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Charterers obligations under the voyage charter

Introduction
There are 3 main duties which charterers ought to perform under a voyage charter:
1. To nominate port of loading and discharging;
2. To provide the goods for loading and
3. To load and later to discharge the goods at the discharging port.

Breach of any of these obligations, unless it is of frustrating nature1, does not give right to the
shipowner to rescind the charter, so he can only sue for damages.
If, however, by words or conduct the charterer professes inability to perform the charter, it will
be sufficient to constitute an anticipatory breach, which if accepted by shipowner, will bring the
contract to an end. When the shipowner choses to rescind charter it will be irrelevant whether
or not the charterer was able to perform2.
If the charterer was continuing to assert, wildly and optimistically, that he could and would
complete the loading, although everyone else knew it to be impossible, would that amount to
renunciation? If not, would the owners be obliged to wait? I can see no good reason why a
party's right to claim an anticipatory breach should depend simply on whether his adversary is
artful enough to conceal his state of mind or obstinate enough not to admit his inability.3

The owner also has an option to affirm the contract but reserve his right for damages. In this
case all rights and duties of parties under contract remain unchanged and parties obliged to
fully perform contract. If the shipowner does not accept the refusal as final, the charterer can
withdraw it at any time before expiration of the laydays and is entitled to begin loading4.
Sometimes, inability to perform can be masked by attempts to engineer a mutual termination
of charterparty on a drop hands basis. And although from commercial point of view there is
nothing wrong with that approach, but words and conduct of the charterer in seeking to
achieve such result were held in SK Shipping (S) PTE Ltd v Petroexport Ltd [2009] EWHC 2974
(Comm)5 to amount to a renunciation of the charterparty in. In that case at the time of the
fixture between owners and charterers was being finalised, the charterers were still negotiating
contracts for a sale of the cargo of naphtha with potential buyers. Eventually they failed to
secure any contract at all by the time of arrival of owners vessel at loadport and tendering
NOR. Moreover charterers had problems at the supply end and had not put up the letter of
credit for the cargo to be loaded. Meanwhile owners became aware of charterers difficulties

Danube & Black Sea Ry. v Xenos (1863) 13 C.B.(N.s.) 825; Universal Cargo Carriers v. Citati [1957] 2 Q.B. 401 at
pp. 436, 437 and Evera S.A. Commercial v North Shipping Co. [1956] 2 Lloyd's Rep. 367 at p. 377
2
Esposito v Bowden (1857) 7 E. & B. 763; Avery v Bowden (1856) 6 E. & B. 953
3
Per Devlin J in Universal Cargo Carriers v. Citati [1957] 2 Q.B. 401
4
Reid v Hoskins (1856) 6 E. & B. 953
5
Per Flaux J at para 104

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and asked charterers to confirm whether they were going to perform. In reply charterers did
not say we will perform our obligations under this charter, but offered to the owners some
options which were outside of scope of current charter. The court considered it as "a
statement that a party will only perform something different from the contract", which is as
capable of amounting to a renunciation as an express statement that a party will not perform
the contract. Flaux J stated at para 117-8:
However there was in effect a refusal on the part of the defendant to provide that
confirmation. [Charterers] submitted that silence would not suffice for renunciation,
because it is equivocal. I do not accept that submission, as it seems to me it must depend
on the context. Renunciation may be by words or conduct and where one party is
seeking confirmation that the other will perform, a failure to give the confirmation may
be renunciatory, especially if, as in the present case, it is preceded by other conduct
which is renunciatory.

118.
In any event, in truth this was not a case of silence, since in fact [charterers]
sent email at 10.35 hours Singapore time in full knowledge of the confirmation the
claimant was seeking in purported response to the claimants email seeking
confirmation.[I]t is perfectly clear what [charterers were] seeking to achieve by those
emails. Rather than provide the confirmation sought, by referring to the claimant having
put the vessel on subs and to tortious interference obviously a reference to Glencore,
[charterers were] trying to embarrass the claimant into agreeing a mutual termination
of the charterparty, with no liability on the defendant for damages. However, in my
judgment the tactic backfired, because the failure to provide the confirmation the
claimant was seeking was further renunciatory conduct on the part of the defendant.

