Q1--What are the UNCLOS provisions concerning ship’s flag and nationality? In observation of UNCLOS what the duties are of flag States and how is it enforced?
Ans. The United Nations conference convention on the laws of the sea (UNCLOS) was an outcome of the third UN conference in 1982 and entered into force on 16th November 1994.
The UNCLOS provides a universal legal frame work for the rational management of marine resources and their conservation. The treaty document consists of 446 articles grouped under 17 part headings and 9 Annexes.
SHIPS FLAG AND NATIONALITY
Part VIII : High seas consists of Provisions concerning ships flag state and nationality Article 90: Every state coastal or land locked has a right to have its ship fly its flag. Article 91: State should lay down conditions / requirements for granting its nationality,
registration and the right to fly its flag. Ships have the nationality of the state whose flag they fly. There must be a genuine link between the state and the ship. The state must issue documents to ships flying its flag.
Article 92: Ships to fly flag of only one state and are subject to its jurisdiction on high
seas. A ship cannot change its flag during a voyage or while in a part of call. Change is allowed in case of transfer of ownership or change of registry.
Duties of flag state:
Article 94 initials duties and responsibilities of the flag state salient parts
are:-1. State shall effectively exercise its jurisdiction and control in Administrative technical and soul matters over ships flying its flag.
2. State should maintain a register of ships flying its flag i.e. names and particulars of ships. State should assure jurisdiction under its laws over ships flying its flag its master officers and crew in respect of Administrative technical and social matters concerning the ship. 3. State to take such measures for ships as necessary to insure safety at sea with regards to
Construction equipment and seaworthiness of ships.
Manning of ship labour conditions and training of crew with regards to applicable international instruments.
Use of signals maintenance of communications and prevention of collision. 4. Such measures shall include these necessary to ensure:
That each ship before registration and thereafter is surveyed by a qualified surveyor and has onboard charts publications and equipment as are appropriate for safe navigation of ship.
Each ship is in charge of master / officers / crew having appropriate qualification and numbers with regards to the type due, machinery and equipment of the ship.
5. Each state should conform to generally accepted international regulations procedures and practices and should take steps which may be necessary to secure their observance.
6. A state which has clear grounds to believe that proper jurisdiction and control w.r.t. a ship have not been exercised may report the facts to the flag state. Upon such request flag state must investigate the matter and take appropriate action to remedy the situation.
7) Every state must cause an enquiry to be held in case of a marine casualty involving a ship flying its flag and causing loss of damage to environment to those at any national and state. Every flag state must co-operate with other flag states in conduct of enquiring.
ENFORCEMENT BY FLAG STATE
Article 217 makes the following provision.
i) Every state must adopt laws / regulations to ensure compliance of international laws by ships flying its flag.
ii) Every state should prohibit ships frame sailing for man compliance with international laws including requirements relating to design construction equipment and manning.
iii) Status should ensure that all certificates as read by international laws are carried on board. States to periodically inspect the vessels to ensure conformity of these certificates with actual conditions on board.
iv) Flag state should provide for immediate investigation in case vessel commits relation of international rules and standards.
v) Flag states should cooperate with other flag states if assistance is requested.
vi) Flag state must investigate any relation committed by vessel flying its flag on a request from any state.
vii) Flag state should be prompt in addressing any requests for information by any other state. It should inform competent international organizations about action taken and the outcome. Such information should be made freely available to all flag states.
Flag states must impose adequate penalty for any vessel relating the law to discourage further violation
Que: Give a brief history and the necessity towards formation of UNCLOS. What are its important highlights? Under this context explain (i) Territorial sea (ii) contiguous zone (iii) EEZ (iv) Continental shelf (v) high seas
Oceans always have been a prime source of nourishment for life. Climate and weather changes depend on the interplay between oceans and the atmosphere. They also serve as a convenient medium for trade, commerce, exploration, adventure and discovery.
As the mysteries of the oceans gave way to their mastering, a lot of customs, traditions and laws arose defining the rights of the ship and the mariners who plied the waters of the ocean.
Attempts were made to regulate the use of ocean by conventions acceptable to all nations. The UN has made considerable progress in developing and codifying the laws of the sea. There UNCLOS (United Nations Convention on the Law of the Seas) have been convened.
UNCLOS I at Geneva in 1958 UNCLOS II at Geneva in 1960
International conferences approved conventions which covered the continental shift, Fishing, High seas, Territorial waters and contiguous zones. During the 1970, it came to be accepted that the sea bed is a common heritage of mankind and should be administered by an international authority.
UNCLOS III was at GENEVA in 1974 which discussed issues on navigation, pollution and the breadth of territorial waters. It entered into force on 16th Nov 1994.
UNCLOS provides a universal frame work for the management of marine resource and their conservation, govern all aspects of the oceans, such as environmental control, marine scientific research, economic and commercial activities, transfer of technology and settlement of disputes relating o ocean matters. UNCLOS is a treaty of 446 articles grouped under17 part heading and 9 annexes.
1) TERRITORIAL SEAS: Extends to 12 Nautical miles from the baseline. Foreign flag vessels have a ‘Right of Innocent Passage’ through it. The passage is considered ‘innocent’ as long as it is not prejudicial to peace, good order or security of the coastal state.
‘Right of innocent passage’ can be suspended if it is essential for the protection of the coastal state its security or for weapons exercise.
The internal waters the coastal state can exercise jurisdiction over all vessels. In territorial seas, it should not exercise criminal jurisdiction except.
a) If the consequences of crime extend to the coastal state
b) If crime disturbs the peace of the country or good order of the sea
c) It master of a vessel or an agent of the Flag State requests the coastal state to exercise jurisdiction
d) If jurisdiction is necessary to suppress traffic of narcotic drugs.
2) CONTIGUOUS ZONE: Extends 12 nautical miles beyond the territorial sea limit Coastal states must exercise control necessary to prevent infringement of its customs, fiscal, immigration or sanitary laws and regulations within its territories. Vessel carrying noxious or dangerous substances or wastes may be turned away on public health or environmental grounds.
3) EXLUSIVE ECONOMIC ZONE (EEZ)
It extends to a maximum of 200 nautical miles from the base line, covering and managing the natural resources whether living or non living of the waters adjacent and of the sea bed and its subsoil.
State has jurisdiction, with regard to installation marine scientific research and protection and preservation of the marine environment.
All other states enjoy the freedom of navigation, laying of submarine cables and pipelines
The outer limit of the continental shelf shall not exceed 350 nautical miles from the base line or shall not exceed 100 nautical miles from 2500 meters isobaths. Coastal states have exclusive rights for exploring and exploiting its natural resources. The state also has the exclusive right o authorize and regulate drilling on the shelf or all purposes.
V. HIGH SEAS:
Part of the sea that is not included in the exclusive economic zone in the territorial sea or in the internal waters of a state or in the archipelagic waters of an archipelagic state.
