part 1 chapter ii- sea

Chapter 2: Shipping

Outline

I. Introduction to shipping1. Introduction2. Infrastructures

II. Methods of vessel charter1. Liner charter2. Voyage charter

I. Introduction to shipping1. Introduction• Advantages:

– Large quantities of freight can be safely stored and move in one go

– Shipping is a viable and cost- effective way for moving a large amount of goods over long distances (cheap freight)

– Shipping is an important factor within the international transport chain

• Disadvantages– Slow speed– Probability of risk occurring

2. Infrastructure

2.1. Merchant vessels2.1.1. Definition• A merchant vessel is a ship that transports

cargo and passengers for profitable purpose.

(The Logistics and maritime economics Institute)

II. Infrastructure2.1. Merchant vessels2.1.2. Specifications• Ship’s name• Port of Registry: A vessel’s home port, port of registry, or hailing

port, is its port of origin as shown on its registration documents and lettered on the stern of the ship's hull

• Flag:– Conventional flag– Flag of convenience

• Ship owner• Dimensions:

– Length over all (LOA): the greatest length of the ship, from fore to aft. – Beam: the greatest breadth of the ship, from port to starboard

2.1.2. Specifications• Classification• Draught/Draft: the distance from the bottom of the keel to

the waterline– Light Draught– Loaded Draught

• Displacement: the weight of the ship and all that it contains- cargo, fuel, water, stores, crew and effects.:– Light displacement (LD): the minimum weight of the ship,

includes weight of body of the ship, machines or equipments, boiler, water in the boiler, crews and their effects

– Heavy displacement (HD): includes LD, weight of cargo and weight of stores that use for itinerary

Load lines

2.1.2. Specifications• Deadweight Tons (DWT) - The difference between

heavy displacement and light displacement- A measure of the ship's total carrying capacity.

• Cargo Deadweight Tons - The weight remaining after deducting fuel, water, stores, dunnage and such other items necessary for use on a voyage from the deadweight of the vessel.

• The gross register tonne (GRT)- The total cubic measurements of the ship (including engine room, bunker tanks for fuel and water, seamen’s accommodation)

• The net register tonne (NRT): is the available cubic capacity for cargo

2.1.2. Specifications

• Cargo space– Grain space: is the space which the ship has

available for cargo in bulk– Bale space: is the cubic contents of the ship

that is available for the transport of goods packed in bales, boxes, crates,…

2. Infrastructure

2.2. Sea Ports2.2.1. DefinitionA port is a facility for receiving ships and/or transferring seamen or cargo. It is usually found at the edge of an ocean.2.2.2. Roles-To serve ships-To serve cargo

2.2. Sea Ports

2.2.3. Requirements for an efficient port:- Well- equipped with the most modern handling facilities;- A well- organized container yard, for both storage and handling of containers;

2.2. Sea Ports2.2.3. Requirements for an efficient port:• Immediate availability of fresh water and bunker supplies for vessels

alongside (at berth);• A high-end computerized system to control the smooth delivery of

cargo to and from the port, to avoid any congestion and delays;• A good, highly trained and qualified workforce working 24/7• A good rail/road/barge network to facilitate delivery;• An efficient Customs clearance system;• Foresight and forward planning to ensure that there are always

enough berths available, to handle larger and faster container ships;• A computer system that allows the automation of routine operations

in the ports, that can be handle by remote control device; and• Making the port as customer- oriented as possible, and having a

user- friendly tariff system.

VI. Methods of vessel charter

• Liner charter• Voyage charter

A. Liner Charter

1. Definition of Liner/ Liner shipping company

- A liner service is defined as one that operates to a regular sailing schedule, transporting goods along a definite route, to fixed ports of call

- A liner is a vessel that is engaged in this kind of transportation

A. Liner Charter

2. Liner characteristics– Vessels operate among ports to a regular

sailing schedules– All relationships are regulated by bill of lading– All terms and conditions of carrier must be

accepted by cargo owner, without negotiation– Liner freight is fixed and be informed in liner

bound freight tariff

A. Liner Charter3. How a liner service is run?

– Liner Planning Division: planning of new trade routes and fleet expansion

– Ship Management Division: overall running of vessels– Liner Division: planning and logistics responsibilities for

services, vessel schedules, container equipment planning, overseas offices and agencies, documentation and data communications, and handling of claims and insurance

