responsible according to
MC 13:50. It was laid down in The Almak that the master was not under an obligation to sign a wrongly dated bill of lading. It was further stated that: 180
“The obligation to sign bills of lading as presented could not of course ever require the master to sign bills which stated a falsehood. He would always be entitled to refuse if he noticed the discrepancy.”
Further, there is an implied requirement that the issued bill of lading correctly should state the quantity and the nature of the cargo shipped.
181
An example of a charterer who makes such a request is found in The Boukadoura .
The facts of the case were the following: The ship, The Boukadoura, was voyage chartered. The charterer presented, to the master, a bill stated that a certain quantity of oil had been loaded. The master believed that the stated quantity was greater than the quantity actually loaded. (It later turned out that he was correct.) Because of this discrepancy the master wished to clause the bill. The charterer refused to allow such a clause and the ship was delayed while the cargo was re-measured.
177 SOU 1990:13, pp. 165-6.
Cf. Falkanger, Introduction to Maritime Law, pp. 338-9.
Cf. Tiberg, SvJT 1995, p. 347. The provision originates from the Hamburg Rules art. 17.3. It has been criticized since it is contrary to the Hague-Visby Rules art. 3.5.
178 Time Charters, pp. 329-30.
Cf. The Nougar Marin [1988] 1 Lloyd’s Rep., pp. 420-2.
179 Michelet, Håndbok i tidsbefraktning, p. 369, Time Charters, p. 331.
180 The Almak [1985] 1 Lloyd’s Rep., p. 561.
181 Time Charters, p. 331.

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It was held that the master was entitled to refuse to sign such a clean bill, i.e. he was entitled to clause it. The shipowner recovered, from the charterer, the loss that was caused by the delay. It was also stated that:
182
“Apart from the requirements of the Hague Rules… there is, in my judgement, a basic and implied requirement that the bills as presented shall relate to goods actually shipped and that they shall not contain a misdescription of the goods which is known to be incorrect.”
Thus, the master may refuse to sign a presented bill that contains an incorrect description of the goods. If the master believes that presented bill incorrectly describes the goods, he should clause it.
183
It follows from this discussion that the master also may refuse to sign a bill that contain goods that he knows has not been loaded on the ship.
184
Another such request could be that the charterer asks the master to state that the cargo has been loaded under deck even though it has, in fact, been loaded as deck cargo.
The master has no duty to sign such a bill.
185
8.3.4. Bills containing clauses which are inconsistent with the charterparty
The fact that a term in the bill of lading is inconsistent or differs from the charterparty does not in itself give the master the right to refuse to sign it. In order for the time charterer to be able to make full use of the ship’s commercial capacity during the charter period it is, in certain situations, necessary that the master signs such a bill. The master is obliged to sign the bill as long as the term falls within the “conditions customary in the trade in question” or is not “extraordinary”.
186
It follows that this must be decided in each individual case (see 8.2.). If the shipowner, as a result of such a bill being issued, suffers economic damages he may direct an indemnity claim against the charterer.
However, the master may refuse to sign a presented bill that do not incorporate a term which the parties, in the charterparty, expressly has agreed shall be incorporated in all bills of lading which are to be issued during the charter period.
187 An example of such clause is Gentime cl. 17 (b). It states:
“Protective Clauses – The Charterers warrant that Contracts of Carriage issued in respect of cargo under this Charter Party shall incorporate the clauses set out in Appendix A.”
The master may, however, not refuse to sign a presented bill that does not incorporate other terms of the charterparty. This may be concluded from The Nanfri . The court stated, when examining the master’s right to insist to incorporate the terms from the charterparty into the bill of lading, that:
188
182 The Boukadoura [1989] 1 Lloyd’s Rep., p. 399.
183 Cf. MC 13:48.
184 Michelet, Håndbok i tidsbefraktning, p. 369.
185 Michelet, Håndbok i tidsbefraktning, p. 370, Time Charters, p. 331.
186 Michelet, Håndbok i tidsbefraktning, p. 373, Time Charters, pp. 328-9.
Cf. MC 14:62 paragraph one. cf. The Berkshire [1974] 1 Lloyd’s Rep., p. 188, cf. The Nanfri [1979] 1
Lloyd’s Rep., p. 206.
187 Michelet, Håndbok i tidsbefraktning, p. 369, Time Charters, p. 329.
188 The Nanfri [1979] 1 Lloyd’s Rep., p. 206.

69
“Then what limitations are there upon this power? It must be clear that the owners cannot require bills of lading to be claused so as to incorporate the terms of the time charter: such a requirement would be contrary to the whole commercial purpose of the charterers.”
Thus, the master may only insist to incorporate a particular term in the issued bill if the shipowner and charterer have expressly agreed to it.
8.3.5. Bills incorporating a “manifestly inconsistent” term
As can be seen from the discussion above, the master may in certain situations be obliged to sign a bill of lading which terms differ from the terms of the charterparty.
There is a limit to this obligation though. It has been said that the master is not obliged to sign a bill that is “manifestly inconsistent” with the charterparty. This is the case when the term in question is expressly prohibited by the charterparty or contrary to the whole tenor of the agreement.
189
Such a situation may arise if the charterer presents a bill of lading that names a port of discharge that lies outside the agreed trade area (see 5.3.2.). Since the charterer does not have the authority to order the ship to a port or area outside the agreed trading limit it follows that he can not compel the master to sign a bill of lading which names such a port of discharge.
190
A statement concerning this situation is found in The Halycon . It was stated that: 191
“Of course, there must be some possible bills of lading which the master would rightly refuse to sign. The limits of trading for the three or five months of this charter-party are Institute Warranty limits, not north of Holland. If the charterers shipped a cargo in America and then tendered bills of lading to the captain under which he was to deliver to Copenhagen or Danzig, of course he would rightly refuse to sign, and similarly if he was asked to sign a bill of lading for a blockaded port coming within… the war clauses.”
Thus, the master may also refuse to sign a bill that would violate a regulation in the charterparty. If the charterer’s authority to use the ship has been limited therein, the master is under no obligation sign a bill that states that the goods are to be discharged in a port where the charterer is not allowed to order the ship to. Such port could, besides a port outside the trading area, be a port excluded by a war clause, an ice clause or the safe port obligation. It also follows that the master may refuse to sign a bill that states that goods that are to be transported is unlawful or otherwise excluded by the charterparty.
192
189 Michelet, Håndbok i tidsbefraktning, p. 372, Time Charters, pp. 326-7.
190 Michelet, Håndbok i tidsbefraktning, p. 372, Time Charters, pp. 141, 329.
191 The Halycon [1943] 75 Ll. L. Rep. 80, p. 84.
192 Cf. Michelet, Håndbok i tidsbefraktning, p. 372.