High seas are open to all states for freedom of navigation, freedom of over flight, freedom to lay submarine cables and pipelines, freedom to construct artificial islands and installations, freedom of fishing freedom of scientific research.
High seas shall be reserved for peaceful purposes. Other high seas precautions are prevention of slave trade, piracy, seizure of ships, illicit narcotics, trafficking and unauthorized broad casting
For enforcement purposes, there are provisions for relevant rights of visit, seizure, arrests and hot pursuits.
Differentiate between Rules, Regulations, Protocol, Act, Tacit Acceptance and Convention as adapted in IMO. Describe the process by which an IMO Convention gets converted into
a Statutory Rule administered by a maritime member country. Rule: is a governing authority.
Regulation: is a generally accepted condition or course of action.
Protocol: If a majority of changes are required is a convention which has been
adopted but not in force, then those are incorporated in the convention and it is called PROTOCOL.
e.g.: the Marpol Convention 1973 has also been amended by means of protocols. The 1978 marpol protocol made major changes to Marpol.
It also absorbed the parent convention and ensured that the combined Convention / Protocol instrument (called Marpol 73/78) would enter into force at an earlier date
then the present convention would have done alone (Marpol 73/78 come into force on 2nd Oct 1983).
Act: It is an action by which amendments are made to the convention. E.g. Act of STCW 95
conference, amending the STCW 78
Tacit acceptance Procedure: Technology and Techniques in the shipping industry change very
rapidly. As a result, not only are new conventions required but existing ones to be kept up to date.
IMO had no authority to adopt let alone amend conventions. Its mandate allowed it only to "Provide for the drafting of conventions, agreements or other instruments and to recommend those to governments and to Inter governmental organizations and to convince such conferences as may be necessary." IMO convention specifically stated that IMO's functions were to be "consultative and advisory." the organization could arrange a conference but it was up to the conference to decide whether the convention
under discussion should or should not be adopted and to decide how it should be amended. Most of IMO conventions could only be updated by means of "classical" (passive) amendment procedure. The number member states of IMO were rising all the time as new countries emerged and began to develop their shipping activities. As the number of parties rose, so did the total required to amend the convention. The problem was made worse by the fact that governments took for longer to accept amendments than they did to ratify the parent convention. The amendments adopted to the 1960 SOLAS convention in 1966, 1967, 1968 and 1969 had failed to enter into force till 1971. It was felt that unless the International maritime community was sufficiently responsive to these charged circumstances states will once again revert to the practice of unilaterally deciding what standards to apply to their owners shipping and to foreign flag shipping visiting their ports. Studies were made on alternative amendment procedures.
The main reason why amendments took so long to enter into force was the time taken to gain acceptance by 2/3 of contracting Governments. One way of reducing this period would be by "specifying a date of entry into force after adoption by the Assembly, unless the date of amendment is explicitly rejected by certain number or contracting Govts." The body which adopts the amendments at the same time fixes a time period within which contracting parties will have the opportunity to notify either their acceptance or their rejection of the amendment, or to remain silent on the subject. In case of silence the amendment is considered to have been accepted by the party. This is known as the "tacit" or "passive" acceptance procedure.
Convention: is a set of rules which are adopted by all countries and comes into
force on agreed date. Any changes in above conventions after date of enforcement are done through various amendments.
. Procedure for adopting a convention:
This is the part of the process with which IMO as an organization is most closely involved. IMO has six main bodies concerned with the adoption or implementation of conventions. The Assembly and council are main organs, and the committees involved are the maritime safety committee, Marine environment protection committee legal committee and the facilitation committee. Developments in shipping and other related industries are discussed by member states in these bodies and the need for a new convention or amendments to existing conventions can be raised in any of them. Normally the suggestion is first made in one of the committees, since these meet more frequently than the main organs. If agreement is reached in the committee, the proposal goes to the council and, as necessary, to the Assembly. If the Assembly or the council as the case may be gives the authorization to proceed with the work, the committee concerned considers the mater in greater detail and ultimately draws up a draft instrument. The draft convention, which is agreed upon is, reported to the council and assembly with a recommendation that a conference be convened to consider the draft for formal adoption. Invitations to attend such a conference are sent to all member state of IMO. Before the conference opens, the draft convention is circulated to the invited Govts. and organizations for their comments. The draft convention, together with the comments thereon from Govts and interested organizations is the closely examined by the conference and necessary
changes are made in order to produce a draft acceptable to all or the majority of the Govt. present. The convention thus agreed upon is then adopted by the conference and deposited with the secretary-General who rends copies to Govts. The convention is opened for signature by states, usually for a period of 12 months. Signatories may ratify or accept the convention while non-signatories may accede. The drafting and adoption of a convention in IMO can take several years to complete although in some cases, where a quick response is required to deal with an emergency situation, Govts. have been willing to accelerate this process considerably.
Before the convention comes into force that is, before it becomes binding upon govt., which have ratified it, it has to be accepted formally by individual Governments. Accepting a convention does not merely involve the deposit of a formal instrument. A Govts. acceptance of a convention necessarily place on it the obligation to take the measures required by the convention. Often national law has to be enacted or changed to enforce the provisions of the convention. Adequate notice must be given to ship owners, ship builders and other interested parties so they make, take account of the provisions of the Convention in their future acts and plans. At present IMO conventions enter into force within an average of five years after adoption.
Que: Give a brief background of ILO, its inception and its field of mandate for maritime labour development? Name the three conventions/protocols of ILO concerning maritime labour, which has came in force in 1996
Ans: Background of ILO
World War I transformed the world’s social and economic map. The International Labour Organization (ILO) emerged together with the League of Nations from the treaty of Versailles in 1919. It gave expression to the concern for social reform that grew with the industrial revolution and the conviction that realistic reform had to be conducted on an international plane. The members of the ILO were to be countries of the world member states. Created to develop international labour standards and to ensure their application, the ILO devoted the bulk of its energies to this major task during its firs forty years. During the twenty year period from 1919 to 1939. 67 conventions and 66 recommendations were adopted. Originally, standards focused on working conditions. The first convention in 1919 dealt with hours of work, the famous eight-hour day and forty eight hour week. In 1926, an important innovation was introduced when the International Labour Conference set up a supervisory system on the application of standards which still exists today. It created a committee of independent jurists responsible for examining government reports on the
application of conventions ratified by them and presenting its own report each year of the conference. Its mandate has since been broadened to cover reports on ungratified conventions and recommendations.
The International Labour office in Geneva is the permanent secretariat of the International Labour Organization, its operational headquarters research centre and publishing house. Administration and management are decentralized in regional area and branch office in more than 40 countries.
Under the leadership of a Director general who is elected for a five year renewable term. The office employs some 2500 officials and experts at Geneva headquarters and in more than 40 field offices around the world.
Regional meetings of the ILO member states are periodically held to examine the matters of special interest to the regions concerned.