– Finance Division: company’s financial results, auditing and performing treasury functions

– IT/EDI Division: computer systems and data interchange with suppliers and contractors

– Human resource Division: manpower planning, staff benefits, and all industrial relations

A. Liner Charter

4. What is a liner agent?A person or company that acts on the shipping

line’s behalf and carries out their business while the vessel remains in the agent’s jurisdiction

Basic organization structure for a liner agent

Senior Management

Marketing/sales Documentation Operations Finance/Administration

InformationTechnology

A. Liner Charter5. The order of liner charter

– Step 1: Shipper let a customs broker or forwarder find a suitable ship

– Step 2: The customs broker or forwarder chooses a carrier– Step 3: The customs broker or forwarder and the carrier

negotiate some main terms and conditions: cargo name, quantity of goods, ports of loading, ports of discharge, issuing documents.

– Step 4: The customs broker or forwarder inform to cargo owner of the negotiated result

– Step 5: Cargo is transported to the loading port by the shipper

– Step 6: After receiving goods, the carrier responsible for issuing bill of lading to the shipper.

6. Ocean Bills of Lading

6.1. Definition and functions• The B/L is the main document used in international maritime

transport. It is issued by a carrier or representative of the carrier, after cargo is shipped on board or received for shipment.

• Notes:– Issuer: give signature, full name, legal position

• Signed by Mr… as the carrier• Signed by Mr… as the Master• Signed by Vietfract as agent for the carrier• Signed by Mr… on behalf of Mr… as the Master

– Issuing time:• Shipped on Board• Received for shipment

– Receiver: shipper (exporter or representative)• Functions

– Evidence of the contract of affreightment– Confirmation of shipment– Document of title (title of ownership)


6.2. Main types of B/L6.2.1. Base on the negotiable ability of B/L• Straight B/L: B/L that clearly states name and

address of the consignee – States that the goods are consigned to a specified person– Is non- negotiable document– Is used where the goods have been paid for or do not

require payment (donation or gifts)– The shipping company will deliver the shipment to its

consignee on presentation of an identification.


• Order B/L: bill of lading that made out to the order of a person (shipper, consignee or bank) for delivery of the goods and that can be transferred by endorsement to third parties. +) to order of shipper+) to order of consignee+) to order of bankThe order B/L can be negotiated by endorsement

procedure.


• Endorsement is a procedure of transferring of cargo ownership from original cargo owner to another beneficiary.

• On the reverse side of B/L, endorser has to give his signature, stamp and hand it to endorsee, which is the next beneficiary of the shipment.

• In terms of legal side, endorsement is an action to confirm that the cargo owner has given up the proprietorship of the shipments that specified in the B/L to another beneficiary.

• The endorser has to:– Make an endorsement by his language to assure that he has definitely

agreed to transfer the shipment to another person.– Make an endorsement in original B/L

• Different types of endorsement:– Straight– To order– Blank


• To Bearer B/L: This bill states that delivery shall be made to whosoever holds the bill. Such bill may be created explicitly or it is an order bill that fails to nominate the consignee whether in its original form or through an endorsement in blank.

• This B/L can be simply transferred by handing the document.


6.2.2. Base on the issuing time• Shipped on board B/L: B/L that is released after cargo is pass

vessel’s rail. This document is an important evidence for completing delivery liability of the sellers.– Note: FOB, CIF, CFR

• Received for shipment B/L: is B/L that is issued after the carrier receive the shipment, pledge to ship on board, and transport the shipment by the named vessel.+) the goods arrive at the port of departure before the vessel +)the goods arrive at the loading port when the vessel has not completed all the necessary conditions to berth the port (pratique, customs…).+) Deliver the goods through a middle man: a forwarder, a multimodal transport operator, or a consolidator.


6.2.3. Base on comments/ remarks B/L• Clean/ Perfect B/L: B/L issued by a carrier declaring

that the goods have been received in an appropriate condition, without the presence of defects, normally about the appearance and the quantity of goods.