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9. Orders concerning the delivery of the cargo
9.1. General
There are four different situations which will be examined and discussed here. First, the charterer may order the master to deliver the cargo to an unauthorized receiver, i.e. to someone who can not produce the bill of lading. Second, the charterer may request that the master shall amend the content of an already issued bill. Third, the charterer may request that the master issues a completely new set of bills. Fourth, the charterer may order the master to go to a different port of discharge than was originally planned.
What these four situations have in common is the special problems that arise due to the fact that a bill of lading has been issued for the cargo. The provisions in MC 13:4,
24-40 and 45-57 is, according to MC 14:5 paragraph two, mandatory if a bill of lading has been issued for the goods carried onboard the ship. Since the master usually has, on behalf of the time charterer, issued such a bill these rules applies to the transport. Once the master has issued the bill, the shipowner has an independent, contractual obligation towards the bill of lading holder.
193 That such an obligation arise follow from the nature of the bill of lading (see 9.2.1.). However, this obligation also appears from MC 13:36 paragraph one. The relevant part states:
“The subcarrier is liable according to the same rules as the carrier for the part of the carriage performed by him.”
The paragraph is relevant since the bill of lading usually states that time charterer shall perform the carriage and, thus, is responsible for its fulfilment.
194
The shipowner will, in those situations, be considered to be a subcarrier. The consequence of the provision in
MC 13:36 paragraph one is that an independent, contractual obligation, towards the holder of the bill of lading, is placed upon the shipowner. The master must then, when receiving an order that might affect the bill of lading holder, bear this obligation in mind.
9.2. Delivery to a receiver who does not posses a bill of lading
9.2.1. The special nature of the bill of lading
When the ship arrives to the port of destination the charterer will order the master to deliver the cargo. It is in both the charterer’s and the receiver’s interest that the delivery is made quickly. As long as the receiver holds an authentic bill of lading there are no problems. It is in situations where the charterer orders the master to deliver the cargo to a receiver who does not posses such a bill a conflict arises.
In such situations, the special nature of the bill of lading and its different functions must be considered. In the hands of the charterer the bill is, in principal, a receipt; it will not determine the conditions of the carriage. Despite this the charterer is, if he wants to take delivery of the cargo, obliged to present the bill to the master in the port of destination. If, however, the bill of lading comes into the hands of a third party, the
193 For this obligation to arise it does not matter if the bill of lading is a “running” or “recta” bill of lading.
Since the “running” bill of lading is, by far, the most commonly used type of bill I will base the discussion below on those. However, the difference between the two types is, for this question, not that important.
Cf. MC 13:42 paragraph two. The definitions of ”running” and ”recta” bills are stated therein.
Cf. Tiberg, Legal Qualities of Transport Documents, pp. 408-9.
194 Michelet, Håndbok i tidsbefraktning, p. 381.
Cf. SOU 1990:13, pp. 156-7.

71 document takes on a new importance. Such a transfer can be done if the bill originally was issued to a third party or if the charterer endorses it to a third party. Since the bill of lading is a negotiable document, the holder of it is entitled to require that the goods shall be delivered to him. The shipowner, on the other hand, can only be discharged from the contractual obligation when the master makes the delivery to a person holding the document.
195
It follows from these rules that the master, once he has signed and parted from the bill, has subjected the shipowner to an independent, contractual obligation towards the holder of the bill in question.
Thus, if the master delivers the goods to a third party who does not present the bill of lading he takes an obvious risk. The shipowner is not discharged from his contractual obligation unless the master delivers the goods to a receiver who is entitled to it. The only way to be sure that the person claiming the cargo is entitled to it is if the receiver in question produces an original bill of lading. If the delivery is made to such an unauthorized receiver the shipowner has no defence if another claimant later shows up with a bill. The shipowner can then be held liable to the actual holder of the bill.
196 The law is clear on this point; the master who delivers the cargo without the production of a bill of lading does so at the shipowner’s peril. There is no difference between Swedish and English law on this point.
197
9.2.2. An order to deliver to an unauthorized receiver
The charterer’s main concern is to quickly deliver the cargo; he does not want the ship to be delayed in port. Because of this, the situation may arise where the charterer orders the master to deliver the cargo to an unauthorized receiver, i.e. to a receiver who does not posses one of the issued bills of lading. The question is then whether the charterer has the authority to give such an order or not. The basic principle, as is stated in MC
13:52, is that it is only the holder of the bill who is authorized to claim the cargo. The section is, according to MC 14:5, mandatory and it reads:
“The person presenting a bill of lading and appearing, through its content or, in the case of an order bill, through a continuous chain of endorsements or through an endorsement in blank as the rightful holder in due course, is authorised as receiver of the goods.
If the bill of lading has been issued in several originals, it suffices for due delivery at the port of destination that the receiver demonstrates his authority by presenting one original of the bill of lading. If the goods are delivered at any other port, any other originals must also be returned or security be lodged for any claim that a holder of any other original in circulation might rise against the carrier.”
Further, it follows, from MC 13:54 paragraph one, that the receiver is “entitled to receive the goods only if he deposits the bill of lading” to the master. One could then argue that the consequence of these provisions is that the master may refuse to obey an order to make a delivery to an unauthorized receiver.
198
However, this principle is inconsistent with the authority that the charterer is granted under the charterparty. The
195 Cf. MC 13:49, 52 and 54. These rules are stated therein.
196 Cf. Tiberg, Legal Qualities of Transport Documents, pp. 414-5. cf. Grönfors, Sjölagens bestämmelser om godsbefordran, pp. 278-80.
197 Tiberg, Legal Qualities of Transport Documents, pp. 414-5.
198 Cf. Falkanger, Introduction to Maritime Law, p. 451, cf. Grönfors, Sjölagens bestämmelser om godsbe-fordran, pp. 278-9, cf. Michelet, Håndbok i tidsbefraktning, p. 384.

72 master shall, after all, be “under the orders and directions of the Charterers as regards employment, agency and other arrangements”.
199
There are a number of possible reasons why the person claiming the cargo does not physically posses the bill of lading. The underlying reason is not important though, the point is that charterer, or the person claiming the cargo, is not able to produce the bill.
In fact, they may not even know where it is or why they can not obtain it. These situations are, however, regulated in the Swedish maritime code. MC 14:62 paragraph two states:
“The carrier shall not be obliged on account of the time charterer’s orders to deliver cargo to a party who does not show authority or otherwise to deliver in violation of the bill of lading terms, if this should involve dealing contrary to good faith. Otherwise, the carrier may always require security for any damages which he may become liable to pay on account of any delivery.”
The paragraph regulates the time charterer’s right to give delivery orders. If the charterer orders the master to violate the rules concerning the delivery of the goods the shipowner’s interests are protected in three ways. First, the master may refuse to deliver the goods to a person who does not posses the bill of lading, if such delivery would be contrary to good faith. Second, the master may refuse to deliver the goods to a person if such delivery would violate the bill of lading terms, if such delivery would be contrary to good faith. Finally, the master may, in other cases, require the charterer to give security for possible third party liability claims. He is, however, obliged to make the delivery if such security is effected by the time charterer.
As can be seen from the paragraph, the master may only refuse to make the delivery if it would be “contrary to good faith” to do so. If that is not the case, the master may not refuse the order. He is, in that case, limited to demand security from the charterer before obeying the order. It is apparent that the purpose of the provision is to weaken the shipowner’s position in benefit of the time charterer’s. The paragraph is an exception from the principal rule that the master is not obliged to make a delivery to a person who can not present the bill of lading. It is the need of the business that has lead to this regulation. Since it has become so common that the bill of lading has not arrived at the port of destination ahead of the ship delivering the goods, it lies in the charterer’s interest to be able to order such deliveries.
200
The question is then how to define the term “contrary to good faith”. The preparatory works does not contain a comprehensive definition of the term. It is, however, stated that the master’s, or the shipowner’s, obligation to obey the time charterer’s orders must be determined in each individual situation on the basis of what is common in the particular shipping in question.
201
In other words, an individual assessment must be made in each case. Personally, I believe that if the master knows, or have strong reasons to suspect, that the appointed receiver is not entitled to receive the cargo he should be able to refuse the order. The shipowner does, after all, have an independent, contractual obligation towards the holder of the bill of lading (see 9.2.1.).
199 Gentime, cl. 12. Cf. NYPE 1993, cl. 8.
200 Cf. Michelet, Håndbok i tidsbefraktning, p. 385.
Cf. SOU 1990:13, p. 209. The paragraph is new, there were no corresponding regulation in the old code.
Cf. The Houda [1994] 2 Lloyd’s Rep., p. 542. The court of the first instance put a lot of weight on the necessity of business efficacy.
201 Prop. 1993/94:195, p. 316, SOU 1990:13, p. 209.

