Ship Contract

It may seem ironic that, whilst more sophisticated ways of financing ships have swept away the concept of 64ths, other schemes in various parts of the world attract non-maritime investors into ship-owning.  That, however, is not the prime reason for the growing ship-management industry which is more the result of the economies of scale which a ship management specialist can offer the smaller owner, plus the increase in moves towards ‘flagging out’ by owners in many otherwise traditional maritime countries. The nomination as ship’s husband or manager should never be taken lightly especially in the light of some of the more recent legal moves taken against those involved in shipping casualties. It is impossible to over-emphasise the responsibility resting on the shoulders of a Ship Manager. In a purely commercial situation the ability to claim that one is only an agent may deflect many problems to the principal.  No amount of pleading agency, however, will protect one from claims for negligence still less will it help where a negligent act or omission results in charges which are tried under criminal law. Obviously, a ship management company will take out appropriate insurance to cover its own errors and omissions and those of its sub-contractors but no amount of insurance will protect one against those things which society looks upon as crimes. The duties of a Ship Manager may vary widely, depending upon the requirements of the owners.  These may range from total management at one end (which may even include making all the decisions in chartering negotiations) or the contract may be specific to only one function such as crewing or technical management at the other extreme. It is in clause 3 of the terms and conditions that we are reminded that a Ship Management Contract, despite the vast range of services and resources which may be employed, is essentially an agency agreement.  This introduces certain problems peculiar to ship management; some for the managers themselves and some for those who deal with such managers.