• Unclean/ Claused B/L: A bill of lading that shows a shortfall or damage in the delivered goods.

Most banks refuse to accept any unclean B/L Repairing ways to have clean B/L:

– Replace or complement some missing or damaged goods– Repair damaged goods if it is possible– Form a letter of indemnity in order to be paid perfect goods part.


6.2.4. Other types• Surrender B/L• Seaway Bill

– SWBs are non- negotiable, they cannot be issued “to order” or “to order of”

– The shipper’s signature is required on the SWB for endorsement of the transport agreement, so that he can not later refute the document

– The lawful consignee has to be clearly identified, so that the carrier knows when a consignee become a lawful owner of the goods

6. Ocean Bills of Lading6.3. Content of B/L6.3.1. First side of B/L• Shipper• Consignee• Notify party• Vessel• Place of receipt• Place of delivery• Port of Loading• Port of Discharge• Goods• Freight and Charges• Number of original• Place of issue• Date of issue• Signature


6.3. Content of B/L6.3.1. Reverse side of B/L• Definitions: carrier, shipper, consignee• The extent of carrier’s responsibility• Excepted Perils• Regulations on loading, discharging, preserving goods• Regulations on Freight and Charges• War, Strike, riots, civil, commodition clauses• Late delivery clauses• General average clause• Both to blame collision clause• Supreme Clause

7.Legal Systems in shipping7.1 International Conventions• International Convention for the unification of certain

rules relating to Bills of lading/ Brussels Convention 1924/ Hague Rules

• Protocol to amend International Convention for the unification of certain rules relating to Bills of lading/ Visby Protocol 1968/ Hague- Visby Rules

• SDR Protocol 1979• United Nation Convention on the carriage of goods by

sea/ Hamburg Convention 1978/ Hamburg Rules7.2.National law• Vietnam Maritime Code, 2005

8. Extend of carrier’s liability to the goods- International legal systems

8.1. Period of liability: is a period in which the carrier is liable for loss resulting from loss of or damage to the goods.

- Hague and Hague Visby Rules: “Carriage of goods covers the period from the time when the goods are loaded on to the time when they are discharged from the ship”

From “tackle to tackle”- Hamburg Rules: “The responsibility of the carrier for

the goods under this Convention covers the period during which the carrier is in charge of the goods at the port of loading, during the carriage and at the port of discharge”

=> From “Port to Port”


The carrier is deemed to be in charge of the goods:A) from the time he has taken the goods from:

i) the shipper, or a person acting on his behalf; orii) an authority or other third party to whom, pursuant to law or regulations applicable at the port of loading, the goods must be handed over for shipment;

B) until the time he has delivered the goods:i) by handing over the goods to consignee; orii) in cases where the consignee does not receive the goods from the carrier, by placing them at the disposal of the consignee in accordance with the contract or with the law or with usage of the particular trade, applicable at the port of discharge, oriii) by handing over the goods to an authority or other third party to whom, pursuant to law or regulations applicable at the port of discharge, the goods must be handed over.


8.2. Basis of liability: carrier’s liability on loss resulting from loss of or damage to the goods

8.2.1. Extend of liability• Hague and Hague Visby Rules: loss and damage of goods• Hamburg Rules: loss, damage of goods and delay in delivery

- “Delay in delivery occurs when the goods have not been delivered at the port of discharge provided for in the contract of carriage by sea within the time expressly agreed upon or, in the absence of such agreement, within the time which it would be reasonable to require of a diligent carrier, having regard to the circumstances of the case”- The goods are considered loss if they have not been delivered within 60 consecutive days following the expiry of the time for delivery, and without waiting for consecutive evidence for the loss.


8.2. Basis of liability8.2.2. Main liabilitiesHague and Hague Visby Rules• Provide a seaworthy ship: the carrier is expected to

exercise due diligence before a voyage, to ensure that:+) the ship is durable and solid, is able to stand the wind and waves in normal conditions.+) the ship is properly manned equipped and supplied for the trip: fresh water, food, fuel…+) all parts of the ship in which goods are to be carried, including the holds, refrigerating and cool chambers, are ready to receive, transport and preserve the goods.