73
Thus, it must be considered to be “contrary to good faith” to obey an order if there are reasons to believe that the rightful receiver is likely to be sidestepped. To obey the order in such situation would amount to fraudulent behaviour towards the holder of the bill.
The master’s suspicion ought to, however, be substantial. If he would be able to refuse delivery on account of minor suspicions, the purpose of the provision in MC 14:62 paragraph two would not be fulfilled.
Even though the master may always require that the charterer puts up an adequate security before he delivers the goods, the section must still be considered to weaken the shipowner’s position. To demand such security will, in most cases, be both more cumbersome and unreliable than to demand that the bill of lading shall be presented.
This is especially true if the ship lies at a foreign, shady port.
202
If the master instead obtains the bill of lading the case, as far as he and the shipowner is concerned, is closed.
In this context, one must also keep in mind that many time charterparties contain a so called “hold harmless” clause. Such clauses regulate the parties’ right of recourse. Even though there is no explicit clause, the shipowner may still, on two grounds, claim indemnity from the charterer. First, such a right of recourse is stated in MC 14:61 paragraph three. Second, most charterparties usually contain a predetermined allocation of responsibility. Such allocation has, in practice, been construed to contain a corresponding right of recourse.
203
Thus, the shipowner would, without such a security, still be protected since he may hold the charterer liable for any subsequent claims from a bill of lading holder.
9.2.3. The Houda case
It may, in this context, be of interest to compare the regulation in MC 14:62 paragraph two with the corresponding English law. According to English law the master may always refuse an order from the time charterer to deliver the cargo to a person who does not present a genuine bill of lading. There is no exception, like the one in the Swedish
MC 14:62 paragraph two, to this rule. This principle has, for a long time, been undisputed in voyage charters. However, it had been argued that it would not apply to time charters. That the principle applies to time charters as well was recently established in The Houda case.
204
The relevant facts of the case were the following: The Houda was chartered on a Shelltime 4 form. On
August 2 nd 1990 when Iraq invaded Kuwait the Houda was laying at one of the countries ports. The master interrupted the loading and managed to leave the port. However, the bills of lading, which were signed by the master, were left behind in the port and had not been seen since. When the charterer wanted to discharge the cargo the shipowner refused. The reason for this refusal was the signed bills of lading could not be presented. Eventually, on September the 27 th, the discharge was effected. One of the questions that were raised was whether the charterer could lawfully order the shipowner to discharge the cargo without production of the bills of lading.
The judge in the court of the first instance answered this question affirmative. However, the judges in the Court of Appeal and the House of Lords came to the opposite conclusion. The Lord Justice Neill formulated the court’s decision. He stated:
205
202 Cf. Michelet, Håndbok i tidsbefraktning, p. 385.
203 Cf. SOU 1990:13, p. 209.
204 The Houda [1994] 2 Lloyd’s Rep., p. 541.
205 The Houda [1994] 2 Lloyd’s Rep., p. 552.

74
“I can see no adequate ground on which a distinction can be drawn between the rights of a voyage charterer and the rights of a time charterer. …I can see no good reason to depart from the general rule that the owners do not fulfil their contractual obligations if the cargo is delivered to a person who cannot produce the bill of lading. …This is a simple working rule. It is of course open to the shipowner to decide that he is adequately protected by a letter of indemnity and to deliver in the absence of the bill of lading, but in my judgement the rights of a time charterer to give orders do not entitle him to insist that cargo should be discharged without production of the bill of lading.”
So, according to English law the time charterer may not order the master to deliver the cargo to a person who can not produce the bill of lading. If the charterer wishes to acquire such a right it must be agreed upon in the charterparty.
Further, the Lord Judge Millett makes, in his opinion, a statement that is of interest when comparing The Houda case with the Scandinavian solution. He refers, in his statement, to the decision in the court of the first instance. The court held that: 206
“…any general principle precluding a time charterer from ordering delivery of the cargo without production of a bill of lading would be contrary to business efficacy; the owners’ contention that the charterers could not lawfully order them to deliver the cargo without presentation of bills of lading would be rejected; such an order would only have been unlawful if given without the authority of the owners of the cargo…”
Lord Judge Millet examines and criticizes the consequences of such a solution. He stated that:
207
“But the real difficulty of the Judge’s conclusion is that it leads to this: the charterers can lawfully require shipowners to deliver the cargo without presentation of the bills of lading if, but only if, the person to whom the cargo is delivered is in fact entitled to receive it. If that is indeed that law, it places the master in an intolerable dilemma. He has no means of satisfying himself that it is a lawful order with which he must comply, for unless the bills of lading are produced he cannot know for certain that the person to whom he has been ordered to deliver the cargo is entitled to it. One solution, no doubt, is that, since the master’s duty is not of instant obedience but only of reasonable conduct, he can delay complying with the order for as long as is reasonable necessary to satisfy himself that the order is lawful, possibly by obtaining the directions of the Court in the exercise of its equitable jurisdiction to grant relief in the case of lost bills. But in my judgement the charterers are not entitled to put the master in this dilemma.”
I believe that the judge’s account of the problem is, especially when comparing with
Scandinavian law, quite discerning. However, one must note that there is a slight difference between the regulation in MC 14:62 and the solution that Lord Judge Millet criticizes. According to the court in the first instance the master may only refuse the order if he is sure that the nominated receiver is not entitled to it. The provision in the
Swedish maritime code allows such refusal if it would be “contrary to good faith” to make the delivery. I believe, as I stated above (see 9.2.2.), that the master may refuse if he has good reasons to believe that the nominated receiver is not entitled to the cargo.
Thus, a lower level of suspicion is allowed according to MC 14:62. However, that distinction does not affect the principal legal question.
The point is, as Lord Judge Millet states in the last sentence of the quote, that the charterer puts the master in a difficult situation. The master takes, after all, an obvious risk when he delivers the goods to a receiver which can not produce the bill of lading
(see 9.2.1.). The question one must ask is then whether this is such a risk that the
206 The Houda [1994] 2 Lloyd’s Rep., p. 542.
207 The Houda [1994] 2 Lloyd’s Rep., p. 558.

75 charterer, without an express provision in the charterparty, may require the shipowner to take. It follows from the provision in MC 14:62 paragraph two that the charterer, in certain situations, may require the shipowner to risk being held liable for wrongful delivery. Further, the provision may also affect the holder of the bill of lading. Since the bill of lading is a negotiable document, its holder shall be able to claim the goods in question. To claim the goods that the bill entitles him to is the likely, underlying purpose for acquiring the bill in question. The consequence of the regulation is that the holder may, because of the charterer’s order, be sidestepped in favour of an unauthorized receiver. He may claim damages from the shipowner though, but this can not be considered to be an equivalent option for the holder. The consequence of this is that the bill of lading loses some of its status.
208
I believe that these are two good arguments for the English solution.
9.2.4. The master’s position
English law is clear and straightforward on this subject. The master is under no obligation to make the delivery unless the receiver can show his authority, i.e. unless he presents the bill of lading. It is up to the time charterer to make sure that the receiver possesses the bill in question. The regulation in the Swedish maritime code is not as clear.
The master’s position, as is the consequence of the provision in MC 14:62 paragraph, can be summarized as follows: First, if being ordered to deliver to an unauthorized receiver the master must determine whether such a delivery would be
“contrary to good faith” or not. There is no established, comprehensive definition of the term, its meaning must be determined in the light of the circumstances of each individual case (see 9.2.2.). Second, if the master believes it to be “contrary to good faith” to make the delivery he may refuse the order. The charterer may, in such situation, claim that the ship has gone off-hire, or claim damages for the loss of time.
Since so much weight, due to MC 14:62 paragraph two, is put on business considerations, the shipowner may have a difficult task proving that a delivery would be contrary to such “good faith”. Thus, a prudent master should be sure of his case before he refuses the order. Third, if the master, on the other hand, does not believe it to be
“contrary to good faith” to make the delivery he must obey the order. However, he can, and should, always demand that the charterer provides security for any possible third party claims that may arise as a consequence of wrongful delivery. If the charterer does not, or is not able to, provide an adequate security the master may refuse the order.
Since the rules in chapter 14 is optional it is, of course, always possible to regulate this issue in the charterparty. There are two possible ways to design such a clause. First, the shipowner may protect himself by stating that the charterer shall not be authorised to order a delivery unless the receiver can produce the bill of lading. Second, the charterer may wish to extend his authority by stating that he shall have the right to order a delivery, despite that a bill of lading is not presented at the port of delivery.
209
208 Cf. Todd [1999] LMCLQ, p. 449.
209 Cf. Michelet, Håndbok i tidsbefraktning, p. 386.

