Ship Masters Business

Introduction
As per this scenario own vessel was on a voyage charter,if on a voyage charter the ship owner provides the charter party with details of ship particulars,capacity and Registry.

The ship shall proceed with reasonable dispatch.Vessel shall proceed with Reasonable dispatch,after this the owner shall undertake to carry the cargo destination.

A list of expected perils.

The charter agrees to pay freight and provides full cargo,as per voyage charterer if the vessel does not arrives at a certain Port on a certain day ,the cancelling clause gives the charter the full right for cancelling the contract.

Own vessel loaded a cargo of high grade steel pipes,On loading some steel appeared to be rusty.None of the concerned parties appointed a surveyor.

Own vessel also accepted a letter of indemnity from the seller and signed a clean ‘Bill of Lading’(BOL).A clean BOL means that contains no positive defective condition ,The importance of BOL is it is an evidence of contract and it is a receipt of goods carried.

It is the duty of master to check cargo practically as stated in the BOL and if it mets the criteria as stated then he should sign the BOL.

By signing a bill of lading without checking the cargo the Master has become to party of fraud,Due to this no claim will be covered by the P&I,In this case Master should have signed a CLAUSED BOL.Its a BOL that contains a positive notation of a defective condition of the cargo covered,material ,of its packaging

Own Vessel sailed out with faulty Navigational equipment(RADAR)and this fault was aware to the Master and also the company.this showed that the Master of own vessel did not exercise due-deligence to make the vessel sea worthy and sailed out for Sea with faulty navigational equipment,which lead to a collision with the container vessel. Due-diligence means all efforts should be made ,So that the vessel meets all the requirements to make the vessel seaworthy.

To meet these requirements the vessel shall be properly manned and should have qualified , competent and well trained staff on Board.Ensure that the vessel can proceed to sea without any harm or danger to the Personnel,Property or Marine environment.

Ensure that the vessel carries all the necessary equipment as per SOLAS regulations.

Also the Equipment, Cargo,Hatches is well maintained and in good condition.Cargo shall be looked and maintained on board until it is finally discharged.This will ensure that the Master and the company has exercised Due-diligence.

The container vessel which had sailed out in a seaworthy condition,this vessel was complying with SOLAS regulations and H-V rules when she sailed out for sea.But a day before the collision the vessel was short manned as 2nd officer was Medically evacuated due to serious injury and rest all officers were working short handed,This lead to short manning which eventually caused fatigue to its officers and thereby breached SOLAS regulationsThis made the container vessel unseaworthy at the time of collision.

But the MCA Guidelines (MSN 1778 (M)),allows a vessel to sail for shorter voyage ,if in incase of emergency ,in the case of short manning ,on a condition that the remaining officers on board are not undergoing through stress or fatigue,due to short manning and also the ILO guidelines of work are observed(ILO guideline 174),in this case the owner of the vessel could be had liable ,if apart from breaching SOLAS regulations,the guidelines from MCA has not been followed.

Apart from these liabilities ,that has caused by the vessel’s owner due to the breach of statutory regulations and requirements,this incident of collision leads to further liabilities,Own vessel besides the liability incurred by the vessel’s owner due to violation of article 3 of Hague rules to provide proper documentations and a seaworthy Vessel.

Due to collision and the vessel being towed to port of refuge,Liability will also be incurred due to the delay caused in delivery of cargo on time.Also the vessel was loaded with high grade steel pipes,since the vessel collided and suffered collision damage on N0 1 Hold,due to water ingress might have also caused damage to the steel pipes.Expenses incurred due to damage to a ship and its cargo.

Own vessel suffered damage at forward N o 1H-port side,which resulted in partial flooding.The container vessel suffered minor Hull damage forward and several containers were lost at sea and some were being jettisoned to help the vessel to prevent water ingress.Master’s duty is to do whatever,necessary or reasonable,so that he can save the ship and cargo from any loss or damage.This allows him to Jettison the cargo,so that is prudent and safe continuation of the voyage.

Both vessels were towed to port of refuge for emergency dry dock repairs.

As per Hague Visby rules “ the carrier is bound, before and at the beginning of the voyage, to exercise due diligence”.

Make the ship seaworthy.

Properly manned, equipped and supply the ship.

