Practice and Law of Charter Party
Law School
Dalian Maritime University
Spring Term 2011-2012
Prof. GUO Ping
Reference Books（I）
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1, JOHN WILSON ,<CARRIAGE OF GOODS
BY SEA>,(6th edition) ，2008,Pearson
Longman Publishing
2, MICHAEL WILFORD, TERENCE COGHLIN,
JOHN D. KIMBALL,<Time Charter Party>,
LLP
3,<Voyage Charter Party>,LLP
4, JOHN SCHOFIELD , <Laytime and
Demurrage>, latest editon LLP
5,SCRUTTON ON CHARTERPARTIES AND
BILLS OF LADING (22th ed.) 2011,Sweet&
Maxwell Thomson Reuters
6,LARS GORTON etc. SHIPBROKING AND
CHARTERING PRACTICE (6th ed.) 2004 LLP
Reference Books（II）
 1, 郭萍编著 《租船实务与法律》（第二版）大连海
事大学出版社，2002年9月
 2, 司玉琢主编 《海商法》（第二版）法律出版社
 3,《程租合约》杨良宜 大连海事大学出版社 最新
版
 4,《期租合约》杨良宜 大连海事大学出版社 最新
版
 5,郭萍主编 《租船缩略语与常用条款》大连海事大
学出版社 2010年
 6,郭萍等 《国际海上货物运输实务与法律》大连海
事大学出版社 2010年
PART ONE GENERAL INTRODUCTION
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Chapter one: General introduction of
tramp shipping
Chapter two: Introduction of charter party
Chapter three: Entering into c/p &
standard form
Chapter four: Law and International
shipping practice of charter party
Chapter five: Tramp Shipping Market
Chapter one -General introduction of
tramp shipping
Key words and terms:
 Liner shipping ：班轮运输
 Tramp shipping：租船运输
 Bulk cargo：散杂货
 General cargo---container cargo：件杂货
 COA-contract of affreightment：运输合同
 C/P:charter party：租船合同
 Charter：租赁
Chapter one -General introduction of tramp shipping
 I Concept of tramp shipping
 ---A contract by charter party differs from a
contract by b/l, although both are normally
contracts of carriage, in that in the tramp shipping
a vessel is used for the carriage of full cargoes or
less frequently of part cargoes while b/l are used
as the document of a contract of carriage in the
liner trade, where ships carry general cargoes and
call at ports which are previously advertised. On
the contrary, in the tramp shipping the vessel loads
and delivers the cargo at the port or place
indicated by the charterer.
 The calculation of the freight or hire differs
profoundly:
 in the liner shipping the freight is calculated
on the basis of the weight or volume of the
goods delivered for shipment by a shipper;
 in the tramp shipping freight (or hire) is
calculated on the basis of the carrying
capacity of the vessel, or of part thereof in
the case of part cargoes, and is payable in
full irrespective of the quantity loaded being
equal to or lower than the full carrying
capacity.
 The allocation of costs and risks differs substantially as a
consequence of the varying control of the shipper/charterer
over the employment of the ship.
 In the liner shipping the carrier must have full control of loading
and unloading operations in order to ensure that his ship
operates on schedule and therefore normally pays for such
operations, the cost of which is included in the freight, and
takes upon himself the risk of delays during loading/discharging,
delivery and redelivery of the cargo taking place ashore,
normally in the warehouses of the carrier or of the port authority.
Conversely, the carrier does not wait for the goods at the
loading port and if they are not placed at his disposal on time
the vessel will sail without them, the shipper paying the freight.
 In the tramp shipping, the charterer has a varying degree or
control over the operation of the vessel and consequently a part
of the related risks and expenses are allocated to him. This
allocation varies according to the type of C/P
II Characteristic of tramp shipping
-no fixed schedule, no fixed route, arrange
carriage as agreed
-specially for bulk cargo ( not general cargo)
-costs and risks depend on the clauses
-contract of affreightment (COA) or charter
party entered into
III Kinds of tramp shipping
basically include the followings:
1 voyage charter
2 time charter
3 bare boat charter
new type :
- TCT (time charter on trip basis or
trip time charter)
-Bare boat charter by purchase
Voyage Charter
 Key words and terms
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Shipowner-出租人
Charterer-承租人
Preliminary voyage-预备航次
Demurrage-滞期费
Despatch money-速遣费
Laytime-装卸时间
Voyage Charter
 -Concept
shipowner provides part of or whole of ship to charterer for agreed
voyage(s)
agreed cargo is carried from agreed loading port to discharging port.
-the voyage may be divided into 4 stages:
-preliminary voyage stage: vessel sails to the port of
lading,during which all costs and risks are borne by the
owner.
-loading stage: vessel is at the port of loading, waits for berth
and loads. There is cooperation between owner and
charterer, costs shall be allocated according to clauses
-voyage stage: all risks and costs are borne by owner,who
has exclusive control over the preformance of the voyage
-unloading stage: vessel is at the port of discharging, waits
for berth and unloads. Also there is cooperation between
owner and charterer, and costs and risks shall be allocated
by clauses.
 -Characteristic
-the shipowner provides wages, bonus and other fees for
crew
-the shipowner is responsible for operation and
management of ship
-freight shall be calculated on the basis of quantity of cargo
and freight rate
-The cost for loading/discharging shall be ascertained
-The provisions on demurrage, despatch money and
laytime
 -Kinds: single trip charter, return trip charter, consecutive
single voyage charter or continuous return voyage charter
 L/P
D/P
Time Charter
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Key words and terms
Hire-租金
Delivery of ship-交船
Redeliver of vessel-还船
Withdrawal of vessel-撤船
Off-hire-停租
Time Charter
 --Concept
charterer has the right within the contractual period,
to employ the vessel within the contractual limits in
the way he likes and can directly order the master to
perform the voyage he decides to make.
 As the consequence of the employment of the
vessel being under the control of charterer, there is
no question of dividing the voyage into stages, and
all risk of delay due to bad weather or congestion or
other causes are borne by charterer. The owner only
bears the risks connected with the working of the
vessel, and if the vessel is prevented from working
owning to breakdown of machinery or others,
payment of hire is suspended until the vessel is
placed again at the full disposal of the charterer.
 -Characteristic
-the shipowner provides the vessel and wages,
bonus and other fees for crew
-the charterer is responsible for operation and
management of ship
-hire shall be calculated on the basis of period
of hire and hire rate etc.
-The costs born for operation shall be provided
as agreement
-The provisions on delivery, redelivery of ship
 TCT: which is a combination between a voyage
and a time charter in that the allocation of risks
and costs is that of time charter; the duration,
however, is not fixed, but related to the
performance of the specified voyage. It is used
-----when the owner does not wish to take upon
himself the risks which are normally at the charge
of an owner in a voyage charter.
------ Such as: not familiar to the loading port /
navigation route, or for some religious reasons
during specified periods. (When the month of
Ramadan（斋月） comes round each year,
Moslems have to fast from dawn to dusk )
Bareboat Charter
 --Concept
Which is opposite to voyage and time charter, is
qualified as contracts of lease. The possession of the
vessel is transferred from the owner to charterer and
the master and the crew are under the employment of
the charterer and are paid by him.
 -Characteristic
-the shipowner provides the bare boat
-the charterer is responsible for crewing,wages,bonus
and other fees for crew
- the charterer is responsible for operation and
management of ship
-The provisions on non-lien promise
- special clauses for changing equipments and
instruments onboard
bareboat charter by hire purchase
 which is actually a contract of sale of ship
with the form of bare boat charter.
 For the reason of finance of shipping
 Charterer (buyer) pays regular installment of
hire together with purchase charge until the
end of the hire of period any may employ
possess the vessel under his disposal as if
he were shipowner
 Shipowner (seller) may withdraw of vessel if
any regular payments fail to protect himself.
Chapter two Charter Party
 Under English Law: COA---- contract evidenced
by B/L , Voyage C/P ,Time C/p; (COA: contract
of affreightment)
 Under CMC chapter IV: COA- Contract
evidenced by B/l, voyage c/p , multimodal
transport contract
 Under CMC Chapter VI charter party: time c/p
and bareboat c/p
 Generally, C/P : voy.c/p,time c/p, bareboat c/p
Voyage Charter Party
 Concept:
------CMC Art.92 “A voyage charter
party is a charter party under which the
shipowner charters out and the
charterer charters in the whole or part
of the ship's space for the carriage by
sea of the intended goods from one
port to another and the charterer pays
the agreed amount of freight ”
Voyage c/p-non-compulsory clause
 CMC art.94
 The provision in art 47 and art 49 of this code shall
apply to the shipowner under voy c/p.
 The other provisions in this chapter (Chapter IV)
regarding the rights and obligations of the parties
to the contract shall apply to the shipowner and
the charterer under voy.c/p only in the absence of
relevant provisions or in the absence of
provisions differing therefrom in the voy.c/p.--’freedom of contract with limits’
 Voy c/p shall be concluded in writing which differs
from other contract of affreightments. (CMC art.43)
The main provisions
 CMC art. 93: name of owner/charterer,bale or grain capacity,
description of goods, laydays, laytime, freight,
demurrage ,dispatch money etc.
 --description of vessel clause
 --preliminary voyage clause
 --owner’ liabilities and exceptions clause
 --payment of freight clause
 --loading and discharging clause
 --demurrage and dispatch money clause
 --cancelling clause
 --lien clause and cesser clause
 --both-to-blame collision clause, new Jason clause, general
average clause, bill of lading clause, strike and war clause,
ice, arbitration , commission clause etc.
Time Charter Party
 Concept:
 CMC Art.129 “A time charter party is a contract
under which the shipowner provides a
designated manned ship to the charterer, and
the charterer employs the ship during the
contractual period for the agreed service
against payment of hire. ”
 The character: seems to be a contract of
leasing property-arguable comments on this
issue
Freedom of contract for time & bareboat c/p
 CMC art.127
-------The provisions concerning the rights and
obligations of shipowner and charterer in this
chapter (VI) shall apply only when there are no
stipulations or no different stipulations in this
regard in the charter party.
 CMC art 128
-------Time & bareboat c/p shall be concluded in
writing.
CMC art.130
 A time charter party mainly contains the
name of the shipowner, the name of the
charter; the name, nationality, class,
tonnage, capacity, speed and fuel
consumption of the ship; the trading area;
the agreed service, the contractual period,
the time, place and conditions of delivery
and redelivery of the ship; the hire and the
way of its payment and other relevant
matters.
The main provisions:
 --description of vessel clause
 --vessel’s speed and fuel consumption
 --delivery of vessel
 --period of hire clause
 --cancelling clause
 --lawful merchandise
 --trading limits
 --owners to provide,--charterers to provide
 --payment of hire
 --redelivery of vessel
 --off-hire clause
 --employment and indemnity clause
 --sublet clause ，--others etc.
Bareboat Charter Party
 Concept:
 CMC Art.144 “A bareboat charter party is a
charter party under which the shipowner
provides the charterer with an unmanned
ship which the charterer shall possess,
employ and operate within an agreed period
and for which the charterer shall pay the
shipowner the hire. ”
 Characteristics: purely lease contract of
property
CMC art 145
 Mainly contains:
the name of shipowner/charterer; name,
nationality, class, tonnage and capacity of ship;
trading area; employment of ship and period of
hire; time, place and condition of
delivery/redelivery; survey, maintenance and
repair of ship; hire and payment; insurance of
ship, the time and condition for the termination
of c/p and others.
 Main provisions:
 There are some provisions which are
quite similar to those of time c/p, except
 --maintenance and operation clause
 --inspection
 -mortgage clause
 --insurance and repairs
 --assignment and sub-demise
 --non-lien clause
 --others etc.
Chapter three: Entering into C/P & Standard Form
 I The making of c/p : chartering broker
 Generally, dry cargo c/p is negotiated and
concluded in one of freight markets of the
world or through broker, while oil c/p are
only negotiated through brokers.
 Liner shipping, ship agent or freight
