A berth is an individual loading point on a jetty, wharf or in a dock system. If the fixture is a Berth Charterparty, then the ship will only have arrived at the agreed destination when it is securely moored to the specified or nominated berth. The NOR can only be tendered at this point.
The Berth need not be named in the Charterparty. If the fixture says 1 Safe Berth (1 SB), then that Berth is deemed to have been named in the Charterparty once it has been nominated. However, the fixture description must be read in accordance with the other terms of the Charterparty.
A Berth Charterparty places the risk of delays within the port, for example, for congestion and bad weather, on the Shipowner.
1- Port Charterparty
2- Berth Charterparty
Berth Charterparty Vs Port Charterparty
Charterparties are classified into Port Charterparty or Berth Charterparty.
In a Port Charterparty, the ship will be considered arrived when the ship has reached the fiscal and geographical limits of the port, and laytime will begin to count accordingly.
In a Berth Charterparty, laytime will not commence until the ship has reached its designated berth.
Obviously, Shipowners prefer a Port Charterparty as opposed to a Berth Charterparty; Therefore, most Charterparties are Port Charterparties.
On this basis, any time lost from the moment the ship arrives at port until it reaches its designated berth will count against the Charterer. The inclusion of the Whether in Berth or Not (WIBON) Clause in the Charterparty safeguards the interest of the shipowner and alleviates the risk of long waiting periods in busy or congested ports.
In The Finix (1975), Donaldson J. commented on Berth and Port Charters as follows: “It is well settled that where the destination is a named berth or there is an express right to nominate a berth, the charter is a Berth Charterparty, in other words, the ship is not arrived before she reaches the berth. It is also well settled that where the destination is an area of wider extent, but there is an implied right in the Charterer to nominate the berth or other discharging spot, the ship is arrived when she reaches the appropriate part of the wider area and not when she later reaches the discharging berth or spot.
There is a realm of uncertainty where the Charterparty provides that discharge shall take place at, for example,
A- “One Safe Berth, New York”
B- “New Yok, One Safe Berth.”
The test is undoubtedly whether on the true construction of the Charterparty, the destination is New York or the berth. My own view is that in Case A it is the Berth and in Case B it is New York.
In case a ship reaches a port where it is obliged to wait for its turn before cargo operations can commence, then such time lost will not count as lay time. On other occasions, the Charterparty may specify that waiting time is limited to, say, forty-eight hours (48 HRS) and laytime will commence after this period has elapsed or upon the commencement of cargo operations.
In case a ship reaches the agreed loading port within the laydays but before the canceling date, in other words, within the laycan period, then the Charterer is obliged to furnish a cargo for the ship to load. There is no such obligation if the ship arrives earlier than the laycan dates.
What is Safe Berth (SB)?
Charterers will be equally liable for the safety of berths, docks and terminals as they are for the safety of the port.
In The Terneuzen (1935) case, the ship was damaged at berth in what would otherwise have been a safe port. The Court of Appeal judges found that, although the safety clause only mentioned ports and places, that implied that the berths would also be good and safe.
If, for some reason, the safety clause only covers berths then it will not imply that the approach to the port is safe but limits the charterers’ obligation to safe movement to and from the berth or berths.
In The APJ Priti (1987) case, in which the court also confirmed that, as with a port, the safety of a berth is to be judged at the time that the charterers give the order to go there.
If a ship is directed to a place to lighten cargo by a port authority can this be considered an order of the charterers if the ship is damaged?
In The Erechthion (1987) case, the judge decided that it could and that the Charterers were liable to indemnify the Shipowners for their losses. However, in the light of earlier cases there is some doubt as to whether suppliers or contractors are agents who can bind the charterers if they give orders for the ship to go to a place or berth which is not safe.
If the Shipowner agrees to a berth that requires the ship to lie aground for part of the loading time, then the safety clause will almost certainly imply that the ground must be good and not cause any damage to the ship’s hull or steering gear.