After receiving the goods into his charge the master or carrier or agent,on demand of the shipper ,issue to the shipper a Bill of lading[1]

CONTRACTUAL OBLIGATIONS OF THE MASTER

When there is a collision the MASTER shall follow the following steps:-

Inform the company,owners,charterers,P&I clubs and Port Authorities .

EVIDENCE COLLECTION.

Details of both the ships.

Deck and Engine log books with entries.

All the printouts and graphs from bridge equipments.

All the navigational charts before and after collision.

All navigational equipment in use at time of collision.

Weather conditions at the time of incident.

At the time of contact the vessels estimated courses and speed.

Communications and signals made a the time of collision.

Statements from witnesses after collision.

Details of VTS or Port Control if any in operation at the time of incident.

Mitigate losses to ship owner.

“ The owner should exercise burden of proof relating to the exercise of due diligence as the vsls navigational equipment was faulty which eventually led to a collision with the container vessel. Whenever loss or damage has been resulted on account of unseaworthiness the burden of proof of due diligence should be on the carrier or the other person claming exemption under this article. The onus is cast on the carrier in relation to proof of due diligence, until the other party has established that the vessel was unseaworthy and his loss was due to that fact, alternatively the burden of proof should rest with the carrier who is the only party to have access to the whole fact”[2]

A prudent Master should act reasonably as per the regulations to mitigate liabilities. So the vessel’s owners has to protect themselves under Marine Insurance at all times and mitigate liability it is necessary to ensure compliance with statutory regulations and requirements.

2.

Salvage:

“As per the scenario the master has two possible choices, salvage options under LOF, or consider a contract of towage ,master should make a risk assessment of the situation in consultation with his senior management team, due to the unreliability of the navigational equipmet ,and damage to the vessel master should not consider moving under his own power, he considered contract of towage or to hire a salvor which would result in 4 to 5 times more then the contract of towage, however a prudent master shall inform his owners that he considers it necessary to engage a salvor, The next decision is to accept which salvor services, as there are large number of salvors offering their services , often advise is taken from the shore back up team including the Average adjusters before salvors are hired .The master has to ensure that a careful logging of all events is required thru out the salvage operation, while enroute to the port of refuge he must discuss & plan with owners and managers how he will handle the first few hours when alongside and he will need full support of his ship management team”[3]

Cargo jettisoned for the safety of vsl will be allowed general average, after collision both vsl proceed to a port of refuge, the expenses of entering & leaving such a port shall be allowed as general average, as stated in the York Antwerp rule X. Loss of freight due to cargo damaged or lost or allowed to lost shall be covered under general average. when the damaged cargo is sold at a loss, General average allowed will be the difference between the net proceed of sale & net sound value

General average

General average In simple is a partial loss caused by or directly consequential upon a general average act.

The General Average as defined in the MIA 1906 s. 66 and York Antwerp rule 2004 rules

“There is a general average act where an extraordinary sacrifice or expenditure is voluntarily and reasonable made or incurred in time of peril for the purpose of preserving all the property imperilled in the common adventure’’[4].

As per GA act damages incurred are usually divided amongst the owner and the shipper,it will depend on the type of charter as to how the expenses will be divided,the Jettisoning of the cargo shall be equally divided between the owner and the shipper.

In the given scenario the vessel had to jettison some containers to assist the vessel to prevent the water ingress for the safety of the ship so this sacrifice was for preserving the property hence eligible for G A. Thus all parties interested in the venture, ship – owner, charterers, and cargo owners etc, will proportionally contribute to ship – owner expenses and for port of refuge for emergency dry dock repairs.

These are the main five parts which will show whether that act is classed under the GA or not, in fact GA arises when sacrifices have been made for the safety of the ship against cargo and freight, from some peril of the sea or from its effects. The total of such G A allowances is shared between the various parties who stood to lose each contributing in proportion to his percentage of the total values involved.

The purpose of G A is to ensure that the owner of the ship or cargo who has incurred an expenditure or suffered a sacrifice of his cargo in time of peril for the purpose of preserving property receives a contribution to his loss from all those who have benefited from the action, G A acts are allowed under the H & M repairs,Expenses incurred due to damage to a ship and its cargo and of taking direct action to prevent further damage to the ship and its cargo is taken as Particular Average.

Hull and Machinery Insurance

The duration of this insurance is for the maximum period of 12 months.this insurance is covered for the damage by herself caused to the vessel due to marine peril.