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9.3. Orders concerning changes in the port of discharge and in the bill of lading
9.3.1. General
The bill of lading that the master issues usually names a particular port of discharge.
The situation may arise that the charterer, during the voyage, decides that he wishes to discharge the cargo at a different port than the one named. An example of such a situation is the following: The charterer initially orders the master to perform a voyage from port A to port B. A bill of lading is then issued for the planned voyage. However, during the voyage, or after the ship has arrived to port B the charterer changes his mind and instead orders the master to continue to port C and discharge the cargo there.
210
When the bill of lading is issued the planned port of discharge may, in principal, be described in three ways. First, the bill of lading may state that the cargo shall be delivered at a particular port. That is usually the case, but the description may also been done in a wider way. Second, a number of alternative ports may be named. Third, it can be stated that the cargo should be delivered to a port in a particular geographical area. In the latter two cases an order to change the port of discharge may not make the bill of lading invalid. If the new port is covered by the original document there is no problem, the bill of lading is then still valid. However, if the new port is not covered by the issued bill a difficult situation arises. The bill of lading is then not in conformity with the actual port of discharge.
In these situations three questions arises. First, can the charterer require that the master shall make an amendment in the original document? Second, can the charterer require the master to issue a new bill of lading? Third, what authority does the charterer have to order the master to take the ship to a different port of discharge? One must, when answering these questions take the special nature of the bill of lading into account.
Since the shipowner, due to the mandatory legislation that applies, may be held liable by a third party holder of the bill, the same considerations that applied in the discussion above must be taken into account here (see 9.2.1.).
It should be noted that these situations are quite complex, there are a number of considerations which must be taken into account. It becomes problematic since the commercial reality may not, in all situations, be in accordance with the legal solutions.
The regulations in the Swedish maritime code are an attempt to adjust the law to the commercial practices and needs. Because of this the regulations may seem to be tilted in bias of the time charterer.
9.3.2. Changes in the bill of lading
The first question is then whether it is possible for the charterer to order the master to make an amendment in the original document. The charterer may, for example, ask the master to change the named port of discharge. Such a request is most likely to arise when three bills have been issued and one or two of them are in circulation. In such situations the receiver must, if he wishes to lay his hands upon the cargo at a different port then the one named in the bill, present all of the outstanding bills of lading, i.e. a full set of bills.
211
From the charterer’s point of view, an amendment in the bill would be a quick and easy solution. The charterer, or a receiver which he later gives the bill to, may then request the cargo at the new port of discharge without having to present a full set of bills.
210 Cf. Michelet, Håndbok i tidsbefraktning, pp. 382-3.
211 Cf. MC 13:52 paragraph two.

77
However, such an amendment can, under no circumstances, be considered to be acceptable.
212
Since the bill of lading is a negotiable instrument, such a change would be considered to be a forgery. The master is, after all, not obliged to perform criminal acts and, thus, he may refuse such an order (see 4.4.4.).
9.3.3. The issuance of a new set of bills
Another possible way for the charterer to get around the nominated port of discharge is to get a new bill of lading, with a different port of discharge named, issued. He may give the master a new set of bills to sign, bills which states that the cargo shall be taken from port B to port C. The master’s concern, in such situations, is that the shipowner has, once the bill has been issued, an independent, contractual obligation towards the, named or not, receiver in port B and to the new receiver in port C (see 9.2.1.).
Due to this independent obligation the master may very well not issue a new set of bills which covers the same cargo. Such behaviour would be considered to be fraudulent and, thus, he may refuse to obey such a request. There is, however, a procedure that would allow the master to, upon the charterer’s request, issue a new set of bills. If the master can assure himself that the possible receiver in port B is not disregarded or neglected, he may oblige the request. This can be done if the charterer presents, and hands over to the master, all bills of lading that are in circulation. The master has then assured himself that no claims, due to an outstanding bill, can be made against the shipowner. It is, after all, not possible to claim the cargo without possessing the document itself.
213 Such behaviour would be in conformity with the Swedish maritime code. The right to claim the goods are, as been stated above, regulated in MC 13:52 (see
9.2.2.).
214
Even though paragraph two apparently deals with the right to claim the goods one should be able to apply it to this situation as well. After all, what the charterer in principal asks the master to do is to deliver the cargo to him onboard the ship and then to make a new delivery. The practical result is the same as if the charterer, with the bills of lading, would claim the cargo in port B and then order the master transport it to port
C.
Thus, it is possible for the master to abide the charterer’s request, and issue a new set of bills, if the charterer can produce all outstanding bills of lading. In fact, the master will be under a legal obligation to obey such a request. The provision in MC 14:62 paragraph two should apply to this situation as well (see 9.2.2.). The relevant part of the paragraph states:
“The carrier shall not be obliged on account of the time charterer’s orders to… deliver in violation of the bill of lading terms, if this should involve dealing contrary to good faith. Otherwise, the carrier may always require security for any damages which he may become liable to pay on account of any delivery.”
It follows that the charterer has the authority to order the master to make a delivery in violation of the bill’s terms as long as it would not be “contrary to good faith” to do so.
If the charterer can produce all outstanding bills the delivery can not be considered to be
“contrary to good faith”. If, however, the charterer was not able to present all outstanding bills, the master may refuse the order. To oblige the request then should be
212 Michelet, Håndbok i tidsbefraktning, p. 383.
213 Ibid.
214 SOU 1990:13, p. 166. One should note that this section is not based on the Hague-Visby Rules or any other convention. Instead it is based on custom which has developed in international trade.