8.2. Basis of liability8.2.2. Main liabilitiesHague and Hague Visby Rules:• Trading liability: “the carrier shall properly and carefully load, handle, stow,

carry, keep, care for, and discharge the goods carried”.• Issuing B/L: after receiving the goods into his charge, the carrier or the

master or agent of the carrier shall, on demand of the shipper, issue to the shipper a B/L.

Hamburg Rules: Presumed fault or neglect principle: “The carrier is liable if the occurrence that caused the loss, damage or delay took place while the goods were in his charge, and he may escape liability only if he proves that he, his servants or agent took all measures that could reasonably required to avoid the occurrence and its consequences.”


8.2. Basis of liability8.2.3. Excepted perils* Hague and Hague Visby Rulesa) Act, neglect or default of the master, mariner, pilot or the servants

of the carrier in the navigation or in the management of the ship.- Navigation- Management of the shipb) Fire, unless caused by the actual fault or privity of the carrierc) Perils, dangers and accidents of the sea or other navigable watersd) Act of God• Act of war• Act public enemies• Arrest or restraint of princes, rulers or people, or seizure under

legal process• Quarantine restrictions• Act or omission of the shipper or owner of the goods, his agent or

representative


8.2. Basis of liability8.2.3. Excepted perils• Hague and Hague Visby Rules:j) Strikes or lockouts or stoppage or restraint of labour from

whatever cause, whether partial or generalk) Riots and civil commotionsl) Saving or attempting to save life or property at seam) Wastage in bulk of weight or any other loss or damage

arising from inherent defect, quality or vice of the goodsn) Insufficiency of packingo) Insufficiency or inadequacy of marks


8.2. Basis of liability8.2.3. Excepted perils• Hague and Hague Visby Rules:p) Latent defects not discoverable by due diligenceq) Any other cause arising without the actual fault or privity

of the carrier, or without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage

Hamburg Rules: Presumed fault or neglect principle


8.3. Limitation of liability: the maximum amount of money that the carrier should compensate for unit of damaged or missing goods in case the value of the goods is not enumerated in B/L or other documents evidencing the contract of carriage.

• Hague Rules: 100 GBP per unit or package of missing or damaged goods

• Hague- Visby Rules: 10 000 francs per package or unit or 30 franc per kilo of gross weight of the goods lost or damaged, whichever is the higher.

• A franc means a unit consisting of 65.5 miligrammes of gold of millesimal fineness 900.


8.3. Limitation of liability• Hague- Visby Rules: for those goods that

are consolidated in container, pallet or other transport articles:– If the B/L does not enumerate what is

contained in the container, the container is one shipping unit

– If the B/L enumerates the contents of the container individually, each of the packages is a unit


8.3. Limitation of liability• SDR Protocol: 666.67 units of account per

package or unit or 2 units of account per kilo of gross weight of the goods lost or damaged, whichever is the higher.

• The unit of account is the SDR as defined by the IMF


8.3. Limitation of liability• Hamburg Rules: 835 units of account per package or

unit or 2.5 units of account per kilo of gross weight of the goods lost or damaged, whichever is the higher.

• For those goods that are consolidated in container or other transport articles:

– If the B/L does not enumerate what is contained in the container, the container is one shipping unit

– If the B/L enumerates the contents of the container individually, each of the packages is a unit

– In case where the article of transport itself has been lost or damaged, the article of transport, if not owned or otherwise supplied by the carrier, is considered one separating shipping unit


8.3. Limitation of liabilityHamburg Rules:• The unit of account is the SDR as defined by the IMF• Those states which are not members of the IMF and whose law

does not permit the application of the SDR may, declare that the limits of liability provided for in this Convention to be applied in their territories shall be fixed by 12 500 monetary units per package or other shipping unit or 37.5 monetary units per kilogramme of gross weight of the goods.

• The monetary unit corresponds to 65.5 milligrammes of gold of millesimal fineness nine hundred.

• The liability of the carrier for delay in delivery the goods is limited to an amount equivalent to 2.5 times the freight payable for the goods delayed, but not exceeding the total freight payable under the contract of carriage of goods by sea.