forwarder plays important role in creating
COA as agent only.
 Chartering broker just plays the role of
informative , intermediary and co-ordination
functions.
 The broker should keep both owner and charterer
continuously informed about the market situation,
market development, available cargo proposals and
shipment possibilities.
 The broker should act strictly within given authorities
in connection with the negotiations.
 The broker should in all respects work loyally for this
principal and should carry out skillfully negotiation and
other works connected with c/p.
 The broker may not withhold any information from his
principal nor give him wrong information
 Payment : commission/ address commission 1.25% of
freight and/or hire,
 Brokerage Commission usually shall be paid by
shipowner only in the practice, except otherwise.
Process for negotiation of c/p
 Inquiry(询价)—offer（要约）—counter
offer—firm offer—acceptance（承诺）—
issue fixture note（订租确认书）—
making, checking and signing c/p (on the
basis of one kind of standard form)
 According to Chinese Contract Law (art 13)
“the parties shall, in making a contract, take
the form of offer and acceptance.”
FIXTURE NOTE (sample )
It is mutually agreed between Messrs (shipowner’s name and
address) as Owners and Messrs (charterer’s name and address) as
Charterers as the followings that:
Cargo xxx t bag rice 5% MOLOO
LOADING AT 1SBP IN XXX PORT
LYCN: 27TH-30TH APRIL,2009
FRT RATE USD XXX PER MT FIOST CQD BENDS
FULL FRT PREPAID TO XXXX B4 RELEASING /SIGNING B/L
BUT ALWAYS BBB (BEFORE BREAK BULK)
…
OTHERWISE DETAILS AS PER ‘94GENCON C/P
FOR AND ON BEHALF OF / FOR AND ON BEHALF OF
SHIPOWNER
CHARTERER
(signature)
(signature)
II The forms of c/p
 In the negotiation of c/p, reference form is made which
the parties agree to take as a basis for their contract.
 The specific elements are discussed and the printed
clauses are modified to the extent agreed and
additional clauses are appended to the form (so called :
‘rider clause’)
 standard c/p form---drafted or accepted by BIMCO (The
Baltic and International Maritime Council) , UK
Chamber of Shipping( previous- GCBS :General
Chamber of British Shipping), NYPE (New York
Produce Exchange) and Japanese Shipping Exchange
(JSE)etc.
 Also some other form prepared by big owners or
charterers in special trade, such as Shell, Exxon, BP,
Cargill etc.
Forms of Voy.c/p
 Uniform General Charter—GENCON
76/94 (BIMCO)
 Scandinavian Voyage Charter-SCANCON
(BIMCO)
 Chamber of Shipping Walsh Coal Charter
Party (GCBS)
 Americanized Welsh Coal CharterAMWELSH
 Coal Voyage Charter-POLCOALVOY
 Baltimore Berth Charter Party—Steam (Form
C), 1913
 BIMCO Grain Voyage Charter Party-GRAINCON
 North American Grain Charter PartyNORGRAIN 89
 North American Fertilizer Charter PartyFERTIVOY
 Fertilizer Voyage Charter Party-FERTICON
 C (ore) 7 Mediterran Iron Ore Charter party
 Tanker Voyage Charter Party (ASBATANKVOY)
 Australian Wheat Charter - AUSTWHEAT 1990
 Others: SYNACOMEX ，GRAINVOY,
NIPPONGRAIN etc.
Form of Time c/p
 Uniform Time Charter (BALTIME)
 Time Charter Party (NYPE) 46/93
ASBATIME AND FONASBATIME
 Time Charter Party 1980 (SINOTIME 1980)
 General Time Charter Party（GENTIME）
 Others：BIMCHEMTIME2005，BOXTIME，
BPTIME3， GASTIME，SUPPLYTIME etc.
Form of Bareboat c/p
 Standard Bareboat Charter (BARECON)
Chapter Four THE LAW AND SHIPPING CUSTOMS
RELATING TO THE CHARTER PARTIES
 No compulsory international conventions
for c/p, and the provisions of the most of
national law are not compulsory .
 See CMC Art.94 and Art.127
 However, the international conventions on b/l,
such as 1924Hague Rules, 1968Visby
Rules,1978Hamburg Rules, 2008Rotterdam
Rules shall apply to bill of lading under c/p if
only the holder of document is not charterer
International Shipping Practice
 There are some international shipping
practice and rules on the terms and clauses
of c/p. Such as 1980 Laytime Definition,
1993 Voyage Charter Party Laytime
Interpretation Rules (voylayrule)
 CMC art 268 “International practice may be
applied to matters for which neither the
relevant laws of PRC nor any international
treaty concluded or acceded to by the PRC
contain any relevant provisions.”
Chapter Five Chartering Market
 Purpose
-The chartering market is not a uniform market where the trend is
entirely up or down. It does not have a homogeneous
connection with a specific geographical area but rather with
ships that can carry similar types of cargoes.
-The current trend of the market is determined by the balance
between the supply and demand of shipping services of various
kinds. The freight market is dependent on the state of the world
trade market and ever-changing price of oil and sometimes
strongly influenced by circumstances such as war, widespread
strike, bad harvests, ice-bound waters etc.
-Contract between the different freight markets may be more or
less extensively. This depends on the type and size of ships,
the goods involved , and to certain extent on the distance of
transportation.
Kinds of freight markets
 -dry cargo market
-- Bulker
--Tweendecker
-- Container
--Ro/ro
--Liner
--Small ships
--Special ships (tug, barge etc.)
 Tanker market
 -Reefer market
 -Car carrier market
 Passenger market
 London market, New York market, Europe market, Asia
market (Tokyo, Hong Kong, Shanghai etc.)
Bulker and tweendecker (5,000-180,000 tons dwt)
Small ships
5,000-10,000
Bulker,own gear
Handysize
18,000-35,000
Bulker,own gear
Handy-max
38,000-45,000
Bulker,own gear
Panamax
50,000-80,000
Gearless, panama
canal
Cape-size
80,000 up
Gearless, Cape of
Hope
tweendecker
17,000-23,000
Own gear of derricks/
cranes, tweendeck
throughout
Part two Voyage Charter Party
 Key words and terms
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MISREPRESENTATIONS:误述
Intermediate clause：中间义务条款
Laydays：受载期
Cancelling date: 解约日
Interpellation clause：质询条款
PRELIMINARY VOGAGE：预备航次
Part two Voyage Charter Party
 Chapter I REPRESENTATIONS UNDER
VOYAGE CHARTER PARTY
 I Definition
 Representation means the statements given by
shipowner about description of vessel.
 Misrepresentation is a false statement of fact.
A pure statement of opinion or of intention
cannot amount to a misrepresentation
 In negotiations leading to a contract, silence,
even about a material fact, will not amount to a
representation. But a statement which is only
half true, in the sense that it discloses parts of
the truth but conceals other parts, may be a
misrepresentation.
II LEGAL EFFECT OF MISREPRESENTATIONS
 Under English Law, two forms of misrepresentations:
 A Make the parties of contract to enter into contract
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fraudulent misrepresentation
• (1)knowingly;or (2)without belief in its
truth;or(3)recklessly, careless whether it be true or false
--a party who suffers loss through relying on it is entitled
not only to rescind the contract, but also claim damages
in tort for deceit.
• negligent misrepresentation
--innocent party may recover damages from the party
making the misrepresentation unless the latter ‘proves
that he had reasonable ground to believe and did
believe up to the time the contract was made that the
facts represented were true.’
• innocent misrepresentation
• --the court or arbitrator shall decide to rescind or award
damage on the basis of the fact and circumstances.
B Consist the provisions of contract
 condition clause
-A condition is a term of the contract that is of such
importance that any breach of it will entitle the
innocent party to treat the whole contract as
discharged.
 warranty clause
-A warranty is a term of the contract of such minor
importance that no breach of it will entitle the innocent
party to treat the whole contract discharge, but only
claims for damages
 intermediate (or innominate) clause
-Any term of the contract which cannot be classified as a
condition or a warranty. Whether the innocent party is
entitled to discharge the contract depends on the
nature and consequences of the particular breach that
has occurred, also may claim for damages
Chapter II main provisions of representation
 name of vessel, see CMC art. 96
Only the named ship may be accepted by charterer except
one substitute vessel agreed by c/p
 nationality of ship
The flag concerns with safety or trading opportunities, as in
wartime, neutrality or otherwise (intermediate clause)
 classification (condition term)
classification certificate given by one classification society
is one of factor to determine the technical condition of
vessel
 Tonnage (intermediate clause)
 position (condition term)
 expected ready to load (laydays, cancelling date:LAYCAN )
(condition term)
Eg:1st-5th May, 2011 layday: 1-5th, May
 If cancelling date: 5th, May------laycan
 If Cancelling date: 7th,May
CMC art 96
 The shipowner shall provide the intended
ship.The intended ship may be substituted
with the consent of the charterer. However, if
the ship substituted does not meet the
requirements of the charter party, the
charterer may reject the ship or cancel the
charter.
 Should any damage or loss occur to the
charterer as a result of the shipowner’s
failure in providing the intended ship due to
his fault, the shipowner shall be liable for
compensation.
interpellation clause (GENCON 94 Cl. 9)
 Should the Owners anticipate that, despite the exercise of
due diligence, the Vessel will not be ready to load by the
cancelling date, they shall notify the Charterers thereof
without delay stating the expected date of the Vessel's
readiness to load the day she is stated to be expected
ready to load, Charterers have the option of cancelling this
contract, unless a cancelling date has been agreed upon
and asking whether the charterers will exercise their option
of cancelling the Charter Party, or agree to a new
cancelling date.
 Such option must be declared by the Charterers within 48
running hours after the receipt of the owners' notice. If the
charterers do not exercise their option of cancelling, then
this Charter Party shall be deemed to be amended such
that the seventh day after the new readiness date stated in
the Owners' notification to the Charterers shall be the new
cancelling date.
Chapter III PRELIMINARY VOGAGE
 GENCON’94 Clause 1: “the said vessel
shall, as soon as her prior commitments
have been completed, proceed to the
loading port(s) or place(s) stated in Box
10 or so near thereto as she may safely
get and lie always afloat……”
Chapter IV. LOADING /DISCHARGING CLAUSE
 Loading/discharging port (s) (GENCON Cl.1)
-SAFETY PORT , NEAR CLAUSE
The said Vessel shall, …proceed to the
loading port (s) or place( s) stated in Box
10 or so near thereto as she may safely
get and lie always afloat, and there load a
full and complete cargo
, see CMC art. 91
CMC art. 91
 If, due to force majeure or any other causes not
attributable to the fault of the carrier or the shipper,
the ship could not discharge its goods at the port
of destination as provided for in the contract of
carriage, unless the contract provides otherwise,
the master shall be entitled to discharge the goods
at a safe port or place near the port of destination
and the contract of carriage shall be deemed to
have been fulfilled.
 In deciding the discharge of the goods, the master
shall inform the shipper or the consignee and shall
take the interests of the shipper or the consignee
into consideration.
LOADING /DISCHARGING COSTS
 GENCON’94 Cl.5 ‘The cargo shall be brought into
the holds, loaded, stowed and/or trimmed, tallied,
lashed and/or secured and taken from the holds
and discharged by the Charterers, free of any risk,
liability and expense whatsoever to the Owners….
-liner clause---berth clause, gross clause, free
alongside ship (FAS)
-free in (F.I)-----FILO
-free out (F.O)-----LIFO
-free in and out (F.I.O)
-free in , out , stowed and trimmed (F.I.O.S.T)--LASHED, DUNNAGES, Secured,…..
Chapter V THE DUTY OF CHARTER TO PROVIDE CARGO
 THE SORTS OF CARGO
--special cargo/ substitute cargo
 CMC Art.100
 ‘The charterer shall provide the intended goods,
but he may replace the goods with the consent of
the shipowner. However, if the goods replaced is
detrimental to the interest of the shipowner, the
shipowner shall be entitled to reject such goods
and cancel the charter.
 Where the shipowner has suffered losses as a
result of the failure of the charterer in providing the
intended goods, the charterer shall be liable for
compensation.’
 THE QUANTITY OF CARGO
----full and complete cargo xxx tonnage more
or less at shipowner’s option/charterer’s
option
-----full and complete cargo xxx tonnage, not
exceeding xx tons, not less than xxx tons
----declaration(宣载) by master before actual
loading
 The duty of charterer
----ready for cargo, take the cargoes alongside
ship, provide cargoes, ship within fixed time
Chapter IV LAYTIME/ DUMURRAGE/DESPATCH MONEY

