Ship Loading Port Nomination

Ship Port of loading may be specified in the charterparty or the charterer may be given the right to nominate a port either from a given geographical area, for example ‘One safe port East Coast of United States’, or from a list of ports named in the charter. Where the port is
specified in the charter then, subject to the usual exceptions, the shipowner is under an absolute obligation to go there and there is no implied warranty by the charterer as to the safety of the port. Where the charterer has a right to nominate the port, he must exercise his election within the time specified, or otherwise within a reasonable time. If he fails to do so, the shipowner is not permitted to withdraw his vessel but must wait for instructions unless the delay is so prolonged as to result in frustration of the charterparty. The charterer is, however, liable for any loss to the shipowner resulting from the delay in giving the necessary instructions. Once the charterer has exercised his election, the selected port is treated as though it had been named in the charter and the choice is irrevocable. In selecting a port, the charterer has a free choice within the indicated range and is under no obligation to consult the shipowner’s convenience. Accordingly, he may nominate a busy or strike-bound port and the shipowner will have no grounds for complaint unless the resulting delay is so prolonged as to frustrate the object of the charterparty. Thus in the case of Reardon Smith Line Ltd v Ministry of Agriculture
the charterers nominated the port of Vancouver where a strike of elevator men was already in progress. Loading of a cargo of wheat
was prevented for a period of over six weeks, yet the court held that the delay was not so unreasonable as to frustrate the adventure. Not only were the charterers entitled to nominate a strike-bound port, but they could invoke a strike exception in the charter to avoid liability
for demurrage accruing during the waiting period. Indeed, the opinion was expressed that charterparties would rarely be frustrated by strikes since, from their very nature, they were of uncertain duration and might be settled overnight. On the other hand, there is evidence to suggest that, in certain circumstances, the courts may be prepared to restrain a completely unfettered choice. In a recent case, where a charterer had the right to nominate ‘1/2 safe ports all India’ the court held that he was not entitled to nominate them in other than their
geographical order. The right to nominate is invariably accompanied by a clause in the charterparty requiring any nominated port to be ‘safe’. Such a clause is a natural corollary to the right to nominate if the interests of the shipowner are to be adequately protected. Recent cases have suggested, however, that, in the absence of such a clause, the common law will not necessarily imply an obligation to the same effect. In the event of the charterer failing to nominate a safe port, damages recoverable will extend to cover such items as actual physical injury to the vessel, losses resulting from any delay, and additional expenses arising from discharging the cargo at an alternative port.
Where an obstruction has prevented the charterer from loading a full cargo, he may also be liable to a claim for dead freight.