Summary:• There are 2 international legal systems that are applied

in shipping field (Hague and Hamburg Rules)• The Hamburg Rules effect a more balance and equitable

allocation of risks and responsibilities between carriers and cargo owners

• Progressive points of Hamburg Rules:– Carrier’s liability is based on the principle of presumed fault or

neglect– Regulates of Deck cargo, live animals, cargo consolidated in

containers, pallets and other transport articles– Regulates liabilities of contracting carriers and actual carriers

9. Extend of carrier’s liability to the goods- Maritime Code of Vietnam, 2005

9.1. Period of Liability- Art. 74: “The responsibility of the carrier for the goods under this Code

covers the period during which the carrier is in charge of the goods at the port of loading, during the carriage and at the port of discharge.”

9.2. Basis of liability- Extend of liability: loss, damage, and delay in delivery- Enumerate 3 main liabilities and 17 excepted perils for the carrier, but the

carrier may escape liability only if he proves that he, his servants or agent took all measures that could reasonably required to avoid the occurrence and its consequences.

9.3. Limits of liability- 666.67 units of account per package or unit or 2units of account per kilo of

gross weight of the goods lost or damaged, whichever is the higher.The unit of account is the SDR as defined by the IMF

This amount of money is converted at the exchange rate that officially announced in Vietcombank at the time of making payment

- Goods consolidated in containers, pallets and other transport articles: same as the Hague Visby rules

- Delay in delivery: same as the Hamburg rules

10. Claims and actions10.1. Notice of loss, damage or delay- Notice of loss, damage or delay is the consignee’s notice in writing

specifying the general nature of such loss or damage, which sent to the carrier in a certain period of time.

- If the loss or damage is apparent: COR (Cargo Outturn Report)- Hague and Hague Visby rules: the consignee must send this notice to

the carrier before or at the time of delivery the goods - Hamburg rules: the consignee must send this notice to the carrier not

later than the working day after the day when the goods were handed over to the consignee.

- If the loss or damage is not apparent: LOR (Letter of Reservation)- Hague rules: 3 days after the day when the goods were handed over to

the consignee - Hamburg rules: 15 consecutive days after the day when the goods were

handed over to the consignee - Delay in delivery (for Hamburg rules only): the notice has been

given in writing to the carrier within 60 consecutive days after the day when the goods were handed over to the consignee

10. Claims and actions10.2. Claim and actions10.2.1. Claimer- Shipper- Consignee- The holder- The insurer10.2.2. Claiming documents- Purposes:

- Proving the benefits of the claimer to the shipment- Proving of the happened loss/damage and the measure of them- Demonstrating such loss/damage belongs to the carrier

- Papers, Documents:- B/L- Commercial Invoice- Packing list- COR- ROROC- Certificate of short landed cargo- LOR- Survey report/certificate- Other papers/ documents

10. Claims and actions10.3. Limitation of Actions• The Hague Rules: any action to the carriage of goods

under this rules is time- barred if judicial or arbitral proceedings have not been instituted within the period of 1 year

• The Visby- Rules: 1 year and may be extended in the period of no more than 3 months.

• The Hamburg rules: 2 years and may be extended at any time during the running of the limitation period by a declaration in writing to the claimant.The limitation period commences on the day on which the carrier has delivered the goods or part thereof or, in cases where no goods have been delivered, on the last day of which the goods should have been delivered.

B. Voyage Charter 1. Definition and features of Tramp vessel1.1. Definition: Tramp vessel carries the goods among 2 or many

oceans ports depend on the demand of the cargo owner. The carriage is based on a transport contract.

1.2. Features:- Tramp vessel sail only when there is a sufficient quantity of cargo

on board; they do not operate on a fixed sailing schedule.- These vessels generally carry cargo in bulk, such as coal, grain,

timber, sugar, ore, fertilizer, cement clinker, copra, bauxite and phosphates

- Tramp vessel’s speed is relatively slower than liner’s one - Carriage, freight, loading and discharging expense conditions are

clearly prescribed in the contract of carriage

B. Voyage Charter2. Voyage Charter Party2.1. Definition

The charter party is the written agreement between the ship owner and the charterer and is in fact the enactment (or charter) of their negotiations that contains the agreed terms and conditions.