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Obligation to nominate port

The charterer should nominate port of loading and discharging and this nomination is in no way
limited by any consideration of the shipowners convenience or expense which would be
incurred in complying with this nomination. Port nomination is, however, subject to safe
port/berth warranty.
Under common law (link to common carriers?) the charterer is impliedly obliged not to
nominate an utterly impossible port, because that would be practically no exercise of the
option at all1, but otherwise he is free to nominate as he chooses2. Definition of an impossible
port was made by Willmer L.J. in Reardon Smith Line Ltd. v. Ministry of Agriculture, Fisheries
and Food [1961] 3 W.L.R. 110 at p 155:
assuming in favour of the shipowners that the charterers were under an implied
obligation not to nominate an impossible port, I am of opinion that a port only becomes
an impossible port for this purpose when loading thereat will subject the ship to such
delay as will frustrate the commercial object of the adventure, so that the voyage when
performed will be something different from that contracted for.
Generally nomination is to be made by the charterer or his agent, but voyage charter may
expressly provide by whom and how nomination to be made. Sometimes, when or so near
thereto as she may safely get clause3 comes into operation, the shipowner will have a liberty
to load or discharge at other port than nominated, in which case, if the owner exercise this
option, he may be deemed to warrant safety of berth or port which he chooses.
In accordance with the decision in Reardon Smith v Ministry of Agriculture (The Vancouver
Strikes Cases) [1963] AC 691 (where the charterer nominated a port with a strike already in
progress) the charterers would have been entitled to require the vessel to wait for cargo to be
loaded unless delay becomes so unreasonable as to frustrate the contract.
The law also implies that nomination of load port or ports shall be made within reasonable
time, but early enough to avoid any delays which the vessel can suffer from the absence of such
nomination. As to nomination of discharge port, some charters as, for example, the Gencon
form, specifies that it must be made on signing bills of lading. Usually, when no separate
nomination received by the time of signing of bills of lading, then issue of bills of lading
specifying discharging port is deemed to amount to such nomination.
Irrevocability of nomination was underlined in The Jasmine B [1992] 1 Lloyd's Rep. 39 by
Diamond J at p.42 that:
In the absence of any special provision in a charter-party, the effect of the nomination of
a loading or discharging port by the charterer is that the charter-party must thereafter

Per Bowen L.J. in Tharsis Sulphur & Copper Co. v Morel Bros. & Co. [1891] 2 Q.B. 647
Reardon Smith Line Ltd. v. Ministry of Agriculture, Fisheries and Food [1961] 3 W.L.R. 110; [1962] 1 QB 42
3
See or so near thereto as she may safely get.
2

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be treated as if the nominated port had originally been written into the charter-party
and that the charterer has neither the right nor the obligation to change that
nomination.
However, Sellers LJ in Reardon Smith Line Ltd. v Ministry of Agriculture, Fisheries and Food
[1961] 3 W.L.R. 110 at p.135 agreeing with Devlin J4 that the charterer has neither the right nor
the obligation to make a second nomination5 when a proper nomination has been made, was of
opinion that if a stipulated port had been destroyed by earthquake or another similar
extraordinary supervening event, so that it could no longer be said to be a port and could not
be used as such in any foreseeable and practical period, then the charterers' obligation to
nominate an existing port under the charterparty would appear to remain.6 On the other side
Willmer LJ categorically denied existence of any such right and obligation7:
It appears to me that the weight of authority is overwhelmingly against the existence of
any right, and a fortiori of any obligation, on the part of a charterer to nominate a fresh
port, if for any reason the port first nominated becomes impossible. No doubt this can be
done by agreement between the parties8
Obviously, a question whether the common adventure has been frustrated will inevitably
appear in cases when load or discharge port is physically or legally impossible to reach after a
valid nomination has been made and especially so when such alternative nomination will
fundamentally change commercial adventure. This matter becomes even more complicated
when the vessel has already loaded cargo her on board and therefore the shipowner cannot
simply put an end to his contract; he must do something with the cargo9.
What happens when the loading berth has been destroyed by excluded peril before vessels
arrival? And whether nomination of berth is a condition to invocation of force-majeure
provisions in Clause 28 of the "Sugar Charter Party 1999"10? This matter was examined in ED &
F Man Sugar Ltd v Unicargo Transportgesellschaft GmbH [2012] EWHC 2879 (Comm). Eder J
found that there is neither any reason in principle nor in the wording of the charterparty which,
as a matter of law, requires the charterers to nominate a berth as a precondition to the