It is the protection of liabilities’s of :-

? ths collision liability :

The underwiter agrees to pay the ? of any sum due to the loss:-

Damage caused to the other vessel ,also the loss of property and the general average or salvage of other vessel.

General average and salvage:-the adjustment made should be according to the law.

The insurance covers loss to the ship caused by following incidents:-

O Fire and Explosion

O Accident during loading and discharging ,shifting cargo .

O Jettisoning of cargo

O Piracy

O Earthquake /Tsunamis

O Peril of the sea,river/lake or any navigable water

O Boiler bursting ,defect in machinery,shaft breakage.

O Barratry of master/officer/crew.

O Contact with land conveyance ,dock or harbour equipment.

O Contact with helicopter,aircraft or falling object.

In this scenario own vessel has sailed with a faulty Radar ,this proves that the master had not showed due diligence and will not be getting any compensation.

P&I Insurance

Charterrs and ship owners are offered various class of coverage by the P&I clubs.

PROTECTION COVERS FOLLOWING LIABILITIES:-

O Collision

O Cargo claims ,crew claims

O Oil pollution

LIMITATION AND P&I COVER:-

The P&I club has a board of directors who decide how to limit and restrict the cover that is given to the members.

The towage of the ship may cover if the member is liable under contract of towage.

The club covers the pollution liabilities only to the liability that the pollution is an extent to the escape or discharge of oil or any substance.

In this case own vessel had an inoperational radar,The marine insurance contract had been breached,so the insurance company may refuse to pay the amount.

Due-diligence shall be maintained at all times so that the insurance policy can cover the cargo and the ship against damages at all times.

3.

Master’s actions are very crucial to obtain cover under Insurance policies.

A prudent Master shall act reasonably with the codes and regulations ,Compliance with the rules and regulation will also reduce the carrier or owner liabilities regarding salvage, Master assess the situation thoroughly whether to take salvage.

The right to salvage can only arise in respect of maritime properties.

The terms and conditions on which the salver agrees to salve the property is divided into two basis:

O The daily hire basis

OThe Lloyds open form (L.O.F)

The term salvage applies to

Othe service performed by a salvor

Othe reward paid to a salvor in respect of his successful services.

Since there is no formal contract as to the money which the salvor is due on successful completion of the contract such a method is only employed when the marine environment are in grave danger.

“L.O.F’’ is the most widely used “no cure – no pay’’ salvage contract, in return for salvage services, the salver receives a proportion of the “salved value ’’the value of the ship, its cargo and bunkers on board the ship.

As per scenario own vessel sufferd severe collision damage on the forward end of the No 1 HOLD-Port side,resulting in partial flooding ,Due to this effect vessel was in grave and imminent danger and threat to environment, in shortest time Master decided to take L.O.F to tow the vessel to port of refuge for emergency dry dock repairs.

Own vessel was under Llyods open Form

Choosing the L.O.F is a matter of getting the best expertise possible in the shortest time, the Master/ owner have insufficient time to arrange a daily hire contract, their need not be a formal signing of the form, the terms and conditions can be agreed on communication the words ‘’L.O.F 2000’’ clearly being spoken during acceptance.

In this incident the container vessel suffers minor hull damage and vessel was not imminent danger and not any threat to marine environment so the Master preferred to organize a daily hire agreement.

The daily hire agreement would work out more economical and less complicated compare to the L.O.F.The salvage operation and its remuneration are as per the Lloyd’s rules and regulations whereas the towage contract depends upon the rules and regulation entered by the two signatories i.e. the ship owner and the towing company. The time factor is essential for the Master to make a prudent decision contacting the owner who sought advice from H & M and P & I club to draw satisfactory action plan. H & M and P & I, insurance policies covered some losses, however, the Master action are extremely important to obtain cover under the different insurance policies.

BIBLIOGRAPHY
College notes – shipmasters business by STC

Carriage of goods by sea by john F Wilson

Shipmasters business companion by Malcolm maclachlan

MCA Guidelines-2003

REFERENCES
www,google.co.uk

www.nortonrose.com

Introduction

As per this scenario own vessel was on a voyage charter,if on a voyage charter the ship owner provides the charter party with details of ship particulars,capacity and Registry.