LAYTIME
means the period of time agreed between the parties during which the owner
will make and keep the ship available for loading/discharging without
payment additional to the freight.

PROVISIONS ON LAYTIME


Fixed laytime
--special loading/discharging days
 a) per day xx t , laytime = quantity/loading & discharging rate
 b) per hatch per day xx t, laytime =quantity of cargo /(daily
rate x numbers of hatches)
c) per working hatch per day xx t , laytime=quantity of cargo in
the largest hold/(daily rate x numbers of hatch serving that
hold)

Unfixed laytime

--CQD (customary quick despatch)

--as fast as the vessel can receive and / or deliver
 PER HATCH PER DAY
 means that laytime is to be calculated by multiplying the agreed
daily rate per hatch of loading/discharging the cargo by the
number of the ships hatches and dividing the quantity of cargo
by the resulting sum.
 PER WORKING HATCH PER DAY
 means that laytime is to be calculated by dividing the quantity of
cargo in the hold with the largest quantity by the result of
multiplying the agreed daily rate per working or workable hatch
by the number of hatches serving that hold.
 CUSTOMARY DESPATCH
----means that the charterer must load and or discharge as fast as
is possible in the circumstances prevailing at the time of
loading/discharging.
 AS FAST AS THE VESSEL CAN RECEIVE/DELIVER
 —means that the laytime is a period of time to be calculated by
reference to the maximum rate at which the ship in full working
order is capable of loading/discharging the cargo.
DEFINITION OF “DAYS” AS LAYTIME






DAY
RUNNING DAYS OR CONSECUTIVE DAYS
WORKING DAYS: W.D
WEATHER WORKING DAYS: W.W.D ( W.W.D, SHEX
OR SSHEX)
EIU (EVEN IF USED)/ UU (UNLESS USED)
WEATHER WORKING DAYS OF 24 HOURS
WEATHER WORKING DAYS OF 24 CONSECTIVE
HOURS

Fact:0800-1600:working time, 1000-1200/0600-0800: raining

0000
0800
1600
2400
1980 Laytime Defination
 “DAY”—means a continuous period of 24
hours which, unless the context otherwise
requires, runs from midnight to midnight.
 “RUNNING DAYS” or “CONSECUTIVE
DAYS”—means days which follow one
immediately after the other.
 “WORKING DAYS”(W.D.)—means days or
part(s) thereof which are not expressly
excluded from laytime by the charterparty
and which are not holidays.
 “WEATHER WORKING DAY”(WWD)—means a working day
or part of a working day during which it is or, if the vessel is
still waiting for her turn, it would be possible to load/discharge
the cargo without interference due to the weather. If such
interference occurs (or would have occurred if work had been
in progress), there shall be excluded from the laytime a period
calculated by reference to the ratio which the duration of the
interference bears to the time which would have or could have
been worked but for the interference.
 “WEATHER WORKING DAY OF 24 CONSECUTIVE
HOURS”—means a working day or part of a working day of 24
hours during which it is or, if the ship is still waiting for her turn,
it would be possible to load/discharge the cargo without
interference due to the weather. If such interference occurs (or
would have occurred if work had been in progress) there shall
be excluded from the laytime the period during which the
weather interfered or would have interfered with the work.
 EIU: even if used/ always excepted
 means that the specified days do not count as laytime
even if loading or discharging is done on them
 UU: unless used
 means that if work is carried out during the excepted
days the actual hours of work only count as laytime.
 Holiday:
 Means a day of the week or part (s) thereof on which
cargo work on the ship would normally take place but
is suspended at the place of loading/discharging by
reason of: (i) the local law or (ii) the local practice.
 In China, New year (Jan 1st), Spring Festival,Memorial
Day (April 5th), Labour Day (May 1st), Duanwu (dragon
boat festival), National Days (Oct.1st-3rd),Lunar Day.
Under voylayrule1993
 Weather working day” (WWD) or “Weather
working day of 24 hours ” or “Weather
working day of 24 consecutive hours”
 mean a working day of 24 consecutive
hours except for any time when weather
prevents the loading or discharging of the
vessel or would have prevented it, had work
been in progress
 It has the similar meaning as WWD of 24
consecutive hours under 1980 Definition.
COMMENCEMENT AND END OF LAYTIME
COMMENCEMENT (GENCON cl.6(c))
‘Laytime for loading and discharging shall
commence at 13.00 hours, if notice of
readiness is given up to and including 12.00
hours, and at 06.00 hours next working day if
notice given during office hours after 12.00
hours.’
 What is notice of readiness (NOR or N/R)
 NOR means the notice to charterer, shipper,
receiver or other person as required by c/p that
the vessel has arrived at the port or berth, as
the case may be, and is ready to load or
discharge.
the requirements for acceptance of NOR
 ---a arrived vessel
port contract: the ship should be within
‘commercial area’of the port, that is used
for laoding/discharing purposes.
berth contract: the ship shall arrive at the
berth designated in c/p.
Q: what if the anchorage area is out of the
scope of port boundary?
-whether in port or not (WIPON)---for some
special ports
----b be ready in every respect
---means anything that the preparation of the
ship to receive or deliver cargo: the removal of
hatch covers, the cleaning of holds, the rigging
of loading gear etc.
---from the trends of world, it is not the
precedent condition for the ship to perform all
necessary procedures at the port, customs,
quarantine, inspection etc. before rendering
NOR. However, all procedures shall be done
before the actual loading operation.
--- any time lost by reason of delay in the
vessel's completion of either of these
formalities shall not count as laytime or time
on demurrage
-- whether customs cleared or not, whether in
free pratique or not )
----c NOR has been tendered
---effective NOR shall be tendered on time,
neither later, nor earlier than the actual
readiness otherwise the laytime shall not
begin as the stipulation in c/p.
 WWWW (whether in port or not, whether
in berth or not , whether customs cleared
or not, whether in free pratique or not )
Problems arising for berth contract
 usual clauses relating to waiting time of berth
 ---“time lost in waiting for berth to count
as loading/discharging time ” or “as
laytime”

it means that if no loading or discharging
berth is available and the vessel is unable to
tender NOR at the waiting place then any time
lost to the vessel shall count as if laytime were
running, or as time on demurrage if laytime
has expired. Such time shall cease to count
once the berth becomes available. When the
vessel reaches a place where she is able to
tender NOR laytime or time on demurrage shall
resume after such tender and, in respect of
laytime, on expiry of any notice time provided
in the charterparty .(Voylayrule 1993)
 ------means that if the main reason why a notice of
readiness cannot be given is that there is no
loading/discharging berth available to the ship the
laytime will commence to run when the ship starts
to wait for a berth and will continue to run, unless
previously exhausted, until the ship stops waiting.
The laytime exceptions apply to the waiting time
as if the ship was at the loading/discharging berth
provided the ship is not already on demurrage.
When the waiting time ends time ceases to count
and restarts when the ship reaches the
loading/discharging berth subject to the giving of
a notice of readiness if one is required by the
charterparty and to any notice time if provided for
in the charterparty, unless the ship is by then on
demurrage. (1980 Definition)
“whether in berth or not” : WIBON
 It shall mean that if no loading or discharging
berth is available on her arrival, the vessel on
reaching any usual waiting place at or off the
port, shall be entitled to tender notice of
readiness from it and laytime shall commence
in accordance with the charterparty. Laytime or
time on demurrage shall cease to count once
the berth becomes available and shall resume
when the vessel is ready to load or discharge
at the berth. (Voylayrule 1993)
 ------means that if the location
named for loading/discharging is a
berth and if the berth is not
immediately accessible to the ship
a notice of readiness can be given
when the ship has arrived at the
port in which the berth is situated.
(1980 definition)
reachable on her arrival/“always accessible”
 ---It shall mean that the charterer undertakes
that an available loading or discharging berth
be provided to the vessel on her arrival at the
port which she can reach safely without delay in
absence of an abnormal occurrence.
(Voylayrule 1993)
 ----means that the charterer undertakes that
when the ship arrives at the port there will be a
loading/discharging berth for her to which she
can proceed without delay (1980 definition)
DEMURRAGE /DESPATCH MONEY
 DEFINITION
a demurrage
---shall mean an agreed amount payable to the owner in
respect of delay to the vessel beyond the laytime, for
which the owner is not responsible. Demurrage shall
not be subject to laytime exceptions.
b dispatch money
----shall mean an agreed amount payable by the owner if
the vessel completes loading or discharging before the
laytime has expired
c damage for detention
----it is unliquidated damages which arise where a vessel
is delayed by default of the charterer , or those he is
responsible, either on the preliminary voyage, or
carrying voyage, or at the port of loading or discharge.
It also differs from demurrage.
CACULATION

A demurrage
• demurrage runs continuously (once on demurrage, always on
demurrage)
• demurrage runs uncontinuously (or per like day)