2.2. Standard forms• Recommended charter parties offer numerous advantages:

- they are used commonly;- they are suited for several traffics and are everywhere available;- their wordings is nearly watertight and they are generally accepted by the courts;- they are without any doubt fair to both parties.

- Uniform standard forms: GENCON, NUVOY, SCANCON… - Specific standard forms: NORGRAIN, CEMENCO, CUBARSUGAR,

RUSSWOOD, EXONVOY, MOBILVOY, SHELLVOY…

2.3. Content of voyage charter party

2.3.1. Introduction • the name and the address of the contracting

parties• the name and a short description of the ship• the position of the ship• the date the ship expected to load• the loading and charging ports or places• the cargo• the freight


2.3.2. Vessel clause • name of the ship: “Ship named Hope and/or

substitute sister ship”• age of the vessel• flag• type of ship• speed of the ship• classification society and the class• length and breadth• draft


2.3.3. Expected ready to loadThe date on which the ship must be ready to start loading must be indicated in the contract.

- On Nov 25, 2009, the named ship must be ready to start loading at the loading port

- On about Nov 25, 2009, the named ship must be ready to start loading at the loading port=> Anyway, the ship owner (or the operator) must keep the charterer (or his broker) informed (via tel, fax, telex, email) of the arrival the ship in the first (or only) port of loading. (Notice of arrival- NOA)

- Canceling date: the latest date on which the vessel must be ready to load at the port.


2.3.4. Cargo- Name of cargo:

- Clearly states the name of cargo- And/or: 1000 MT rice and/or maize- And/or any lawful goods

- Packing: types of packing, marks and numbers- Quantity:

- X metric tons– About X metric tons:

• 5% more or less in Owners’ option (moloo)• 5% more or less in charterers’ option (molco)• 5% more or less in Master’s option (molmo)


2.3.5. Port of loading, port of discharge • A fixed berth, e.g.: berth 2 at Haiphong port• A fixed port: one safe port La Havre• A fixed area : one safe port/ one safe berth Australia• one good/safe port Northern range• A port or an area to be indicated later: US gulf for order• Several ports: berth 1 at Fort the France and one safe berth at port

of Spain Anyway, the loading and discharging ports in the charter party must

be safe ones in terms of both of nautical and political features. There is no nautical and political obstacles to reach the port/berth with a

loaded ship“at all times of the tide always afloat” “Not always afloat but safely aground (NAABSA)”

Note: “… or so near thereto as she may safely get and lie always afloat…”


• 2.3.6. Freight and charge• Freight in the ordinary mercantile sense, is the reward payable to

the carrier for the carriage and arrival of the goods in a merchantable condition, ready to be delivered to the merchant”.

• Freight rate: the freight per unit of cargo• Freight unit: weight (heavy goods), volume/ measurement (light

goods)• Quantity:

– On taken quantity– Delivery quantity

• Time to pay: - In advance: Freight Prepaid/ Freight payable at Loading port- Freight to Collect:

+) Freight payable on commencement of discharge+) Freight payable concurrent with discharge+) Freight payable on completion of discharge)+) freight payable on actual and proper completion of discharge


2.3.7. Loading/discharging expense• Liner term/ Gross term/ berth terms• Free In and Out (FIO): exempt the carrier from the loading and

discharging expenses, the charterer will bear these costs- FIOST• FI: exempt the carrier from the loading cost, but he should bear the

discharging cost. The charterer’s liability is in contrast to the carrier’s one.

• FO=> Those above terms and conditions about Loading/discharging

expense should accompanied by the freight rate in the charter party. The most important things is during negotiation, the charterer should

choose the most suitable Loading/discharging expense condition so that:

+) he can avoid to pay double Loading/discharging expenses for the carrier and the shipper

+) he can save foreign exchange+) he may create favorable conditions for Loading/discharging

the cargo


2.3.8. Laydays/ Laytime: is the time, which according to the charter party, is allowed for the loading and discharging of the cargo (the allowed time)

* Manners:• according to a fixed number of days/hours which are

necessary for the loading and/or discharging operations• without a fixed number of days/hours (with customary

dispatch, customary quick dispatch, as fast as the vessel can receive, etc.)