The work of the governing body and of the International Labour office is aided by tripartite committees covering major industries and by committees of experts on such matters as
vocational training, management development, occupational safety and health industrial relations workers education and special problems of certain categories of workers (young workers,
women, the disabled etc). The International Labour office maintain a very comprehensive website at http://www.ilo.org/
Mandate of the ILO
The ILO formulates International labour standards in the form of conventions and recommendations setting minimum standards for basic labour rights:
Freedom of association
Right to organize
Collective bargaining
Abolition of forced labour
Equality of opportunity and treatment and other standards regulation conditions across the entire spectrum of work related issues.
It provides technical assistance primarily in the fields of:
Vocational training and vocational rehabilitation
Employment policy
Labour administration
Labour law and industrial relations
Working conditions
Management development
Co-operatives
Social security
Labour statistics and occupational safety and health.
It promotes the development of independent employers and workers organizations and provides training and advisory services to those organizations
Within the UN systems, the ILO has a unique tripartite structure with workers and employers participating as equal partners with governments in the work of its governing organs
1996 maritime Session of the International Labour Conference
the 84th (Maritime) Session of the International labour Conference concluded its work in October
1996 with the adoption of three conventions three recommendations and a protocol concerning the living and working conditions of seafarers.
Seafarers’ hours of work and the Manning of ships convention
Seafarers’ wages, hours of work and the manning of ship recommendation 1996 Labour inspection (seafarers) convention and recommendation 1996
Recruitment and placement of seafarers’ convention (revised) and recommendations 1996 1996 protocol to the Merchant Shipping (Minimum Standards) Conventions 1976
Seafarers hours of work and the manning of ships convention
The conference revised the wages, hours of work and manning (sea) convention and
recommendation 1958 (No. 109). It adopted the new seafarers hours of work and the manning of ships convention 1996 which establishes specific daily and weekly limitations on hours of work or conversely daily or weekly minimum rest periods for seafarers with the aim of preventing fatigue associated with excessive work.
It calls upon member states which ratify it to acknowledge that normal work hours shall be based on an eight hour day with one day of rest per work and then provides that maximum limits shall not exceed 14 hours per day and 72 hours in a week. Alternatively, member sates may define working time through a minimum of ten hours of rest per day or 77 hours in a week. These limitations are to be posted in an easily accessible place on board the ship.
Records of daily working hours or periods of rest are to be maintained and the competent authority is to examine and endorse these records at appropriate intervals in order to monitor compliance and if the records indicate infringements of the provisions governing hours of work or rest requires measures to be taken to avoid infringements.
The new convention has also been included in the protocol to the Merchant Shipping (minimum Standards) conventions 1976 (No.147). This means that, following sufficient ratifications, this instrument may also be subject to port state control.
19. An Indian flag vessel collided with another vessel off the coast of India, as a result few lives were also lost and vessel damaged. In accordance with the provisions under the Merchant Shipping Act, what steps should be initiated and who should initiate such steps for the safety of the ships and the marine environment
Ans. Whenever a shipping accident takes place and comes under the purview of M.S.Act as a shipping casualty, the master, the pilot or persons in charge of ship at the time of casualty is required to give notice of this casualty to officer appointed by the government under the section 358(2) of the M.S.Act. The proper officers appointed by the government are notified in the official gazette.
Preliminary enquiry:- When an officer appointed under the Act received information about the shipping casualty, he is required to conduct a preliminary inquiry about the accident. The purpose of the preliminary enquiry is to establish the following:
(a) A shipping casualty has occurred within the meaning of Act. (b) The details of the voyage leading to the casualty.
(c) Events that led to the casualty
(d) Extent to which loss of life or loss of property has occurred due to shipping casualty
(e) The causes that led to the casualty including act of incompetency, negligence or misconduct of person or persons is concerned
The preliminary enquiry, which is held under section 359 of M.S.Act is departmental enquiry and the proceedings of such enquiries are not released to public. In conducting the preliminary enquiry, the officer has the following responsibilities:
(1) To inform the central government and the state government concerned where necessary of the detail of the shipping casualties occurring within their jurisdiction (2) To go on board the ship and inspect the same including machinery and equipment,
but not unnecessarily detaining or delaying her from proceeding on any voyage (3) To enter and inspect any premises to facilitate the completion of the preliminary
enquiry
(4) To summon persons he thinks to take statement to complete the preliminary enquiry (5) To demand the production of all log books, documents or papers he considers
necessary for the enquiry
(6) To submit the report to central government
If any person refuses to attend and answer or to produce necessary evidence or to impede the enquiry, officer should call his attentions to the power given to him. In case he still refuses, he can take action under chapter X of the Indian Penal Code.
Persons who may be present at the examination; where the owner or agent of a ship, a casualty to which is being investigated signifies his desire to be present but only while witness belonging to the ships at which he is directly interested are being examined, and he must be requested to remain silent. He may take note of evidence, if he desires but should not interfere examination of witnesses. Barring this, no person is to be present in room during the examination of the witness excepting the deponent. The officer
conducting the enquiry and his clerk and if necessary an interpreter. Professional lawyers are not admitted in to the proceedings of preliminary enquiry or formal investigation. Whenever it appears that the event leading to ship casualty, demand a formal
investigation by court, the D.G.Shipping, by virtue of power delegated to him under section 360 of M.S.Act may direct the same to be held. On receipt of the order of director general the proper officer shall make an application to the court of empowered under 361. the objective of court empowered under 361 is not to punish anyone who may have been at fault, but to throw light on the cause of casualty and to consider steps to prevent such casualties in future. Only first class magistrates are empowered to conduct these formal investigations.
The courts are assisted by assessors having the requisite technical knowledge and are independent of all the interest concerned. The assessor are appointed by the court out of the list which is maintained by the directorate.
Where formal investigation involves or appears likely to involve any question regarding cancellation or suspension of certificate of competency of master, mate or engineer, the court shall be assisted by not less than two assessors having the requisite experience in merchant marine service.
Apart from the officer on whose application this investigation is undertaken, any person upon whom a notice of investigation has been served, any other interested parties may be permitted to appear at investigation and become a party to the proceedings. On the appointment time and place for holding investigation, the court can proceed with investigating witness the parties upon whom notice of investigation have been served are present or not.
Report of court, unless the cancellation or suspension of any officers certificate is not involved, the court need not tell its decision in open court. It may send or deliver to the parties a copy of the report as required by 369 of M.S.Act to be transmitted to the central government. The court should submit its report to the central government in duplicate. Where cancellation or suspension of officers certificate of competency is involved, the court may deliver its decision in open court and also send or deliver to the parties a copy of the report to be transmitted to the central government. Where the certificate is suspended and the court has recommended a certificate of lower grade should be issued, the same shall be issued by D.G.Shipping through the principal officer concerned.