B dispatch money
all time saved : ATS
----means that despatch money shall be payable for the time
from the completion of loading or discharging to the expiry
of the laytime including periods excepted from the laytime.
all working time saved: WTS
---- means that despatch money shall be payable for the time
from the completion of loading or discharging to the expiry
of the laytime excluding any periods excepted from the
laytime.
Whether to add L/D laytime together?
 TO AVERAGE Laytime
-----shall mean that separate calculations are to
be made for loading and discharging and that
any time saved in one operation is to be set off
against any excess time used in the other
 REVERSIBLE Laytime
---shall mean an option given to the charterer to
add together the time allowed for loading and
discharging. Where the option is exercised the
effect is the same as a total time being
specified to cover both operations
计算实例：假设租船合同规定装货和卸货的可用时间各为5个良好
天气工作日，星期六、星期日、节假日除外， 罢工、停工时间也除
外，滞期时间连续计算，速遣时间按节省全部工作时间计算，滞期
费率为2,000美元/天，速遣费率为1,000美元/天。
装卸时间事实记录 (laytime statement of fact: SOF)
 装货港
 1/8 Mon.
2/8 Tue.
3/8 Wed.
4/8 Thu.
5/8 Fri.
6/8 Sat.
 7/8 Sun.
 8/8 Mon.
9/8 Tue.
全天装货
全天装货
全天装货
全天装货
全天装货
停工
停工
全天装货
装货完毕
 卸货港
 17/8 Wed.
18/8 Thu.
19/8 Fri.
 20/8 Sat.
 21/8 Sun.
22/8 Mon.
23/8 Tue.
全天卸货
全天卸货
罢工
停工
停工
全天卸货
卸货完毕
 Q 1: loading port
------demurrage 4 days:8000USD
 Q2: discharging port
------despatch 1 day:1000USD
 Q3: reversible laytime
-------demurrage 1 day, 2000USD
 Q 4: average laytime
-------demurrage 3 days,6000USD
Chapter VII OTHER CLAUSES UNDER GENCON’94
 RESPONSIBILITIES AND EXCEPTIONS OF SHIPOWNER
(Art.2)
 ‘---The Owners are to be responsible for loss of or damage to
the goods or for delay in delivery of the goods only in case the
loss, damage or delay has been caused by personal want of
due diligence on the part of the Owners or their Manager to
make the Vessel in all respects seaworthy and to secure that
she is properly manned, equipped and supplied, or by the
personal act or default of the Owners or their Manager .
 ----And the Owners are not responsible for loss, damage or
delay arising from any other cause whatsoever, even from the
neglect or default of the Master or crew or some other person
employed by the Owners on board or ashore for whose acts
they would, but for this clause, be responsible, or from
unseaworthiness of the Vessel on loading or commencement of
the voyage or at any time whatsoever.’
CMC art. 47
 The carrier shall, before and at the
beginning of the voyage, exercise due
diligence to make the ship seaworthy,
properly man, equip and supply the ship and
to make the holds, refrigerating and cool
chambers and all other parts of the ship in
which goods are carried, fit and safe for their
reception, carriage and preservation.
DEVIATION CLAUSE(Art.3)
 Liberty clause, liberty deviation clause
 ‘The Vessel has liberty to call at any port or
ports in any order , for any purpose, to sail
without pilots, to tow and/or assist vessels in
all situations, and also to deviate for the
purpose of saving life and/or property.’
CMC art 49
 ‘The carrier shall carry the goods to the port
of discharge on the agreed or customary or
geographically direct route.
 Any deviation in saving or attempting to
save life or property at sea or any
reasonable deviation shall not be deemed to
be an act deviating from the provisions of
the preceding paragraph .’
LIEN CLAUSE (CESSER CLAUSE ) (Art.8)
‘The Owners shall have a lien on the cargo and on all sub-freights
payable in respect of the cargo, for freight, deadfreight,
demurrage, claims for damages and for all other amounts due
under this Charter Party including costs of recovering same.’
‘Charterers shall remain responsible for dead freight and
demurrage (including damages for detention), incurred at port
of loading. Charterers shall also remain responsible for freight
and demurrage (including damages for detention) incurred at
port of discharge, but only to such extent as the Owners have
been unable to obtain payment thereof by exercising the lien on
the cargo.’ (GENCON 76 art 8)
freight
sub-freight
 Shipowner--------- charterer—------- sub-charterer
head voy.C/P
sub-voy.C/P
Back –to –back contract
CMC art. 87 lien on cargo
 If the freight, contribution in general
average, demurrage to be paid to the
carrier and other necessary charges paid
by the carrier on behalf of the owner of the
goods as well as other charges to be paid
to the carrier have not been paid in full,
nor has appropriate security been given,
the carrier may have a lien, to a
reasonable extent, on the goods
LAW AND ARBITRATION CLAUSE (Art.19)
 ‘（a) This Charter Party shall be governed by and
construed in accordance with English law and any dispute
arising out of this Charter Party shall be referred to
arbitration in London in accordance with the Arbitration
Acts 1950 and 1979 or any statutory modification or reenactment thereof for the time being in force. Unless the
parties agree upon a sole arbitrator, one arbitrator shall be
appointed by each party and the arbitrators so appointed
shall appoint a third arbitrator, the decision of the three
man tribunal thus constituted or any two of them, shall be
final. On the receipt by one party of the nomination in
writing of the other party's arbitrator, that party shall appoint
their arbitrator within fourteen days, failing which the
decision of the single Arbitrator appointed shall be final’
 (b) in New York, American Law applied
 (c) in other place agreed, proper law applied accordingly
 (d) if there is no choice, sub clause (a) of this Clause shall
apply .
CMAC Model Arbitration Clause
 Any dispute arising from or in
connection with this contract shall be
submitted to China Maritime Arbitration
Commission for arbitration which shall
be conducted in accordance with the
Commission’s arbitration rules in effect
at the time of applying for arbitration.
The arbitral award is final and binding
upon both parties. (not simply say
“Arbitration in Beijing”)
Part three Time Charter Party
 Key words and terms
 legitimate last voyage:合法的最后航次
 WITHDRAWAL OF VESSEL：撤船
 anti-technicality clause：反技巧性条款/抵御市场波动条
款
 OFF-HIRE：停租
 enjusdem generis：同类解释原则（拉）
 Sub-let ：转租
 Sub-charter party :转租租船合同
 Head Charter Party：主（租船）合同
 disponet owner:二船东
 Safe port (berth):安全港口（泊位）
Part three Time Charter Party
 Chapter I REPRESENTATION UNDER TIME C/P
 NYPE 46：‘Owners of the good
Steamship/Motorship…of…tons gross register, and……tons net
register, having engines of………indicated horse power and
with hull, machinery and equipment in a thoroughly efficient
state, and classed……at……of about……cubic feet bale
capacity, and about ………tons of 2240 lbs. deadweight
capacity (cargo and bunkers, including fresh water and stores
not exceeding one and one\|half percent of ship’s deadweight
capacity, allowing a minimum of fifty tons) on a draft
of……feet……inches on……… Summer freeboard(夏季干舷) ,
inclusive of permanent bunkers, which are of the capacity of
about……tons of fuel, and capable of steaming, fully laden,
under good weather conditions about……knots on a
consumption of about………tons of best Welsh coal best
grade fuel oil—best grade Diesel oil,
now………and…Charterers ’
Similar clauses in NYPE 93 & Baltime
VESSEL’S SPEED AND FUEL CONSUMPTION
----capable of steaming
# at the time of delivery of vessel
---- fully laden
-----good weather conditions
-----about
# it allows the owners a margin of accuracy, no
general rule on the margin, however, it
depends on the fact, the age of ship and
particular trade route etc.
-----other causes to affect speed/fuel
# wind course, water current, bottom fouling,
bunker quality etc.
Chapter II SHIPOWNER /CHARTERER TO PROVIDE
 SHIPOWNER TO PROVIDE
----NYPE46 cl.1 ‘Owners shall provide and pay
for all provisions, wages and consular shipping
and discharging fees of the Crew; shall pay for the
insurance of the vessel, also for all the cabin, deck,
engine-room and other necessary stores,
including boiler water and maintain her class and
keep the vessel in a thoroughly efficient state in
hull, machinery and equipment for and during the
service…’
--- see also BALTIME cl. 3, NYPE93 cl.6
---“maintenance clause”
(initial seaworthiness—delivery of vessel)
 This obligation continues through the charter
period, supplementing the initial warranty of
seaworthiness at delivery of vessel.
 However, it is not an absolute one. If her
machinery or equipment do become inefficient
during the period, the owners are obliged to
take reasonable steps within a reasonable
time to put them right.
CMC art 133
 ---During the charter period, if the ship is found at
variance with the seaworthiness or the other
conditions agreed upon in the charter, the
shipowner shall take all reasonable measures to
have them restored as soon as possible.
 ----Where the ship has not been operated normally
for 24 consecutive hours due to its failure to
maintain the seaworthiness or the other conditions
as agreed upon, the charterer shall not pay the
hire for the operating time so lost, unless such
failure was caused by the charterer .
CHARTERER TO PROVIDE
 ---1946 NYPE cl.2
 ‘..the Charterers shall provide and pay for all the fuel
except as otherwise agreed, Port Charges, Pilotages,
Agencies, Commissions, Consular Charges ( except
those pertaining to the Crew) and all other usual
expenses except those before stated, but when the
vessel puts into a port for causes for which vessel is
responsible, then all such charges incurred shall be
paid by the Owners. Fumigations ordered because of
illness of the crew to be for Owners account.
Fumigations ordered because of cargoes carried or
ports visited while vessel is employed under this
charter to be for Charterers account …
 Charterers are to provide necessary dunnage and
shifting boards, also any extra fittings requisite for a
special trade or unusual cargo. .’
---see also BALTIME cl.4, NYPE93 cl.7
Chapter III PERIOD OF HIRE /DELIVERY/ REDELIVERY
 THE PERIOD OF HIRE
NYPE93 Cl.1
‘The Owners agree to let and the Charterers agree to hire the
Vessel from the time of delivery for a period of ….within
below mentioned trading limits ….’
Baltime Cl.1 (The Owners let, and the Charterers hire the
Vessel for a period of… calendar months from the time
(not a Sunday or a legal Holiday unless taken over) the
Vessel is delivered and placed at the disposal of the
Charterers …)
Usual clauses on the period of hire
---a xxx months
---b about xxx months
---c xxx months, more or less at charterer’s option
---d not more than xxx months, not less than xxx months
---e the period necessary to perform voyages such as xxx to
xxx months
DELIVERY OF VESSEL
 Date,palce and condition of delivery (NYPE93 Cl.2/Cl.16)
 ----‘The Vessel shall be placed at the disposal of the
Charterers at……..The Vessel on her delivery shall be
ready to receive cargo with clean-swept holds and tight,
staunch, strong and in every way fitted for ordinary cargo
service, having water ballast and with sufficient power to
operate all cargo-handling gear simultaneously.
 ----‘The Owners shall give the Charterers not less
than…days notice of expected date of delivery ‘.
 ----‘If required by the Charterers, time shall not commence
before…and should the Vessel not be ready for delivery on
or before…but not later than …hours, the Charterers shall
have the option of cancelling this c/p’
 -----If the Owners warrant that the Vessel will not be ready
for delivery by the cancelling date, and provided the
Owners are able to state with reasonable certainty the date
on which the Vessel will be ready, they may, … require the
Charterers to declare whether or not they will cancel the
Charter Party. See also NYPE 46 ,Baltime Cl.1&5
Place of delivery
NYPE 46: ‘Vessel to be placed at the disposal of the
Charterers, at…..in such dock or at such wharf or
place (where she may safely lie, always afloat, at all
times of tide, except as otherwise provided in clause
No.6), as the Charterer may direct.
 If such dock, wharf or place be not available time to
count as provided.
 Baltime cl.1 ‘the Vessel is delivered and placed at
the disposal of the Charterers between 9 a.m. and 6
p.m., or between 9 a.m. and 2 p.m. if on Saturday,
at…in such available berth there she can safely lie
always afloat, as the Charterers may direct ….’
Conditions of delivery---initial seaworthiness
 NYPE: ‘….with clean-swept holds and tight,
staunch, strong and in every way fitted for
ordinary cargo service….’
 Baltime cl.1 ‘…she being in every way fitted for
ordinary cargo service….’
 In general, the meaning of seaworthy ship shall
be broad one ,not as narrow as the clauses
mentioned above.
 --the ship itself
 --man the ship and have proper provisions
 --it is available and fitful for cargo’
transportation, storage etc.
CMC art 132
 At the time of delivery, the shipowner shall
exercise due diligence to make the ship
seaworthy. The ship delivered shall be fit for
the intended service.
 Where the shipowner acts against the
provisions in the preceding paragraph, the
charterer shall be entitled to cancel the
charter and claim any losses resulting
therefrom.
On-Off Hire Survey (NYPE 93 Cl.3)


