The Ice Cometh: Time Charterparty Considerations
As winter approaches in the higher latitudes, the presence of ice covered waters presents an added peril to those engaged in the carriage of goods by sea. In the context of and within the framework of time charterparties a number of distinct contractual and legal regimes will apply to situations where, for whatever reason, difficulties are experienced or anticipated as a result of contact between ship and ice.
The dangers of sheet and pack ice in and around ports should not be underestimated as the account of events affecting the M.V. SUSSEX OAK approaching Hamburg via the River Elbe in January 1946 demonstrates: "the vessel was held up in a narrow part of the river. The master could not have turned round and gone back because the propeller or rudder would probably have been damaged by the ice or even have been lost. He could not go astern for the same reasons, and he could not anchor. If he had tried to remain where he was, he would have been carried towards Pagan Sand, and there would have been serious risk of the vessel stranding. If she had stranded, she would have been subjected to the risks ordinarily attendant on a vessel aground in a tidal river, and also to the risks of ice packing round the vessel and crushing her plating." (The Sussex Oak [1950] 83 Ll.L. Rep 297)
Not surprisingly therefore, The Mariner’s Handbook states that: "Ice is an obstacle to any ship, even an ice-breaker, and the inexperienced ice navigator is advised to develop a healthy respect for the latent power and strength of ice in all its forms." (The Mariner's Handbook, 5th Edition)
Contractual restrictions
Notwithstanding the widespread practice of charterparty regimes designed to restrict a vessel’s trading activity to safe ports and within Institute Warranty Limits and other specific trading restrictions, such as "Great Lakes Trade only allowed between official opening and closing dates" (The Helen Miller [1980] 2 Lloyd's Rep 95) (which in themselves will have the effect of restricting a vessel’s movements to some ice-bound ports and areas), in recognition of the risk of damage to vessels and the incurrence of expense as a result, both the 1946 and 1993 NYPE and the Baltime form contain printed clauses, which despite the differing wordings, all restrict a charterer’s right to order a vessel to (or remain in) ice-bound ports or areas and otherwise to force ice and give an owner the right to leave a port on account of the presence of ice.
The broad effect of this type of clause is that it "enables the Master to refuse to go to an ice-bound port, and to refuse to face ice met on his voyage, without being guilty of any breach of charter, and without prejudicing his owners’ right to hire when he is waiting for proper orders, or for a sea free of ice. She is also allowed to leave a port which is likely to become ice-bound, but is not oblige to do so; that I, in my view, it cannot be said that the owners lose their right to hire, because the Master elects to stay when he might have escaped." (Scrutton, L.J.; The Inishboffin [1921] 7 Ll.L. Rep 69 (CA) at 71)
An owner, in relying on these clauses in refusing an order from the charterer to proceed to a particular port, must establish either that the port is one where lights, lightships, marks and buoys are or are likely or about to be withdrawn by reason of ice or that the port is ice-bound. Ports which are naturally and ordinarily ice-bound but which are kept open by icebreakers or indeed other artificial means, are not ice-bound within this definition. (The Inishboffin, supra)
Vessel damage
Contact between ship and ice can result in damage, particularly shell plating (as a result of crushing) and propeller (as a result of contact with ice during steaming) and, as a result, disputes arise as to the responsibility of such damage as between owner and charterer. A number of possible scenarios exist.
First, responsibility for the navigation of the vessel rests with the owners. As such, damage caused by ice (whether in the form of ice sheets, floes or bergs) in open seas during an ocean voyage will, ordinarily be for the owner’s account in circumstances where the charterers have legitimately ordered the vessel to proceed to a particular (ice-free) port.
However, following a recent House of Lords decision (The Hill Harmony [2001] 1 Lloyd's Rep 147 (HL)) where it was held that charterers have the right to give orders as to employment and navigation of a vessel, it is presently unclear to what extent, if any, a charterer will assume responsibility by way of indemnity for loss and damage sustained to a vessel (including ice damage) in circumstances where the charterer gives and the owners accept specific orders as to the route to be taken and damage to the vessel on that route occurs. In other words, to what extent will the navigation risk pass from owner to charterer? In the present context it is suggested that the risk of collision with any obstruction en route is a risk that will remain firmly with the owners.
Second, an owner, in relying on specific ice clauses (as above) who instead of requesting alternative voyage instructions or waiting for icebreaker assistance in order to reach a port which the charterers have validly ordered the vessel to proceed, nevertheless elects to force ice, will not be in a position to make a recovery from the charterers for any damage to the vessel.
Third, where a charterer expressly agrees (in the form of a rider clause to the charterparty or by subsequent agreement) to provide icebreaker assistance to enable a vessel to reach and/or load and/or leave a particular port. In the absence of icebreaker assistance and in the event of damage to the vessel occurring as a result of forcing ice, the charterers will be liable for this damage unless it can be demonstrated that such damage would have occurred even with icebreaker assistance. (The Rendal [1937] 58 Ll.L. Rep 298 (HL))
Further difficulties of causation arise in circumstances where it is alleged that the master’s handling of the vessel with regard to the speed of the vessel and the turning of the propeller amounts to a novus actus interveniens and where icebreaker assistance is intermittent (for example as a result of a convoy of vessels serviced by a solitary icebreaker) and damage is sustained in waters containing ice from frozen packs as a result of "humping".
Fourth, damages sustained by reason of ice will be the responsibility of the charterers if the port or the approach to the port where damage occurs is found to be unsafe by reason of the presence of ice. The M.V. SUSSEX OAK, given her perilous situation during her approach to Hamburg forced ice, suffering damage as a result. It was found that the master acted properly in so doing without icebreaker assistance and the charterers were held responsible for the damage on the ground that Hamburg was an unsafe port.
Consideration of the general principles relevant to determining the safety or otherwise of a particular port is beyond the scope of this article. However, with regard specifically to ice and the danger it poses, a number of general principles can be deduced:
- A port can be unsafe by reason of ice dangers encountered on its approach.
- The safe port regime with regard to ice is not ousted by the existence of additional, specific clauses dealing with remedies for ice dangers. Despite subsequent comments from Lord Roskill (cf. The Evia (No. 2) [1982] 2 Lloyd's Rep. 307 at 321) casting doubt as to the correctness of this approach, it is suggested that this is the correct position and that the inclusion of such specific clauses is designed to provide extra protection for a shipowner against a known and identified peril. This cannot and should not derogate from the risk placed on the charterer for the safety of the ports to which a vessel is ordered.
- One of the factors in determining port safety will be the presence, or not, of icebreakers and their efficiency to keep a port open to sea-going traffic.(The Inishboffin, supra)
- Additional, specific clauses dealing with remedies for ice dangers may be of relevance in determining liability for vessel damage as between owner and charterer. (The Inishboffin, supra)
Owners and charterers alike, beware!
This article was written by Stephen Grainger of Morgans.
It is used with permission.
Please read our disclaimer.