The power to cancel certificate of competency – The certificate of competency may also be cancelled by central government under provision of 373 of M.S.Act
A ship is required to be registered at a specific port in India. List the documents that will be required for such registration, detailing related flow process thereof. What statutory surveys will be required to be carried out before the ship makes her first voyage?
. Normally an Indian ship is registered in any of the following ports in India i.e. Mumbai, Calcutta and Chennai. At each port, the principal officer (P.O.) of the MMD is the registrar for that ship. The registrar has a book called The Register book which carries entries made regarding the registration of ship.
Following Documents are required for registration of the ship. a) Surveyor’s Certificate
b) The Builder’s Certificate
c) Any instrument of sale, by which the ship was previously sold. d) All declarations of ownership.
1) Surveyor’s Certificate:
The owner of the ship which is to be registered in India makes the arrangements for the vessel to be surveyed by a surveyor, who then ascertains the tonnage of the ship. The surveyor grants a certificate, specifying the ships tonnage and other particulars. This certificate is delivered to the Register for purpose of registry.
2) The Builders Certificate:
In case the ship is built in India, a Builders Certificate i.e. true account of proper
denomination and the tonnage of the ship as estimated and the name of the person, if any, on whose account the ship was built to be submitted to the Registrar. If the ship is built outside India, the same evidence should be produced as in case of a ship built in India. If the place and time of her building are not known or if the builders’ certificate cannot be produced, then the instrument of sale under which ship was sold earlier is required.
3) If the ownership of the ship has been changed in the past. Those instrument of sale is required at the time of registry.
Owner (i.e. a person/company) should sign a declaration of ownership in the prescribed format containing following.
A) Statement containing citizenship of India.
B) A statement of the time and place where the ship was built. If the ship was built outside India. and time and place are not known, a statement to that effect must be given. In addition, in case of a ship previously registered outside India, a statement of the previously registered name and other particulars. c) Name of her master
d) The number of shares (of the ship) held by the individual / company ( as the case may be) and
e) A declaration that the particulars stated are true to the best of his / her knowledge and belief.
5) The give a minimum of 14 days notice to the Registrar of the name proposed for the ship. The Registrar before registering the vessel in the name of the applicant shall obtain prior approval of the name from D. G. shipping who will also allot an official number of the ship.
On being satisfied that the ship, on the strength of evidence placed before him is entitled to be Indian ship, Registrar arranges for a surveyor for the determination of her tonnage in accordance with the merchant shipping (Tonnage measurement) Rules 1987, as amended from time to time, for the purpose of issue of a certificate of survey.
After the formalities enumerated above have been gone thro’, Registrar issues a carving and marking note. This note is to be returned to the registrar after carving and marking have been duly carried out on the ship in the prescribed manner & certified by surveyor. It involves carving of name of the ship conspicuously on each side of her bows as well as insertion permanently on her stern the name of the intended port of Registry.
After entering the required particulars of the ship in the register, the registrar issues a certificate of Registry to the owner.
Explain the following maritime term:
(a) Charter Party (b) Freight (c) Bare Boat Charter (d) Bill of Lading (e) Lay Time, Demurrage and Off-Hire.
Charter party: In trumping the market conditions strongly influence the freight that has to be paid. The contract between two parties is called the charter party.
Charter parties are contracts of affreightment under which the shipowner, in return for a sum of money called the freight or charter hire aggress to carry goods in bulk by sea or provide services of a vessel for the purposes of such carriage.
There are no international conventions governing charter parties. Most countries have also not made laws for regulating chartering practices. The terms and conditions of charter parties have been evolved over a period of years in preparing with the growth of maritime commerce and the shipping industry.
Organization like the UK chamber of shipping and the BALTIC INTERNATIONAL MARITIME CONFERENCE (BIMCO) in Copenhagen have played a significant role in evolving international accepted CHARTER PARTIES. Besides such standard forms, there are also a number of private charter party’s forms evolved by individual commodity producers and merchants. Thus, charter parties could vary from place to place and also from one commodity o another.
The chartered will normally employ brokers to hire a ship for the carriage of their cargoes. They may be carrying their own goods or goods of another party. They maybe a member of a
consortium conference on other multi party agreement or may be outsider. There are three important elements concerning chartering
The owner he who puts his vessel or part of the vessel at the disposal of another party for carriage of cargo.
THE CHARTERER: He who hires the vessel and pays for it
The FREIGHT: The amount of money which the charterer has to pay the owner for hiring of the vessel.
According o the contract both charterer and the owner have their own responsibilities with respect to the hired costs and the variable costs in the use of vessel. The charter party are
normally claused to allow charterers to sublet the vessel in whole are impart on condition that the charterer remain responsible to the ship-owner for the performance of original charter.
There are different types of charter parties 1. Voyage Charter
2. Time Charter 3. Bare boat Charter
Freight: The fright is expressed as per ton loaded cargo. This is usually expresses in dollars per MT or long ton. Freight is the remuneration payable by charters to the owners for the
performance of the contract and may be called charter party freight. This is normally payable in accordance with the terms of a freight clause which stipulate the amount of freight the time for payment and the method of payment.
This is often payable under the charter party terms partially or fully in advance e.g., on loading on
Q.31 issue of Bill of Lading
Dead freight is not genuine freight but owners compensation for loss of freight, payable by charterers on a quantity of cargo short shipped i.e., a quantity they agreed upon but failed to load 3) BARE BOAT OR (DEMISE CHARTER)
A bare boat charter may also be called a charter by demise or demise charter and is often described as a type of ship financing arrangement.
It will be generally on the BARE CON 89 charter party form
It is used by owners such as banks/finance organization who may not be prepared to operate or manage ships themselves.
It is a contract for the lease of a ‘vessel for an agreed period’. The legal owner ship continues to vest in the owner but her physical possession, operation
(including manning) and commercial exploitation are the responsibility of and are the benefit of the charterer.
They often have a purchaser option at the expiry of the charter period and are frequently linked to management control.
Any bills of lacking for cargo are issued by or on behalf of the charterer and not on behalf of the legal owner.
The chartered usually pay the owner a fixed hire per month in advance as detailed in agreement.
4) BILL OF LADING
The bill landing is the declaration of the master of the vessel by which the
acknowledges that he received the goods on board of his ship and assures that he will carry the goods to the place of destination for delivery, in the same condition as he received them against handing of the original bill of landing. The definition of a bill of lading given in the “HAMBURG RULES” is the following.
“BILL OF LADING” means a document which evidence a contract of carriage by sea and the taking over of loading of the goods by the carrier, and by which the carrier undertakes to deliver the goods against surrender of the document.
A provision in the document that the goods are to be delivered to the order of a named person, or to order or o bearer, constitutes such an undertaking.
