Nominate Charterer

This is never more important than in the case of time charter.  It is vital to be sure that the charterer is able and willing to fulfil his side of the bargain.  The immediate recourse if a hire payment is late and any time allowed for ‘technical delay’ has expired is to withdraw the ship from the service of the time charterer.  That is by no means as easy as it sounds because the ship may be full of cargo which almost certainly belongs to an innocent third party.  If the owner of the cargo has not yet paid the freight then it should be possible to ensure that he pays the freight direct to the owner and in the unlikely event of this being more than is necessary to settle what is due then the balance can be handed over to the charterer. The sad fact is, however, that when a time charterer defaults one generally finds that the cargo in the ship is the subject of ‘freight paid’ bills of lading.  In such a case the law is very clear and it states that the ship has to deliver that cargo to the consignees named in the bills of lading without in any way being able to demand any payment from them.  Without going into the details of this apparently iniquitous situation, sufficient to say that a freight paid bill of lading gives the holder of that B/L a clear title to the goods and your failure to hand them over to him would be an offence under any legal system. So the solution, when legally binding clauses seem at times to be not worth the paper they are written on still boils down to sound judgement.  It is vital to know the background of a time charterer.  The fraud of taking a ship on time charter, paying the first hire with commendable promptness, filling her with general cargo, issuing freight paid B/Ls, pocketing the money and disappearing is by no means a novel scenario.