Charterparty Protecting Clauses

A voyage charter-party form commonly ends with a group of standard contractual provisions known as Protecting Clauses. These clauses are not decorative additions. They are designed to allocate risk, preserve rights, reduce uncertainty, and provide practical solutions when events occur outside the ordinary loading, carrying, and discharging of cargo.

Protecting Clauses have developed through maritime practice, court decisions, insurance requirements, P&I Club recommendations, and the commercial need to protect the shipowner’s interests while still giving the charterer a workable contractual framework. In voyage chartering, a ship may trade across different ports, jurisdictions, weather zones, political conditions, and cargo environments. For that reason, a well-drafted charterparty must address not only freight, laytime, demurrage, cargo description, and port rotation, but also the extraordinary risks that can affect the voyage.

The most widely used Protecting Clauses include:

P&I (Protection and Indemnity) Bunkering Clause
Both to Blame Collision Clause
New Jason Clause
Ice Clause
War Risks Clauses

These clauses are particularly important because maritime operations involve risks that may produce heavy financial consequences. Bunker disputes may affect machinery and pollution exposure. Collisions may involve cargo claims and cross-liabilities. General average may require contributions from cargo interests. Ice may prevent safe navigation or delay the voyage. War risks may make a route or port commercially and physically dangerous. Each protecting clause therefore operates as a risk-management tool inside the charterparty.

1- P&I (Protection and Indemnity) Bunkering Clause

The P&I (Protection and Indemnity) Bunkering Clause is a charterparty provision dealing with the responsibilities, liabilities, insurance position, and operational standards connected with the supply of bunkers to the ship. Bunkering is the process of supplying marine fuel for the ship’s engines and auxiliary machinery. Although bunkering may appear to be a routine port operation, it can create serious risks, including fuel contamination, quantity disputes, machinery damage, overflow, pollution, fire, crew injury, and claims from third parties.

A properly drafted P&I (Protection and Indemnity) Bunkering Clause should make clear which party is responsible for arranging bunkers, paying for bunkers, selecting the supplier, verifying quality, supervising delivery, taking samples, keeping records, and responding if a problem occurs. In many chartering arrangements, the allocation of these duties depends on whether the charter is a voyage charterparty, time charterparty, contract of affreightment, or another commercial structure.

A typical P&I (Protection and Indemnity) Bunkering Clause may address the following matters:

Responsibilities: The clause should define the obligations of the shipowner and charterer during the bunkering operation. The charterer may be required to supply fuel that is suitable, lawful, and compliant with the agreed specification, while the shipowner must ensure that the ship is ready to receive, segregate, store, and use the bunkers safely.
Quality and Quantity: The clause should identify the grade, specification, sulfur content, viscosity, density, flash point, and quantity of fuel to be supplied. Reference may be made to recognized marine fuel standards such as ISO 8217 where appropriate. Clear fuel specifications help prevent disputes over off-spec bunkers and reduce the risk of damage to the ship’s machinery.
Bunker Suppliers: The clause may require the use of reputable bunker suppliers or suppliers approved by the shipowner, charterer, or P&I Club. Supplier selection is commercially important because poor-quality bunkers can cause delays, engine problems, off-hire disputes, or expensive de-bunkering operations.
Bunkering Procedures: The clause should set out the practical procedures for safe bunkering, including pre-delivery checks, communication between the ship and supplier, hose connection, drip tray use, valve control, sampling, record-keeping, bunker delivery notes, and emergency response. Proper procedure reduces the likelihood of spills and operational accidents.
Insurance: The clause should confirm the P&I insurance position for liabilities that may arise during bunkering, including pollution, personal injury, property damage, wreck-related exposure, and third-party claims. The presence of adequate P&I cover is vital because even a small spill may generate large clean-up costs and regulatory consequences.
Indemnity: The clause should contain an indemnity mechanism so that one party is protected against losses caused by the other party’s negligence, breach of the charterparty, wrongful instruction, unsuitable fuel supply, or failure to follow agreed procedures. The indemnity wording should be precise because bunker claims can involve several parties, including bunker traders, physical suppliers, port authorities, insurers, and cargo interests.
Reporting and Notification: The clause may require prompt notification of fuel contamination, shortage, unsafe delivery, spill, machinery difficulty, or non-compliance with local or international regulation. Fast reporting allows the parties to preserve evidence, notify insurers, arrange surveys, mitigate loss, and protect legal rights.

