BLG Shipping and International Trade Notes

Profession:Barlow Lyde & Gilbert

Article by Nigel Wagland

Time charters: Safety of ports in Iraq and the Arabian Gulf region

At the time of publication, an attack in Iraq was imminent. The question arises whether in the case of a time charter where Iraq (and the region) is not excluded as a potential destination, the shipowner could refuse to go there on the basis of prospective unsafety of that port.

At present it is rumoured that charterers serving Iraq have secured lucrative deals for food supplies as Iraq prepares itself for a siege, so the issue may well arise.

The legal test for safety is well known (the Eastern City [1958] 2LLR 127): ''a port will not be safe unless, in the relevant period of time, the particular ship can reach it, use it and return from it without, in the absence of some abnormal occurrence, being exposed to danger which cannot be avoided by good navigation and seamanship ''. The relevant period of time at which to judge the prospective safety of the port is when the charterers' order is given (the Evia (2) [1982] 2LLR 307).

Obviously the answer to whether the Gulf area will be safe will depend on what exactly is happening at the time the charterers' order is given for the vessel to proceed to that port. At the moment, if we believe Rear Admiral Snelson, Commander of British Naval Forces in the Persian Gulf speaking in a maritime conference in Dubai in February, although Iraq has Styx missiles capable of hitting moving targets such as ships, its ability to deploy them in the Southern no-fly zone is ''extremely limited by US and UK air patrols''. He accepts that there will be some disruption to trade with Iraq itself, but he believes that the potential war against Iraq would be unlike the mayhem caused by the tanker war during the Iran/Iraq war of the 1980s.

Shipowners will of course prefer to be better safe than sorry even if their charterers are prepared to shoulder - as they seem to be at present - the higher premiums for hull, war risk, blocking and trapping and crew insurance. Although certainty on the prospective safety of a port in the Gulf will only come with the benefit of hindsight, it should be borne in mind that English courts have historically been generous to the discretion of the master should he decide that a port to which the charterers have ordered his ship is prospectively unsafe - provided the master's discretion is exercised reasonably, on the information available at the time.

Do The Hague Visby Rules Apply Where No Bill Of Lading Is Issued?

The House of Lords has recently refused an application by the ship, owners for leave to appeal with the result that the Court of Appeal decision in favour of the shippers, Parsons Process Group Inc, stands.

Parsons Corporation And Others V C.V. Scheepvaartonderneming (The ''Happy Ranger'') [2002] Ewca Civ 694

The original contract was for the heavy lift carriage of three reactors from Italy to Saudi Arabia which did not exclude liability on the part of the owners for damage. Damage occurred to one of the reactors, weighing 833 tonnes, during loading when a crane hook broke causing it to fall to the ground, striking the side of the vessel as it did so.

The issues before the Court so far have centred on whether the Hague or Hague Visby...

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