The ship shall proceed with reasonable dispatch.Vessel shall proceed with Reasonable dispatch,after this the owner shall undertake to carry the cargo destination.

A list of expected perils.

The charter agrees to pay freight and provides full cargo,as per voyage charterer if the vessel does not arrives at a certain Port on a certain day ,the cancelling clause gives the charter the full right for cancelling the contract.

Own vessel loaded a cargo of high grade steel pipes,On loading some steel appeared to be rusty.None of the concerned parties appointed a surveyor.

Own vessel also accepted a letter of indemnity from the seller and signed a clean ‘Bill of Lading’(BOL).A clean BOL means that contains no positive defective condition ,The importance of BOL is it is an evidence of contract and it is a receipt of goods carried.

It is the duty of master to check cargo practically as stated in the BOL and if it mets the criteria as stated then he should sign the BOL.

By signing a bill of lading without checking the cargo the Master has become to party of fraud,Due to this no claim will be covered by the P&I,In this case Master should have signed a CLAUSED BOL.Its a BOL that contains a positive notation of a defective condition of the cargo covered,material ,of its packaging

Own Vessel sailed out with faulty Navigational equipment(RADAR)and this fault was aware to the Master and also the company.this showed that the Master of own vessel did not exercise due-deligence to make the vessel sea worthy and sailed out for Sea with faulty navigational equipment,which lead to a collision with the container vessel. Due-diligence means all efforts should be made ,So that the vessel meets all the requirements to make the vessel seaworthy.

To meet these requirements the vessel shall be properly manned and should have qualified , competent and well trained staff on Board.Ensure that the vessel can proceed to sea without any harm or danger to the Personnel,Property or Marine environment.

Ensure that the vessel carries all the necessary equipment as per SOLAS regulations.

Also the Equipment, Cargo,Hatches is well maintained and in good condition.Cargo shall be looked and maintained on board until it is finally discharged.This will ensure that the Master and the company has exercised Due-diligence.

The container vessel which had sailed out in a seaworthy condition,this vessel was complying with SOLAS regulations and H-V rules when she sailed out for sea.But a day before the collision the vessel was short manned as 2nd officer was Medically evacuated due to serious injury and rest all officers were working short handed,This lead to short manning which eventually caused fatigue to its officers and thereby breached SOLAS regulationsThis made the container vessel unseaworthy at the time of collision.

But the MCA Guidelines (MSN 1778 (M)),allows a vessel to sail for shorter voyage ,if in incase of emergency ,in the case of short manning ,on a condition that the remaining officers on board are not undergoing through stress or fatigue,due to short manning and also the ILO guidelines of work are observed(ILO guideline 174),in this case the owner of the vessel could be had liable ,if apart from breaching SOLAS regulations,the guidelines from MCA has not been followed.

Apart from these liabilities ,that has caused by the vessel’s owner due to the breach of statutory regulations and requirements,this incident of collision leads to further liabilities,Own vessel besides the liability incurred by the vessel’s owner due to violation of article 3 of Hague rules to provide proper documentations and a seaworthy Vessel.

Due to collision and the vessel being towed to port of refuge,Liability will also be incurred due to the delay caused in delivery of cargo on time.Also the vessel was loaded with high grade steel pipes,since the vessel collided and suffered collision damage on N0 1 Hold,due to water ingress might have also caused damage to the steel pipes.Expenses incurred due to damage to a ship and its cargo.

Own vessel suffered damage at forward N o 1H-port side,which resulted in partial flooding.The container vessel suffered minor Hull damage forward and several containers were lost at sea and some were being jettisoned to help the vessel to prevent water ingress.Master’s duty is to do whatever,necessary or reasonable,so that he can save the ship and cargo from any loss or damage.This allows him to Jettison the cargo,so that is prudent and safe continuation of the voyage.

Both vessels were towed to port of refuge for emergency dry dock repairs.

As per Hague Visby rules “ the carrier is bound, before and at the beginning of the voyage, to exercise due diligence”.

Make the ship seaworthy.

Properly manned, equipped and supply the ship.

After receiving the goods into his charge the master or carrier or agent,on demand of the shipper ,issue to the shipper a Bill of lading[1]

CONTRACTUAL OBLIGATIONS OF THE MASTER

When there is a collision the MASTER shall follow the following steps:-

Inform the company,owners,charterers,P&I clubs and Port Authorities .