Incorporating a careful P&I (Protection and Indemnity) Bunkering Clause into a charterparty helps reduce uncertainty during bunkering operations. It creates a practical framework for fuel delivery, protects the shipowner and charterer against avoidable exposure, and supports the safe and lawful operation of the ship.

2- Both to Blame Collision Clause

The Both to Blame Collision Clause is a provision found in charterparties and bills of lading to deal with liability where two ships collide and both are partly at fault. Collision law can become complex because the carrying ship, the non-carrying ship, cargo interests, insurers, and third-party claimants may all have separate rights and remedies. The purpose of the clause is to protect the shipowner against an indirect cargo claim that may arise because of the way collision liability is apportioned.

In a collision where both ships are negligent, each ship may be responsible for part of the resulting loss according to its degree of fault. Cargo interests may recover against the non-carrying ship, and the non-carrying ship may then seek contribution from the carrying ship. The Both to Blame Collision Clause is designed to ensure that cargo interests contribute back to the carrying ship where the clause applies, preventing the cargo side from recovering indirectly what it could not recover directly from the carrying ship under the contract of carriage.

A typical Both to Blame Collision Clause may include the following elements:

Allocation of Liability: The clause should state how liability is to be handled if both ships involved in the collision are at fault. Liability is usually divided according to the degree of fault attributed to each ship, subject to the governing law and applicable collision regime.
Indemnity: The clause may require cargo interests or the relevant contractual party to indemnify the shipowner for certain amounts that the shipowner is compelled to pay because of cross-claims following a both-to-blame collision. This helps preserve the intended risk allocation under the bill of lading or charterparty.
Cargo Interests: The clause should address the position of cargo owners, receivers, shippers, and insurers. Cargo interests may be required to contribute to claims paid by the carrying ship where those claims arise from the collision and fall within the clause.
Insurance: The clause is closely connected with hull and machinery insurance, P&I cover, cargo insurance, and collision liability insurance. A well-drafted clause should fit the insurance structure and avoid conflict with policy terms or P&I Club rules.
Claims Handling: The clause may provide a process for notification, survey, documentation, exchange of evidence, settlement negotiations, litigation, arbitration, and preservation of rights. Collision claims often require technical evidence, navigational records, voyage data, crew statements, and expert analysis.
Governing Law: The governing law and jurisdiction are important because collision liability, cargo rights, limitation of liability, and enforceability of the clause may vary between legal systems. Clear law and jurisdiction wording reduces uncertainty if a dispute arises.

The Both to Blame Collision Clause remains an important protective device because collisions can produce large and complicated claims. By including the clause in the charterparty or bill of lading, the parties establish in advance how part of the financial burden will be handled if both ships are legally responsible for the casualty.

3- New Jason Clause

The New Jason Clause is a charterparty and bill of lading provision dealing with contribution to general average. General average is an old maritime principle under which extraordinary sacrifices or expenses voluntarily and reasonably incurred for the common safety of the ship, cargo, and other property at risk are shared proportionally by the interested parties. Examples may include jettison of cargo, salvage expenses, port of refuge costs, emergency repairs, or other extraordinary measures taken to preserve the maritime adventure.

The New Jason Clause developed in response to legal issues arising under United States law, particularly after the decision connected with The Jason. Its practical function is to preserve the shipowner’s right to collect general average contributions from cargo interests even where the casualty may have resulted from negligent navigation or management of the ship, provided the shipowner has exercised due diligence to make the ship seaworthy before and at the commencement of the voyage.