Prior to delivery and redelivery the parties shall,
unless otherwise agreed, each appoint
surveyors, for their respective accounts, who
shall not later than at first loading port/last
discharging port respectively, conduct joint onhire/off -hire surveys, for the purpose of
ascertaining quantity of bunkers on board and
the condition of the Vessel.
A single report shall be prepared on each
occasion and signed by each surveyor, without
prejudice to his right to file a separate report
setting forth items upon which the surveyors
cannot agree.
REDELIVERY OF VESSEL
NYPE93 cl.10 (date, place, condition)
 …hire shall continue until the hour of the
day of her redelivery in like good order
and condition, ordinary wear and tear
excepted, to the Owners (unless Vessel
lost) at………… unless otherwise
mutually agreed.
 The Charterers shall give the Owners not
less than……days notice of the Vessel's
expected date and probable port of
redelivery.
See NYPE46 cl.3/4/13;. Baltime cl.7
THE TIME OF REDELIVERY
AFTER THE EXPIRATION OF HIRE
• legitimate last voyage
• Under English law: the charterer is not in breach if,
when the vessel was dispatched on its final voyage he
could reasonably have expected the voyage to be
completed within the charter period plus the permitted
leeway expressly or implied in c/p.
• Under USA law: overlap< underlap
• Overlap: the delay after expiration of period of hire if the
last voyage shall be performed.
• Underlap: the time saved before expiration of period of
hire if the last voyage shall not be performed.
•
expiration of period
•
Underlap
A
overlap
CMC art.143
 If, on the basis of a reasonable calculation, a ship
may be able to complete its last voyage at around
the time of redelivery specified in the charter and
probably thereafter, the charterer is entitled to
continue to use the ship in order to complete that
voyage even if its time of redelivery will be
overdue. During the extended period, the charterer
shall pay the hire at the rate fixed by the charter,
and , if the current market rate of hire is higher
than that specified in the charter, the charterer
shall pay the hire at the current market rate.
Legal effect of legitimate last voyage
 -the shipowner shall follow the order given
by charterer and perform the last voyage at
the payment of hire as agreed in c/p.
 --during the delay, shipowner entitled to
claim for the difference between the higher
market rate and contract rate, not for any
other losses suffered by delay, such as
damages for failing perform the next charter.
 Therefore, it is still unfair for shipowner if the
delay caused the benefit loss for non
performing next charter on time.
illegitimate last voyage
 English Law
---when the vessel was dispatched on its final
voyage he could not reasonably have expected
the voyage to be completed within the charter
period plus the permitted leeway
 USA Law: overlap > underlap
 Chinese law: keep silent
 Effects: the master may refuse to follow the
order given by charterer for illegitimate last
voyage and entitled to claim for all losses
resulting from it.
EARLIER REDELIVERY
 Earlier or delay to redeliver the vessel to
shipowner depends on the change of market.
 2008 Finance Crisis, a lots of disputes on this
point. Eg, Capsize ship (35,000 USD/day3000USD/day)
 The shipowner has to accept and has the
obligation to minimize the loss for other
arrangement of charting during the period of
earlier redelivery.
 -shipowner claims for loss resulting from it on
proven anticipated losses therefrom.
THE CONDITIONS OF REDELIVERY
 ----The charterer will be liable in damages if as a
result of a breach of any of their obligations under
the charter they redeliver the ship in a worse
condition than when delivered, ordinary tear and
wear excepted.
 ordinary tear and wear---means normal
depreciation. The nature of particular trade in c/p
is a relevant factor. The scrathces, nicks, gouges,
dents, bending and shearings of the metal parts of
a ship’s holds, hatches and decks that are
inherent in the usual method of discharge of most
bulk cargoes by grab buckets or other mechanical
equipment, but which when not major, do not
affect the strength or function of the structural
members of a ship’ hold, hatches and decks are
considered as ordinary tear and wear.
Legal Effects
 ----Under maintenance clause, the
owners will be obliged to make good
much of damage which occurs during
the charter and they will only recover
the cost of repairs from charterer when
they show that damage was caused by
charterer.
 -----The owners cannot refuse the
redelivery of damaged ship and are left
to a claim for damages.
CMC art.142
 ‘When the charter redelivers the ship to the
shipowner, the ship shall be in the same good
order and condition as it was at the time of
delivery, fair wear and tear excepted.
 Where, upon redelivery, the ship fails to
remain in the same good order and condition
as it was at the time of delivery, the charter
shall be responsible for rehabilitation or for
compensation.

Chapter IV PAYMENT OF HIRE AND
WITHDRAWAL OF SHIP
PAYMENT OF HIRE -NYPE’46 cl.5 (NYPE’93 cl.11)
‘Payment of said hire to be made in New York in cash in
United States Currency , semi-monthly in advance,
and for the last half month or part of same the
approximate amount of hire, and should same not
cover the actual time, hire is to be paid for the
balance day by day, as it becomes due, if so
required by Owners, unless bank guarantee or
deposit is made by the Charterers, otherwise failing
the punctual and regular payment of the hire, or
bank guarantee, or on any breach o f this Charter
Party, the Owners shall be at liberty to withdraw the
vessel from the service of the Charterers, without
prejudice to any claim they (the Owners) may
otherwise have on the Charterers ’
Baltime cl.6
‘The Charterers to pay as hire……………per 30
days, commencing in accordance with clause 1
until her re-delivery to the Owners. Payment of
hire to be made in cash, in…………without
discount, every 30 days, in advance.In default of
payment the Owners to have the right of
withdrawing the Vessel from the service of the
Charterers, without noting any protest and
without interference by any court or any other
formality whatsoever and without prejudice to
any claim the Owners may otherwise have on
the Charterers under the Charter. ’
 Cash
------Means actual currency, bank checks,
payment orders, or telex transfer.
 without discount
-----charterer has no right to withhold hire
except as expressly provided in c/p for
off-hire or advances. Any deduction
shall be made bona fide and be
assessed on a reasonble basis.
 --previous off-hire

