Obligation to Trim

The judge decided that if clause 3 (with the FIOST requirements) was read with clause 17, the wording clearly showed the parties intended to transfer to the charterer the owner’s common law responsibility for performance. “The obligation to ‘trim’”, he said, was intended to mean responsibility for lashing, stowing and dunnage. These were transferred to TCI, as charterer, so it could not sue under the charter, while Jindal and Hiansa could not claim compensation under the bills of lading so long as the damage was not caused by the carrier. The parties had agreed to be governed by English law, under which (according to Pyrene v Scindia) Art III r 2 only applied to the carrier if he had agreed to carry out the specified functions relating to the cargo. Jindal, Hiansa and TCI appealed against the judge’s interpretation of the charterparty, and the effect of Art III on the bills of lading. They contended that although in the case of bulk ore, clause 17 would have transferred all cargo work obligations to the charterer, the word ‘trim’ could not be taken to apply to manufactured steel. The appeal judges rejected this argument. They agreed with the judge that while FIOST was only a ‘who is to pay’ provision, the word “free” simply meaning “at no cost to the shipowner”, it must be read with clause 17, which determined the transfer of responsibility. Although ‘trim’ was inappropriate, the rest of the clause showed the charterer was to load and discharge the cargo. The parties had “clearly put their minds to what is required to stow the steel coils,” said the Judge – namely, the obligation to ‘lash, secure and dunnage’. They intended to transfer the obligation to the charterer, and there was no other wording to suggest they did not mean this to happen. As to Hague-Visby Art III, he confirmed that Pyrene v Scindia (later confirmed by the House of Lords in Renton v Palmyra) was binding in English law. So the effect of the bills of lading was not invalidated by Rule 8. “Article III rule 2,” does not compel the shipowner to be responsible for the loading and unloading or for the way other parties carried out the work. “It simply compels the shipowner to load and unload properly if he undertakes those functions” – and he could contract out of them. None of us should believe that we are not capable of drawing up clauses that are equally potentially difficult to interpret. We are all liable to do so. But we must all guard against this to the best of our ability unless we wish to end up in arbitration or a court of law!