The bill of lading serves as a
a) A receipt of the goods by the ship-owner acknowledging that the goods of the stated species, quantity and conditions are shipped to a stated destination in a certain ship or at least received in custody of the ship owner for the purpose of shipment.
b) A memorandum of the CONTRACT OF CARRIAGE by which the master agrees to transport the goods to their destinations all terms of the contract which was in fact concluded prior to signing of the bill of loading are repeated on the back of this document
c) A document of little to the goods enabling the consigner to dispose of the goods by endorsement and delivery of the bill of lading.
LAY TIME: The lay time is the allowed time for loading and unloading of the vessel. The lay time is determined in the charter party. If this time excelled by the charterer he has to pay the owner compensation called the
DEMURRAGE: On the other hand if the ship has loaded or discharged quicker than foreseen then the owner will have o pay the charter compensation called
dispatch. Lay time consists of a specific number of days “DAYS” means a period of 24 consecutive hours running from 0000 to 2400 hrs.
DEMURAGE: Rate of amount payable per “weather working day” a portion thereof to the ship-owner by the charter as penalty for the letters failure to load or discharge cargo within the lay time specified in the charter party provided however that the delay was not due to circumstances within the control of ship-owner or beyond control of the chartered.
OFFHIRE: It is the responsibility of the owner to provide the vessel in a seaworthy condition for the purpose of the contract and the time of contract making. Owners usually agree to exercise due diligence to make the vessel seaworthy for each voyage during the charter period.
A term charter party usually contains an undertaking by owners to maintain the vessel in a good condition throughout the charter period and owners may be required to keep the vessel in the condition she was stated to be in when the
contract was made. The term off hire means that in certain circumstances for which the charterer is not responsible, the hire will be temporarily suspended. So the hire of the vessel is suspended when the charterer cannot use the vessel for which he had hired it.
The circumstances in which “off hire” is allowed are given in the charter party.(eg- dry docking, strike of officers, crew, breakdown of machinery, to maintain efficiency of the vessel, deficiency of owner stores etc.)
The boiler and piston cleaning is included to allow owners to carryout maintenance of machinery. This period is normally 48 hours per year. The vessel goes off hire if period of maintenance is exceeded.
If deviating for owner’s purpose eg-landing a sick man, repairs, dry dock the vessels will be off hire from the moment of deviation until she is ready to resume service in a position not less favourable to the charterers.
A deduction of hire is calculated on the basis of fuel used in deviation including F.O and D.O at the port deviated to.
But if deviation is for the charterer purposes eg. stress of weather the vessel will remain on hire.
Charter party: Charter parties are contracts of affreightment under which the shipowner, in return for a sum of money called the freight or charter hire aggress to carry goods in bulk by sea or provide services of a vessel for the purposes of such carriage.
There are no international conventions governing charter parties. Most countries have also not made laws for regulating chartering practices. The terms and conditions of charter parties have been evolved over a period of years in preparing with the growth of maritime commerce and the shipping industry.
Organization like the UK chamber of shipping and the BALTIC INTERNATIONAL MARITIME CONFERENCE (BIMCO) in Copenhagen have played a significant role in evolving international accepted CHARTER PARTIES. Besides such standard forms, there are also a number of private charter parties forms evolved by individual commodity producers and merchants. Thus, charter parties could vary from place to place and also from one commodity o another.
The chartered will normally employ brokers to hire a ship for the carriage of their cargoes. They may be carrying their own goods or goods of another party. They maybe a member of a
consortium conference on other multi party agreement or may be outsider. There are three important elements concerning chartering
The owner he who puts his vessel or part of the vessel at the disposal of another party for carriage of cargo.
THE CHARTERER : He who hires the vessel and pays for it
The FREIGHT : The amount of money which the charterer has to pay the owner for hiring of the vessel.
According o the contract both charterer and the owner have their own responsibilities with respect to the fired costs and the variable costs in the use of vessel. The charter party are
normally claused to allow charterers to sublet the vessel in whole are impart on condition that the charterer remain responsible to the shipowner for the performance of original charter.
There are different types of charter parties 4. Voyage Charter
5. Time Charter 6. Bare boat Charter
LAY TIME: The lay time is the allowed time for loading and unloading of the vessel. The lay time is determined in the charter party. If this time excelled by the charterer he has to pay the owner compensation called the demurrage. On the other hand if the ship has loaded or discharged quicker than foreseen then the owner will have o pay the charter a compensation called dispatch. Lay time consists of a specific number of days “DAYS” means a period of 24 consecutive hours running from 0000 to 2400 hrs.
4) BILL OF LADING
The bill landing is the declaration of the master of the vessel by which the
acknowledges that he received the goods on board of his ship and assures that he will carry the goods to the place of destination for delivery, in the same condition as he received them against handing of the original bill of landing. The definition of a bill of lading given in the “HAMBURG RULES” is the following.
“BILL OF LADING” means a document which evidence a contract of carriage by sea and the taking over of loading of the goods by the carrier, and by which the carrier undertakes to deliver the goods against surrender of the document.
A provision in the document that the goods are to be delivered to the order of a named person, or to order or o bearer, constitutes such an undertaking.
The bill of lading serves as a
a) A receipt of the goods by the shipowner acknowledging that the goods of the stated species, quantity and conditions are shipped to a stated destination in a certain ship or at least received in custody of the ship owner for the purpose of shipment.
b) A memorandum of the CONTRACT OF CARRIAGE by which the master agrees to transport the goods to their destinations all terms of the contract which was in fact concluded prior to signing of the bill of loading are repeated on the back of this document
c) A document of little to the goods enabling the consigner to dispose of the goods by endorsement and delivery of the bill of lading. OFFHIRE:It is the responsibility of the owner to provide the vessel in a seaworthy condition for the purpose of the contract and the time of contract making. Owners usually agree to exercise due diligence to make the vessel seaworthy for each voyage during the charter period.
A term charter party usually contains an undertaking by owners to maintain the vessel in a good condition throughout the charter period and owners may be required to keep the vessel in the condition she was stated to be in when the
contract was made. The term off hire means that in certain circumstances for which the charterer is not responsible, the hire will be temporarily suspended. So the hire of the vessel is suspended when the charterer cannot use the vessel for which he had hired it.
The circumstances in which “off hire” is allowed are given in the charter party.(eg- dry docking, strike of officers, crew, breakdown of machinery, to maintain efficiency of the vessel, deficiency of owner stores etc.)
The boiler and piston cleaning is included to allows owners to carryout
maintenance of machinery. This period is normally 48 hours per year. The vessel goes off hire if period of maintenance is exceeded.
If deviating for owners purpose eg-landing a sick man, repairs, dry dock the vessels will be off hire from the moment of deviation until she is ready to resume service in a position not less favourable to the charterers.
A deduction of hire is calculated on the basis of fuel used in deviation including F.O and D.O at the port deviated to.
But if deviation is for the charterer purposes eg.: stress of weather the vessel will remain on hire.
3. What are the basic “contracts” used in Maritime transportation? Discuss the basic elements of the time Charter Party and Demise (Bareboat Charter Parties)? State the conflicts between chartering and Maritime Law?