WIBON (Whether In Berth Or Not)
In voyage charter parties, WIBON (Whether In Berth Or Not) provision has the effect of converting the Berth Charterparty into a Port Charterparty.
In Notos case, charterparty form stipulated that the ship should load a cargo of crude oil and then proceed to a submarine line as ordered by the charterer and there delivered the cargo. In the event the ship was unable to discharge at the only sea line available, firstly because of the swell existing at the time and secondly because of another ship discharging at the berth.
Notos case is different than the Laura Prima case. Particularly, in Notos, there was only one place for discharge to be nominated. Substantial cause of the delay in getting into that only place of berthing was the swell and that was certainly beyond the charterers’ control as it was a feature of the weather conditions then prevailing. Generally, doubt has always existed judicially about the legal effect on a charter party of the WIBON (Whether In Berth Or Not) provisions. Some light has very recently been thrown on this point by a case heard in the Queen’s Bench Division 1989 involving the ship MV Kyzikos chartered on a GENCON charter-party form and including WIBON (Whether In Berth Or Not) provisions. MV Kyzikos was consigned to a named berth to which in the event MV Kyzikos was prevented from access by fog even though it was available. MV Kyzikos incident was taken to arbitration as being a laytime dispute. Arbitrator found that the WIBON (Whether In Berth Or Not) provision had the effect of converting the berth charter into a port charter. Therefore, MV Kyzikos was an arrived ship and time ran against the charterer from the time of arrival except for the few hours of notice time.
Time Lost Waiting for a Berth
The most standard of these clauses drafted to shift the risk of delay is the Gencon Clause which stipulates that “time lost in waiting for berth to count as loading or discharging time. The object of this clause is to shift the risk before the ship becomes an Arrived Ship, in other words, from the time when the ship could have entered a berth had one been available.
Therefore, Berth Charterparty covers the duration while the ship is waiting in port until a berth is available. Port Charterparty covers the duration while the ship is waiting outside the port and even while it is waiting inside the port in cases where, according to The Johanna Oldendorff criteria, it is not immediately and effectively at the disposal of the Charterer.
Unavailability of Berth
Originally, the clause was practically a Berth Charterparty clause which, because of its popularity and effectiveness, was later included in Port Charterparty. This usage led to confusion since, in the case of Port Charterparty, there is the possibility of an overlap between waiting time and the laytime provisions, in that a ship could be an Arrived Ship and still, be waiting for a berth.
In the past, the courts held that the Time Lost Clauses should be given priority and treated independently of the Laytime Provisions with the outcome that the Charterer had to disburse for all time lost irrespective of whether it occurred on a Sunday or public holiday, or whether a laytime exception might otherwise have been applicable. The misconception of this interpretation was ultimately recognized by the House of Lords in The Darrah when the previous decisions on this point were overruled. Whether the Time Lost Clause provides that all time lost waiting for a berth is to count as loading time or lay time the result is the same. All such time lost is to be treated as laytime in the same way as if the ship had become an Arrived Ship.
There is no rule of law that Time Lost Clauses and Laytime Clauses form two separate and unrelated codes for calculating the amount of permitted laytime that has been used up.
Lord Diplock stated ‘the ship is to be treated as if during that period she were in fact in berth and at the disposition of the charterer for carrying out the loading or discharging operation . . . and . . . in the computation of time lost in waiting for a berth there are to be excluded all periods which would have been left out in the computation of permitted laytime used up if the ship had been in berth’.
In cases where waiting time and laytime overlap, the ship while waiting for a berth is also an Arrived Ship, Laytime Provisions take precedence and the Time Lost Clause is regarded as surplusage.
What is Berth Charterparty?
A berth charterparty is a type of charterparty agreement where the charterer is granted the use of a specific berth at the loading and/or discharging port(s) for the duration of the charter. In this type of agreement, the ship is chartered for the purpose of carrying cargo between specified ports, with the charterer being responsible for providing the berth(s) for the ship to conduct its loading and/or discharging operations.