78 considered to be contrary to such “good faith” per se since the master then knows that there exists a holder that is entitled to claim the goods at the named destination.
When issuing a new set of bills the master must make sure that the information in the bills is correct. After all, the shipowner has, after the bill has been issued, an independent obligation towards the receiver. He must therefore make sure that the receiver in port C is protected. For example, the master should not sign a new bill that states that the cargo originates from port B. Instead he must make sure that the original time and port of loading is stated in the bill so it is clear that the cargo is shipped from port A and not from port B.
215
If the information in the bill is not correct the master may contribute in deceiving the new receiver in port C.
216
If the new bill contain such incorrect statements the master therefore should refuse to sign it (see 8.3.3.).
9.3.4. Changes of the port of discharge
That leaves the third and final question that shall be dealt with here. What authority does the charterer have, when the original bill still exists, to order the ship to a different port of discharge? In other words, what is the extent of the charterer’s authority to dispose of the cargo during the voyage? The charterer may wish to reroute the entire transport or just claim the goods at a port other than the original destination.
217
The question has, to some extent, been answered in the discussion above (see 9.3.3.). There are, in this situation, two conflicting considerations that must be weighted against each other.
218
First, the charterer has the right to use the commercial capacity of the ship as he wishes. To change the port of discharge is, without doubt, a commercial decision. In fact, it might seem to be quite a reasonable request. However, the shipowner has, once the bill has been issued, an independent, contractual obligation towards the, named or not, receiver in port B and to the new receiver in port C (see 9.2.1.).
Even though it is a common enough problem, most of the standard time charterparty forms do not contain a clause that covers this issue.
219
However, Shelltime 4 cl. 13 (b) regulates these situations. It states:
“Notwithstanding the forgoing. Owners shall not be obliged to comply with any orders from Charterers to discharge all or part of the cargo
(i) at any place other than that shown on the bill of lading and/or
(ii) without presentation of an original bill of lading unless they have received from Charterers both written confirmation of such orders and an indemnity in a form acceptable to Owners.”
The consequence of such a clause is that the charterer may, after the bill of lading has been signed, order the ship to a different port if he gives a written order and provides sufficient security for any possible third party claims. There is no similar clause in the
Gentime or the NYPE 1993 forms.
Even though there is no such clause in the charterparty, the charterer may still order the master to deliver the cargo to a different port of discharge. The principal rule, in
215 A so called ”Country of Origin” clause may be inserted in the bill of lading.
216 Cf. Michelet, Håndbok i tidsbefraktning, p. 383.
Cf. MC 13:52.
217 Cf. Tiberg, Legal Qualities of Transport Documents, p. 417.
218 Cf. Michelet, Håndbok i tidsbefraktning, p. 383.
219 Michelet, Håndbok i tidsbefraktning, p. 390.

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Scandinavian law, is that the time charterer has no right to issue such an order.
220
If the bill of lading contains a number of alternative ports of discharge, the charterer may reroute of the ship to one of the other alternative ports. Such a change would not be in conflict with the shipowner’s obligation towards any third party holder of the bill of lading. The charterer is, however, not considered to have the right to reroute the ship to a port that is not encompassed by the issued bill.
However, there is no reason why the provision in MC 14:62 paragraph two would not be applicable in this situation as well. The master could then, due to this provision, come under a legal obligation to obey the request. It would be a similar situation as were accounted for above (see 9.3.3.). After all, what the charterer, in practice, does is to order the master to deliver the cargo in violation of the bill of lading terms. The master may only refuse to make such a delivery if it would be “contrary to good faith” to do so. If the charterer is able to present a full set of bills he has shown that he has the full right of disposal over the cargo. When he has such a right he can be permitted to reroute the ship or to accept the cargo at a different port of discharge.
221 It can, in this situation, not be considered to be “contrary to good faith” to obey the order.
Consequently, the master is then obliged to reroute the ship.
If the charterer is not able to present all of the outstanding bills, the master may refuse the order. Since the master then knows that there exists a holder that is entitled to claim the goods at the named destination it should be considered to be contrary to such
“good faith” per se to obey it (see 9.2.2.).
222
However, the master may, if he wishes, obey the order even if the charterer can not present all of the outstanding bills.
223 Before he obeys the request he should make some things sure though. First, he should contact the shipowner in order to get instructions. If the shipowner agrees to the order the master should contact the receiver in the original port of discharge in order to make sure that he is in agreement with the change. The master should also request that the charterer, in accordance with MC 13:52 paragraph two, puts up an adequate security before he carries out the request since the shipowner may be held liable for the wrongful delivery.
220 Michelet, Håndbok i tidsbefraktning, pp. 390-2.
221 Tiberg, Legal Qualities of Transport Documents, p. 417.
Cf. Michelet, Håndbok i tidsbefraktning, p. 391.
222 Cf. Tiberg, Legal Qualities of Transport Documents, p. 409, cf. Michelet, Håndbok i tidsbefraktning, pp. 391-2.
223 Michelet, Håndbok i tidsbefraktning, pp. 391-2, Tiberg, Legal Qualities of Transport Documents, pp.
11, 13.

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10. Redelivery of the ship
10.1. General
The length of the charter period is fixed in the charterparty. The charterer is obliged to, at the place and time of the agreed redelivery; once again place the ship at the shipowner’s disposal. When the ship has been redelivered the charterparty expires and the commercial control over the ship passes back, from the time charterer to the shipowner.
224
The parties mutual obligations is suspended and the hire ceases to be payable. Thus, the charterer’s authority to command the master ceases as well. The legal state is, after the redelivery, clear. The problem is when the redelivery is to take place.
The underlying reason for disputes concerning the time of redelivery are the two parties’ commercial considerations. If the prices on the freight market are higher around the time when the redelivery is to take place the shipowner have an interest in a quick delivery while the charterer may wish to postpone it as long as possible.
225
It is, of course, difficult for the charterer to arrange the redelivery at a specific date. Practical considerations therefore require that the charterer is granted some margins when completing the redelivery. The underlying idea is that the time charterer shall have the possibility to perform a last voyage with the ship before the redelivery shall take place.
226
The order to perform the last voyage before the redelivery is usually called the last voyage order.
10.2. Time of redelivery
In most standard forms there is no clause that specifically regulates the last voyage of the charter. Shelltime 4 cl. 19 contains such a regulation though. The relevant part of the states:
“If at the time this charter would otherwise terminate… the vessel is on a ballast voyage to a port of redelivery or is upon a laden voyage, Charterers shall continue to have the use of the vessel at the same rate and conditions as stand herein for as long as necessary to complete such ballast voyage, or to complete such laden voyage and return to a port of redelivery as provided by this charter, as the case may be.”
As can be seen the charterer has the right to extend the charter, at the agreed charter rate, for whatever time is necessary. This might prove to be a valuable right since such necessary time could very well be extended to several months. However, such clauses are likely to be construed restrictively in favour of the shipowner. Since the clause grants the time charterer a unilateral power to extend the charter period a court is likely to adopt it only if the words in the clause are unambiguous and the situation at hand clearly is covered by the clause.
227
224 Falkanger, Introduction to Maritime Law, p. 427, Michelet, AfS 11, p. 644.
225 Cf. Michelet, AfS 11, p. 591.
226 Grönfors, Sjölagens bestämmelser om godsbefordran, p. 264. Cf. Falkanger, Introduction to Maritime
Law, p. 428.
227 Halson, [1993] LMCLQ, pp. 21-2.

81
The Swedish maritime code contains two rules which concern the redelivery of the ship. The principal rule is stated in MC 14:68 paragraph one. It states:
“The time charterer shall redeliver the vessel to the carrier at the time and place agreed.”
Thus, the statutory rule presupposes that a time and place of redelivery have been agreed upon in the charterparty. The rules concerning the so called over-lap period is contained in MC 14:69. It states:
”The carrier is obliged to let the vessel proceed upon a new voyage although the agreed time for redelivery is thereby exceeded. This does not apply if the excess is more than can be considered reasonable or if a set period for redelivery has been agreed upon.
For such excess of time as is permissible according to the first paragraph, the time charterer shall pay the agreed hire. For other excess he shall pay current hire, though not less than the agreed hire, and compensation for any damage which the delay causes the carrier.”
The first paragraph states that there is no room for any under- or overlap if a margin of redelivery is agreed upon in the charterparty. Such a clause is considered to sufficiently satisfy the time charterer’s interest in having a somewhat flexible redelivery time.
228
The charterer is then obliged to perform the redelivery within that period and, consequently, he must give the master the appropriate last voyage order. If, on the other hand, a fixed date of delivery has been agreed upon the charterer is entitled to an overlap period. Thus, there is considered to be an implied margin in the charterparty. He may, in other words, order the ship to perform a last voyage even though it is clear that the redelivery will, due to that last voyage, come to take place after the agreed redelivery date. The purpose of this rule is to render it possible for the charterer to be able to fully use the ship’s commercial capacity during the charter period. Without such rule he could be prevented from this use since it is often difficult for the charterer to plan his commercial operations so that the last voyage exactly coincides with the expiration of the charter period.
229
Another, underlying reason behind this rule is the fact that the charterer, according to Scandinavian law, is not considered to have the right to return the ship before the expiration of the charter period and get a corresponding reduction of the hire. In the light of that this it is important for the charterer to be able to prolong the charter period in this way. If he would have the right to get a reduction when making an earlier delivery, he would be able to estimate the most favourable alternative and the need of the overlap institute would not be as great.
230
However, the overlap may not exceed what is considered “reasonable”. When determining what such a reasonable period of time is one must make an objective estimation of the concrete circumstances in each individual case. Significant circumstances are, for example, the agreed trading area and the time of the year. Other, more subjective circumstances does not entitle the charterer to a corresponding overlap.
Such circumstance may, for example, be that the ship has been off-hire for a longer
228 Prop. 1993/94, p. 322, SOU 1990:13, p. 215, Grönfors, Sjölagens bestämmelser om godsbefordran, pp.
264-5.
Cf. Time Charters, p, 127. The same rule applies according to English law. Cf. The Penonia [1991] 1
Lloyd’s Rep., p. 107.
229 Prop. 1993/94:195, p. 321, SOU 1990:13, pp. 214-15.
Cf. Time Charters, p, 126. The same rule applies according to English law. Cf. The Penonia [1991] 1
Lloyd’s Rep., p. 107.
230 Prop. 1993/94:195, p. 321, SOU 1990:13, p. 215.

