Panama

Demise charterers have an interest in ships which are very like the interest of shipowners and some countries (Panama) recognize this fact by allowing demise charterers to register the ships which they have chartered. Demise charter parties are effected by means of standard forms. In BARECON A adopted by BIMCO it is provided that “the vessel shall during the charter period be in the full possession and absolute disposal for all purposes of the charterers and under their complete control in every way”. The owners are to exercise due diligence before the vessel is delivered and the vessel is to be redelivered in the same or as good structural state condition and class as that in which she was delivered, fair wear and tear not affecting class excepted. The charter allocates all rights and liabilities connected with the operation of the ship to the charterers and seeks to protect the owner’s interest by prohibiting the creation of mortgages, encumbrances and liens by the charterer. Both owners and charterers have an insurable interest in the ship and it is of the utmost importance to the owners that the vessel is fully insured. All systems of law have limitation periods within which civil claims must be brought. The claimant must ensure that his writ is issued in the given period. The Limitation Act 1980 governs general time bars. Under a charter party a claimant has six years from the date of the breach to bring an action. It is to be noted that other countries may have shorter limits. In France the limit is one year and Spain has a limit of six months. If the charter is governed by English law and the limitation period is six years, the laws and rules in the country where the defendant has his place of business may be relevant, so that if the charterers are Spanish the owners must be aware of the Spanish six month limit and not rely on the English six year limit which is applicable to the charter party. The Limitation Act also provides for various circumstances in which an extension of time in which to bring the action may be granted.