Ship’s husband

The first question to be decided is who will be registered as the ship’s husband.  If the contract is for a very restricted range of tasks then the owners themselves will have to provide the name, but if the agreement covers almost all the functions, the management company will have to nominate someone to appear in that role.  But now we have an anomaly where the managers are agents but have placed themselves in the position of a principal in the eyes of the law with great potential responsibilities involved. This problem is addressed in clause 11.3 of the sample contract which seeks to ensure that the owners are no better but no worse off than if they managed the ship themselves.  Having obtained such indemnification from the owners as is appropriate it is vital that the managers then insure against claims resulting from their own negligent acts or omissions and also those of sub-contractors that the managers may have properly employed in the fulfilment of their obligations under the contract.  This protection and indemnity insurance in favour of the manager covers any liabilities to the owner or other parties arising under the second part of Clause 11.2.  It should not be confused with the various policies relating to the vessel which are drawn in favour of both the owners and the managers as set out in Clause 6. Although management companies may be granted very wide discretion in the ordering of supplies and services and enjoy comforting reassurances in their contract with their principals they are still only agents.  What comfort, therefore, is there for those supplying goods or services to the managers?  It is, after all, open to an agent to disclaim liability for a debt incurred on behalf of his principal if the latter cannot or will not pay up.  This very situation has, from time to time, caused great heart-ache to port agents who have taken instructions in good faith from a manager whose principal has subsequently become insolvent.  There have, of course, been some interesting results to situations like this where it has been proved that the managers never made their role clear and allowed the agent to believe they were in fact the principals.  So managers should take care never to conceal their agency status unless they are prepared to risk the consequences.