The question of responsibility for safe loading and seaworthiness, as between owners and charterers under the NYPE form was recently reconsidered in an LMAA arbitration

A vessel was chartered under a time charterparty on the NYPE form for one time charter period. The charter provided, inter alia:-

Clause 1:
The Owners shall … keep the vessel in a thoroughly efficient state … for and during service.

Clause 8:
Charterers are to load stow … lash … the cargo at their expense under the supervision of the Captain…

Clause 24 was deleted, thus the United States Carriage of Goods Act was not applicable.

Lines 21-22 Vessel on her delivery to be ready to receive cargo … and tight, staunch, strong and in every way fitted for service …

Additional Clauses

Clause 48
Lashing … although done by crew, crew to be considered as Charterers’ servants.

Clause 62
… In the event that cargo is shipped on deck … Charterers are to ensure that Bills of Lading are claused as follows: carried on deck at shippers’ risk without responsibility for loss or damage however caused.

The vessel loaded timber for discharge at three discharge ports. The timber was loaded both on and below deck. The loading and stowage of the cargo was carried out under the direction of the charterer's supercargo. The lashing of the cargo was carried out by the crew.
The lashings were generally spaced at three-metre intervals. Such lashings for deck cargoes of the height to which the timber was loaded, were in contravention of the IMO Code of Practice for ships carrying timber deck cargoes.
During the course of the voyage to the first discharge port part of the vessel’s deck cargo was lost overboard during heavy weather. The vessel was also damaged and had to deviate to a port of refuge. The damage to the vessel included sections of the bulwark (on both the port and starboard sides) being carried away, deck fittings being torn off and, in places, the weather-deck plating being torn open.
The tribunal found that the cause of the loss of cargo was the insufficiency of lashing, which, of course, also caused the damage to the vessel.
A dispute arose between the parties in relation to liability for the lost cargo and damage to the vessel. The owner submitted that the terms of the charterparty made it clear that the responsibility for the proper loading and lashing lay with the charterer, and that was so whether or not the consequences of bad loading or lashing were to make the vessel unseaworthy.
The charterer argued that there was an absolute obligation on the owner to intervene and prevent the vessel sailing in an unseaworthy condition, hence the owner was in breach of the charter and therefore caused its own loss.
The tribunal had first to consider the concept of "seaworthiness". In its traditional sense "seaworthiness" refers to the qualities of the ship itself, i.e. it must be watertight, stable, in proper trim and structurally sound. In its wider, modern, sense "seaworthiness" means the ability of the vessel to carry her cargo safely.
In this particular case, and based on the evidence of both parties, the tribunal found that the insufficiency of the lashings caused the vessel to be unseaworthy on sailing from the loading port. The tribunal also found that both the charterer's supercargo and the Captain knew, or should have known, of the contravention of the IMO code. The tribunal was not convinced, however, that it would have been apparent to the Captain that any failure of the lashing might put the safety of the ship at risk. It held that, insofar as the vessel was rendered unseaworthy in the wider sense, the cause of the unseaworthiness was the securing of the cargo for which the charterer assumed responsibility.
The express obligations of "seaworthiness" on the owner, imposed by lines 21-22 and clause 1 were in limited terms, and were not broken by the owners.
The obligation to load and lash was expressly placed upon the charterer by clause 8. The words "under the supervision of the Captain" did not qualify the obligation of the charterer, they did not impose any duty on the Captain to supervise the loading and stowage of the cargo. Such words merely gave the Captain the right to intervene ("Panaghia Tinnou", 1986 2 Lloyd’s Rep 568). A right to intervene does not carry with it a liability for failure to do so, let alone relieve the actor from his liability, hence the owner was not liable for the lost cargo or the damage to the vessel.
Charterparties containing a clause substantially in the same terms as clause 8 of the NYPE are often amended to include additional words such as "responsibility". The insertion of the word "responsibility" after "supervision" will transfer all responsibility to the owner for loss or damage to the ship or cargo as a result of improper loading, stowage or trimming, unless the charterer in some way interfered and such interference caused the loss or damage to either the cargo or the ship (see the "Shinjitsu Maru No.5" (1985) 1 Lloyd’s Rep 568, the "Argonaut" (1985) 2 Lloyd’s Rep 216, and the "Alexandros P" (1986) 1 Lloyd’s Rep 421).

Difficulties arise where clause 8 or similar clauses may have been amended differently, for instance by inserting the word "discretion". The general rule is that absent such emphatic wording as "responsibility", liability attaches to the owner only if the Captain positively intervenes in loading operations (Canadian Transport Co Ltd -v- Court Line Ltd (1940) 67 Lloyd’s Rep 161).


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