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The Meaning of “Trip”: The Wehr Trave - Ishfaq Ahmed

SBT Star Bulk & Tankers (Germany) GMBH & Co KG v Cosmotrade SA sub nom WEHR TRAVE, [2016] EWHC 583 (Comm), QBD (Comm) (Sir Bernard Eder) 22/03/2016

The Wehr Trave concerned the question of whether a trip time charter on an amended NYPE form with typed additional clauses (“the charter”) allowed the charterers to order the vessel m/v WEHR TRAVE (“the vessel”) on a further voyage after she had discharged her cargo. 

Facts

The charter was for “one time charter trip via good and safe ports and/or berths via East Mediterranean / Black Sea to Red Sea / Persian Gulf / India / Far East always via Gulf of Aden”. The vessel was to be redelivered at one safe port in charterers’ option Colombo/Busan range including China not north Qingdao. The vessel after delivery into the charter on dropping outward pilot at Algeciras on 16th October 2013 was given voyage orders by charterers and proceeded to the Black Sea, where she loaded cargoes at Sevastopol/Avitla, Novorossiysk and Constantza/Agigea. She then proceeded on her route, discharging at one port in the Red Sea (Jeddah), one port in the Gulf of Oman (Sohar), and three ports in the Persian Gulf (Hamriyah, Jebel Ali and Dammam). The vessel berthed at Dammam on 7 December 2013. 

On 8 December 2013, the charterers ordered the vessel to proceed to Sohar (Oman) after sailing from Dammam when the vessel was empty of cargo to load a project cargo for delivery at New Mangalore or Cochin (West Coast of India). It was common ground that such order was given before the vessel had completed discharge at Dammam. This led to a dispute between owners and charterers as to whether charterers were contractually entitled to give the vessel the order to load at Sohar for discharge in India under the charter i.e. whether this was a legitimate or illegitimate order. The owners alleged that after discharge at Dammam the vessel should have been ordered to proceed to the charter redelivery place as “one time charter trip” had been completed. 

Decision

The judge observed that it was important to bear in the mind that the present charter was a time charter and that in such cases the defining characteristic of the charter is that the vessel is under the directions and orders of the charterers as regards her employment for the charter period. What this means is that shipowners place the vessel at the disposal of the charterers for a period of time in return for the payment of hire and subject to the charter terms such as geographical, period, trading limits and other constraints. 

In addition, the judge stated that the trip time charter may be drafted so as to define the “trip” using a number of different permutations ranging from one loading and discharging port to a number of combinations and sequences of these. As a result, the fact that the charter here was for “one” time charter trip was not of much, if any, assistance. Instead, ultimately, the scope of any “trip time charter” would depend upon the particular terms agreed between the parties and the charterers’ entitlement to give directions and orders may be restricted by whatever may be agreed between the parties with regard, for example, to period, trading limits, geographical route and even (perhaps) number and designation of loading and discharging ports or ranges. However, any such restriction would have to be specifically agreed and would require clear words.

Here, construing the specific charter, the charterers were not (as a matter of language) restricted to loading the vessel at a single port. The charter in the present case specified a delivery port/range and a redelivery port/range. By and within that range, it specified a route. On that route the vessel was to trade “between good safe port and/or good safe ports and good safe berth and/or good safe berths and good safe anchorage and/or good safe anchorages, always afloat, always within Institute Warranty Limits”. Thus, the charterers were, in principle, entitled to call at such ports as they wished provided that the calls were within the trading limits and the route was not inconsistent with the contractual route, which was a voyage from Algeciras to the Colombo/Busan range via the East Mediterranean and/or the Black Sea and/or the Red Sea and/or the Persian Gulf and/or India and/or the Far East (always via the Gulf of Aden and always ending in the Colombo/Busan range). 

Sohar was not inconsistent with the contractual route and was a safe port within IWL and not an excluded loading place under the charter. As a result, the charterers were entitled to order the vessel to proceed to Sohar and load a cargo there. The words “via” and “to” did not restrict the charterers’ general entitlement to give orders and directions with regard to loading and discharging provided, of course, that the calls were within the trading limits and the route was not inconsistent with the contractual route. The charterers were, upon paying hire, entitled to call upon the vessel to load and discharge at any port or ports within trading limits and on the contractual route subject to any express agreement to the contrary. 

Comment

Those who are familiar with time charters will be aware that they can be divided into two main categories as discussed in the judgment. Term time charters agree the charter period in advance which would usually allow more than one voyage to be completed in the agreed time (this may be the subject of variation under the terms of the charter such as the final voyage clause). Trip time charters on the other hand define the charter period by a trip within either a geographical range or via specified ports, although they may also be constrained further by a maximum stated duration. Thus, though for a voyage or voyages trip time charters are in a time charter form. Trip time charters have become more popular since they can avoid the “hideous complexities of demurrage” (Lloyd J, Care Shipping Corp v Latin American Shipping Corp (The Cebu) [1983] QB 1005) but also give the charterers the ability, subject to contract terms, to give orders as to the employment of the vessel. However, as the judge in The Wehr Trave emphasised, the word “trip” can be unclear and therefore the Courts will pay close attention to the words used to see what was meant by the parties. Unlike bills of lading, charterparties are not subject to any statutory regulation and hence the scope and meaning of what is included is up to the parties to decide. As a result, much will depend on the terms of the contract. Here the Court construed the charter to mean that so long as the trip was along the defined contractual route and in accordance with the other contractual terms, the charterers were entitled to order the empty vessel which had already discharged cargo from one voyage under the charter to call at another loading port and perform another trip before being redelivered to the shipowners at the agreed redelivery range. 

The effect of choosing the correct words is therefore crucial. In many cases the disagreement will stem from changes in market freight rates and whether one party or the other perceives it to be in its advantage to have the charter at an end.

Ishfaq Ahmed

01/11/2016
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