A typical New Jason Clause may cover the following points:

General Average: The clause should state that, if a general average act occurs, the shipowner, charterer, cargo interests, and other parties with a financial interest in the adventure will contribute to general average expenses according to their respective values and interests.
Preconditions for Contribution: The clause commonly requires that the shipowner has exercised due diligence to make the ship seaworthy. This condition is important because general average contribution should not be available to a shipowner who has failed to meet essential seaworthiness obligations.
Notice and Documentation: The clause may describe the procedure for declaring general average, notifying cargo interests, appointing an average adjuster, collecting documents, and preparing the general average adjustment. Accurate documentation is essential because contribution depends on values, expenses, sacrifices, and legal entitlement.
Security: The clause may require cargo interests to provide general average security before cargo delivery. This may include a general average bond, general average guarantee, cash deposit, or insurer’s undertaking. Security protects the shipowner and other contributing interests against non-payment after the cargo has been released.
Salvage and Special Compensation: The clause may also address the treatment of salvage, special compensation, port of refuge expenses, and related costs. These items can be significant and may require careful adjustment under the relevant general average rules.
Governing Law and Dispute Resolution: The clause should be consistent with the chosen law, jurisdiction, arbitration clause, and applicable general average rules. Clear dispute resolution wording helps avoid delay when large cargo values and multiple interests are involved.

Including the New Jason Clause in a charterparty or bill of lading protects the shipowner’s right to general average contribution while giving cargo interests a defined legal basis for contribution and security. In international shipping, where one casualty may involve many cargo owners and insurers, the clause is a practical and commercially important safeguard.

4- Ice Clause

The Ice Clause is designed to deal with the dangers and delays that may arise when the ship must navigate to, from, or through ice-affected waters. Ice can prevent entry to a port, close a berth, damage the hull, restrict maneuvering, slow the voyage, require icebreaker assistance, or make safe navigation impossible. In trades involving northern Europe, the Baltic, Canada, Russia, the Great Lakes, Arctic routes, or winter-season ports, ice wording can be one of the most important protective clauses in the charterparty.

An effective Ice Clause must balance the charterer’s commercial desire to use the nominated port against the shipowner’s obligation to protect the ship, crew, cargo, and maritime adventure. The master must not be forced into ice conditions that are unsafe for the ship’s class, equipment, construction, crew capability, or prevailing circumstances.

A typical Ice Clause may include the following elements:

Safe Navigation: The clause should confirm that the master and shipowner may decide whether it is safe to enter, remain in, or proceed through ice-affected waters. The decision may depend on the ship’s ice class, hull strength, engine power, equipment, weather forecasts, ice reports, local authority instructions, and availability of icebreaker assistance.
Route Deviation: The clause may permit the ship to deviate from the ordinary route, delay the voyage, remain outside an ice-bound port, or proceed to an alternative safe place if ice conditions make the original route or port unsafe. Such action should not automatically amount to breach of charterparty if taken within the clause.
Notice and Communication: The clause should require prompt communication between the shipowner, charterer, master, agents, and relevant port authorities when ice affects the voyage. Clear communication allows the parties to arrange alternative orders, revise schedules, notify cargo interests, and manage commercial consequences.
Costs and Expenses: The clause may allocate additional costs caused by ice, including extra bunkers, waiting time, icebreaker dues, pilotage, tugs, port charges, damage repairs, deviation expenses, or substitute port costs. Without clear wording, these expenses can become a source of serious dispute.
Off-hire: In time charter contexts, the clause should specify whether the ship remains on hire during ice delays, deviation, waiting, or icebreaker convoy. In voyage chartering, the wording may also affect laytime, demurrage, exceptions, and cancellation rights.
Indemnity: The clause may require one party to indemnify the other for losses caused by unsafe orders, failure to follow the clause, negligence, or breach of agreed ice procedures. The indemnity should be drafted carefully because ice-related claims may include delay, hull damage, cargo deterioration, and third-party expenses.
Governing Law and Dispute Resolution: The clause should be consistent with the charterparty’s law and arbitration or litigation provisions. Ice disputes often turn on factual evidence, including ice charts, port reports, weather data, master’s logs, and expert navigation opinion.

A well-drafted Ice Clause gives the master operational authority to protect the ship while giving the charterer clarity on the commercial effect of ice-related interruption. It is especially valuable where seasonal trading patterns make ice a foreseeable but uncertain risk.