4
These two authorities were considered by Diamond J in The Jasmine B [1992] 1 Lloyd's Rep. 39 in his statement
above.
5
Per Devlin J. in Anglo-Danubian Transport Co. Ltd. v Ministry of Food (1949) 65 T.L.R. 762; [1949] 2 All E.R. 1068
6
Per Sellers LJ in Reardon Smith Line Ltd. v. Ministry of Agriculture, Fisheries and Food [1961] 3 W.L.R. 110 at p.135
7
Willmer LJ in Reardon Smith Line Ltd. v. Ministry of Agriculture, Fisheries and Food [1961] 3 W.L.R. 110 at p.156.
8
Willmer LJ cited here Bulman & Dickson v Fenwick & Co. [1894] 1 Q.B. 179 later in Bulk Shipping A.G. v Ipco
Trading S.A. (The Jasmine B) [1992] 1 Lloyd's Rep. 39 it was affirmed that the presence of a special clause allowing
the charterer to change his nomination would allow the charterer to make such a change.
9
This distinction between load and discharge ports or places was formulated by Lord Blackburn in Dahl v Nelson,
Donkin, and Others, (1881) 6 App. Cas. 38 at p.53.
10
The clause sais: In the event that whilst at or off the loading placethe loadingof the vessel is prevented or
delayed by any of the following occurrences: strikes, riots, civil commotions, lock outs of men, accidents and/or
breakdowns on railways, stoppages on railway and/or river and/or canal by ice or frost mechanical breakdowns at
mechanical loading plants, government interferences, vessel being inoperative or rendered inoperative due to the
terms and conditions of appointment of the Officers and crew time so lost shall not count as laytime.

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operation of force-majeure clause. Naming a berth, said the judge11, merely makes alternative
arrangements for loading at another berth legally impossible without a variation of the charter.

11

Per Eder J in ED & F Man Sugar Ltd v Unicargo Transportgesellschaft GmbH [2012] EWHC 2879 (Comm) at para
11
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Obligation to provide the goods for loading

In absence of express stipulations to the contrary the charterer is under an absolute obligation
to provide1 a cargo in accordance with charterparty, which duty forms the basis of the
shipowner's right to earn freight.
"Is not the freighter," says Lord Ellenborough in Barker v Hodgson (1814) 3 M. & S. 267,
"the adventurer who chalks out the voyage, and is to furnish, at all events, the subjectmatter out of which the freight is to accrue." And on this principle it was held in that
case, and has been held in several others, that there is an absolute contract on his part
to furnish a cargo, and that he is bound to pay damages if it becomes impracticable to
do so; though it would be otherwise if it became illegal to do so.2
Thus, charterers will be liable for any failure to provide cargo, whether total3 or partial4, even if
caused by extraordinary circumstances unless either the whole transaction is vitiated by
illegality or the charterers protected themselves by express stipulations in the charterparty
relieving them from the consequences of unforeseen impediments to the due performance of
their contract5.
Moreover, the cargo must reasonably comply with the terms of the charter6, the charterer
must bring the cargo to the loading place and the charterer must perform his part of the
operation of putting the cargo on board the vessel. Since the shipowner is not concerned with
the methods by which the charterer intends to acquire the cargo, the arrangements for
procuring that cargo are outside the scope of the contract. In Grant Coverdale (1884) 9 App
Cas 470 Earl of Selborne LC described these arrangements in the following words:
those things with which [shipowner] has nothing whatever to do, which precede
altogether the whole operation of loading, which are no part whatever of it but which
belong to that which is exclusively the charterer's business. He has to contract for the
cargo, he has to buy the cargo, he has to convey the cargo to the place of loading and
have it ready there to be put on board; and it is only when he has done those things that
the duty and the obligation of the shipowner in respect of the loading arises.
However, if the ship cannot arrive so as to enable laytime to commence but for the cargo is
available for her7 defaulted charterer will be liable in damages to the shipowner for delay
caused by the non-availability of such cargo.8 In the Atlantic Sunbeam9 it was held that:

Unless the charterer can legally do so he cannot excuse himself that he was prevented from furnishing cargo by
reasons which are entirely beyond his control.
2
Postlethwaite v Freeland (1880) 5 App Cas 599 at 619 per Lord Blackburn.
3
Blight v Page (1801) 3 Bos & P 295n
4
Elliott v Lord (1883) 5 Asp MLC 63, PC; Kirk v Gibbs (1857) 1 H & N 810
5
In Adams v Royal Mail Steam-Packet Co (1858) 5 CBNS 492 per Cockburn CJ at p.497.
6
Hunter v Fry (1819) 2 B & Ald 421; Morris v Levison (1876) 1 CPD 155
7
Due to, for example, local rules or regulations.
8
The Aello [1961] A.C. 135
9
Sunbeam SS v President of India [1973] 2 Lloyds Rep 482 by Kerr J at p.488.

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the term to be implied in this case is to the effect that the charterers were bound to
act with reasonable dispatch and in accordance with the ordinary practice of the port of
Calcutta in doing those acts which had to be done by them as consignees to enable the
ship to become an arrived ship. In that connection the burden of proof, as in all cases of
allegations of breach of contract, rests on the plaintiff, in this case the owners.
Provision of the cargo and nomination of the berth must be made in sufficient time to enable
the vessel to be completely loaded within the lay days. But failure to do so from the part of the
charterer does not give a right to the owner to rescind10 the charter unless the delay becomes
so prolonged that the breach is so grave as to go to the root of the contract11.
If contract has no express provisions covering the case the charterer will not be relieved from
obligation to obtain cargo by such causes like strikes bankruptcy of merchants supplying the
cargo, or non-existence of such cargo as well as causes preventing loading due to ice, bad
weather, railway delays or Government orders. It seems to be equally difficult to invoke the
doctrine of frustration in instances where the supplier refused to make goods available as case
CTI Group Inc v Transclear SA [2008] EWCA Civ 856 shows. The Court of Appeal held that refusal
is a matter of choice and is not of itself sufficient to frustrate a contract.

10

But gives rise to a claim for damages only; and those damages are liquidated damages paid in the form of
demurrage, see Universal Cargo Carriers v Citati [1957] 2 Q.B. 401 by Devlin, J.
11
Ibid
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Obligation to load and later to discharge the goods

At common law the obligation to load, stow and discharge the cargo rests solely on the
shipowner1, but due to the fact that the loading is a particular operation in which both parties
have to concur2, the shipowner's duty does not begin until the goods are under his charge. As
Earl of Selborne LC said in Grant Co v Coverdale, Todd Co (1884) 9 App Cas 470 at 475-476:
No doubt, for the purpose of loading, the charterer must also do his part; he must
have the cargo there to be loaded, and tender it to be put on board the ship in the usual
and proper manner. Therefore the business of both parties meets and concurs in that
operation of loading. When the charterer has tendered the cargo, and when the
operation has proceeded to the point at which the shipowner is to take charge of it,
everything after that is the shipowners business, and everything before the
commencement of the operation of loading, those things which are so essential to the
operation of loading that they are conditions sine quibus non of that operation
everything before that is the charterers part only.
Such distribution of responsibilities between the charterer and the shipowner during loading
and discharging operations is known at common law as alongside rule or tackle to tackle rule,
i.e. the owners duty commences when the cargo to be loaded on the ships tackle crosses ship
rails and ceases when this cargo has been discharged over the ships side. Rules notion of cargo
handling technology evidently takes its roots from sail ship era, but was firmly holding its
ground against criticism mainly because same period was conveniently covered by the Hague
and the Hague-Visby regimes. Meticulous adherence to tackle to tackle rule was reflected with
scepticism by Devlin J in Pyrene Co Ltd v Scindia Steam Navigation Co Ltd [1954] 2 Q.B. 402 at
p.419:
But the division of loading into two parts is suited to more antiquated methods of
loading than are now generally adopted and the ship's rail has lost much of its
nineteenth century significance. Only the most enthusiastic lawyer could watch with
satisfaction the spectacle of liabilities shifting uneasily as the cargo sways at the end of a
derrick across a notional perpendicular projecting from the ship's rail.
In the modern context the carriers period of responsibility often begins before the start of the
tackle to tackle period, namely, when the carrier receives the goods prior to the
commencement of loading, and may extend until the moment when the cargo owner take
delivery of the goods, which were stored in the warehouse after the completion of discharge.