Key elements of a berth charterparty include:
- Ship Details: The agreement will outline the particulars of the ship being chartered, such as the name, owner, flag, dimensions, deadweight, and any other relevant details.
- Cargo Details: The cargo to be loaded and carried by the ship will be specified, including its type, quantity, and any special handling requirements.
- Loading and Discharging Ports: The agreement will specify the loading and discharging port(s) and the particular berth(s) allocated for the ship’s operations.
- Laytime: The laytime allowed for loading and discharging operations will be specified, along with any terms related to demurrage and despatch.
- Notice of Readiness (NOR): The charterparty will include provisions for the submission of the NOR by the ship’s master, indicating when the ship is ready to load or discharge cargo.
- Berth Availability: The charterer is responsible for providing the berth at the specified port(s) and ensuring it is available for the ship upon arrival. The agreement may include a clause outlining the consequences if the berth is not available when the ship arrives.
- Costs and Charges: The agreement will stipulate the freight rates, and any additional costs and charges associated with the loading, transportation, and discharging of the cargo, including any port fees or other expenses incurred.
- Force Majeure: The charterparty may include a force majeure clause, which protects both parties from liability in the event of unforeseen circumstances that prevent the fulfillment of their contractual obligations.
- Dispute Resolution: The charterparty will often specify the governing law and dispute resolution mechanisms, such as arbitration or litigation, in case of disagreements between the parties.
A berth charterparty is generally used when the charterer has control over the berth(s) and wants to ensure the ship’s efficient use of the designated space during loading and discharging operations. As with any charterparty, the specific terms and conditions should be carefully negotiated and documented to minimize disputes and ensure smooth operations for both the shipowner and charterer.
Unavailability of Berth under Berth Charterparty
Under a berth charterparty, the charterer is responsible for providing a specific berth for the ship’s loading and/or discharging operations. However, there may be situations where the designated berth is unavailable when the ship arrives at the port. The consequences and remedies for berth unavailability depend on the terms and conditions outlined in the charterparty agreement. Some possible outcomes include:
- Waiting Time: If the berth is unavailable when the ship arrives, the ship may be required to wait until the berth becomes available. The waiting time usually does not count towards laytime, which means the charterer is not incurring any additional costs during this period. The charterparty agreement may specify a certain amount of waiting time that is acceptable before any penalties apply.
- Shifting Berth: The charterer may provide an alternative berth for the ship to use while waiting for the designated berth to become available. In this case, the costs and time associated with shifting to the alternative berth may be borne by the charterer, and any additional waiting time may count towards laytime, depending on the terms of the charterparty.
- Demurrage: If the waiting time due to berth unavailability exceeds the allowed waiting time specified in the charterparty, the charterer may be liable for demurrage. Demurrage is a compensation paid by the charterer to the shipowner for the additional time spent waiting for the berth to become available, which goes beyond the agreed laytime.
- Cancellation: If the berth remains unavailable for an extended period, the shipowner may have the right to cancel the charterparty agreement, depending on the terms and conditions specified. This cancellation may lead to the charterer compensating the shipowner for the losses incurred due to the cancellation.
- Force Majeure: The charterparty may include a force majeure clause, which protects both parties from liability in the event of unforeseen circumstances (such as extreme weather conditions, labor strikes, or other events beyond their control) that prevent the fulfillment of their contractual obligations, including berth availability.
It is crucial for both shipowners and charterers to carefully consider and negotiate the terms and conditions of a berth charterparty agreement to minimize disputes and ensure smooth operations. Proper communication and cooperation between the parties are essential in handling any berth unavailability issues effectively.
What is the difference between Berth Charter and Port Charter?
Berth charter and port charter are two different types of charterparty agreements in the shipping industry. They differ mainly in the specificity of the location where the ship is to load or discharge cargo at the port. Here are the main differences between the two:
- In a berth charter, the charterer is responsible for providing a specific berth at the loading and/or discharging port(s) for the ship to conduct its operations. The agreement will explicitly mention the berth(s) allocated for the ship’s loading and discharging operations.
