rnte1.11ntional Frcighti~~g Charter Party contains detailed terms and conditions that are concluded on the basis of UNIT 13 LEGAL ASPECTS OF Prnctices standard chartered party forms duly supplemented, in case of private CPs, by additional CARRIAGE OF GOODS clauses. The main clauses usually relate to description of the vessel, description of the port: of loading and discharging, loading and cancelling time, nature and value of cargo to be Structure carried, notice of readiness, laytime, freight and other expenses, liabilities of the charterer Objectives and the shipowner, payment of hire charges, arbitration etc. Introduction Carriage of Goods by Sea 12.7 KEY WORDS 13.2.1 Charter Party 13.2.2 Bill of Lading :Maritime Law Bareboat Charter ?Letting out the bare ship for a period of time with full rigllts and 13.2.3 Difference between Bill of Lading and Charter Party responsibilities of operating the ship with the charterer. 13.2.4 Liabilities of a Carrier by Sea 13.2.5 Shipper's Lien and Maritime Lien Bill oflading :Document issued by the carrier, or by someone on his behalf, which is in the 13.2.6 Bottonlery and Respondentia Bond form of (i) a receipt of goods, (ii) an evidence of the contract of affreightment, and (iii) a title Carriage of Goods by Air to goods. 13.3.1 Liability of the Carrier 13.3.2 Position of the Consignor Charter Party :Document of agreeillent made between a charterer and a shipowner Carriage of Goods by Land and Rail containing all teims and conditions of carriage/charter. Carriage of Goods by Multi-Modal Transpoi-t Let Us Sum Up Customary Despatch : It ineans that the charterer inust load and /or despatch as fast as Key Words possible in the circunlstances prevailing at the hire of loading or dischargin~. Answers to Check Your Progress Te~n~inalQuestions Despatch Money : It means the money payable ofby the owner if the ship con~pletesloading or discharging before the laytime has expired. 13.0 OBJECTIVES Free In and Gross Out :Freight rates inclusive of disctlarging expenses but exclusive of loading expenses. After studying this unit you should be able to : define contract of affreightment Free In and Out :Freight rates exclusive of stevedoring expenses. Also known as 'Free explain rules applicable to carriage of goods by sea Teitns ' . describe the implied undertakings, by shipowners and charterers Gross In and Free Out : Freight rates iiiclusive of loading expenses charges but exclusive 6 distinguish between charter party and bill of lading discharging expenses. explain ~ulesapplicable to carriage of goods by air Laytime : The time period agreed between shipowner and charter during which the vessel is r describe the legal aspects of carriage of goods by land and rail available for loading/discharging without extra payment by the charterer. explain the nahlre of multi-modal transport document Time Charter :Engagement ofa ship for a fixed period of time for operation within the outline the liabilities of the multi-modal transport operator and the position of the defineid territories or between safe ports, 1' consignor in that context. Notice of Readiness (NOR) :A notice to the charterer, shipper, receiver or any other person as required under the charter party about arrival of the vessel at the agreed portherth and 13.1 INTRODUCTION its readiness to loadldischarge. You have learnt that the carriage of goods across the countries may take place by sea, by air, by road and rail or through multi-modal transportation, The nature and content of contract Voyage charter : Engagement of a ship for either a single voyage or for consecutive/round . of carriage of goods also depend upon the mode of transport used. By contract of carriage voyages for shipment of an agreed quantity of cargo. of goods we niean a contract whereby a person agrees to cany goods from one place to another in rehlrn for a payment. The party who undertakes to carry the goods for payment 12.8 ANSWERS TO CHECK YOUR PROGRESS e.g.. the shipping company or the ailways, is called the 'carrier', and the person who delivers the goods for carriage is known as the 'consignor' or the 'shipper'. Specific contracts A 3 (i) False (ii) True (iii) False (iv) True (v) Tiue between the carriers and the shippers are mostly based upon international conventions B3 (i) vessel (ii) charterer (iii) stevedoring (iv) fifteenlthirty which are duly incorporated in the national laws. In many cases, however, contracts acquire (v) arbitration legal entity when collcluded on the basis of mutually accepted tenns provided these terms do not go against any specific legal requirement in the concerned countries. In this unit, you will learn about all the international conventions and the relevant provisions of the Indian 12.9 TERMINAL QUESTIONS Acts governing the international carriage of goods by sea, by air, by road and rail and through multi-modal transportation. 