Ans.:- Contract is an agreement enforceable by law and exists between owner and ship manager if any.
Owner, manager and any ship broker fixing the ships employment Owner, manager and any charterer of the vessel.
Owner, manager and agent appointed at each port. Master and his employer
Legal carrier and each shipper of goods on vessel.
Owner, manager and various parties engaged during a voyage such as ship chandlers. Repairing parties, tug owners, pilotage authorities, port authorities, stevedores. Individual crew members and their employers.
Ship owners and charterers. Charterers and sub-charterers. Ship owners and owners of cargo
Ship owners (or carriers) and passengers (contracts of passage)
- Contracts of carriage by sea are normally made between a shipper or charterer & a ship owner or carrier, by brokers acting as agents on their behalf. (For brokers services a separate contract is made).
An agent normally has the legal capacity to bind his principal to any contract made on the principal’s behalf, although he must always act within his authority.
A master normally has no capacity to make or alter a contract of carriage made by his employer except in except in exceptional circumstances. (E.g. when making a salvage contract in time of peril, or in circumstances where he becomes an agent of necessity when unable to communicate with its principal.
Time Charter: - is a contract for the services of the vessel for a specified period of time which could vary from one trip (trip time charter) to as much as a few years. The owners retain possession of the vessel & provide the master & crew, provisions, insurance deck and engine stores & have the responsibility of maintaining the vessel in an efficient state in hull, machinery & equipment. The charterers provide and pay for fuel, port and canal charges, pilotage, tugs, agency fees & commissions. The time charter forms in common use are NYPE, BALTIME, ASBATIME, SHELLTIME, INTERTANKTIME & SUPPLYTIME. The charterer-hire is generally on a daily rate & is usually payable in advance every fortnight/every month.
Bareboat Charter or Demise Charter: - Is rather more in the nature of a ship financing
agreement for the services of the ship. In this arrangement the legal ownership continues to vest in the owner but her physical possession, operations (including manning) & commercial
exploitation are the responsibility of & are for the benefit of the charterer. Bareboat charters often have a purchase option at the expiry of the charter-period & are frequently linked to a management contract. The owners are often banks or investment companies who do not have the expertise to operate or manage ships. Any Bills of Lading for cargo loaded are issued by or on behalf of the charterer & not on behalf of the legal owner. The most-often used form for this type of agreement is “Barecon-89” published by BIMCO. The charter hire is generally payable in advance on the basis of per annum. Que: State the responsibilities and liabilities under the
Explain the difference between Hague rules and Hague visbey rules.
Ans: The duties of the ship-owner/carriers are covered under Article (iii) of Hague Visby rules. I) The carrier is obliged to exercise due diligence before and at the beginning of the voyage in respect of the following:
(a) to make the ship seaworthy
(b) to properly man, equip and supply her
(c) to make the holds and other places where goods are to be carried fit and safe for their reception carriage and preservation.
II) The carriers duty to exercise due diligence in the above respects is a paramount duty and an overriding obligation. If subsequently it is established that loss of or damage to cargo resulted from failure of the carrier to exercise due diligence, the carrier will not be permitted to avail of the benefit of the protection, otherwise available to him under the rules.
III) The carrier is obliged to properly and carefully load handle, stow, carry and discharge the cargo. The carrier must have a proper system for taking care of cargo during the time he is in custody thereof. This provision includes aspects such as security, ventilation, maintenance of required temperature and avoidance of contamination
(IV) The carrier must demand of the shipper, a bill of lading showing (a) Leading marks necessary for identification of goods. (b) Number of packages or the quantity or weight in writing by the shipper (c) The apparent order and condition of goods.
(V) A bill of lading issue as above must be a ‘shipped’ Bill of lading, provided that the shipper has surrendered any ‘Mate’s Receipt or “Received for shipment” Bill of lading (issued prior to the issue of the bill of lading)
Such a Bill of Lading is also a prima-facia evidence of receipt of goods as described therein but proof to the contrary is not admissible where the B/L has been endorsed/transferred to a third party acting in good faith.
CARRIER’S LIABILITIES
(I) Unless the value of goods has been declared by the shipper before shipment and has been inserted in the Bill of lading the carrier’s liability for loss of or damage to goods is limited as provided in the rules
(ii) Under the Hague Rules, the carriers liability was restricted to G.B. pounds 100 (gold equivalent) per package-unless of course a higher limit had been mutually agreed.
(iii) By Hague Visby amendments in 1968, the above limit was raised to 10,000 francs per package or 30 francs per kilogram (whichever is higher). A frame meant 65.5 mgs of gold of 900/1000 fineness (90% pure gold)
(iv) By amendments in 1979, the above limits were further raised to 666.67 SDR’s per package or 2SDR’s per kg.
(v) The 1968 amendment provided that where a container/pallet or “similar article of transport” is used to consolidate goods, the number of packages mentioned in the B/L as packed in such article of transport shall be deemed to be the number of packages as far as these units are concerned.
RESPONSIBILITIES OF SHIPPER
(i) The shipper is the person who has a legally binding contract with the carrier. It is the shipper’s responsibility to provide accurate information about the cargo.
(ii) Following information must be included in the B/L (a) Shipper’s identity (b) Vessel name
(c) Port of loading (d) Port of discharge (e) Quantity of cargo.
As far as possible the master should insert words viz., ‘shipper figures’ or ‘shore figures’ or ‘weight and quantity unknown’ to protect the carrier from claim short loading date of loading (g) condition of goods (h) freight (i) condition of carriage
(iii) The shipper has to clearly declare, the nature of goods being shipped when goods are being shipped without the knowledge of consent of carrier, the carrier is free to jettison land or destroy the goods without any liability.
(iv) The shipper is responsible for all damages and expenses resulting from the shipment of dangerous goods, even when such goods are shipped with carrier’s knowledge. The carrier can deal with the goods when they become dangerous to the ship without any liability except general average. But in such a case, the shipper is not liable for any consequential loss.
LIABILITIES OF SHIPPER
1. If the value of goods has not been declared in the B/L the shipper will get only 666.6 SDR’s per package or 2 SDR’s per kg
2. In case of loss or damage, written notice must be served on the carrier within are year of delivery of goods.
DIFFERENCE BETWEEN HAGUE RULES AND HAGUE VISBY RULES
1) Under Hague rules (framed in 1920’s) carriers liability was restricted to GB pounds 100 (gold equivalent) per package.
Under Hague-Visby rules, this limit was raised to 10,000 francs (gold equivalent) per package or 30 francs per kg
2) As per Hague Visby rules, the carrier loses his right to limit liability, if the damage to cargo resulted from an act or omission of the carrier, done with the intent to cause such damage. As per Hague rules, no such provision were provided. Thus the carrier could limit his liability to 100 GB pounds even if the damage caused to cargo was done intentionally with the intent to cause damage.