• according to a quantity to be loaded or discharged


* Unit expressions• Running days/consecutive days/days• Working days• Working days of 24 consecutive hours• Weather working days• Sundays and holidays

- 15 WWD, S.H. EX, U.U (Cargo to be loaded in 15 weather working days of 24 consecutive hours, Sundays and holidays excepted, unless used)

- 15 WWD, S.H. EX, E.U (Cargo to be loaded in 15 weather working days of 24 consecutive hours, Sundays and holidays excepted, even if used)


• The laytime starts from the moment that the NOR is tendered and accepted by the charterer, unless the charter party stipulates differently.

• Before accepting the NOR, the cargo owner should check: – The ship must have arrived at her loading/discharging berth as

indicated in the charter party– The ship must in all respects be ready to load or discharge– the ship is in order with all formalities such as custom formalities,

quarantine formalities, etc.• Note: “W, W, W, W”

- WIPON: Whether in Port or not- WIBON: Whether in Berth or not- WIFON: Whether in Free Pratique or not- WICON: Whether in Custom Cleared or not


* GENCON standard form:• The laytime starts from 1p.m if the NOR is

tendered in office hour before 12a.m• The laytime starts from 6 a.m of the next day if

the NOR is tendered in office hour after 12a.m• Excluded time starts from 1p.m of Saturday or of

the working day before holiday to 7a.m of the next Monday or the day after the holiday.


2.3.9.Demurrage/ Dispatch* Demurrage• If the ship needs more time to load or discharge

than foreseen by the laydays, then the ship will be in days of demurrage. The Charterer will have to pay for this a certain compensations to the ship owner called demurrage.

• “Once on demurrage, always on demurrage”• Demurrage rate = 2 X dispatch rate• Demurrage money = demurrage time X

demurrage rate


* Dispatch• Dispatch money is a compensation which the

ship owner must pay to the charterer when the ship is loaded and/or discharged more rapidly than provided by the laydays that were foreseen.

• “Dispatch money for all time saved”“Dispatch money for all working time saved”

• Dispatch = 1/2 X demurrage rate• Dispatch money = Dispatch time X Dispatch rate


* Calculation of demurrage/ dispatch money• Mutually complement• Individually complement* Statement of facts• Time sheet:

– Date and hour of arrival in the roads or in the port– Date and hour of arrival in the loading or discharging place– Date and hour on which the ship is ready in all respects to start loading or

discharging, as stated in the NOR– Date and hour on which the NOR was tendered– Date and hour on which the NOR is accepted by charterer, receiver or his agent– Date and hour on which, according to the charter,, the laydays started– Loading and discharging speed according to charter party– Statement of days, which could not be worked– Statement of the time allowed for loading and discharging– Date and hour on which the loading/discharging was terminated


2.3.10. Carrier/ship owner’s responsibility and exceptions• Responsibilities:

- To make the vessel in all respects seaworthy by due diligence- Secure that the vessel is properly manned, equipped, and supplied- Issue B/L after receiving the goods- Guide for loading and discharging the shipment- Liable for loss, damage or delay in delivery of the goods caused by nautical fault- Control the vessel with proper speed, avoid deviation unless in case of force majeure.

• Exceptions:- Act of God- Perils of the sea- Force majeure- Hostile activities


• 2.3.11.Arbitration and law• Arbitration is a kind of private court assigned by both parties in the

contract. They obey all of its rules spontaneously.• All disputes arisen out of the charter party may be solved and

addressed only if there is an arbitration negotiation in advance or an arbitration clause in the charter party.