5- War Risks Clauses

War Risks Clauses address the dangers that may arise when a ship is ordered to proceed to an area affected by war, hostilities, terrorism, piracy, civil unrest, sanctions, blockades, mines, seizure, detention, or similar threats. These clauses are essential because war risk is not limited to declared war. Modern maritime risk may arise from regional conflict, missile attacks, piracy zones, port instability, political violence, sanctions enforcement, or security threats against commercial shipping.

War Risks Clauses are intended to protect the ship, crew, cargo, shipowner, and charterer by creating a contractual process for assessing danger and responding to it. They often allow the shipowner or master to refuse unsafe orders, deviate from a dangerous route, change port rotation, require additional security measures, or demand payment of extra insurance and war-risk-related expenses.

A typical War Risks Clauses section may include the following elements:

Definition of War Risks: The clauses should define war risks broadly enough to include war, hostilities, civil war, revolution, rebellion, terrorism, piracy, sabotage, mines, blockades, sanctions-related detention, capture, seizure, arrest, restraint, and similar dangers that may threaten the ship, crew, or cargo.
Safe Navigation: The clauses should confirm that the shipowner and master may assess whether it is safe for the ship to proceed to, remain at, or pass through a risky area. Relevant factors may include security intelligence, naval warnings, Joint War Committee listings, insurer requirements, local notices, crew safety, and the ship’s security arrangements.
Route Deviation or Port Changes: The clauses may allow the ship to deviate, delay, proceed by a safer route, refuse a nominated port, change discharge place, or suspend performance where war risks make the original employment unsafe. The clause should make clear that safety can take priority over the original commercial order.
Notice and Communication: The clauses should require the shipowner, charterer, master, agents, and insurers to exchange information promptly when war risks arise. Clear communication is necessary for rerouting, security arrangements, cargo instructions, insurance notifications, and evidence preservation.
Costs and Expenses: The clauses may allocate additional costs such as war risk premiums, kidnap and ransom insurance where lawful and applicable, armed guards where permitted, security escort costs, deviation bunkers, waiting time, port charges, canal alternatives, crew bonuses, and increased operating expenses.
Off-hire: In time charterparties, the clauses should state whether the ship remains on hire during delay, deviation, security preparation, or waiting caused by war risks. In voyage charterparties, similar wording may affect laytime, demurrage, freight, cancellation, and discharge obligations.
Indemnity: The clauses may provide that the charterer indemnifies the shipowner for losses resulting from orders to proceed into a dangerous area, or that either party is protected against losses caused by the other party’s breach, negligence, or failure to comply with agreed risk procedures.
Governing Law and Dispute Resolution: Because war risk disputes can involve sanctions, insurance, safety, and contractual performance, the clause should be aligned with the governing law and dispute resolution clause of the charterparty. Arbitration wording is commonly used in international chartering contracts.

Well-drafted War Risks Clauses allow commercial shipping to respond to political and security threats without leaving the parties uncertain about responsibility, cost, or authority. They are particularly important in unstable trading areas where risk conditions can change rapidly between fixture and arrival.

Protecting Clauses in Charterparty

A charterparty is a legally binding contract between the shipowner and the charterer, setting out the agreed terms for employing a ship in the carriage of cargo. Protecting clauses strengthen that contract by addressing risks that may interrupt performance, cause delay, produce claims, or expose one party to unexpected financial liability. A charterparty without clear protective wording may leave key questions to uncertain negotiation after a dispute has already arisen.

The following clauses are commonly used to protect the interests of both parties and to make the charterparty more commercially complete:

