Unsafe Port

Unsafe Port

Court of Appeal Judge Sellers L.J. defined it as Safe Port: “a port will not be safe unless,in the relevant period of time, the particular ship can reach it, use it and return from it without, in the absence of some abnormal occurrence, being exposed to danger which cannot be avoided by good navigation and seamanship”.

Since that time there has not been any attempt by the courts to lay down a better general definition.

In fact, in 1979 another Court of Appeal judge said that he thought it unnecessary to look back to earlier decisions since the law was so clearly stated by Court of Appeal Judge Sellers L.J. There has been some doubt cast on this proposition in a later case where it was said that there might be issues not covered by the general principles.

In such circumstances, judges and arbitrators could still look at the older cases if they assisted. The individual elements of the test for what constitutes an Unsafe Port can be broken down as follows:

  • The ship must be exposed to danger.
  • The ship means the particular ship which has been chartered.
  • The danger may be in the approach, use of or return from the port.
  • The danger will not be the result of an abnormal occurrence.
  • The master and crew must exercise good navigation and seamanship.
  • The danger must be present during the relevant period.

All these elements are essentially matters of fact but the tests used to determine whether a Port is Safe or Unsafe are Matters of Law. Therefore judges and arbitrators must be able to apply the principles of law to evidence given of the facts and expert opinion in order to determine liability in Unsafe Port cases.

There is a fundamental question that has to be asked, namely, how does the obligation on the part of the charterer to send the ship only to Safe Ports arise.

 

Charterers’ Obligation

A charterparty is, under English law, a contract. The parties to the contract take on obligations and are given rights by mutual agreement and for a price.

One of these obligations on the part of the charterer under a Time Charterparty will be that not to send the ship to Unsafe Ports. However, for the obligation to arise it should be expressly set out in the Charterparty (possible implied rights, that is, unwritten).

Most printed Time Charterparty forms contain an express Safe Port provision. For example: Vessel to be employed … between good and safe ports or places where she can safely lie always afloat as the charterers may direct Baltime Form (Vessel … to be employed) … between safe port and/or ports … as the charterers or their agents shall direct New York Produce Exchange Form 1946 which was amended in the 1993 revision to: Vessel shall be employed … between good and safe ports and safe places … as the charterer shall direct ….

The wording is clear and direct. As with any English law contract the parties are essentially free to agree what they want and, as a result, there have been variations of the Safe Port wording.

In particular some Tanker Time Charterparties have been amended to reduce the burden on the charterers to an obligation of exercising due diligence in nominating Safe Ports. Generally, in Tanker Time Charterparties, the oil majors are the charterers and have the commercial muscle to be able to reduce their potential liabilities. One example is in the Shelltime form which is as follows: “Charterers shall exercise due diligence to ensure that the vessel is only employed between and at safe ports … and shall be under no liability in respect thereof except for loss or damage caused by their failure to exercise due diligence ….”

This clause was considered by the English Commercial Court in a case called (The Chemical Venture 1993). A brief note of the case is as follows: During the Iran/Iraq war the tanker Chemical Venture was ordered to a port in a third country to load cargo. Just before that order Iran had started attacking ships at the potential load port despite the fact that she was in a neutral or non-combatant country. After first refusing to go there the crew then agreed to do so, on the payment of bonuses. In fact, the ship was hit by a missile and damaged. At least three other vessels had been attacked in the same way in the previous eleven days. The charterers defended a claim by the owners that was an Unsafe Port.

Because the Time Charterparty was on the Shelltime form they said that they only had to exercise due diligence which they had done by ordering the ship to the port at a time when attacks were sporadic.

The judge found that the port was unsafe and that because the charterers knew the facts they had not exercised due diligence when they gave the orders. However, because the Shipowners had allowed the ship to go to the port after agreeing crew bonuses the judge also held that they had agreed the port despite the unsafety.

As a result they could not recover their losses. The test of what constitutes due diligence in these circumstances seems to be one by which diligent enquiries must be made and a reasonable conclusion reached

Physically Unsafe Port

The most obvious type of danger is that of physical damage to the ship. Such damage may be caused by the characteristics of the port such as mud banks on which the ship may ground, tidal flows that may cause the ship to hit other vessels or the berth and rock outcrops that are not properly marked.

In addition a port may be physically unsafe because of weather and sea conditions; ice can be a major cause of unsafety as may high winds or large swells. Quite apart from these physical attributes a port may also be dangerous because of political reasons or hostilities. Such conditions or events may have the effect of making what would otherwise be a safe port into one which is unsafe.

There have been many examples of cases involving political unsafety, particularly more recent cases relating to the Israeli/Arab and Iran/Iraq wars, but one of the leading cases dates back to 1861. In Ogden v Graham (1861) a ship was ordered to a port in Chile which had been declared closed by the Chilean government on account of a rebellion there. The essential danger was that if the ship arrived there was every likelihood of her being confiscated. The judge found that although the port was physically safe it was unsafe within the meaning of the charter because of the risk of confiscation.

However, not every possible  danger  of this  nature  will  have the  effect  of making  the Port  Unsafe; a good example of this is the case of The Saga Cob (1992). The  brief facts and finding in this case are as follows: Whilst on a time charter on the Shelltime form the Saga Cob completed a number of voyages to the then Ethiopian port of Massawa. At the time there was guerrilla activity in the area by the Eritrean People’s Liberation Front (EPLF) and there had been occasional attacks on the town of Massawa. In August 1988 the charterers gave orders for the vessel to sail for Massawa and she arrived in early September. The EPLF had attacked a vessel about three months earlier some 65 miles south of Massawa but that had been the only incident of this nature. Unfortunately, the Saga Cob was attacked by the EPLF while at Massawa in September and damaged. There were no further attacks until January 1990. The Shipowners claimed that the port was unsafe and sued the charterers for their breach of the obligation to use due diligence to send the vessel only to safe ports.

When the case was first heard the judge decided that, while the risk was not high, it was  more than negligible. As a result, the Port was Unsafe when the charterers ordered the ship there in August 1988 and they were accordingly liable for the losses suffered by the owners.

This decision was appealed and the Court of Appeal overturned the original judgment. The Court of Appeal judges found that the Port was Safe, on the basis that there had been few incidents and a system of naval escorts had been put in place. The slightly odd aspect of the Court of Appeal’s finding in the The Saga Cob (1992) was that the judges took into account events after the order had been given by the charterers. In a later case this issue was taken up and some doubt was cast on the proposition that the exercise of due diligence could be tested by later events.

Safe Port for Loaded Ship

A port may be perfectly safe for the ships that generally use it but unsafe for others. This may be the case both in respect of Physical Risks and Political Risks.

An example of the risks is where a ship is ordered to a port where there is a draught restriction which the ship will exceed when loaded.

In the case of political risk a charterer cannot order a ship to a port where she may be detained because of her national flag.

The leading case on this topic is an old one which concerned the largest ship to sail to the port of London; as a result of the size of the ship tugs had to be ordered from Scotland. It was held that the port was unsafe for this particular ship and the costs of the tugs were recoverable from the charterers.

In giving judgment, Roche J. said that it mattered not that 99 out of 100 ships using the port were safe if that particular ship was not. The port must also be safe when the ship is in the condition which it will be when she uses the port. If a ship can use a port only when she is without cargo and not when she is loaded, then the port will be considered Unsafe Port if the ship is ordered to it in a loaded condition.

The same port would not be considered unsafe if that ship was ordered to go there to bunker whilst in ballast.