34.Elaborate the influences of a Charterer on operation of propulsion and other shipboard machineries during a voyage. A ship on a time- charter if met with several unforeseen machinery breakdowns due to which the scheduled date cannot be met with, stale the different options and actions a Chief Engineer on-board should undertake.
Ans. The different types of charter parties are
(1) Voyage Charter (2) Time Charter (3) Bareboat Charter.
In case of a voyage charter and time charter, it is the responsibility of owner to take care of ships propulsion machinery and other machineries on board.
In case of any breakdown :
(a) In case of voyage charter in breakdown if laycan is not met i.e. at agreed time if the vessel is not presented at agreed port or place, the charterers are entitled to reject the vessel and cancel the charter.
(b) In case of time charter, loss of time governed by the so called off hire clause. This clause provides that time charter shall not be required to pay hire for such time as is caused by breakdown of machinery or repairs. (c) In case of bareboat charter all responsibilities regarding navigation,
propulsion and maintenance of shipboard machinery remains with charterer itself.
Prior taking a ship on charter following things (but not limited to ) are taken in to consideration by the charterer:
(1) Description of the vessel name, flag, ownership, class, gross and net tonnage, cargo capacity and horsepower etc.
(2) Speed and fuel consumption in function of determined weather conditions (in good weather & smooth water)
Time charter has a major concern in speed of the ship and fuel consumption as it determines the time period between ports and also the expenses to be incurred on fuel in the voyage. Minimum speed agreed in charter party has to be achieved and any deviation in case of speed or fuel consumption if any, then the owner has to pay compensation to the charterer.
Voyage charter has stipulated laycan so in order to meet that a minimum agreed speed has to be achieved/maintained during the voyage otherwise charterer is entitled to reject the vessel and cancel the charter.
(3) Apart from propulsion machinery the charterer can also ask for following reports:
a) Aux. eng. fuel consumption per day b) Conditions of hatches/tanks
c) Boiler fuel consumption d) DO cons. in IGG (gas ships) e) Cargo machinery
f) Mooring & windlass g) Navigation
h) General condition of vessel i) Vetting inspection defect list
j) CAP survey reports of hull and machinery
For delivering the cargo at agreed terms and conditions in charter party, other machinery also play vital role.
Time Charter:- This means a vessel is to be operated for a period of time under charter without undertaking either the financial commitments of ownership or
responsibilities of navigation and management of vessel.
If too much unforeseen machinery breakdown have occurred and ship cannot
meet with the scheduled date, a chief engineer on board should undertake following options and actions:
In case of time charter a period of 48 hrs is allowed for the shipowner per year to carry out maintenance jobs on boiler and main engine.
So in case the breakdown is on ME or boiler, the C/E must ensure that
maintenance is carried out within the stipulated time by charter party. To expedite the work, the option of making two teams to work on ME can be considered in that when one group is working the other can take rest and work goes on continuously till the job is over, to ultimately avoid the possibility of off-hire vessel.
In case of breakdown:-
1) Company must be informed regarding the breakdown machinery and proposed maintenance action must be reported also
2) Any special assistance required like some spare parts/stores or technicians must be discussed with company
3) Anticipated time for carrying out the maintenance must be reported to company
4) Make separate teams to work on the machinery so that work is in progress all the time till maintenance is over and machine is ready to start
5) Motivate the crew and engineers and be a part of team. This will be an encouraging factor to all and work can be done efficiently and effectively 6) Appreciate and encourage the crew and engineers
If the breakdown is not over within time stipulated by charterparty, after discussion with company the following action may be taken –
(a) Speed of ship may be increased within safe limits. This should be done in consultation with the company because increase in speed increases fuel consumption which may deviate from that mentioned in charterparty.
(b) The load on diesel generator should be reduced if possible to compensate for increase in fuel consumption.
(c) After discussion with master the course of ship may be altered keeping in mind the safety of ship
(d) A more vigilant watch must be kept on the machinery to avoid further breakdowns and engineroom to be manned at all times.
Company to be well informed about the condition of machinery.
Q1/60- Define the salient consideration taken during survey of ship under i) Bareboat charter ii) Voyage charter iii) Time charter. As a C/E on board, explain with reasons, which of the three surveys is most demanding and exhausting and why?
Charter : is the contract between the ship owner and the charterer for the use of a ship or her
services for a particular voyage or for series of voyages, or for a stipulated period of time.
Contracts for hire of specified vessels, includes o time charters
o Bare boat charters (also know as "demise charters). o Voyage charter
Bareboat charter:
Is a contract for the hire of a vessel for an agreed period during which the charterers acquire most of the rights of the owners.
(Is most usually on the BARECON 89 charter party form
Is used by owners such as banks & finance houses who are not prepared to operate or manage ships themselves.
May be hinged to a purchase option after expiry of the charter or during the hire period.)
In essence the vessel owners put the vessel at the complete disposal of the charters and pay the capital costs, but no other costs. The charters have commercial and technical responsibility for the vessel, and pay all costs except capital costs.
The "BARECON A" from under which the owners bear responsibility for insurance premiums, was designed by BIMCO for short period chartering.
The "BARECON B" form was designed as a long-period, financial type of contracts, mainly for new buildings although it can be modified for second -hand tonnage. The charters are responsible for insurance premiums.
BARECON 89 is an amalgamation of the BARECON "A" and "B" forms, designed to reflect the growing use of Bareboat charter registration. There will be an agreement, that there will be an on hire survey. In the case of new ship building the survey procedures can be done in the yard itself according to the agreement. In other cases there is a thorough examination considering the following points.
- Bunkers on board
- Stores & spares on board. - General condition of the vessel. - Certificates validity
- Tanks condition - Sea worthiness.
As a Chief engineer, you are responsible for maintaining the equipment in good condition. Bunker on board to be properly calculated and kept ready for the surveyors to check. Cleanliness and proper P.M.S. system has to be maintained in view of seaworthiness. It is a more stringent survey since the charter takes the responsibility of the vessel in full respect except capital cost. All crew members to be aware of the safety procedure and safe working practices according to the company's quality management system. In this regard proper training and briefing to be given before surveys.
Voyage Charter: is a contract for the carriage by a named vessel of a specified
quantity of cargo between named posts or places.
The ship owner basically agrees that he will present the named vessel for loading at the agreed place within an agreed period of time a following loading, will carry the cargo to the agreed place, where he will deliver the cargo.
The charter agrees to provide for loading, within the agreed period of time, the agreed quantity of the agreed commodity, to pay the agreed amount of freight, and to take delivery of the cargo at the destination place.
In effect the charterers hire the cargo capacity of the vessel and not the entire vessel. The owner must provide the master and crew, act as carrier and pay all running and voyage costs, unless the charter party specifically provides otherwise.
The survey under voyage charter is not very strict as compared to other charter party : The charter mainly interested in sea worthiness and condition of the cargo space. The surveyor checks for whether the vessel can carry the cargo of particular quantity and to be able to discharge within an agreed period of time.
