Subject Receiver

The reason for ‘subject receiver’s approval’ is for a similar purpose, the charterers need to check whether a ship in that precise position can be accommodated. Sadly both expressions are occasionally abused. There are cases where a fixture is made before the cargo is even bought, respectively sold, but those abusing accepted codes of ethics usually get found out and will be shunned by respectable operators. Under English Law there is no fixture until all ‘subjects’ have been lifted and, from an Owner’s point of view, it is therefore desirable to place a time-limit on the removal (i.e. the ‘lifting’ of any subjects agreed upon). This will have the effect of concentrating the efforts of Charterers to lift the subjects in good time or to risk losing the ship to other competing business. A time limit on subjects also provides less opportunity for an unscrupulous Charterer to continue unobtrusively seeking cheaper tonnage whilst supposedly clearing subject. The time available to a Charterer to clear subjects is negotiable, like charterparty terms, but should obviously be sufficient, reasonable and practicable, or else a Charterer may simply need to request extensions of time to comply with these requirements. This available time is, however, potentially capable of misuse by Charterers, and Shipowners are normally nervous about being too lenient by allowing too many subjects for indeterminate periods, especially when dealing with previously unknown and untested Charterers. On the other hand, Charterers may quite legitimately need a considerable length of time, especially when obtaining reconfirmation of a cargo’s availability on certain dates in a remote corner of the world. However, it is not always Charterers who put subjects on a negotiation. Where Charterers are unknown to Owners, it is quite likely that Owners will make any offer subject to ‘approval of Charterers by Owners’, or at least they will enquire of their background and history, probably seeking references from Shipowners with whom the Charterer has conducted business in the past. As a last resort, a Shipowner may insist on a bank guarantee in support of the Charterer, although this is expensive and frequently difficult to arrange, and is not usual.