Charterers’ orders to Safe Port

There have been some cases in which, for one reason or another, the express term obliging the charterers to send the vessel to a safe port has been omitted. That raises the following question – will the English courts imply a term into a time charterparty that any ports or places to which the ship is sent on the charterers’ orders must be safe?. For a term to be implied into a contract under English law there are certain tests which have to be met. One is that the term will give the contract what is called ‘business efficacy’, that is, make the contract work; another is that it must have been the obvious but unexpressed intention of the parties to the contract. How does this work in the context of safe ports? There was a very old case called ‘The Moorcock’ which considered the matter in the context of berths. The leading case on ports and places is ‘The Evaggelos [1971]. The brief facts are as follows: The vessel was fixed on a time charterparty and one of the areas where she was to trade was the Red Sea. There was no warranty about the safety of ports. The vessel was ordered to Suez when there was a ceasefire in the then existing Middle-East war. However, after the ship arrived to discharge, hostilities flared up and during shelling of the port the vessel was so badly damaged as to become a constructive total loss. The judge decided that, at the time the order was given by the charterers to discharge at Suez, it was a safe port and might have been expected to remain so. Therefore, although a term should be implied that the nominated port should be safe at the time of nomination and remain so until the departure from it, there was no breach by the charterers in this case. However, he did go on to state that there was an alternative claim under the employment and indemnity clause and that the charterers would be liable under that since the order to go to the port was the proximate cause of the loss. Although the decision in the ‘Evaggelos Th’ has been approved since, there may still be some doubt as whether such an implied term would always be allowed. The reason for this is that there have been decisions dealing with the safety of ports under voyage charters which have cast some doubt on the proposition if a particular port has been named in the charterparty. In the case
‘The A P J Priti’ [1987] Bingham L.J. said, of an argument that a named port should be implied to be safe, as follows: “There is no good ground for implying a warranty that the port declared was prospectively safe because the omission of an express warranty may have been deliberate, because such an implied term is not necessary for the business efficacy of the charter and because such an implied term would at best lie uneasily beside the express terms of the charter.” So, if a port was named for some reason in a time charterparty and an express term of safety was omitted then it is arguable that the owner would not be protected by an implied term in the case of the named port. The most likely possibility of this happening is in relation to named ports of delivery and redelivery (an Australian case on this point is ‘The Houston City’ [1954]. There is even some doubt that a named port in a time charterparty is covered by an express warranty of safety if it is generally known to be unsafe – see ‘The Mary Lou’ [1981]. A very recent case “The Livanita” [2008]”  has considered the issue of whether an expressly named port in a charterparty with a safe port warranty can be unsafe. In this particular case a voyage charter was involved but he same principles apply in the case of time charters. In the judgment Langley J. said that there was no inherent inconsistency between a safe port warranty and a named loading port as it limited the owners’ place of performance.