Apr. Off-hire due date
May
 Advances paid by the charterer on the
request of master
 Speed & fuel consumption
 Any others agreed between the parties
 If the deduction is allowable, the charterer
shall make it on bona fide(诚实信用原则)
In Advance
-----each periodic payment shall be made by
charterer on or before but not later than the
due date. If the due date for a particular
payment falls on a Sunday or some other
non-banking day, charterer must make their
payment on an earlier banking day.
-----To pay on or before the due date is an
absolute obligation for charterer
WITHDRAWAL OF VESSEL
-----conditions of withdrawal
If charterer fails to make punctual payment of an
instalment of hire on or before the due date,
owner is entitled to withdraw the ship from the
service and brings the charter to an end.
----limits to exercise withdrawal
anti-technicality clause: “ when there is any
failure to make punctual and regular payment
of hire, the charterers shall be given by the
owners xxx bank’s working day’s written
notice to rectify any failure.”
the legal effect of withdrawal
Upon a valid withdrawal by owner, the charter comes
to an end. But owner may continue to be liable to
the owners of cargo under b/l issued under c/p,
therefore, owner may claim for remuneration for
those services. And also owner has the right to
claim the unpaid hire together with any other
amounts due from charterer at the time of
withdrawal.
-------- waiver of the right to withdrawal
* accept the late payment
* accept punctual payment, but not full
amount of payment
* not exercise the right of withdrawal on
time
* confirm to perform the contract by owner
Chapter V OFF-HIRE
 Baltime cl.11
 ‘In the event of drydocking or other necessary
measures to maintain the efficiency of the Vessel,
deficiency of men or Owners' stores, breakdown
of machinery, damage to hull or other accident,
either hindering or preventing the working of the
vessel and continuing for more than twenty four
consecutive hours, no hire to be paid in respect of
any time lost thereby during the period in which
the Vessel is unable to perform the service
immediately required. Any hire paid in advance to
be adjusted accordingly. ’
NYPE’93cl.17
 In the event of loss of time from efficiency and/or default
and/or strike of officers or crew,
 deficiency of stores,
 fire,
 breakdown of, or damages to hull, machinery or
equipment, grounding,
 detention by the arrest of the Vessel,
 detention by average accidents to the Vessel or cargo
unless resulting from inherent vice, quality or defect of
the cargo,
 drydocking for the purpose of examination or painting
bottom,
 by any other similar cause preventing the full working of
the Vessel, the payment of hire and overtime, if any, shall
cease for the time thereby lost. (see also NYPE’46 cl 15)
common provisions for off-hire
 ----deficiency of men
-----break down or damage to hull, machinery
or equipment
------detention by average accidents to ship or
cargo
------ dry-docking
------any other causes preventing the full
working of the vessel
 enjusdem generis of “any other causes”
 “any other whatsoever causes” has more
chance to broad the meaning of ‘any other
causes’, however, cannot be extended too
much.
 Such as detention and arrest by Somalia piracy in
latest UK cases.
Chapter VI RESPONSIBILITIES/
OBLIGATIONS/EXEMPTIONS
 RESPONSIBILITIES AND OBLIGATIONS OF
SHIPOWNERS
(1) ---initial seaworthiness;
(2) -----maintenance seaworthiness
(3) ----- the shipowners to provide ;
(4)----- reasonable despatch
 SHIPOWNER TO PROVIDE
----NYPE46 cl.1 ‘Owners shall provide
and pay for all provisions, wages and
consular shipping and discharging fees
of the Crew; shall pay for the insurance
of the vessel, also for all the cabin, deck,
engine-room and other necessary stores,
including boiler water and maintain her
class and keep the vessel in a thoroughly
efficient state in hull, machinery and
equipment for and during the service…’
reasonable despatch
 NYPE’93 cl.8(See also NYPE’46 cl.8;Baltime cl.9 (similar
clauses)
 “The Master shall perform the voyages with due despatch,
and shall render all customary assistance with the
Vessel's crew….”
 --this obligation shall be balanced against the
paramount duty of master to provide the safety of
the vessel, her crew and cargo. If the master acts
in good faith and with a reasonable exercise of
judgment in the particular circumstances in
concluding that the voyage must be delayed for
the safety of the vessel, crew or cargo ,such
delay would not constitute a violation of the
charter.
 ----customary assistance---means the master
and crew would normally work or perform just
like if the ship is not under charter. It
depends on the matter of fact. Among other
relevant factors will be the flag of the ship, the
articles signed by the crew and the trade in
which the ship is engaged. Generally,
removal of soft non –adhering rust is the duty
of the crew
RESPONSIBILITIES AND OBLIGATIONS OF CHARTERERS
---Charterers to provide
---safety of port/berth
NYPE 93 cl.12—berth: ‘The Vessel shall be loaded
and discharged in any safe dock or at any safe
berth or safe place that Charterers or their agents
may direct, provided the Vessel can safely enter,
lie and depart always afloat at any time of tide.’
cl.5 trading limits ---’The Vessel shall be employed
in such lawful trades between safe ports and safe
places within…’
See also NYPE preamble, Baltime cl.2
CHARTERER TO PROVIDE
 ---1946 NYPE cl.2
 ‘..the Charterers shall provide and pay for all the fuel
except as otherwise agreed, Port Charges, Pilotages,
Agencies, Commissions, Consular Charges ( except
those pertaining to the Crew) and all other usual
expenses except those before stated, ……. .
Fumigations ordered because of cargoes carried or
ports visited while vessel is employed under this
charter to be for Charterers account …
 Charterers are to provide necessary dunnage and
shifting boards, also any extra fittings requisite for a
special trade or unusual cargo. .’
---see also BALTIME cl.4, NYPE93 cl.7
DEFINITON OF SAFE PORT
 Definition of 1980:
 “means a port which, during the relevant
period of time, the ship can reach, enter,
remain at and depart from without, in the
absence of some abnormal occurrence,
being exposed to danger which cannot be
avoided by good navigation and
seamanship.”
SCOPE OF SAFE PORT
(---Geography safe & political safe)
--the port must be safe for the particular ship chartered.
eg,one port may be entirely safe for 99 out of 100, except
the very big ship.
---the ship must be able to reach the port in safety. If the
approach to one port is such that the ship cannot reach in
safety without dismantling part of her structure, it is
unsafe. Or the ship must lighten some of her cargo to
enter into.
---the port must be physically safe in its location, size and
layout for the particular ship to use at the relevant time,
having regard to both its natural and artificial aspects.
Defective or missing navigational aids, incompetent or
unavailable pilot , inadequate mooring facilities might
make the port unsafe at the time of using.
 the port will not be safe if the ship is
endangered in departing from it. Eg. one ship in
laden condition has no difficulties in entering,
after discharging she could not clear the canal
bridge on her outward passage owing to
decreased draft.
 abnormal occurrences----means some event
which is unrelated to the prevailing
characteristics of the particular port, or can not
be regarded as an attribute or its own qualities
of the port. Eg, exceptional storm or damaged
by another ship being negligently navigated.
----Good navigation and seamanship
most navigable rivers, channels, ports, harbors
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 steamship.
But if more than ordinary skill is required to
avoid the dangers the port will not be safety.
---the risk of hostile seizure or attack en route
to the port nominated may make the port
unsafe.
WHEN TO WARRANTY THE SAFETY OF
PORT-prospectively safe theory
 --primary obligation
 It arises when the order the ship to the port. At that
time, the port need only be prospectively safe for the
ship at the appropriate time in the future, to reach, use
and leave. It cannot be broken by a state of unsafety
prevailing at the time of the order which will have been
cured before the ship’s arrival.
--secondary obligation: port becomes unsafe after
nomination
Under new obligation, Charterer comes to cancel the
original order and issues fresh orders to another port
which is then prospectively safe. Similarly if a
subsequent state of unsafety arises when the ship is
at the port but she may still avoid danger by leaving.
Exceptions Clause
 NYPE’93 Cl.21 (NYPE’46 Cl.16)
 ‘The act of God, enemies, fire, restraint of princes, rulers and
people, and all dangers and accidents of the seas, rivers,
machinery, boilers, and navigation, and errors of navigation
throughout this Charter, always mutually excepted ‘’
 Baltime Cl.13
 ‘The Owners only to be responsible for delay in delivery of the
Vessel or for delay during the currency of the Charter and for
loss or damage to goods onboard, if they are caused by want
of due diligence on the part of the Owners or their Manager in
making the Vessel seaworthy … or any other personal act or
omission or default of the Owners or their Manager. ….
 …Not be liable for loss or damage caused even if by the
neglect or default of their servants.
 …not to be liable for loss or damage arising or resulting from
strikes, lockouts or stoppage or restraint of labour (including the
Master, Officers or Crew) whether partial or general. ….
Common nature for exception clause
 Act of god
----due to natural causes, without human intervention,
the event must be so overwhelming and unanticipated.
 Enemies
----the actions of enemies of the state whose flag the
ship flies and of enemies of the states in which the
charterer or owner are registered.
 Fire
-----the fire is not caused by negligence. Damage by
reason of fire includes damage by smoke and damage
from water used to extinguish the fire.
 Restraint of princes, rulers and people
-----which covers forcible interference by a government or
state preventing or impeding the performance of the
charter, such as the imposition of restrictions on trade,
action taken pursuant to Customs or quarantine
regulations, action to protect the government’s own
proprietary interests in the cargo or action taken for
political reasons.
----which excludes
(1) actions by any body of persons who do not constitute the
ruling power, or the executive of the ruling power of the
country;
(2) arrest or detention under ordinary judicial process;
(3) restraint arising from a state of affairs which existed at the
time the charter was entered into, where the law
applicable was known to the party seeking to rely on the
exception.
(4) restraint resulting from negligence
 All dangers and accidents of the seas,rivers
-----which covers perils peculiar to seas or rivers or to
the navigation of a ship at sea or in rivers which
cannot be avoided by the exercise of reasonable care.
It also relates to dangers and accidents of the seas
rather than on the seas (fire or lighting, rain etc)
 Break down of Machinery, boilers
----which covers those physical risks incident to vessel’s
equipments etc., it afford no protection if what occurs
is caused by negligence.
Errors of navigation
---which does not cover negligence unless agreed
otherwise.
 Strike (voylayrule 93 art.28 )
----- which means a concerted industrial action by
workmen causing a complete stoppage of their work
which directly interferes with the working of the vessel.
Refusal to work overtime, go-slow or working to rule
and comparable actions not causing a complete
stoppage shall not be considered a strike.
A strike shall be understood to exclude its consequences
when it has ended, such as congestion in the port or
effects upon the means of transportation bringing or
taking the cargo to or from the port .
Chapter VII OTHER MAIN CLAUSES UNDER TIME C/P
 I EMPLOYMENT AND INDEMNITY CLAUSE
NYPE’93 Cl.8 (NYPE’46 Cl.8)----employment only,
no indemnity
‘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, stowing, trimming, lashing,
securing, dunnaging, unlashing, discharging,
and tallying, at their risk and expense, under
the supervision of the Master’.
Baltime Cl.9
‘The Master to be under the orders of the Charterers
as regards employment agency, or other
arrangements. The Charterers to indemnify the
Owners against all consequences or liabilities
arising from the Master, Officers or Agents signing
Bills of Lading or other documents or otherwise
complying with such orders, as well as from any
irregularity in the Vessel's papers or for
overcarrying goods. The Owners not to be
responsible for shortage, mixture, marks, nor for
number of pieces or packages, nor for damage to
or claims on cargo caused by bad stowage or
otherwise..’
CMC Art.136
 The charterer shall be entitled to give the
master instruction with respect to the
operation of the ship. However, such
instruction shall not be inconsistent with the
stipulations of the time charter.
The problem of under supervision of master
(or ‘….and responsibility of…’)
 ---the master has the right to supervise the cargo operation,
particularly from the view of safety of ship. If the ship is
damaged by the negligence of the stevedores in these
operations, the damage shall be recovered by owners except
that the damage was in fact attributable to the master’s
supervision.
 ---- ‘under the supervision & responsibility of master’
 It is prima facie the liabilities and risks transferred from
charterer back to owner for entire operation of
loading/discharging/trimming/stowing. Transfer means not only
for loss or damage to the cargo but also for loss of ship.
 However, if the operation was interfered by the charterer or this
agents or representatives, then the charterer is estopped.
Who shall be responsible for damages caused by stevedore?
 NYPE 93 Cl.35 (silent in NYPE 46 & Baltime)
 ‘Notwithstanding anything contained herein to the
contrary, the Charterers shall pay for any and all
damage to the Vessel caused by stevedores provided
the Master has notified the Charterers and/or their
agents in writing as soon as practical but not later than
48 hours after any damage is discovered. Such notice
to specify the damage in detail and to invite Charterers
to appoint a surveyor to assess the extent of such
damage.
(a) In case of any and all damage(s) affecting the
Vessel's seaworthiness and/or the safety of the crew
and/or affecting the trading capabilities of the Vessel,
the Charterers shall immediately arrange for repairs of
such damage(s) at their expense and the Vessel is to
remain on hire until such repairs are completed and if
required by the Vessel's classification society.
 (b) Any and all damage(s) not described
under point (a) above shall be repaired at
the Charterers' option, before or after
redelivery concurrently with the Owners'
work. In such case no hire and/or expenses
will be paid to the Owners except and
insofar as the time and/or the expenses
required for the repairs for which the
Charterers are responsible, exceed the time
and/or expenses necessary to carry out the
Owners' work. ’
II TRADING LIMITS CLAUSE
 NYPE ’93 Cl.5 ( NYPE’46 preamble)
----‘The Vessel shall be employed in such lawful trades between
safe ports and safe places within …..excluding….as the
Charterers shall direct ’
 -Baltime Cl.2
------‘The Vessel to be employed in lawful trades for the carriage of
lawful merchandise only between good and safe ports or places
where she can safely lie always afloat within the following
limits……..
 Purpose: Opposite to voy.c/p, time charterer originally is free to
send the ship to any navigable waters in the wide world that he
likes. This clause is not to grant a liberty, but to impose a limit or
restriction, by cutting down the unlimited and universal liberty of
the charterer and excluding him from certain areas.
CMC Art. 134
 The charterer shall guarantee that the ship
shall be employed in the agreed maritime
transport between the safe ports or places
within the trading area agreed upon.
 If the charterer acts against the provisions of
the preceding paragraph, the shipowner is
entitled to cancel the charter and claim any
losses resulting therefrom.
 Point I: orders to trade outside the limits
-----master may refuse an order from charterer to
proceed outside limits even under employment
clause. Nor is the master obliged to sign a b/l
which names a port of discharge outside limits.
 Point II: obedience to charterer’s order outside
---Mere compliance with charterer’s order to
proceed outside limits will probably not amount
to a waiver of owner’s right either to refuse
further compliance subsequently or to claim
damages for the breach.
 Point III: measure for damages for outside
----if owner instructs the master to comply with order
under protest, owner may claim for the difference
between the charter rate and market rate (if higher)
for the voyage performed outside the limits even if
that exceeds the additional costs to which the
owner has been put by those voyages.
 Point IV: agreement that limits may be broken
--- It is usual for the parties to agree in the charter
that charterer may order the ship outside the
specified trading limits, while paying any extra
premium consequently required by ship’s
underwriter (insurer).
LAWFUL MERCHANDISE CLAUSE
 Baltime Cl.2
 ‘No live stock nor injurious, inflammable or
dangerous goods (such as acids, explosives,
calcium carbide, ferro silicon, naphtha, motor
spirit, tar, or any of their products) to be
shipped’
NYPE ’93 Cl.4 (NYPE’46 preamble)
 ‘The Vessel shall be employed in carrying lawful
merchandise excluding any goods of a dangerous,
injurious, flammable or corrosive nature unless
carried in accordance with the requirements or
recommendations of the competent authorities of
the country of the Vessel's registry and of ports of
shipment and discharge and of any intermediate
countries or ports through whose waters the
Vessel must pass. Without prejudice to the
generality of the foregoing, in addition the
following are specifically excluded: livestock of any
description, arms, ammunition, explosives, nuclear
and radioactive materials,…
CMC Art.135
 The charterer shall guarantee that the ship
shall be employed to carry the lawful
merchandise agreed.
Where the ship is to be employed by the
charterer to carry live animals or dangerous
goods, a prior consent of the shipowner is
required.
The charterer shall be liable for any loss of the
shipowner resulting from the charterer’s
violation of the provisions of paragraph 1 or
2 of this article.
 Point I : what is lawful?
---goods will not be lawful if their loading amounts
to a breach of local law nor if they can not
lawfully be discharged at the nominated
discharge ports. They must be lawful under the
law of the ship’s flag and the proper law of the
charter.
 Point II : shipment of cargo excluded under c/p
----it is the breach of contract for charterer to ship
goods excluded by c/p and master may
properly refuse an order to load such goods
 Point III : effect to load exclusive goods
---if the owner either are unaware of this or instruct the
master to accept it under protest, owner may be
entitled to additional remuneration based on the
current market rate for carriage of the excluded
cargo ,either as damages or under an implied promise
by the charterer.
 Point IV: what is dangerous goods
---it is implied at common law not shipping dangerous
goods unless owners or their crew knew or ought
reasonably to have known of these peculiar
characteristics.
---It is not easy to differ safe and dangerous. Reference
on IMDG CODE.
SUB-LET CLAUSE
 NYPE 93 Cl.18 (NYPE 46 Preamble)
----‘Unless otherwise agreed, the
Charterers shall have the liberty to
sublet the Vessel for all or any part
of the time covered by this Charter
Party, but the Charterers remain
responsible for the fulfillment of this
Charter party’
 Baltime Cl.20 (CMC: art 137 has similar provision)
 ----‘The Charterers to have the option of
subletting the vessel, giving due notice to the
Owners, but the original Charterers always to
remain responsible to the Owners for due
performance of the Charter’

