MarIus

3.1.1 Consequences in case of a damage to the vessel

When charterers direct a vessel to a prospectively unsafe port, and they have promised to send it to a safe one, they are committing a breach. In such instances, the shipowner is entitled to damages, provided they reasonably obeyed the orders.^{(1)The Stork [1955] 1 Llyod’s Rep 349; The Houston City [1954] ; The Batis [1990] 1 Llyod’s Rep. 345; Coghlin et al. (2014), at 10.58} Furthermore, establishing a causal link between the damage and the risk is essential. This is illustrated in The Lucille where the port was acknowledged to be unsafe at the time of the order. The pivotal question was whether this unsafety caused the damage. This issue was addressed in light of standard principles of remoteness and causation.^{(2)The Lucille [1984]; The Saga Cob [1992] at 551} If a claim for hire is made in such situations, it will be calculated based on the current market rate at the time the vessel performed the services.^{(3)The Batis [1990] ; Cooke et al. (2014), at 5.20}

Aditionnally, there is an argument that charterers may be liable if the unsafety of a port necessitates the shipowner incurring unusual or excessive expenses to avoid obvious dangers. The principle here is that if a port becomes safe only through the exercise of exceptional seamanship, the shipowner has the right to claim damages for the costs of unusual measures required to ensure safety. In The Archimidis, as discussed by Gay in an article, this idea is further developed. It is suggested that such a situation aligns with The Eastern City definition of a “safe port.”^{(4) Robert Gay, Safe port undertakings: named ports, agreed areas and avoiding obvious dangers, [2010] LMCLQ 119.}

3.1.2 Implications when the only consequence is delay: Demurrage vs damages for breach of safe port warranty

Under English law, demurrage and damages for detention are distinct concepts. Demurrage is a compensation regime used to apportion the risk of delay during loading and discharge between owners and charterers. A specified duration is set aside for both loading and discharging, termed as “laytime” in voyage charterparties. This timeframe is agreed upon and incorporated into the negotiated freight cost. If the loading/discharging finishes within this timeframe, the charterer owes no extra charges. However, if the loading process extends beyond this set duration, the ship enters into “demurrage,” mandating the charterer to provide compensation to the owner. The rate of this compensation is established in advance within the charter agreement. Depending on the specific terms of the agreement, laytime may commence at various points, typically when the ship is legally deemed "arrived”.^{(5) Thor Falkanger [2017] at 15.6} 

Herein lies the distinction: if the vessel experiences a delay due to a breach of port safety before it becomes “an arrived ship”, the breach of the safe port clause is activated. Conversely, if the ship has already “arrived”, charterers will utilise their laytime. Anything exceeding it will be paid in terms of demurrage. Essentially, the difference hinges on the fact that a safe port breach can prevent the laytime from starting, and the owner will be compensated in terms of a breach of the safe port warranty. This means, in our context, that owners may be reimbursed for actual losses or costs incurred, due to the delay imposed by potential arrests/intimidation measures taken at the entry to the Black Sea. In contrast, if an arrest occurs after the laytime has begun (i.e., the vessel has reached the port/berth or has given its notice of readiness, depending on the agreed terms), the charterer will only be liable for the time that exceeds the laytime and the agreed amount for demurrage.^{(6) See for a detailed study, Paul Todd, [2012]; see also, Inca Compania Naviera SA v Mofinol Inc, The President Brand [1967] 2 Lloyds Rep. 338 QBD; Shipping Developments Corp v V/O Sojuzneftexport The Delian Spirit [1972]; Inverkip Steamship Co Ltd v Bunge & Co [1917] 2 K.B. 193 (CA); The Johanna Oldendorff [1974]} Depending on the terms of the agreements and the rates established for demurrage, the amount owed by the charterers can vary significantly.

In the Delian Spirit case for example, a “reachable on arrival case.”^{(7) This term is often included in charterparties and stipulates that the berth must be available and accessible to the vessel upon its arrival, if not, charterers will be liable for the delay and the extra costs incurred.} Due to congestion, the ship was only able to berth after four and a half days. Once berthed, the loading process was swift, and the charterers would have barely surpassed the laytime. This means that if the demurrage system was applied, the charterers would have been responsible for a minor amount.

However, the shipowner successfully pleaded that the ship had not became an “arrived ship” and that the breach amounted to the breach of a “reachable on arrival” clause. The outcome was therefore that the charterers had to pay damages for detention for the entire period of the delay. The charterers were deprived of their laytime benefits. Similar facts and a comparable decision were observed in another case, "The President Brand”^{(8) Ibid. note} which is often cited as a precedent. Note that if a shipowner agrees to an unfavourable demurrage rate, they might be better off claiming a breach of the safe port warranty rather than settling for the demurrage rate. To ascertain which claim basis is more advantageous, several factors must be considered. However, it is important to understand that the two systems cannot coexist; they are mutually exclusive. Once on laytime, damages based on the breach of an independent obligation will be precluded.

In a time charterparty, a similar reasoning applies. Consider the case of The Mass Glory as an illustrative example. In this instance, the notice of readiness was deemed invalid because the vessel was unable to berth due to a breach by the charterers. The ship was sub-chartered on a time basis. This breach caused a delay, culminating in a late redelivery. Consequently, the disponent owners were obligated to make additional hire payments under a detention claim. The determined amount was anchored to the original charterparty rate. Given the significant downturn in the market, this rate was markedly higher than the contemporary market rates.

However, it is imperative to note that the aforementioned stands unless the parties have agreed on a distinct allocation of delay risk based on the specific stage of the voyage undertaken.^{(9) In that sens, Paul Todd, [2012]} Moving from the consequences of ordering a vessel to an unsafe port, let's now delve into the situation where port unsafety arises after the port nomination, leading to charterers' secondary obligations.