Carriage of goods by sea - framework Dr. Iva Savić, Department for Maritime and Transport Law April 5, 2018

Carriage of Goods by Sea - Main Routes -

Major global seaports

legal framework -Contracts Introduction

Basic Division (i) Continental /Common Law Tradition Mix Charterparties Bareboat Charter Legal nature: Service Contract Shipowner keeps the right to manage the vessel Charterer uses the vessel Legal nature: Use of Vessel Contract Charterer manages and uses the vessel

BASIC DIVISION (iI) – contracts of affreightment CHARTERPARTY BILL OF LADING (CARRIAGE OF GOODS CONTRACTS) Main Contract Element: vessel/vessel space Individualized vessel (name or general attributes), possibility of utilizing the substitution clause Main Contract Element: goods being carried Modus: Charterparties Modus: Bill of Lading *straight bill *sea-waybill * Liner bill etc.

Basic Division (iiI) - services Lines Trade (liner shipping services) Tramp Trade (charter services) Regular scheduled service, set routes Individually negotiated departures and arrivals General cargo, necessity of constant supply of a particular types of goods Individual needs – specific purpose More stable freight/tarifs (*Liner conferences) Freight dictated by the market Cargo manipulation – included in freight Cargo manipulation – usually covered by the charterer Adhesion contracts Negotiation Carriers’ cooperation /regulatory supervision Individual, market forces Vessels adapted to the lines Open navigation Wider availability „Tailor Made”

Contracts of Affreightment Maritime-Shipping contracts Bareboat Charter Carriage of Goods Carriage of Goods by Sea (B/L) Whole vessel Carriage of Passengers by Sea contracts Charterparties Specific part of vessel Towage Voyage Portion of vessel Time Other (standard form) contracts

Time Charter Introduction

Basic elements (i) For the whole vessel; Purpose: to carry goods by sea Shipowner possesses and manages the vessel Basic responsibilities: Seaworthiness of a ship (until the beginning of a voyage/throughout the charter service) Cargoworthiness of a ship (throughout the whole voyage) Master of Vessel and crew Carriage in the agreed time frame with the agreed vessel Master of Vessel – shipowner’s legal representative

Basic Elements (iI) Charterer Risk of delay taken by the charterer Basic obligations: Payment of Hire *OFF-HIRE CLAUSE Payment of drive costs, port charges, special atonements Redelivery of a ship *early/late redelivery – damages Commercially manages a vessel Master of Vessel? Shipowner’s responsibility? Only with regard their specific duties Free cargo space? Shipowner has the right of disposition only with the charterer’s consent Risk of delay taken by the charterer Why?/allowing a degree of flexibility

Sub-Charter Charterer’s responsibilty for the actions and omissions of sub- charterer Charterer and Shipowner – Joint and Several Responsibility towards the cargo interest Shipowner’s responsibility – mandatory regulation, common commercial terms or charterparty

Bareboat charter Introduction

Bareboat charter Use of Vessel contract, defined or undefined time frame (written cancelation, at least three months in advance), specified voyage(s) Bareboat Charter – charter without the crew (presumed by statutory regulation) Demise Charter – charter with the crew Sub-Charter – only if agreed upon by the shipowner

Basic Elements (i) Shipowner Delivers a vessel to be used for shipping enterprise (shipping service) Vessel: as contracted (individually agreed, or agreed by scpecific characteristics or agreed/usual purpose) Right to double charter fee – if charterer does not return the vessel after the expiry date If the charterer is responsible for the delay – he will be liable for any additional damage as well

Basic Elements (ii) Charterer’s duties Payment of Hire Unless it is not possible, due to shipowner’s fault or hidden defect present at the time of delivery, to utilize the vessel Covering maintenance and drive costs Redelivery at charter’s expiry Charterer becomes a person in full charge of the vessel *Insurance costs (with the acceptance of shipowner) *Hidden defects present at the time of delivery – shipowner’s responsibility

Time Charter / Bareboat charter Charterer not in full control Charterer in full control Vessel and crew Vessel without crew Exception: Demise Charter Service contract Use of vessel contract Maritime-shipping contract, carriage of goods Shipping and other contracts If doubt, statutory presumption – time charter for the whole vessel

Voyage charter Introduction

Basic elements Chartering a ship for one particular job *Consecutive Voyage Charterparty Carriage of goods, one or more passages Departure and destination port set by contract Freight Lump Sum or calculated based on the cargo volume for consecutive voyages - number of passages Risk of delay – shipowner’s responsibility Why? Difference to Time Charter?