Safe Port Warranty: This clause requires the charterer to nominate ports that are safe for the ship to reach, use, and depart from. A safe port must normally be safe in its physical, political, and operational characteristics, subject to the wording of the charterparty and applicable law.
Laytime and Demurrage: These clauses define the time allowed for loading and discharging cargo and the financial consequence if that time is exceeded. Clear laytime and demurrage provisions protect the shipowner against delay and give the charterer certainty about exposure if cargo operations take longer than agreed.
Payment Terms: Payment clauses should identify freight, hire, deadfreight where applicable, demurrage, dispatch if agreed, payment currency, due dates, banking details, deductions, and consequences of late payment. Precise payment wording reduces commercial disputes and protects cash flow.
Performance Guarantee: This clause may deal with speed, fuel consumption, cargo capacity, pumping capability, crane capacity, or other operational promises. In time chartering, performance wording is especially important because the charterer relies on the ship’s ability to perform as described.
Force Majeure: A force majeure clause addresses extraordinary events beyond the parties’ control, such as natural disasters, government restrictions, strikes, epidemics, war, port closure, or other events that prevent or delay performance. The clause should state whether obligations are suspended, extended, or terminated.
Indemnity: An indemnity clause allocates responsibility for claims, losses, damages, liabilities, or expenses caused by one party’s breach, negligence, wrongful orders, unsafe cargo, documentary failure, or misconduct. Clear indemnity wording is essential because broad or vague wording can create further disputes.
Insurance: Insurance clauses may require hull and machinery insurance, P&I cover, war risk cover, cargo insurance, pollution cover, or other policies depending on the trade. The clause should identify minimum cover, evidence of insurance, and responsibility for additional premiums.
Termination: Termination provisions allow a party to end the contract in defined circumstances such as non-payment, breach, insolvency, cancellation date expiry, force majeure, prolonged delay, or failure to provide a suitable ship. Termination wording gives the parties a controlled legal exit route.
Dispute Resolution: This clause sets out how disputes will be resolved, commonly through arbitration or litigation. It should identify the seat of arbitration, rules, number of arbitrators, language, and jurisdiction where necessary. Clear dispute resolution provisions reduce procedural uncertainty.
Governing Law: The governing law clause identifies the legal system that will interpret the charterparty. This is fundamental because rights, remedies, limitation, evidence, and clause interpretation may differ significantly between legal systems.

Sublet and Substitution: This clause may allow the charterer to sublet the ship’s employment or allow the shipowner to substitute another suitable ship, subject to agreed conditions. Proper wording preserves flexibility while protecting contractual expectations.
Lien: A lien clause may give the shipowner rights over cargo, sub-freights, sub-hire, or other receivables to secure unpaid freight, hire, demurrage, deadfreight, or other sums due. Lien rights must be drafted carefully because their practical enforcement may depend on local law and cargo control.
Bunker Adjustment Factor (BAF): This clause addresses changes in fuel prices by adjusting freight or other charges. It is especially relevant where bunker prices are volatile or where the voyage is fixed long before performance.
War Risk: A war risk clause defines the procedure when the ship is ordered into a dangerous area, including route changes, additional insurance, security measures, extra costs, and the master’s right to refuse unsafe orders.
Seaworthiness: This clause requires the shipowner to provide a seaworthy ship, properly manned, equipped, supplied, documented, and fit to carry the agreed cargo. Seaworthiness is a core obligation in maritime law and must be considered carefully at the time required by the contract.
Bill of Lading: A bill of lading clause should align the charterparty with the transport documents issued for the cargo. It helps avoid conflict between charterparty terms, bills of lading, cargo claims, freight collection, delivery obligations, and rights of third-party holders.
Off-hire: In time charterparties, an off-hire clause identifies when hire stops because the ship is not fully available for the charterer’s service. Causes may include breakdown, deficiency of crew, drydocking, detention, damage, or other operational interruption, depending on the wording.
Cargo and Stowage: This clause allocates responsibility for loading, stowage, trimming, lashing, securing, carriage, care, and discharge of cargo. It should also address dangerous cargo, deck cargo, cargo compatibility, contamination, and the role of stevedores.
Pollution Liability: A pollution clause allocates responsibility for oil spills, bunker spills, cargo contamination, garbage, ballast water, emissions, or other environmental damage. Pollution exposure can be extremely expensive, so the clause should align with insurance and applicable regulation.
Confidentiality: A confidentiality clause protects sensitive commercial information such as freight rates, cargo contracts, trading routes, customer identities, financial terms, operational data, and negotiation records. This can be important where market-sensitive fixtures or private trading arrangements are involved.

Protecting clauses make a charterparty more complete, more reliable, and better suited to the realities of maritime commerce. They do not remove every risk, but they provide a structured method for dealing with predictable legal and operational problems before they become expensive disputes. For shipowners, charterers, brokers, insurers, cargo interests, and lawyers, careful attention to these clauses is a fundamental part of sound chartering practice.