EVIDENCE COLLECTION.

Details of both the ships.

Deck and Engine log books with entries.

All the printouts and graphs from bridge equipments.

All the navigational charts before and after collision.

All navigational equipment in use at time of collision.

Weather conditions at the time of incident.

At the time of contact the vessels estimated courses and speed.

Communications and signals made a the time of collision.

Statements from witnesses after collision.

Details of VTS or Port Control if any in operation at the time of incident.

Mitigate losses to ship owner.

“ The owner should exercise burden of proof relating to the exercise of due diligence as the vsls navigational equipment was faulty which eventually led to a collision with the container vessel. Whenever loss or damage has been resulted on account of unseaworthiness the burden of proof of due diligence should be on the carrier or the other person claming exemption under this article. The onus is cast on the carrier in relation to proof of due diligence, until the other party has established that the vessel was unseaworthy and his loss was due to that fact, alternatively the burden of proof should rest with the carrier who is the only party to have access to the whole fact”[2]

A prudent Master should act reasonably as per the regulations to mitigate liabilities. So the vessel’s owners has to protect themselves under Marine Insurance at all times and mitigate liability it is necessary to ensure compliance with statutory regulations and requirements.

2.

Salvage:

“As per the scenario the master has two possible choices, salvage options under LOF, or consider a contract of towage ,master should make a risk assessment of the situation in consultation with his senior management team, due to the unreliability of the navigational equipmet ,and damage to the vessel master should not consider moving under his own power, he considered contract of towage or to hire a salvor which would result in 4 to 5 times more then the contract of towage, however a prudent master shall inform his owners that he considers it necessary to engage a salvor, The next decision is to accept which salvor services, as there are large number of salvors offering their services , often advise is taken from the shore back up team including the Average adjusters before salvors are hired .The master has to ensure that a careful logging of all events is required thru out the salvage operation, while enroute to the port of refuge he must discuss & plan with owners and managers how he will handle the first few hours when alongside and he will need full support of his ship management team”[3]

Cargo jettisoned for the safety of vsl will be allowed general average, after collision both vsl proceed to a port of refuge, the expenses of entering & leaving such a port shall be allowed as general average, as stated in the York Antwerp rule X. Loss of freight due to cargo damaged or lost or allowed to lost shall be covered under general average. when the damaged cargo is sold at a loss, General average allowed will be the difference between the net proceed of sale & net sound value

General average

General average In simple is a partial loss caused by or directly consequential upon a general average act.

The General Average as defined in the MIA 1906 s. 66 and York Antwerp rule 2004 rules

“There is a general average act where an extraordinary sacrifice or expenditure is voluntarily and reasonable made or incurred in time of peril for the purpose of preserving all the property imperilled in the common adventure’’[4].

As per GA act damages incurred are usually divided amongst the owner and the shipper,it will depend on the type of charter as to how the expenses will be divided,the Jettisoning of the cargo shall be equally divided between the owner and the shipper.

In the given scenario the vessel had to jettison some containers to assist the vessel to prevent the water ingress for the safety of the ship so this sacrifice was for preserving the property hence eligible for G A. Thus all parties interested in the venture, ship – owner, charterers, and cargo owners etc, will proportionally contribute to ship – owner expenses and for port of refuge for emergency dry dock repairs.

These are the main five parts which will show whether that act is classed under the GA or not, in fact GA arises when sacrifices have been made for the safety of the ship against cargo and freight, from some peril of the sea or from its effects. The total of such G A allowances is shared between the various parties who stood to lose each contributing in proportion to his percentage of the total values involved.

The purpose of G A is to ensure that the owner of the ship or cargo who has incurred an expenditure or suffered a sacrifice of his cargo in time of peril for the purpose of preserving property receives a contribution to his loss from all those who have benefited from the action, G A acts are allowed under the H & M repairs,Expenses incurred due to damage to a ship and its cargo and of taking direct action to prevent further damage to the ship and its cargo is taken as Particular Average.

Hull and Machinery Insurance

The duration of this insurance is for the maximum period of 12 months.this insurance is covered for the damage by herself caused to the vessel due to marine peril.