82 period or time or that it has, due to events outside the charterer’s control, been lying still.
231
Further, it should be noted that the length of the basic charter period has, in some English cases, influenced what has considered being a reasonable period of overlap.
232
This may very well be considered by a Swedish court as well. There is no reason why the length of the basic charter period could not be considered to be an objective circumstance. Thus, the extent of the overlap period may vary considerably between different charters.
10.3. Last voyage orders
As was mentioned above, the charterer’s order to perform a last voyage before the ship is redelivered is usually called the last voyage order (see 10.1.). Such an order is legal if it is reasonable to assume that the ship, despite of the order, will be redelivered before the definite end of the charter period. The master is obliged to obey such a legal order.
Accordingly the master may refuse the order if it is illegal, i.e. if it is apparent that the ship will be not redelivered before the end of the period. A concise definition of this is found in The Penonia . It was stated:
233
“The cases and books draw a distinction between two cases which have become known as “the illegitimate last voyage” and “the legitimate last voyage”. In the former case the charterer gives orders for the employment of the vessel which cannot reasonably be expected to be performed by the final terminal date. He is therefore seeking to avail himself of the services of the vessel at a time when the owner had never agreed to render such services. It is accordingly an order which the charterer is not entitled to give… The owner need not comply with such an order, because he never agreed to do so.”
The legitimacy of a last voyage orders is determined at the time when the order is to be carried out.
234 The reason for this is that the charterer may give the order in question some time in advance. Since delays may arise during the time between when the order was given and when it is supposed to be performed, it would not be reasonable to determine its legitimacy at a different point in time. Thus, an order for a final voyage given in advance is contingent only. This may be illustrated by an English case, The
Gregos . It was stated, by Lord Mustill, that:
235
“Whatever the charterer may order, a service which falls outside the range encompassed by the owner’s original promise is not one he can be compelled to perform… There is thus to be a measuring of the service called for against the service promised. As a matter of common sense, it seems to me that the time for such measurement is, primarily at least, the time when the performance falls due.
My Lords, I have qualified this statement with the words “primarily at least”, because in practice the interests of both parties demand that the charterer is entitled to give orders in advance of the time for performance; and this must entail at least a provisional judgement on the validity of the order. If it can be seen at this early stage that compliance will involve a service which lies outside the shipowner’s undertaking the latter can say so at once and reject the order. But if the order is apparently valid its validity is no more than contingent, since the time for matching the service against the promise to serve does not arrive until the service is due to begin, or in some instances until it is already in progress. Thus, if and for so long as the service required conforms with those which the shipowner promised in advance to render the specific order creates a specific obligation to perform them when the time arrives. But only
231 Prop. 1993/94:195, pp. 321-2, SOU 1990:13, p. 215, Grönfors, Sjölagens bestämmelser om godsbefordran, p. 265.
Cf. Falkanger, Introduction to Maritime Law, pp. 428-9, cf. Time Charters p. 128.
232 Time Charters, p. 128.
233 The Penonia [1991] 1 Lloyd’s Rep., pp. 107-8.
234 Time Charters, p. 123. Cf. Falkanger, Introduction to Maritime Law, p. 429.
235 The Gregos [1995] 1 Lloyd’s Rep., p. 7.

83 for so long as that state of affairs persists. If circumstances change, so that compliance with the order will call for a service which in the original contract the shipowner never undertook, the obligation to comply must fall away. As I see it, the charterer’s order in advance amounts to a continuing requirement, the validity of which may change with the passage of time.”
Lord Mustill based his opinion on two basic principles. First, the risk of delay in a time charter lies on the charterer. Second, the service called for by the charterer must always be matched against the service promised by the shipowner. It follows that the time charterer must bear the risk of the original last voyage order becoming obsolete.
10.4. The master’s position
If given a last voyage order the master must determine whether the charterer is entitled to order the ship on the voyage or not. The master is obliged to obey the order if it, at the time it is given, is considered to be legal, i.e. the ship can reasonably be expected to be redelivered before the end of the charter period. This duty to obey is, however, a contingent duty. If the circumstances change, and the order subsequently becomes illegal, the master is released from this obligation. He is, after all, not obliged to obey an illegal order.
If the charterer’s order is considered to be illegal, at the time given or later when it is to be executed, there are, in principal, two options open to the master.
236
First, he may refuse to undertake the voyage. The master should then ask the charterer to issue a fresh order. Second, he may point out the illegality of the order and perform the voyage under protest. The shipowner may, in that case, subsequently claim damages. If the master undertakes to perform the illegal last voyage, and there has been no waiver on the shipowner’s right to claim damages, the shipowner are entitled to claim payment according to MC 14:69 paragraph two.
236 Cf. Falkanger, Introduction to Maritime Law, p. 429, cf. Time Charters, p. 125.

84
11. String charters
11.1. General
It is not uncommon for the time charterer to sublet the ship to another charterer. If the charterer is not capable of, or have no wish to use the whole commercial capacity of the leased ship he might as well sublet part of it. Since a string of successive charterers is formed such constructions are called string charters.
An illustration of such a string charterer may be the following:
237
1. The shipowner.
2. The original time charterer. He may, for example. Lease the ship for two years.
3. The subsequent time charterer. He has a contract with the original time charter. He may, for example, lease the original time charterer’s right to use the ship for six months.
4. Voyage charter. He contracts with the subsequent time charterer. He leases part of the transport capacity for one, single voyage.
5. Sub-voyage charterer. He contracts with the voyage charterer. He leases part of his transport capacity on that voyage.
One must separate subletting from assignment of the charterparty. When the time charterer assigns the charterparty the new charterer takes it over completely. In other words, he steps into the old charterer’s shoes. Assignment is a different question than subletting and need not be considered here. Another question that will not be discussed is the original time charterer’s problems. Depending on the subsequent contracts a subsequent charterer may hold the original charterer responsible if he, because of the charterparty, can not use the ship in the way he intended and the parties agreed on in the charterparty.
In practice such sub-chartering may cause problems for the shipowner and the master. In some cases the shipowner knows the original charterer well and they may have a long-standing business relationship. He may not have the same relationship to the sub-charterer. It is also possible that the ship initially may have been used in a particular type of trade. This trade may change when the new charterers come in with their own commercial plans and ideas. Another practical aspect is that the sub-charterers will give their orders directly to the master. If the master, or the shipowner, believes that these orders is outside the scope of what the charterparty allows he must protest to the original time charterer.
238
The issue that will be considered is how such string charters affect the master.
Which of the successive charterers may give orders to the master? In other words, what authority do the new charterers have over the ship and its master?
237 Cf. Gaskell, Charterers’ Liability and Damage to the Vessel, p. 5. The example is copied from
Gaskell’s article. It was a good example so I decided to use it.
238 Cf. Michelet, Håndbok i tidsbefraktning, p. 494.

