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How to play it safe in an unsafe port: guidance for charterers and owners

Posted: 17/09/2021


Marine, trade and energy: safe ports video

The Piraeus marine, trade and energy team has recorded a short video to accompany this article. Marine manager Helen Walsh and Evelyn Komaki, an associate specialising in marine law and shipping disputes, discuss what constitutes a safe port and a charterer's obligations when nominating one.

The video is available here.

Many standard form charterparties often contain an express warranty to ensure the port’s safety on the part of the charterer. Even in circumstances where such a warranty is not expressly provided, there is still the possibility that one could be implied.

In this article, we first examine what constitutes a safe port and the nature of the charterers’ obligation to nominate one and then how this old doctrine finds new use in the era of Covid-19 and increased digitalisation.

The Charterers’ obligation to nominate a safe port

The charterers’ primary obligation is an “absolute” one. It is a question of whether the port is safe not whether the charterers were careless in their selection of a port. Examples of such absolute obligations can be found in the NYPE 1946 and Asbatankvoy 1977 standards forms.

Some charter forms, however, expressly qualify the obligation to nominate a safe port to one of due diligence. In these instances, the charterers’ obligation is merely to take reasonable care to establish that the nominated port is safe. Examples of such a reduced obligation can be found in the Shelltime 3 and Shellvoy 6 standards forms. Parties should note that a due diligence clause may be overridden by unqualified safe port language in the recap, as in The Greek Fighter [2006].

The US Supreme Court recently brought US law in line with UK law through its significant ruling in The Athos I.[1] In this case, the court held that the safe berth provision in an Asbatankvoy form constituted a warranty of safety, imposing an absolute duty on the charterer to select a safe berth.

Furthermore, the US Court of Appeals (Third Circuit) held that the head owner could benefit from the absolute warranty wording of the voyage charterparty down the line as a third party beneficiary. It is doubtful whether an English Court would have taken the same view in this respect.

When does this obligation arise?

The charterers’ obligation arises at the time they give the order for the vessel to proceed to a specific port. At that time, the port only needs to be prospectively safe for the ship to reach, use and leave at the appropriate time in the future.

The charterers’ order does not have to be incontestably obeyed. The master and owners are permitted a reasonable amount of time to collect local advice and eventually decide whether to proceed to the port or not.

It should always be borne in mind that, if owners knew about the port’s unsafety but, nonetheless, obeyed the charterers’ order, they might potentially be found to have waived their right to claim damages for any losses suffered to the extent that they made unequivocal representations. Reserving one’s rights is always sensible when parties are not aware of the risks and how dangerous or not the situation may become.

Nevertheless, if a state of unsafety arises after the order has been given and when the ship can still avoid the danger, the charterers come under a new obligation to give alternative instructions.[2]

Definition of safe port

The long-standing definition of what constitutes a safe port was established in The Eastern City [1958] to be the following:

“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…”.

As such, the question of safety concerns the specific vessel’s approach voyage, use of port and departure from it. All three requirements need to be satisfied for a port to be safe.

Additionally, the dangers that may render a port unsafe can be physical or non-physical. Physical dangers may arise as a matter of topography or man-made hazards such as ice, sandbanks, misplaced fenders, wrecks and even meteorological risks.

Much will depend on whether the port had the proper systems in place to ensure safety such as local warnings, navigational aids (pilots, buoys, lights) and any technological systems to monitor and report the safety of channels leading to and from it[3].

In The Marinicki, the vessel was damaged by an obstruction in a dredged approach channel. Despite the fact that the owners failed to show that the obstruction was there when the relevant voyage order was given, their claim succeeded on the basis that the port lacked a proper system for monitoring the safety of the channel and reporting hazards accordingly.

Non-physical dangers may be in the form of political unsafety such as war and hostilities. Furthermore, in The Greek Fighter [2006], Colman J accepted, albeit in obiter, that a port could be unsafe if there was a risk of unjustified confiscation of the ship by the local coastguard and the political and legal system provided no effective remedy in respect of such an unlawful seizure.

Defences to an unsafe port claim

In accordance with the well-established definition of a safe port, the charterers will not have breached their obligation if the danger is caused by an “abnormal occurrence”. As demonstrated by The Evia (No. 2) [1982], occurrences are abnormal where the danger does not arise from the qualities of the port itself.

In The Ocean Victory [2017], the Supreme Court held that one must look at the frequency of such a danger occurring and the likelihood of it occurring again and further stressed that it was an “abnormal occurrence” for two normal characteristics of the port to happen in combination.

In addition to abnormal occurrences, dangers that are avoidable by good navigation and seamanship do not render a port unsafe either. The standard of navigation expected is that of an ordinarily prudent and skilful master. It follows that, where the master and crew fail to reach this standard and are negligent on their part, charterers may rely on such failure to show that it was the effective cause of the damage. This may prove a difficult case to run if the master has acted reasonably but mistakenly.

Covid-19 and safe ports

There is currently no case law on the issue of whether a pandemic could render a port unsafe. However, two types of danger can potentially lead to an unsafe port in the midst of the Covid-19 pandemic.

Firstly, a port could be unsafe if there is a risk to the ship crew of infection. To safeguard against this possibility, the IMO has provided guidance to the ports on what measures to take through its IMO Circular No.4204. If a port fails to adhere to this framework, it could potentially be rendered unsafe.

The second danger concerns the risks of the ship’s detention or its blacklisting. If the ship is asked to quarantine at the port of call, then the charterers’ port of choice could be unsafe. However, the detention or quarantine period would have to last for an inordinate time for the port to become unsafe. As long as the quarantine imposed is for 14 days, owners will face difficulties in asserting that a port was unsafe.

Nonetheless, there is a stronger argument for the port’s unsafety if the vessel is blacklisted at a subsequent port, merely because of it having called at a previous port severely affected by the Covid-19 outbreak.

The charterers’ defence against such an unsafe port claim could potentially be that the Covid-19 outbreak is an abnormal occurrence. Following this, any danger to the ship due to Covid-19 would not automatically render the port unsafe. However, charterers should beware that, as the time goes by, the argument for “abnormal occurrence” becomes weaker.

Cyber attacks and safe ports

The increased digitalisation of port ecosystems has led to the emergence of new threats and cybersecurity challenges. The concept of ‘Smart Ports’ and the deployment of Internet of Things devices, Artificial Intelligence (AI), automation and blockchain mean that ports will have to integrate cybersecurity in their global strategy and look beyond physical safety.

It is arguable that a port could be rendered unsafe if it has not taken any active measures to guard against cyber attacks. While a single cyber event would probably not suffice, if a port suffers repeated cyber attacks or if it can be shown that the port has not taken measures to protect against cyber attacks, then the port could be rendered unsafe as per The Ocean Victory [2015].

Conclusion

Recent developments including Covid-19 and cyber attacks revive the old doctrine of safe port and the charterers’ obligation to nominate a safe port. Safe port is a question of law but safety is a question of fact.

For this reason, it is recommended to consult experts at an early stage. Members of our Greek office can advise on all aspects of charterparty disputes and would be happy to assist with any queries and matters arising.

 

This article was co-written with Elina Pavlidou, a paralegal in the marine, trade and energy team.

 

[1] Citgo Asphalt Refining Co v Frescati Shipping Co Ltd (2020) 140 S Ct 1081

[2] The Evia (No. 2)

[3] The Marinicki [2003] 2 Lloyd’s Rep. 655


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