- The charterer is responsible for ensuring that the designated berth is available when the ship arrives. If the berth is unavailable, the charterer may be liable for any additional costs, demurrage, or delays incurred by the shipowner.
- Berth charter agreements are typically used when the charterer has control over the berth(s) and wants to ensure the ship’s efficient use of the designated space during loading and discharging operations.
- In a port charter, the agreement specifies the loading and discharging port(s), but it does not mention a particular berth for the ship’s operations. The ship is required to load or discharge cargo within the port area, and the actual berth assignment is determined by the port authority or terminal operator.
- The shipowner and master of the ship usually coordinate with the port authority or terminal operator to secure a berth for loading or discharging operations. The charterer’s responsibility in a port charter is limited to providing cargo and ensuring it is ready for loading or discharging within the port area.
- Port charter agreements are commonly used when the charterer does not have direct control over the berths within the port or when the actual berths may not be known in advance due to factors such as port congestion or operational constraints.
The primary difference between berth charter and port charter lies in the allocation of responsibility for securing a specific berth at the loading and discharging ports. In a berth charter, the charterer is responsible for providing a designated berth, whereas, in a port charter, the shipowner coordinates with the port authority or terminal operator to secure a berth within the port area.
What is WIBON?
WIBON, which stands for “Whether in Berth or Not,” is a term used in charterparty agreements in the shipping industry. It is a clause that affects the commencement of laytime, the period allowed for loading or discharging cargo without incurring additional costs.
When a WIBON clause is included in a charterparty agreement, it indicates that the ship’s laytime can commence even if the ship is not in its designated berth. This may happen, for example, when the ship has arrived within the port limits but is unable to proceed to its berth due to congestion, bad weather, or other factors beyond the control of the shipowner or charterer.
The WIBON clause is typically used in conjunction with other clauses, such as WIFPON (Whether in Free Pratique or Not) and WICCON (Whether in Customs Clearance or Not), to determine when laytime commences. In a charterparty agreement containing a WIBON clause, the laytime will start once the ship has arrived at the port, submitted its Notice of Readiness (NOR), and fulfilled any other requirements specified in the agreement, even if it has not yet reached its designated berth.
The inclusion of a WIBON clause is essential to ensure a fair allocation of risks between the shipowner and the charterer in case the ship is unable to proceed to its berth immediately upon arrival at the port. It prevents the shipowner from incurring undue demurrage charges and ensures that the charterer is still responsible for completing the loading or discharging operations within the agreed laytime.
What is Safe Berth (SB)?
A Safe Berth (SB) is a term used in the shipping industry to describe a berth that is designated as safe for a ship to conduct its loading or discharging operations without any undue risk to the ship, its crew, or its cargo. The concept of a safe berth is an essential part of charterparty agreements, as it ensures that the ship is protected from potential hazards while performing its operations.
A berth is considered safe when it meets the following criteria:
- Accessibility: The ship should be able to reach the berth without facing any undue navigational risks, such as extreme weather conditions, shallow waters, or obstructions that may cause damage to the ship.
- Suitability: The berth should be suitable for the ship’s specific requirements, including its size, draft, and cargo type. This means that the berth should have the necessary infrastructure and equipment to accommodate the ship and facilitate its loading or discharging operations.
- Security: The berth should be located in a secure area, free from any threats of piracy, theft, or other unlawful activities that may jeopardize the safety of the ship, its crew, or its cargo.
- Availability: The berth should be available for the ship’s use upon arrival, without any undue delays caused by port congestion, berthing conflicts, or other operational issues.
- Safe departure: The ship should be able to safely leave the berth once the loading or discharging operations are completed, without facing any undue navigational risks or other hazards.
In a charterparty agreement, the charterer is typically responsible for providing a safe berth for the ship at the loading and discharging port(s). Failure to provide a safe berth may result in a breach of contract and could lead to the shipowner claiming damages or other remedies, depending on the terms of the charterparty. It is crucial for both parties to clearly define and understand the concept of a safe berth to ensure smooth and safe operations throughout the charter period.