85
11.2. The charterer’s right to sublet the ship
Most time charterparties grants the charterer the right to sublet the vessel. An example of such a clause is NYPE 1993 cl. 18. It states:
“Unless otherwise agreed, the Charterers shall have the liability to sublet the Vessel for all or any part of the time charter covered by this Charter Party, but the Charterers remain responsible for the fulfilment of this Charter party.”
Not all charterparties contain such clauses though. Gentime is a good example of such a form, there is no clause that expressly regulates string charters there. However, even without such an express clause the charterer is considered to have the right to sublet the ship. Unless there is an express agreement that subletting is prohibited or otherwise specifically regulated, such right is considered to be implied in the charterparty. This is the case in both Scandinavian and English law.
239
11.3. The legal consequences of the ship being sublet
The legal consequences of the ship being sublet are regulated in the Swedish maritime code. MC 14:4 paragraph one state:
“If the charterer assigns his rights under the charterparty to someone else or if he subcharters the vessel, he still remains responsible for the performance of the contract.”
As was stated above, the charterer may assign his rights under the charterparty freely, it is not necessary for him to get the prior consent of the shipowner. Under a time charter this grants him the right to sublet the ship to a third party.
240
However, as can be seen from MC 14:4, the original charterer will still remain responsible for the performance of the contract. Thus, his duties does not cease when he arranges such a subcharter.
241
Under a time charter the charterer’s basic performances are to pay the hire and to, on the agreed time, redeliver the ship. Thus, this remains the original charterer’s responsibility, how he arranges it with the sub-charterers is not the shipowner’s concern.
Such a sub-charter does not neither create a contractual relationship between the shipowner and the sub-charter. This follows from a general principle of contract law. A contract cannot, generally, confer rights or impose obligations on persons who are not parties to the contract.
242 Thus, the original charterer may then not confer any other rights to the sub-charterer than the rights he himself has acquired from the agreement with the shipowner. The master is, however, obliged to obey orders from a sub-charterer that is considered to be legal. A statement concerning this obligation is found in The
Vikfrost . It was there stated that:
243
“By cl. 19 the charterers had the option of sub-letting and no restrictions are imposed as to the terms of the sub-letting, the sub-charterers would be entitled to require the master to sign bills of lading, and to sign themselves such bills of lading as they were entitled to require the master to sign, and so to create a
239 Michelet, Håndbok i tidsbefraktning, p. 494.
Cf. Adlercreutz, Avtalsrätt I, section 5.2.
240 Prop. 1993/94:195, pp. 268-9, SOU 1990:13, pp. 173-4.
241 Prop. 1993/94:195, pp. 268-9, SOU 1990:13, pp. 173-4.
Cf. Adlercreutz, Avtalsrätt I, section 5.3. Cf. Time Charters, pp. 147-9. The same applies according to
English law.
242 Cf. Time Charters, p. 147.
243 The Vikfrost [1980] 1 Lloyd’s Rep., p. 567.

86 contract between the owners and the holders of the bills of lading… To summarize it, I take this view of the situation here: (1) the head charter expressly authorized sub-letting; (2) by necessary implication the head charter authorized the charterer in case of such a sub-letting to put the sub-charterer in the same position as to signature of bills of lading as the charterer was under the head charter, i.e. to authorize the sub-charterer to require the master to sign bills of lading or to sign them himself.”
The statement concerned bills of lading, but it reflects the general view of the subcharterer’s position vis-à-vis the master and the shipowner.
11.4. The master’s position
As can be seen from The Vikfrost case, the master is obliged to obey any legal order which a sub-charterer gives. It is, of course, possible for the sub-charterer to give his instructions to the original charterer who, in his turn, relays the order in question to the master. However, in practice an order will go straight from the sub-charterer to the master. If the master believes that the order is illegal, i.e. outside the original time charterer’s scope of authority, he has, in principal, has two options. First, he could protest to the sub-charterer directly and request that he issues a new instruction. Second, he could protest to the original charterer. This might be the preferable way to act. A three-part discussion will then commence.
244
What determines the sub-charterer’s right to give orders to the master is the agreement between the shipowner and original charterer. The master is not obliged to obey a request from a sub-charterer if that request lies outside the original charterer’s authority. Such an order is illegal, and the master may refuse to obey it.
244 Michelet, Håndbok i tidsbefraktning, p. 494.

87
12. Conclusions
The purpose of this paper was to examine, and discuss, the relationship between a time charterer and the ship’s master. The aim was to determine what authority the charterer, according to Swedish law, has to give the master orders. The basis for the paper was the
Swedish maritime code and its’ preparatory works. The code is quite modern and the regulations therein take, to large extent, the prevailing business practices and business considerations into account. The code does not, however, contain a comprehensive regulation of time charters. Due to this it has, for the purpose of the paper, been valuable to look at the English law that governs the subject. Through this comparative view I believe it has been possible to, quite correctly and comprehensive, determine the
Swedish legal regime covering the subject.
It is doubtless so that the master is, through the duration of the time charter period, put in a situation where he has dual loyalties. The underlying reasons for this are found in the nature of the time charter. As was stated in chapter 3 above, “(c)harterparties are examples of contracts in which one party, the charterer, is entitled to exercise some control over the conduct of an employee of the other party, the shipowner.” The master is employed by the shipowner and is, quite naturally, expected to look after the shipowner’s interests during the charter period. He will be held accountable for any display of disloyalty towards his employer. However, the master is also under the orders of the time charterer. He is, due to this position, expected to obey any legal orders that the time charterer issues within a reasonable time frame. Usually there is no conflict between these two loyalties. As long as the time charter issues legal orders the master should obey such an order more or less immediately. Correspondingly the master is not expected to obey any orders which are illegal. Problems usually arise in unclear situations, i.e. situations when the master can not, with sufficient certainty, determine whether the order is legal or not.
My starting-point of the paper was that it is, in principle, possible to determine the scope of the charterer’s right give orders to the master. This is done by establishing the legal boundaries of the time charterer’s control over the ship and the master. Surely this is a positivistic view of the legal system. Even though there may be strong arguments against such a view I believe that it is the only feasible way to handle legal questions like this. In order to regulate such a specific business relationship, as a time charter undoubtedly is, it is necessary to determine the precise scope of the parties’ authority.
Without such delimitation it would be possible to end up in a legal “limbo”, a grey zone where neither the shipowner nor the time charterer could enforce his rights according to the charterparty in a court.
There are, in principal, six different types of orders that the time charterer may give to the master. Those are orders to 1) the nomination of loading and discharging ports, 2) the conduct of the voyage, 3) the loading and discharge process, 4) the signing of bills of lading, 5) the delivery of the cargo to a third party and 6) the time and place of the ship’s redelivery. There are different considerations that must be taken into account in each situation. To this come some special problems when the time charterer, in his turn, sublets the ship in question to a sub-charterer.
When the master receives an order he must, when considering an appropriate response, take a number of factors into account. There are, in principle, three different types of factors the master must consider. These are: safety factors, commercial factors and legal factors. Each of these factors may affect the charterer’s right to dispose of the ship and, consequently, order the master.