head charter
Sub-charter
Shipowner--------------charterer (disponet)---------subcharterer
Point I : there is no direct contract relation between owner
and subcharterer
Point II : Maybe there is direct contractual relation between
owner and sub-charterer under b/l issued under subcharter
(Under CMC, carrier, actual carrier)
Part Four Bareboat Charter Party
 Chapter I Main provisions
 Delivery clause ( Barecon Art.1-3,7)
I place:
‘The Vessel shall be delivered and taken over by the
Charterers at the port indicated in Box 15, in such
ready berth as the Charterers may direct. ’
II conditions
--seaworthy: ‘The Owners shall before and at the time of
delivery exercise due diligence to make the Vessel
seaworthy and in every respect ready in hull, machinery
and equipment for service hereunder. The Vessel shall be
properly documented at time of delivery…’
---latent defect:...the Owners shall be responsible for repairs
or renewals occasioned by latent defects in the Vessel, her
machinery or appurtenances, existing at the time of
delivery under the Charter, provided such defects have
manifested themselves within 18 months after delivery ….
(special)
---lists of provisions: ‘A complete inventory of the Vessel's
entire equipment, outfit, appliances and of all consumable
stores on board the Vessel shall be made by the
Charterers in conjunction with the Owners on delivery and
again on re-delivery of the Vessel ’ (special)
Time for delivery & cancelling
 ---time : ‘The Vessel to be delivered not before the date
indicated in Box 16 unless with Charterers' consent.
 ---notice to delivery: Unless otherwise agreed in Box 19, the
Owners to give the Charterers not less than 30 running days'
notice of the date on which the Vessel is expected to be ready
for delivery.
 The Owners to keep the Charterers closely advised of possible changes in
the Vessel's position. (30/15/10/7/3/2/1 ETA)
 ----Cancelling & interpellation clause: If it appears that Vessel
will be delayed beyond the canceling date, Owners shall, as
soon as they are in a position to state with reasonable certainty
the day on which Vessel should be ready, give notice thereof to
Charterers asking whether they will exercise their option of
canceling, and the option must then be declared within one
hundred and sixty eight (168) hours of the receipt by Charterers
of such notice. If Charterers do not then exercise their option of
canceling, the seventh day after the readiness date stated in
Owners' notice shall be regarded as a new canceling date for
the purpose of this Clause.
CMC Art. 146—delivery
 The shipowner shall deliver the ship and its
certificates to the charterer at the port or
place and time as stipulated in the C/P. At
the time of delivery, the shipowner shall
exercise due diligence to make the ship
seaworthy. The ship delivered shall be fit for
the agreed service.
 Where the owner acts against the provisions
of the preceding paragraph, the charterer
shall be entitled to cancel the charter and
claim any losses resulting therefrom.
Surveys & Inspection
 Surveys: (Art.5)
---’The Owners and Charterers shall each
appoint surveyors for the purpose of
determining and agreeing in writing the
condition of the Vessel at the time of delivery
and re-delivery hereunder. The Owners shall
bear all expenses of the On-Survey including
loss of time, if any ,and the Charterers shall
bear all expenses of the Off-Survey including
loss of time, if any, at the rate of hire per day
or pro rata, also including in each case the
cost of any docking and undocking, if required,
in connection herewith.
Inspection (Art.6)
---- ‘The Owners shall have the right at any time to inspect or
survey the Vessel or instruct a duly authorized surveyor to
carry out such survey on their behalf to ascertain the
condition of the Vessel and satisfy themselves that the
Vessel is being properly repaired and maintained ……
-----The Charterers shall also permit the Owners to inspect
the Vessel's log books whenever requested and shall
whenever required by the Owners furnish them with full
information regarding any casualties or other a accidents
or damage to the Vessel.
---- If required, the Charterers shall from time to time keep the
Owners advised of the intended employment of the Vessel
Maintenance & Operation (Art.8)
 Complete control ---- ‘The Vessel shall be in the
full possession and at the absolute disposal for
all purposes of the Charterers and under their
complete control in every respect….’ .
 Maintain the good order---- ‘The Charterers
shall maintain the Vessel, her machinery,
boilers, appurtenances and spare parts in a
good state of repair, In efficient operating
condition and in accordance with good
commercial maintenance practice and keep the
Vessel with unexpired classification ….’
 Reasonable repair---- ‘The Charterers to
take immediate steps to have the necessary
repairs done within a reasonable time failing
which the Owners shall have the right of
withdrawing the Vessel ….’
 Structural changes-----in the event of any
improvement, structural changes or
expensive new equipment becoming
necessary by reason of new class
requirements or by compulsory legislation
shall be allocated between two parties or as
agreed.
CMC Art. 147
 —maintenance and operation
 The charterer shall be responsible for the
maintenance and repair of the ship during
the bareboat charter party
Hire (Art.9)
 ----date of payment : ‘The Charterers shall pay
to the Owners for the hire of the Vessel at the
lump sum per calendar month as indicated in
Box 23 commencing on and from the date and
hour of her delivery to the Charterers …until the
date and hour when the Vessel is re-delivered..
 ----cash, in advance: ‘Payment of Hire, … shall
be made in cash without discount every month
in advance…
 ----ship missing : ‘Should the Vessel be lost or
missing, Hire to cease from the date and time
when she was lost or last heard of. Any Hire
paid in advance to be adjusted accordingly….
 ----withdrawal ‘In default of payment beyond a
period of seven running days the Owners to
have the right of withdrawing the Vessel from
the service … without noting any protest and
without interference by any court or any other
formality whatsoever and without prejudice to
any claim the Owners may otherwise have
against the Charterers ……
CMC art. 152
 The charterer shall pay the hire as stipulated
in the charter. In default of payment by the
charterer for seven consecutive days or
more after the time as agreed in the charter
for such payment, the shipowner is entitled
to cancel the charter without prejudice to
any claim for the loss arising from the
charterer's default.
 Should the ship be lost or missing, payment
of hire shall cease from the day when the
ship was lost or last heard of. Any hire paid
in advance shall be refunded in proportion
Mortgage (Art.10)
 ----no mortgage : ‘Owners warrant that they
have not effected any mortgage of the
Vessel unless otherwise indicated in Box 27.
 ----limits on mortgage: ‘Owners hereby
undertake not to effect any (other) mortgage
of the Vessel without Charterers' prior
approval….
 ‘Any mortgage approved by Charterers
hereunder is herein referred to as an
“approved mortgage” and any mortgagee
under an approved mortgage is herein
referred to as an “approved mortgagee” ’
CMC Art. 150
 —mortgage clause
 The shipowner shall not establish any
mortgage of the ship during the bareboat
charter period without the prior consent in
writing by the charterer.
 Where the owner acts against the provisions of
the proceeding paragraph and thereby causes
losses to the charterer, the owner shall be
liable for compensation.
Insurance & repairs (Art.11 or Art.12 optional)
 Insurance
---who pays for insurance? ‘Vessel shall be
kept insured by Charterers at their
expense against marine, war and
Protection and Indemnity risks in such
form as Owners shall in writing approve,
which approval shall not be unreasonably
withheld….’
-----fails to insure ‘If the Charterers fail to
arrange and keep any of the insurances
provided …., Owners shall notify Charterers
whereupon Charterers shall rectify the position
within seven running days, failing which
Owners shall have the right to withdraw the
Vessel from the service of the Charterers
without prejudice to any claim the Owners may
otherwise have against the Charterers. …..
----Total loss : Should the Vessel become an
actual or constructive total loss under the
insurances …… all insurance payments for
such loss shall be paid to Owners, who shall
distribute the moneys between themselves and
Charterers according to their respective
interests. …..
 repairs
----repairing covered by insurance: ‘The
Charterers shall, subject to the approval of the
Owners and the Underwriters, effect all insured
repairs and shall undertake settlement of all
costs in connection with such repairs as well
as insured charges, expenses and
liabilities …… to the extent of coverage under
the insurances provided for …..
----other repairs: ‘The Charterers also to remain
responsible for and to effect repairs and
settlement of costs and expenses incurred
thereby in respect of all other repairs not
covered by the insurances and/or not
exceeding any possible franchise(s) or
deductibles provided for in the insurances…..
CMC Art.148
 —insurance
 During the charter period, the ship shall be
insured, at the value agreed upon in the
charter and in the way consented to by the
shipowner, by the charterer at his expense.
Re-delivery (Art.13)
 -----Time & place---‘-The Charterers shall at the
expiration of the Charter period redeliver the
Vessel at a safe and ice-free port as
indicated. …
 ----notice of redelivery The Charterers shall
give the Owners not less than 30 days'
preliminary and not less than 14 days' definite
notice of expected date, range of ports or port
of re-delivery. Any changes thereafter in
Vessel's position shall be notified immediately
to Owners.
 -----dealy in redelivery ‘Should Vessel be
ordered on a voyage by which Charter period
may be exceeded Charterers to have the use of
Vessel to enable them to complete voyage,
provided it could be reasonably calculated that
the voyage would allow re-delivery about the
time fixed for the termination ….
 -----condition ‘..Vessel shall be re-delivered to
Owners in the same or as good structure, state,
condition and class as that in which she was
delivered, fair wear and tear not affecting class
excepted.
 The Vessel upon re-delivery shall have her
survey cycles up to date and class certificates
valid for at least the number of months agreed.
Non-lien (Art.14)
 ------no possessory lien or maritime lien etc.
‘Charterers will not suffer, nor permit to be
continued, any lien or encumbrance incurred by
them or their agents, which might have priority
over the title and interest of the Owners in the
Vessel. …’
 ------ indemnify : ‘Charterers shall indemnify and
hold Owners harmless against any lien of
whatsoever nature arising upon the Vessel
during the period …. and against any claims
against Owners arising out of operation of the
vessel by Charterers ….
 ----security : ‘Should the Vessel be arrested
by reason of claims or liens arising
hereunder by Charterers, Charterers shall at
their own expense take all reasonable steps
to secure that within a reasonable time the
Vessel is released and at their own expense
put up bail to secure release of the
Vessel ….
CMC Art. 149
 —indemnity clause
 During the charter period, if the charterer’s
possession, employment or operation of the
ship has affected the interests of the owner or
caused any losses thereto, the charterer shall
be liable for eliminating the harmful effect or
compensation for the losses.
 Should the ship be arrested due to any
disputes over its ownership or debts owed by
the shipowner, the owner shall guarantee that
the interests of the charterer is not affected.
The owner shall be liable for compensation for
any losses suffered by the charterer thereby.
Assignment and Sub-Demise (art 19)
 ----limits on assignment & sub demise: ‘The
Charterers shall not assign this Charter Party
nor sub-demise the Vessel except with the prior
consent in writing of the Owners which shall not
be unreasonably withheld and subject to such
terms and conditions as the Owners shall
approve …
 ---no limits on sub charter other than sub
demise, it is the liberty of charterer to sublet
under voy./time c/p
CMC art. 150
 During the bareboat charter period, the
charterer shall not assign the rights and
obligations stipulated in the charter or sublet
the ship under bareboat charter without the
shipowner's consent in writing.
-----------------------------------------------------------------
 CMC Art. 153 : the followings under time
c/p of CMC provisions shall apply to bareboat
c/p
 Art 134 (safe port &trading limits), Art 135
(1)(lawful cargo), Art 142(condition of
redelivery), Art 143 (legitimate last voyage)
Chapter II Bareboat charter with hire purchase
