Charter Parties

A voyage charter party is where the parties agree that the vessel shall be hired for the carriage of cargo for a specified voyage or voyages. The charterer may or may not be the owner of goods. In consideration of using the vessel he pays to the owner freight. This freight may be either an agreed rate per tonne of cargo or a fixed lump sum paid to the shipowner, depending upon the commodity involved. In this type of charter party it is the shipowner’s responsibility to ensure that the vessel carries the cargo from a named port(s) of shipment to a named port(s) of destination. The Master and crew are the agents of the shipowner, not of the charterer. Thus, in this type of charter party the shipowner will be the person to whom vicarious liability for the negligence of his Master and crew will be attributed. The voyage charter party contains an express term obliging the shipowner to carry the goods from the named port(s) of loading to the destination(s) named in the charter party. Both the port(s) of loading and the port(s) of discharge must be mentioned, although the charterer may negotiate the option to declare at a later date a port (or ports) out of an agreed list of ports or out of a geographical range. (e.g. “Antwerp, Rotterdam or Hamburg”  or “one safe port Antwerp Hamburg Range”. A time charter party is where the charterer hires the vessel for a period of time within agreed limits during which time the charterer has the discretion as to how the ship shall be used. Hires is usually paid to the owners on a monthly or semi-monthly basis. Although the possession and control of the ship are not transferred to the time charterer, he is more involved with the voyage than is the voyage charterer. In a time charter party it will be the charterer who provides and pays for the fuel, pays dock and harbour dues and arranges and pays for loading and discharge. It will be the charterer who gives instructions to the Master as to which ports the vessel will go. Again, however, it should be noted that in this type of charter party the Master and crew are the servants of the shipowner. Thus, again it will be the shipowner to whom any vicarious liability is attributed.  The time charterer may negotiate the option to sub-charter (sublet) the vessel in which event the time charterer’s name will appear as the disponent owner.  The word “disponent” does not appear in many dictionaries but the expression “disponent owner” may best be defined as “deemed to be the owner but not actually the owner”.