1 What are the various ways in which a tiamp may be chartered? Explain fully. 2 Describe the responsibilities of shipowners and the charterers under different forms of chartering arrangements. 13.2 CARRIAGE OF GOODS BY SEA 3 Discuss the main clauses of voyage charter party and time charter party. A contract for the carriage of goods by sea is known as 'Contract of Affreightment'. It is a Legal Aspects of Internatjonrl Frcipl~ting time of its sailing. Ally defect arising after these two stages is not considered to be a breach contract between the shipper (consignor) and the shipowner (shipping company) by which Carriage of Goods Practices the shipowner undertakes to carry the goods of another (shipper) in consideration of a price of its undertaking. Unless otherwise specified in the charter party, if the charterers find the called 'freights'. A contract of affreightment contains all the terms and conditions of carriage ship to be unseaworthy before sailing and the defect cannot be rectified within a reasonable of goods. It may take the fonn of a charter party or a bill of lading as the contractual time period (reasonably is not a question of law but a matter of fact) the charterers may obligations of the palties are governed by the nature of carriage. Where a tramp is chartered, rescind the contract. But, they cannot claim damages unless there is specific provision to the contract of affreightment between the charterer and the shipowner takes the form ofa this ef'fect in the charter party. Charter Party (CP).On the other hand, where cargo is carried by a liner, the contract of affreightment takes the form of a Bill of Lading (BL)which operates as a receipt of goods, a It has been accepted.under Common Law that the shipowners can insert a clause in the document of title and a contract of carriage. Let us now leam about these two forms in charter party to exempt themselves for a liability arising out of unseaworthiness of the detail. vessel. But, such clause should be absolutely clear and unambiguous. In one case, the shipowners had contracted to carry animals on the condition that they would not be liable for death or injuiy to animals on the condition that they would not be liable for death or 13.2.1 Charter Party injury to animals by disease. They, however, did not disinfect the ship after,the previous voyage and consequently the cattle were infected with mouth-and-foot disease. In this There is no specific Convention for charter pal-@. Not only that, in most of the countries no case, the shipowners were held liable because the infection was caused by the uncargo- specific legal provisions exist for concluding charter party on the basis of any minimum worthiness which disentitled them from relying upon the exception clause. requirements. Consequently, contracts can be concluded on mutually acceptable terms and conditions provided these do not violate ally national law. Like any other contract, charter Reasonable,Despatch :This implied undertaking means that the shipowners ensure the party may be concluded either orally or in writing. In practice, however, for minimizing cai-rier to be ready to comnlence the voyage and load the cargo to be carried and proceed conflict between the parties, charter parties are concluded in writing and, in order to upon and complete the voyage with all reasonable despatch. This undertaking, in fact, facilitate the contract conclusion, the standard formats evolved overtime may be used. emphasises the importance of time as by delay the object of the voyage is defeated. While for loading and discharging of cargo, the time limits are usually prescribed in the charter Charter Party contains all terms and conditions of carriage which may also include rights party but the dispute may rise regarding reasonable despatch related to commencing and and obligations of the parties and the provisions for settlement of disputes. Since it completing the voyage. Unless specifically mentioned in the charter party, the time taken operates with reference to the Common Law, the shipowners' liability in receiving, cai~ying should be reasonable. The reasonableness of time, in tum,.is related to trade in which the and discharging cargo is an absolute one, unless otherwise restricted by incorporation of parties are engaged and, therefore, it differs from the trade to trade. , specific clauses. Absolute liability means that when loss takes place the ship-owner cannot takes recourse to any exception, other than (i) Act of God, (ii) Act of Enemy, and (iii) Act of No Undue Devlatlon :If the route is not prescribed in the charter party, the shipowners are to charterers and their representatives. However as a matter of practice, the shipowners agree follow the customary route which is usually followed, Any departure from such a route is to carry cargo by limiting their liability by including Exception Clauses.