And if parties like to transfer this responsibility to the charterer clear words are required, Jindal Iron and Steel Co.
Ltd. & Ors v Islamic Solidarity Company Jordan Inc. & Anor [2003] EWCA Civ 144, see also Sandeman v Scurr (1866)
2 Q.B. 86 per Cockburn C.J. at p.98: The stowage of goods, in the absence of any spec agreement, forms part of the
obligation which the carrier takes upon himself. It is a duty to be discharged by the master and crew. There is
nothing to release master and crew from their responsibility in respect of the stowage.
2
Grant Co v Coverdale, Todd Co (1884) 9 App Cas 470

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Besides, charterparties nowadays often provides for the cargo to be carried on f.i.o. (free in and
out) terms, i.e. the charterer is responsible for the cost of loading and discharge. In such case
the master is still responsible for the loading and stowage of the goods because improper
stowage affects safety of the vessel3.
Availability and good operational status of ships loading and discharging gear for the ordinary
purposes of loading and discharging is within vessels duty of seaworthiness4.
It is necessary to stress that obligation imposed on the owners to receive on board, and one
imposed on the charterers to supply a full and complete cargo are mutual and interdependent,
i.e. the owners obligation to load is contingent upon and cannot be performed without
performance by the charterers of their obligation to ship or to tender for shipment a full and
complete cargo5.
A promise to load a full and complete cargo creates a duty to fill the ship, not merely to provide
a cargo equal to the capacity of the ship as stated in the charter.
If the charterer expressly or by conduct refuses to load the vessel, the shipowner does not have
to wait till the end of the laydays before he can sue for a breach of the contract to load, but
may accept such refusal and treat it as final6.
Flaux J noted in SK Shipping (S) PTE Ltd v Petroexport Ltd [2009] EWHC 2974 (Comm) at para
104:
Whilst not in themselves renunciatory, the combined effect of those matters was
enough, both subjectively in terms of [the owners] state of mind and objectively in terms
of what a reasonable person in the position of [the owner] would have thought, to give
rise to a concern as to whether [the charterer] would be able to perform the
charterparty, notwithstanding that the laydays had not yet expired.
Similar strict obligation to provide means for discharging cargo imposed on the charterer at
discharge port. As Lord Selborne LC stated in Postlethwaite v Freeland (1880) 5 App Cas 599 at
p. 608:
There is no doubt that the duty of providing, and making proper use of, sufficient means
for the discharge of cargo, when a ship which has been chartered arrives at its
destination and is ready to discharge, lies (generally) upon the charterer. If, by the terms
of the charterparty, he has agreed to discharge it within a fixed period of time, that is an
absolute and unconditional engagement, for the non-performance of which he is

Hang Fung Shipping Co. v Mullion [1966] 1 Lloyd's Rep. 511, per McNair, J. at p.524.
Hang Fung Shipping Co. v Mullion [1966] 1 Lloyd's Rep. 511, per McNair, J. at p.523.
5
Per Tomlinson J. in China Offshore Oil (Singapore) v International Pte Ltd (The Posidon) [2000] EWHC 229 (Comm)
at para.24. The learned judge considered an effect of the following words in cl.1 of ASBATANKVOY: The vessel ...
shall ... proceed as ordered to or so near thereunto as she may safely get (always afloat), and , shall load
(always afloat) from the factors of the Charterers a full and complete cargo of
6
Danube & Black Sea Ry. v Xenos (1863) 13 C.B.(N.s.) 825; Universal Cargo Carriers v Citati [1957] 2 Q.B. 401 at pp.
436, 437 and Evera S.A. Commercial v North Shipping Co. [1956] 2 Lloyd's Rep. 367 at p. 377.
4

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answerable, whatever may be the nature of the impediments which prevent him from
performing it, and which cause the ship to be detained in his service beyond the time
stipulated.
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