Neptune Atlas

Warranties

Safe port and safe berth

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A charterer names a port. The owner sends the ship there because that is what the charter obliges. If the port turns out to be dangerous and the ship is damaged or lost, somebody carries a very large number, and which of them carries it is decided by a few words in the charter and by the law those words are read under. The words are the most litigated short phrase in chartering.

The test

The classic English formulation comes from the Court of Appeal in Leeds Shipping Co Ltd v Societe Francaise Bunge, known as The Eastern City, decided in 1958. Sellers LJ put it this way: 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.

That sentence is the whole subject, and each element of it does separate work.

The particular ship. Safety is not a property of the port. It is a relationship between the port and this hull, with this draft, beam, length, air draft and manoeuvring characteristics. A berth entirely safe for a handysize can be unsafe for a capesize, and the same berth can be safe on one tide and not another.

In the relevant period of time. The obligation bites when the port is nominated and it looks forward: the port must be prospectively safe for the period the ship will be there. Seasonal ice, a known swell season and a berth a dredging programme is about to close are all inside the question.

Reach it, use it and return from it. Approach and departure are included, and a great many unsafe port cases are about getting out rather than getting in, because that is the leg on which the ship is loaded, deeper and less manoeuvrable.

In the absence of some abnormal occurrence. The undertaking is about the characteristics of the port, not everything that can happen there.

Danger which cannot be avoided by good navigation and seamanship. A hazard a competent master and crew can handle is not unsafety. This is also where the owner's own conduct enters: negligent navigation by the ship can break the chain between the port's characteristics and the loss.

Unsafety is not confined to the physical. Political and legal danger counts, so a port where the ship would be detained, blockaded or seized can be unsafe with perfect water under her keel.

The abnormal occurrence question, and what settled it

The United Kingdom Supreme Court took the point in Gard Marine and Energy Ltd v China National Chartering Co Ltd, The Ocean Victory, decided on 10 May 2017. A capesize bulk carrier grounded leaving the Japanese port of Kashima in October 2006 in severe weather and became a total loss. Two features of the port were involved: long waves affecting the berth, and northerly gales making the single narrow channel out of the port dangerous. Each was known and each was ordinary on its own. They had not previously occurred together.

The court held that concurrence was an abnormal occurrence, so there was no breach. The reasoning is the part worth carrying: the question is not whether the individual ingredients were foreseeable, but whether the event that caused the loss was a normal characteristic of the port or something rare and unexpected. A port is not unsafe merely because something bad has happened there.

The same case makes a second point that catches owners out. Where the charter provides for joint insurance of the ship, the structure of that insurance can bar a claim between the co-assured parties altogether, whoever was at fault. The safe port argument is not always the argument that decides the case.

Warranty or due diligence, and why the answer depends on the law

This is the divergence to know about, and it is not a subtlety.

Under English law the safe port undertaking is a contractual promise about the port, subject to the qualifications in the test above, rather than a duty to take care in choosing. Some forms, particularly in the tanker time charter family, deliberately reword it as an obligation to exercise due diligence in nominating a safe port, which is a materially weaker promise, and where that wording is used it governs.

Under United States law the position was unsettled between the circuits until the Supreme Court decided CITGO Asphalt Refining Co v Frescati Shipping Co, The Athos I, on 30 March 2020. The charter was on the ASBATANKVOY form. The court held that the plain language of the safe-berth clause, requiring the charterer to designate a safe berth, establishes a warranty of safety rather than a duty of due diligence. The charterer was liable whether or not it had been careful.

The consequence is simple to state and easy to skip. The same printed clause, on the same form, does not mean the same thing in London and in New York. If the safe port allocation matters on this trade, the law and arbitration clause is part of the safe port negotiation rather than a housekeeping line at the end of the recap.

What is promised, and about which place

War risk is a separate regime

A war zone is a danger, but the owner's right to refuse an order into one usually comes from a war risks clause rather than from the safety warranty. The BIMCO clauses for time and voyage chartering set their own test, their own decision maker and their own consequences, including who pays additional premium and where the ship goes instead. Running a war risk refusal through the safe port undertaking is a common and expensive category error. See war risk areas.

What to record

Safe port disputes are decided on what was known at the moment of nomination, and that moment is often a line in an e-mail nobody kept. Keep the nomination with its timestamp, the wording of the warranty as fixed, the ship's particulars relied on, any protest the master made, and the weather and port information available at the time rather than afterwards.

References

Navigating limits and AWIWLFour letters on a recap standing for a hull underwriter’s list of water, most of it excluded only in winter, and none of it forbidden. War risk areasAn underwriters’ list of water, not a report of what happened last week. What being inside one does to the premium, the crew, the route and the rate. P&I clubs and marine insuranceA ship carries several insurances that do not overlap, so is the ship insured is not a question with one answer. Charterparty formsNobody drafts a charterparty from nothing. They name a printed form, amend it, and then argue about which half of the document wins. Reading a ship's particularsWhat each figure on a vessel description constrains, why GRT is a volume, and why draught excludes a ship long before deadweight does.

Neptune Atlas

Safety is relative to the particular ship, so the answer starts with her draft, beam, length and air draft, which Neptune Atlas holds as particulars on the register record. It does not hold port depths, tidal windows or berth restrictions, and it does not tell you whether a port is safe. Every paid plan starts with 7 free days. A card is needed to start them, and cancelling before they end costs nothing.

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