• Requirements for An arbitration negotiation/clause:+) Full and correct name of arbitration organizations+) Procedural law/rule to deal with the matter+) Place and Language for judging, number of arbitrators

• Sample of arbitration clause:“All disputes arising out of or in relation to this contract shall be finally settled by the Vietnam International Arbitration Center at the Vietnam Chamber of Commerce and Industry in accordance with its Arbitration Rules”


2.3.12. Both to Blame Collision

“If the (Carrying) ship comes into collision with another ship as a result of the negligence of the other ship and any act, neglect or default in the navigation or the management of the carrying ship, the Merchant undertakes to pay the carrier or where the Carrier is not the owner and in possession of the carrying ship to pay to the Carrier as trustee for the owner and/or demise charterer of the carrying ship, a sum sufficient to indemnify the Carrier and/or the owners and/or demise charterer of the carrying ship against all loss or liability to the other or non carrying ship or her owners, insofar as such loss or liability represents loss of or damage to or any claim whatsoever of the Merchant, paid or payable by the other or non carrying ship or her owners to the Merchant and set off recouped or recovered by the other or non carrying ship or her owners as part of their claim against the carrying ship or her owner or demise charterer or the Carrier. The foregoing provisions shall also apply where the owners, operators or those in charge of any ship or ships or objects, other than, or in addition to the colliding ship or objects, are at fault in respect to a collision; contact, stranding or other accident.”


• “Nếu tàu chở hàng A đâm va tàu không hàng B do hậu quả sơ suất của tàu B và do hành vi sơ suất hoặc lỗi lầm của thuyền trưởng, thủy thủ, hoa tiêu hay người phục vụ trong việc chạy tàu và quản trị tàu chở hàng A, thì chủ hàng trên tàu A sẽ bồi thường cho người chuyên chở (Tàu A) mọi mất mát hoặc trách nhiệm đối với tàu không hàng B đến mức mất mát hoặc trách nhiệm này tương ứng với mất mát hoặc hư hỏng mà chủ hàng được tàu không hàng B đã hoặc sẽ bồi thường và nó đã được đối chiếu, giảm trừ hoặc trích giữ như làmột phần khiếu nại của tàu B đối với tàu A. Quy định vừa được đề cập cũng sẽ áp dụng tại nơi nào đó mà chủ tàu, người điều hành hoặc người quản lý tàu hay phương tiện nào khác mà phạm lỗi lầm trong một vụ tàu đâm va”.


2.3.12. General Average and New Jason Clause• “General Average shall be adjusted in London unless otherwise agreed in

Box 22 according to York- Antwerp Rules 1994 and any subsequent modification thereof. Proprietors of cargo to pay the cargo’s share in the general expense even if same have been necessitated through neglect or default of the Owners’ servant.

• If General Average is to be adjusted in accordance with the law and practice of the US of America, the following clause shall apply: “ In the event of accident, danger, damage or disaster before or after the commencement of the voyage, resulting from any cause whatsoever, whether due to negligence or not, for which, or for the consequence of which, the Carrier is not responsible, by statute, contract or otherwise, the goods, Shippers, Consignees or owners of the goods shall contribute with the Carrier in general average to the payment of any sacrifices, losses or expenses of a general average nature that may be made or incurred and shall pay salvage and special charges incurred in respect of the goods. If a salving ship is owned or operated by the Carrier, salvage shall be paid for as fully as if the said salving ship or ships belonged to strangers. Such deposit as the Carrier or his agents may deem sufficient to cover the estimated contribution of the goods and any salvage and special charges thereon shall, if required, be made by the goods, Shippers, Consignees or owners of the goods to the Carrier before delivery”.”


• “Chủ hàng hoặc người gởi, người nhận hàng có bổn phận đóng góp tổn thất chung bất kể hiểm họa, tai nạn xảy ra trước hoặc sau hành trình của con tàu, bất kể nguyên nhân xảy ra tổn thất chung như thế nào bao gồm cả nguyên nhân bất cẩn của tàu mà tàu được hưởng miễn trách căn cứ theo luật pháp, hợp đồng hoặc cách nào khác. Họ sẽ trả phí cứu hộ và những chi phí đặc biệt phát sinh đối với hàng hóa. Phí cứu hộ sẽ được trả toàn bộ đầy đủ cho dù tàu cứu hộ thuộc sở hữu chủ tàu hay sở hữu của người ngoài. Số tiền ký quỹ đóng góp tổn thất chung do người chuyên chở hoặc đại lý của họ dự kiến coi như đầy đủ sẽ được chủ hàng, người gởi hoặc người nhận hàng giao nộp trước khi nhận hàng”.

part 1 chapter ii- sea

Economy & Finance