CHARTERPARTIES AND THE INTER-CLUB AGREEMENT
We are going to look at the 2 main types of
Charterparties in use.
We will then look at the NYPE Inter-Club Agreement
and how this allocates liabilities for cargo claims.
2
INTRODUCTION
Please find your copies of:
• Gencon 1994 (Page 58)
• NYPE 1946 (Page 38)
• Inter-Club Agreement 1996 (as amended September
2011)(Page 52)
3
INTRODUCTION
• Demise charter
• Master & crew employed by the Demise Charterer
Non-Demise charter
• Master & crew employed by the shipowner or ship
manager on behalf of the shipowner
6
MASTER & CREW
Two main types of Non-Demise charterparties:
• Voyage charter
- Charter period is one voyage from Port A to Port B
- Charterer pays freight to his owner (or disponent Owner)
• Time charter
- Charter period is a period of time (e.g. 11-13 months)
- Charterer pays hire: usually every 15 days in advance
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NON-DEMISE CHARTERPARTIES
10
CONTRACTUAL CHAINS FOR THE
CARRIAGE OF GOODS
Sub-Time Charterer
Time Charterer /Disponent Owner
Shipowner
11
CONTRACTUAL CHAINS FOR THE
CARRIAGE OF GOODS
Voyage Charterer
Sub-Time Charterer
Time Charterer /Disponent Owner
Shipowner
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CONTRACTUAL CHAINS FOR THE
CARRIAGE OF GOODS
Cargo Owner
Sub-Sub-Voyage Charterer
Sub-Time Charterer
Time Charterer /Disponent Owner
Shipowner
Bill of Lading
A typical Voyage Charterparty:
• Gencon 1994
• For a voyage from Port A to Port B
• Charterer pays freight based on the amount of
cargo loaded
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CARGO - VOYAGE
CHARTERPARTIES
• An unamended Gencon is favourable to the
Shipowner
• Cargo is loaded and stowed by the Charterer at
his cost and also at his risk
Clause 5
15
GENCON 1994
Shipowners will only be responsible for loss, damage or
delay to the cargo when:
• It has been caused by personal want of due diligence
on the part of the Owners or their Manager to make
the vessel seaworthy and to secure that she is
properly manned, equipped or supplied.
• By the personal act or default of the Owner or
Manager.
Clause 2
16
GENCON 1994
Changes and Rider (additional) Clauses will often be
inserted which can significantly change the original
cargo responsibility provisions.
17
GENCON 1994
Examples:
‘…shipowners to be responsible for the number of
bags loaded..’
‘…stevedores, although appointed by charterers to
be considered agents of the shipowners…’
18
GENCON 1994
A frequent amendment is:
‘…Clean bills of lading to be issued for cargo loaded…’
It is crucial that the Master is made aware of such a
clause in the charterparty before loading commences
as this will affect what he is entitled to load or reject.
19
GENCON 1994
• NYPE 1946
• Probably the most popular dry cargo Time
Charterparty in use
• Contract for the hire of the Ship for a period of time
• Charterer pays hire, usually every 15 days in advance
21
NYPE 1946
• The shipowner employs the Master
• The Time Charterer is responsible for the loading,
stowing and discharge of the cargo under the
supervision of the Captain
Clause 8
22
NYPE 1946
Responsibility for:
• Cargo shortage claims
• Claims arising from over-carriage of cargo
is not clear from the Charterparty terms.
24
NYPE 1946
Clause 8 includes
‘…under the supervision of the Captain…’
Supervision means that the Master has an obligation
to:
• Make sure that the vessel remains seaworthy at all
times during the cargo operation
25
NYPE 1946
• The charterers are loading and stowing the cargo
But:
• The Master must still make sure that they are doing
it in a way that will not result in the vessel becoming
unseaworthy
26
NYPE 1946
• If the Master insists on changing the way in which
the Charterers are loading and stowing the cargo
the shipowners may then be responsible for any
damage to the cargo which subsequently arises.
27
NYPE 1946
Changes and Rider Clauses will often be inserted
which will significantly change the original cargo
responsibility provisions.
28
NYPE 1946
A frequent amendment to Clause 8:
‘…under the supervision and responsibility of the
Captain…’
Transfers responsibility for loading and stowing onto
the Owners.
29
NYPE 1946
• Inter-club Agreement to promote amicable and equitable
settlements to cargo claims
• Mechanical apportionment of liability
• No re-trial of the underlying cargo claim, but the cause of
the loss/damage is examined
• Incorporated into time Charterparty by reference
• Most recent version: ICA 1996 (as amended September
2011)
31
INTER-CLUB AGREEMENT
Defines cargo claims and includes:
• Loss of cargo
• Damage to cargo
• Shortage of cargo (including slackage, ullage or
pilferage)
• Over-carriage of cargo
• Delay to cargo
• Customs dues or fines in respect of such loss, damage,
shortage, over-carriage or delay
32
INTER-CLUB AGREEMENT
Additional costs covered:
• Legal costs of the original cargo claim
• Interest on the original claim
• Certain costs and expenses incurred by the Club
which dealt with the claim initially
33
INTER-CLUB AGREEMENT
• Does not apply if there has been a material amendment to the
cargo responsibility clauses in the Charterparty.
• A material amendment to the cargo responsibility clauses under the
Inter-Club Agreement is one that makes the liability, as between
owners and charterers, for cargo claims clear.
• The addition of the words “and responsibility” in Clause 8 of NYPE is
not considered a material amendment.
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INTER-CLUB AGREEMENT
• Cargo claims arising out of the unseaworthiness of
the vessel will be apportioned 100% Owners [NB –
no defence of due diligence]
• Unless the Owner prove that the unseaworthiness
was caused by the loading, stowage, lashing,
discharge or other handling of the cargo
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INTER-CLUB AGREEMENT
Under the Inter-Club Agreement:
• If NYPE Clause 8 is not amended by the addition of
the words “and responsibility”
• Claims arising out of the loading, stowage, lashing,
discharge, storage or other handling of the cargo will
be apportioned 100% Charterers.
36
INTER-CLUB AGREEMENT
• If NYPE Clause 8 is amended to include words and
responsibility
• Claims arising out of the loading, stowage, lashing,
discharge, storage or other handling of the cargo will
be apportioned:
50% Charterers/50% Owners
37
INTER-CLUB AGREEMENT
• Claims arising out of shortage or over carriage will
be apportioned:
50% Charterers/50% Owners
• Unless there is clear evidence that the claim arose
out of pilferage or neglect
• All claims to be notified within 2 years of discharge
38
INTER-CLUB AGREEMENT
• All other claims including delay will be apportioned:
50% Charterers/50% Owners
• Unless there is clear evidence that the claim arose
out of neglect
40
INTER-CLUB AGREEMENT
• If Clause 26 of NYPE is amended to include “and
cargo claims”
• Apportionment under the Inter-Club Agreement will
not apply even if the Agreement is specifically
incorporated into the Charterparty
41
INTER-CLUB AGREEMENT
• Cargo claims must be properly settled or
compromised and paid for a liability to arise
• Can usually be fulfilled where a settlement is
achieved on a reasonable basis
• Security
42
INTER-CLUB AGREEMENT
Summary:
We have looked at 2 different types of Charterparty
• Voyage Charterparty
Port A to Port B; freight paid
• Time Charter
Hire of a ship for a period of time; hire paid
• ICA – to simplify cargo claims
43
SUMMARY