As a Chief Engineer one should take care of cargo hold/ tank, cargo gear condition. It any repairs are necessary to keep the same in good condition, that has to be carried-out. He has to prove that the ship is able to carry the cargo safely and vessel able to reach in proper time which is agreed.
Time charter : is a contract for the hire of a named vessel for a specified period of
time.
(The charters agree to hire from the ship owner a named vessel, of specific technical characteristics, for an agreed period of time, for the chatterers purposes subject to agreed restrictions. The hire period of time, for the charters purposes subject to agreed restrictions. The hire period may be the duration of one voyage (a "trip charter") or anything up to several years ("period charters"))
The ship owner is responsible for vessels running expenses i.e., manning repairs and maintenance, stores, masters and crew’s wages, hull and machinery insurance, etc. He operates the vessel technically, but not commercially. The owner bears no cargo handling expenses and do not normally appoint stevedores.
The charters are responsible for the commercial employment of the vessel, bunker fuel purchase and insurance, port and canal dues (including pilotage, towage, linesmen etc.), and all loading stowing / trimming / discharging arrangements and costs.
A directions and logs clause requires the charters to provide the master with all instruction and sailing directions and the master and Chief Engineer to keep full and correct logs accessible to the chatterers or their agents so that they can monitor the vessels efficiently. Stevedoring damage notification forms and log abstracts will usually be required to be rent to the chatterers.
On-hire survey and delivery certificate: There will be usually agreements that there
will be an on-hire survey or delivery survey to establish. - Bunkers remaining on board (R.O.B.) in order to determine the quantity the chatterers will have to pay the owners for.
-The general condition of the vessel.
-Tanks or holds are fit for the carriage of the contemplated cargoes.
-Holds of a dry cargo vessel must be dry and swept clean, etc. and tanks for oil or chemicals must pass survey and be certified fit.
The on-hire survey is usually carried out by jointly approved surveyors, paid for 50/50 by the owners and the chatterer. Time spent on the survey is normally at the owner's risk, i.e., the vessel is not on -hire until passing of the survey.
A delivery certificate should be issued by the surveyor to confine the date and time of hand-over, bunkers R.O.B. and the condition of holds or tanks. The certificate should be attached to the survey report and is a vital document for the assessment of hire payments due and the commencement of various chatterer liabilities.
The on hire survey should not be confused with the condition survey that may be required by a prospective chatterer, particularly where this is an oil company or in the case of older tonnage.
As a Chief Engineer, one should calculate the bunker on board correctly and to keep all machinery in good condition. He has to prove that ship is able to satisfy charter party requirement regarding fuel consumption and speed. Any maintenance required for cargo holds or tanks to be carried-out prior survey to keep them in good condition.
OFF HIRE SURVEY AND REDELIVERY
CERTIFICATE:-The chatterers must normally re-deliver the vessel in the "same good order as when delivered to the chatterer, fair wear & tear excepted." In the event of redelivery not being in the same good order and condition, the charters would be liable for the costs of repairs. If the charterers are given the option of redelivering the vessel "dirty" a sum in compensation to the owners will be provided for.
The off hire survey will normally be carried out by an independent surveyor to ascertain the extent of damage done during the charter, bunkers R.O.B. etc. The redelivery clause may provide that repairs necessary to make a vessel sea worthy must be done immediately on redelivery, and any other repairs at a more convenient time, e.g. at the next dry-docking.
The off-hire survey is similar in scope to the on-hire survey Bunkers r.o.b. are measured so that they can be "brought back by the owners. The condition of the vessel and her cargo spaces is examined for damage attributable to charterers operations. A redelivery certificate should be issued to the master.
As a Chief Engineer, he should check the bunkers r.o.b. and condition of the cargo spaces. If any repairs to be done has to be notified to the surveyor.
4. Explain the following;
(a) World scale (b) Responsibilities of a shipbroker
Ans: (a) WORLD SCALE: This is used for tanker’s cargoes whereby freight rates are quoted
with reference to an international scale called the new Worldwide Tanker Nominal Freight Scale or “World Scale” in short. This is used as a reference by the parties in the tanker market to easily compare and evaluate freight rate for all the different voyages and market levels.
The basis of world scale is that the particulars of a standard tanker of 75000 tons DWT
have been chosen for making round voyage calculation for practically all known tanker trades with the comparatively few. In these calculations specified figures have been used
for all items involved, e.g. a distance of 15000 nautical miles, port cost, port
time(hour/days) bunker cost, etc. and the additional fictional cost element of 12000
dollars/day. In this way the freight/MT required by the standard ship in each trade has been calculated and these freighted figures are printed in World Scale as a certain dollars/ton. These values are called world scale 100 or world scale in short. In practise, reference is made to these world scales in other freight negotiation and market reports. The prevailing market levels, the actual ship size, the type and quality of product to be supplied and also the loading place, then determine how for above or below the reference level of WS 100, the fixture will be calculated. In other words what percentage of the tabulated freight figure will be used for calculating the freight to be paid, e.g. in a fixture covering 10000 tons DWT from Gulf to Western Europe made at WS 80 means that the owner will be paid a freight equal to 80% of the freight per ton tabulated in the world scale table for the trade in question. The freight rates are normally negotiated on a fixture, using world scale for the basis of negotiations. It is called the world scale freight rate.
Advantages:
2) Simplified negotiations for tanker charterers.
3) A simple reference covers all possible voyages within the agreed trading areas. 4) Facilitate ready and quick comparison of fixture.
Disadvantages:
1) World Scale is not a substitute for voyage estimating 2) It does not allow for income or freight tax etc.
3) World Scale is only a method of comparison and tool for negotiation, not a substitute for risk management and/or business forecasting.
Responsibilities of a ship broker: Ships are normally fixed on charters, between ship owners and charterers by shipbrokers acting as negotiator for the two parties. Many ship brokers are self employed, while others work in large firms active in several of above disciplines. Shipbrokers are remunerated by commissions called brokerage, payable by the ship owner to each broker involved in arranging a contract. In a voyage or time charter, the brokerage payable is stipulated in brokerage clause and is normally 1.25% of the ship owner’s gross receipts from hire, freight, dead freight and demurrage, payable to each broker involved. The professional body for ship brokers worldwide is the London based Institute of Chartered Shipbrokers. The institute sets and monitors professional standards for shipbrokers through annual examinations. Its tutorship correspondence courses enable shipbroking students (including mariners) to study for the institute’s annual exams (from which qualified mariners are granted some exemptions).
London is still the hub of international ship broking community and many individual brokers and broking firms are members of Baltic Exchange, which is essentially a ship broking market place. Most shipbroking today is conducted via the international telecommunication network.
Such specialists may be engaged by a shipowner are customarily referred to as chartering agents or chartering brokers and are paid a commission for their services