It is the protection of liabilities’s of :-

? ths collision liability :

The underwiter agrees to pay the ? of any sum due to the loss:-

Damage caused to the other vessel ,also the loss of property and the general average or salvage of other vessel.

General average and salvage:-the adjustment made should be according to the law.

The insurance covers loss to the ship caused by following incidents:-

O Fire and Explosion

O Accident during loading and discharging ,shifting cargo .

O Jettisoning of cargo

O Piracy

O Earthquake /Tsunamis

O Peril of the sea,river/lake or any navigable water

O Boiler bursting ,defect in machinery,shaft breakage.

O Barratry of master/officer/crew.

O Contact with land conveyance ,dock or harbour equipment.

O Contact with helicopter,aircraft or falling object.

In this scenario own vessel has sailed with a faulty Radar ,this proves that the master had not showed due diligence and will not be getting any compensation.

P&I Insurance

Charterrs and ship owners are offered various class of coverage by the P&I clubs.

PROTECTION COVERS FOLLOWING LIABILITIES:-

O Collision

O Cargo claims ,crew claims

O Oil pollution

LIMITATION AND P&I COVER:-

The P&I club has a board of directors who decide how to limit and restrict the cover that is given to the members.

The towage of the ship may cover if the member is liable under contract of towage.

The club covers the pollution liabilities only to the liability that the pollution is an extent to the escape or discharge of oil or any substance.

In this case own vessel had an inoperational radar,The marine insurance contract had been breached,so the insurance company may refuse to pay the amount.

Due-diligence shall be maintained at all times so that the insurance policy can cover the cargo and the ship against damages at all times.

3.

Master’s actions are very crucial to obtain cover under Insurance policies.

A prudent Master shall act reasonably with the codes and regulations ,Compliance with the rules and regulation will also reduce the carrier or owner liabilities regarding salvage, Master assess the situation thoroughly whether to take salvage.

The right to salvage can only arise in respect of maritime properties.

The terms and conditions on which the salver agrees to salve the property is divided into two basis:

O The daily hire basis

OThe Lloyds open form (L.O.F)

The term salvage applies to

Othe service performed by a salvor

Othe reward paid to a salvor in respect of his successful services.

Since there is no formal contract as to the money which the salvor is due on successful completion of the contract such a method is only employed when the marine environment are in grave danger.

“L.O.F’’ is the most widely used “no cure – no pay’’ salvage contract, in return for salvage services, the salver receives a proportion of the “salved value ’’the value of the ship, its cargo and bunkers on board the ship.

As per scenario own vessel sufferd severe collision damage on the forward end of the No 1 HOLD-Port side,resulting in partial flooding ,Due to this effect vessel was in grave and imminent danger and threat to environment, in shortest time Master decided to take L.O.F to tow the vessel to port of refuge for emergency dry dock repairs.

Own vessel was under Llyods open Form

Choosing the L.O.F is a matter of getting the best expertise possible in the shortest time, the Master/ owner have insufficient time to arrange a daily hire contract, their need not be a formal signing of the form, the terms and conditions can be agreed on communication the words ‘’L.O.F 2000’’ clearly being spoken during acceptance.

In this incident the container vessel suffers minor hull damage and vessel was not imminent danger and not any threat to marine environment so the Master preferred to organize a daily hire agreement.

The daily hire agreement would work out more economical and less complicated compare to the L.O.F.The salvage operation and its remuneration are as per the Lloyd’s rules and regulations whereas the towage contract depends upon the rules and regulation entered by the two signatories i.e. the ship owner and the towing company. The time factor is essential for the Master to make a prudent decision contacting the owner who sought advice from H & M and P & I club to draw satisfactory action plan. H & M and P & I, insurance policies covered some losses, however, the Master action are extremely important to obtain cover under the different insurance policies.

BIBLIOGRAPHY

College notes – shipmasters business by STC

Carriage of goods by sea by john F Wilson

Shipmasters business companion by Malcolm maclachlan

MCA Guidelines-2003

REFERENCES

www,google.co.uk

www.nortonrose.com

[1] College notes-shipmaster’s business

[2] Carriage of goods by sea by Jhon F wilson

[3] Commercial management for ship masters (A practical guide) Robert L Tallack.

[4] Shipmasters business by Malcolm Malcalahan

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Ship Masters Business. (2019, Apr 07). Retrieved from https://phdessay.com/ship-masters-business/

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