 Special provisions other than bareboat c/p
 I Transfer of title of property and risks (Art.26,31)
 ---time to transfer title: On expiration of this
Charter and …Charterers have fulfilled their
obligations ….. that on payment of the last
month's hire installment ….. Charterers have
purchased the Vessel with everything belonging
to her and the Vessel is fully paid for …..
 ----failing to pay on time : ‘If the payment of the
installment due is delayed for less than 7 running
days or for a reason beyond Charterers' control,
the right of withdrawal …. shall not be exercised.
However, any delay in payment of the installment
due shall entitle the Owners to an interest of 10
percent. per annum …..
 -----risks & expenses : ‘The Vessel with
everything belonging to her shall be at Sellers'
risk and expense until she is delivered to the
Buyers, subject to the conditions of this
Contract ….. after which the Sellers shall have no
responsibility for possible faults or deficiencies
of any description….
time commence for purchasing contract:
Art.26/27
 On expiration of this Charter and …Charterers
have fulfilled their obligations ….. that on
payment of the last month's hire installment …..
Charterers have purchased the Vessel with
everything belonging to her and the Vessel is
fully paid for …..
 the Owners are referred to as the Sellers and
the Charterers as the Buyers.
Seller’s guarantee (Art.29)
 ----non lien ‘The Sellers guarantee that the Vessel,
at the time of delivery, is free from all
encumbrances and maritime liens or any debts
whatsoever other than those arising from anything
done or not done by the Buyers or any existing
mortgage agreed not to be paid off by the time of
delivery.
 ----indemnify ‘Should any claims, which have
been incurred prior to the time of delivery be made
against the Vessel, the Sellers hereby undertake to
indemnify the Buyers against all consequences of
such claims to the extent it can be proved that
Sellers are responsible for such claims…..
 ----bill of sale : ‘In exchange for payment of
the last month's hire installment the Sellers
shall furnish the Buyers with a Bill of Sale
duly attested and legalized, together with a
certificate setting out the registered
encumbrances, if any.
 -----registry : ‘On delivery of t he Vessel the
Sellers shall provide for deletion of the
Vessel from the Ship's Register and deliver
a certificate of deletion to the Buyers.’
Instruments and costs (Art. 29,30,32)
 ----classification certificates etc. ‘The Sellers
shall, at the time of delivery, hand to the
Buyers all classification certificates (for hull,
engines, anchors, chains, etc.), as well as
all plans which may be in Sellers'
possession….
 ----Some instruments: ‘The Wireless
Installation and Nautical Instruments, unless
on hire, shall be included in the sale without
any extra payment.
 -----costs for dispatch of crew: ‘The
Buyers undertake to pay for the
repatriation of the Captain, Officers
and other personnel if appointed by
the Sellers to the port where the
Vessel entered the Bareboat
Charter or to pay the equivalent
cost for their journey to any other
place.
Part Five BILL OF LADING UNDER
CHARTER PARTY
 Key words and terms
 INCORPORATION CLAUSE:并入条款
 B/L under Charter party:租约提单/租船合
同下签发的提单
 Identify of carrier—承运人识别
 Demise clause-光租条款(过户条款)
Part Five BILL OF LADING UNDER C/P
 It is normal for b/l to be issued by the master or
other agent of the shipowner even though the
cargo has been shipped under a c/p. Most
standard charter forms make express provision
to this effect while, in the event of the shipper
being a party other than charterer.
c/p
 Shipowner ---------------------------charterer
b/l
sale or other
holder of b/l (not charterer)
B/L under C/P and Ordinary Ocean B/L
 General Ocean B/L
----Three functions according to CMC as well as other int’l
conventions.
 B/L under C/P
-----the receipts for the goods shipper
-----potential documents of title
-----do not constitute evidence of the contract of carriage
-----the relationship between owner and charterer is governed
solely by the terms of c/p, unless the latter contains
provision that its terms can be modified or superseded by
the subsequent issue of a b/l.
-----neither the Hague Rules , Hague/Visby Rules, Hamburg
Rules, nor Rotterdam Rules are applicable to a b/l in the
hands of charterer. That is one of reasons why it is
common to have expressly incorporation clause in most
standard c/p forms to incorporate those Rules into c/p.
However, if the b/l under c/p is in the hands of party other
than charterer, all Rules mentioned above shall apply.
INCORPORATION CLAUSE
 It is the statement which incorporates some terms
and clauses of one designated c/p into the b/l
issued under c/p.
 differences between c/p and ocean b/l
---freedom/compulsory
---privacy of contract rule
 Purpose: from the view of shipowner, making no
differences on obligations and rights of him under
both c/p and b/l
 Short form for b/l under c/p (only few clauses
provided ----CONGENBILL, General Paramount
Clause , General Average , New Jason Clause ,
Both-to-Blame Collision Clause etc.)
Which contract may be incorporated into b/l
 The eventually holder of b/l is left quite unclear
and uninformed as to which c/p (especially
under sub-let) is the one intended to be
incorporated.
------It depends on the exact meaning of
incorporation clause in b/l
------Only the contract of carriage of goods shall
be incorporated into b/l (such as voy.c/p)
-------If there are a chains of voy.c/p and it is
blank on the dates or which shall be referred in
the b/l, only the head charter shall be
incorporated into according to English Law
(“San Nicholas” 1976 1 Lloyd’s Rep.8)
common incorporation clauses
 “freight and all other conditions as per c/p”
 “all the terms, conditions, exceptions as per
c/p dated on XXXX”
 “arbitration clause ”
 “All terms and conditions, liberties and
exceptions of the Charter Party, dated as
overleaf, including the Law and Arbitration
Clause, are herewith incorporated”
(CONGENBILL cl.1)
THE GENERAL PRINCIPLES OF EFFECTIVENESS
 First of all, Effective words of incorporation must be
found in the b/l itself without reference to the provisions
of the charterparty. The followings shall be noted:
 -----description issue: if the incorporation clause itself is
wider enough to incorporate the provisions of charter
party
Eg. “all conditions and exceptions of c/p…” are appropriate
to the carriage and delivery of goods and not extent to
collateral terms such as an arbitration clause
 -----consisitency issue: if the contents in c/p which
intends to be incorporated into b/l make sense to b/l or
conflict with expressed clauses in b/l
In the event of any conflict, the provisions of b/l will prevail.
 -----if the incorporation clause is conflict with that of
international conventions or national laws related to bill
of lading
Eg, the obligation for providing seaworthy ship
CMC art 95
 Where the holder of the b/l is not the
charterer in the case of a b/l issued under a
voyage charter, the rights and obligations
of the carrier and the holder of the b/l shall
be governed by the clauses of the b/l.
However, if the clauses of the voy. c/p are
incorporated into the b/l, the relevant
clauses of the voy.c/p shall apply.
 ----there are almost no any limits on this
point. However, it is a little bit different in
the judicial practice which differs in
different maritime court.
Problems : incorporation of arbitration clause
 A. “All conditions and exception of c/p shall be
incorporated…” X
 B. “all terms whatsoever shall be incorporated…” X
 C. “all disputes arising under this c/p shall be referred to
arbitration ….”+ “All terms , conditions, exceptions and
Arbitration Clause, are herewith incorporated…. X
 D “all disputes arising under this c/p ,or any b/l issued
hereunder, shall be referred to arbitration.”+ “All terms ,
conditions, exceptions and Arbitration Clause, are herewith
incorporated…. √
 E “all disputes arising under this c/p ,or any b/l issued
hereunder, shall be referred to arbitration+ “arbitration
under c/p shall be incorporated….” √
Note: the arguable point on “shall be referred to arbitration…”
under 1995 Arbitration Law and Chinese Arbitration Act.
BILL OF LADING CLAUSES UNDER CHARTER PARTY
 GENCON’94 cl.10
“b/l shall be presented and signed by the master as per
‘Congenbill ’b/l form, without prejudice to this
charter party, or by the owner’s agent provided
written authority has been given by owners to the
agents, a copy of which is to be furnished to the
charterers. The charterers shall indemnify the owners
against all consequences or liabilities that may arise
from the signing of b/l as presented to the extent that
the terms or contents of such b/l impose or result in
the imposition of more onerous liabilities upon the
owners than those assumed by the owners under this
charter party.”
 NYPE’93 cl.30, (NYPE’46 cl.8, BALTIME cl.9, BARECON
cl.20)
 (a) The Master shall sign the bills of lading or waybills for
cargo as presented in conformity with mates or tally clerk's
receipts. However, the Charterers may sign bills of lading
or waybills on behalf of the Master, with the Owner's prior
written authority, always in conformity with mates or tally
clerk's receipts.
 (b)All bills of lading or waybills shall be without prejudice
to this C/P and the Charterers shall indemnify the Owners
against all consequences or liabilities which may arise
from any inconsistency between this C/P and any bills of
lading or waybills signed by the Charterers or by the
Master at their request.
 (c) Bills of lading covering deck cargo shall be claused:
“Shipped on deck at Charterers', Shippers' and Receivers'
risk, expense and responsibility, without liability on the
part of the Vessel, or her Owners for any loss, damage,
expense or delay howsoever caused.”
“as presented”
----the master is under a duty to the charterer to sign b/l as
presented to him, breach of which the owner is liable.
---it is charterer to have the right to decide the form of b/l,
not shipowner
----master is required to sign bills as presented, even if they
conflict with the charter or expose the owner to liabilities
other than those imposed by c/p.
----the few situation to refuse to sign b/l
(1)For cargo which has not in fact been loaded; (anti-dated
b/l; or b/l in advance)
(2) which names a discharge port outside the allowed
trading limits.
(3)sign clean b/l when he knows the goods were not in
good order and condition when received.
(4)if b/l purports to bind third person he knows are not
parties to the contract of affreightment;
(5)no authority to sign blank b/l
“without prejudice”
 It means that the rights and liabilities of the owner
and charterer as between themselves under c/p
will not be affected by the bill.
 ----if owner was imposed greater liabilities than
imposed by charter, the owner had a valid cause
of action against the charterer for indemnity since
the charterer had caused the master to issue b/l
which conflicted with the charter and which
subjected the owner to a loss.
 ----the owner and charterer are of course, free to
impose restrictions on the issuance of b/l. such as
“in the event charterer wish issuance of liner b/l,
then authority at each time to be requested from
owners……”
Who is the carrier in case of b/l under c/p
 Normally shipowner would be regarded as the carrier
since, despite the existence of c/p, he remains
responsible for the management of the ship.
 Generally, if the master signs the bills, which are
issued as owner’s agent. (shipowner-carrier)
 Any bills presented by charterer and signed by the
master under the authority of the clause such as
NYPE form, shipowner will be carrier.
 The shipowner is a carrier even though the bill are
signed by the charterer himself, providing that he
indicates on the bill that he is signing on behalf of the
master and owners.
 If c/p provides that the master is authorised to
sign b/l ‘as agent on behalf of the charterer’,
then charterer is the carrier.
 If charterer negotiates contract of
affreightment in his own name and issues his
own b/l, charterer is the carrier.
 Charterer may also be a carrier where he
merely signs b/l without indicating that he is
acting as the agent of the master and owners.
 Somehow, it is usual that charterer
transfers carrier’s liabilities to owner
under some clauses in c/p.– Identity of
carrier clause /demise clause
Demise clause
 ‘If the ship is not owned by or chartered by
demise to the company or line by whom this b/l
is issued, this b/l shall to be effect only , as a
contract with the owner or demise charterers
as the case may be as principal made through
the agency of the said company or line who act
as agent only and shall be under no personal
liability whatsoever in respect thereof.’
 ------such clause is invalid in the b/l since it
attempts to exclude carrier liability as
prescribed by International Rules.
Thank You All !
“3QORZ”