88
The master’s response, or at least what would be considered to be the correct response, to a given order which falls within one of these six categories is in principal determined by the charterparty itself. Since the prevailing principle in this field of law is freedom of contract one must look at the charterparty in order to settle any legal questions. There are limitations to this principle though. Such limitations especially apply to orders that involve bills of lading. The reason for this is the mandatory rules that originate in the Hague-Visby Rules. These rules have been implemented in the
Swedish maritime code. Due to the presence of these mandatory rules the type of orders that the time charterer may legally give has been restricted. Thus, it is necessary to take such rules into considerations when examining the charterer’s right to order the master.
Further, even though most of the rules concerning time charters in the Swedish code are optional, it may still be necessary to take them into account when settling a legal question. Unless it has been clearly stated in the charterparty or otherwise clearly agreed that the code’s rules shall not govern the time charter a Swedish court may construe a charterparty clause in the light of the maritime code. It follows that the Swedish code, despite the initial impression, may strongly influence the charterer’s right to order the master.
The legal solutions and the master’s choices have been thoroughly discussed through chapter five to ten in the paper. Therefore I refer to what has been written there.
The number of different situations that may arise and the types of orders that may be issued during the charter period is simply too many to be accounted for in this conclusion.

89
List of sources
Cases
Scandinavian cases
ND 1915.61 NCC Venus
ND 1919.364 NSC Urd II
ND 1928.11 SSC Gylsboda
ND 1928.108 SCA Macedonia
ND 1935.436 NSC Snefjeld
ND 1952.442 NCC Hakefjord
ND 1959.55 NCC Grethe
ND 1972.183 SCA Vale
ND 1975.85. NSC Sunny Lady
ND 1987.229 NCA Ulla Dorte
NJA 1978 p. 14.
English cases
Brostrom & Son v. Dreyfus & Co. [1932] 44 Ll. L. Rep. 136. The Sagoland
Lensen Shipping, Ltd. v. Anglo-Soviet Shipping Co., Ltd. [1935] 52 Ll. L. Rep. 141.
The Terneuzen
Halycon Steamship Company, Ltd. v. Continental Grain Company [1943] 75 Ll. L.
Rep. 80. The Halycon
Temple Steamship Company, Ltd. v. V/O Sovfracht [1945] 79 Ll. L. Rep. 1. The
Temple Moat
G. W. Grace & Co., Ltd. v. General Steam Navigation Company, Ltd. [1950] 83 Ll. L.
Rep. 297. The Sussex Oak
Leolga Compania de Navigacion, S.A. v. John Glynn & Son, Ltd. [1953] 2 Lloyd’s
Rep. 47. The Dodecanese
Compania Naviera Maropan S/A v. Botwater’s Lloyd Pulp and Paper Mills, Ltd. [1954]
2 Lloyd’s Rep. 397. The Stork
Leeds Shipping Company Ltd. v. Societe Francaise Bunge [1958] 2 Lloyd’s Rep. 127.
The Eastern City
Cheikh Boutros Selim El-Khoury and others v. Ceylon Shipping Lines, Ltd. [1967] 2
Lloyd’s Rep. 224. The Madeleine
Micada Compania Naviera S.A. v. Texim [1968] 2 Lloyd’s Rep. 57. The Agios Nicolas
London and Overseas Freighters Ltd. v. Timber Shipping Company S.A. [1971] 1
Lloyd’s Rep. 523. The London Explorer
The Berkshire [1974] 1 Lloyd’s Rep. 185.
Splosna Plovba of Piran v. Agrelak Steamship Corporation [1975] 1 Lloyd’s Rep. 139.
The Bela Krajina
Mareva Navigation Co. Ltd. v. Canaria Armadora S.A. [1977] 1 Lloyd’s Rep. 368.
The
Mareva A.S.
Kristiandsands Tankrederi A/S and others v. Standard Tankers (Bahamas) Ltd. [1977] 2
Lloyd’s Rep. 353. The Polyglory
Federal Commerce and Navigation Ltd. v. Molena Alpha Inc. [1979] 1 Lloyd’s Rep.
201. The Nanfri

90
W. & R. Fletcher (New Zealand) Ltd. and others v. Sigurd Haavik Aksjeselskap and others [1980] 1 Lloyd’s Rep. 560. The Vikfrost
Kodros Shipping Corporation v. Empressa Cubana de Fletes [1982] 2 Lloyd’s Rep. 307.
The Evia (No. 2)
C.H.Z. “Rolimpex” v. Eftavrysses Compania Naviera S.A. [1986] 2 Lloyd’s Rep. 586.
The Panaghia Tinnou
Rudolf A. Oetker v. IFA Internationale Frachagentur A.G. [1985] 1 Lloyd’s Rep. 557.
The Almak
Naviera Mogor S.A. v. Société Metallurgique de Normandie [1988] 1 Lloyd’s Rep. 412.
The Nogar Marin
Boukadoura Maritime Corporation v. Societe Anonyme Marocaine de L’Industrie et du
Raffinage [1989] 1 Lloyd’s Rep. 393. The Boukadoura
K/S Penta Shipping A/S v. Ethiopian Shipping Lines Corporation [1992] 2 Lloyd’s Rep.
545. The Saga Cob
Triad Shipping Co. v. Stellar Chartering & Brokerage Inc. [1994] 2 Lloyd’s Rep. 227.
The Island Archon
Kuwait Petroleum Corporation v. I & D Oil Carriers Ltd. [1994] 2 Lloyd’s Rep. 541.
The Houda
Torvald Klaveness A/S v. Arni Maritime Corporation [1995] 1 Lloyd’s Rep. 1. The
Gregos
Whistler International Ltd. v. Kawasaki Kisen Kaisha Ltd. [2001] 1 Lloyd’s Rep. 147.
The Hill Harmony
Preparatory works
Prop. 1993/94:195. Proposition om ny sjölag.
SOU 1990:13.
Översyn av sjölagen 2. Godsbefordran till sjöss.
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Carter, Leif H., Burke, Thomas F., Reason in law , 6 th
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Grönfors, Kurt, Sjölagens bestämmelser om godsbefordran
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Honka, Hannu, Fartygets skick och egenskaper
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91
Hellner, Jan, Speciell avtalsrätt II, Kontraktsrätt , 3 rd
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Lehrberg, Bert, Praktisk juridisk metod , 4 th edition, Iustus Förlag, Uppsala, 2001.
Michelet, Hans Peter,
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Tiberg, Hugo (editor), Ship Masters , Skrifter utgivna av Axel Ax:son Johnsons institute för sjörätt och annan transporträtt (Nr. 11), Stockholm, 1991.
Time Charters , 4 th
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Ltd., 1995. Michael Wilford, Terence Coghlin and John D. Kimball.
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Baughen, Simon, Navigation or employment?
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Davenport, Brian, Rhumb line or great circle? – That is a Question of Navigation ,
[1998] LMCLQ, p. 502.
Davies, Donald, Rights to routes , [1999] LMCLQ 461.
Falkanger, Thor, En sammenligning mellom engelske og norske prinsipper for fortolkning av kontrakter , AfS 9, Universitetsförlaget, Oslo, 1965-69.
Gaskell, Nicholas, Master and Charterer , found in Ship Masters , p. 49.
Gaskell, Nicholas, Charterers’ Liability and Damage to the Vessel , Ninth Hasselby
Colloquium, 2001.
Girvin, Stephen D., Shipper’s liability for the carriage of dangerous cargoes by sea ,
[1996] LMCLQ 487.
Halson, Roger, Time Charterers – Legitimate last voyages , [1993] LMCLQ 19.
Michelet, Hans Peter, Periodens lengde vid tidsbefraktning , AfS 11,
Universitetsförlaget, Oslo, 1971-2.
Tiberg, Hugo, Legal qualities of transport documents , found in Festskrift to Jan
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