Where this BIMCO clause is incorporated, Owners would be in a much better position since it does not only allow the Master to reject cargo at his sole discretion, but also that any delay or time loss whatsoever related to the cargo quality issues will arguably be on Charterers’ account. Further (by virtue of paragraph (d) above) Charterers expressly agree to indemnify Owners for all the resulting losses. This clause would make Owners’ lives much easier and a Master would be in a stronger position to reject off-spec cargo.
Charterers in the middle – time charter in and voyage charter out?
Even in the absence of the aforesaid BIMCO clause, the un- amended NYPE form imposes on time charterers the primary responsibility for loading, stowing and trimming the cargo. If shippers fail to provide accurate cargo certificates and the cargo liquefies, time charterers will also be liable to Owners under the express charterparty terms/breach of IMSBC Code and SOLAS Convention.
Furthermore, time charterers are under a general implied indemnity to Owners against the consequences of following time charterers’ orders, including orders to carry a particular cargo.
As such, there are more than sufficient grounds on which an Owner can hold time charterers liable for their losses resulting from cargo liquefaction. That is probably the reason why Owners sometimes may not appoint a local surveyor to monitor the loading as they would have fairly high chance of success in passing any claims and/or losses down to time charterers.
By contrast, unlike time charterparty, English law does not generally find such an implied indemnity under a voyage charterparty. Thus, when time- chartering in the vessel, and voyage-chartering her out, the time charterers should incorporate the Clause Paramount and where possible, the BIMCO clause for solid bulk cargo that can liquefy (mentioned above), to maintain a back to back position.
Prior to fixing the voyage charterparty, the time charterers should also make sure that the voyage charterers are of good financial standing and that they are entered with a reputable P&I Club (preferably an IG Club).
The insurer
To summarise, Members can now see that they should strictly follow the IMSBC Code, SOLAS, ISM etc., and the recommendations
made by their P&I Club (and the IG). In loading this kind of volatile cargo Members should put their P&I Club on notice well in advance, as failure to do so could cause severe and adverse consequences, including the invalidation of the P&I insurance cover.
For example, the removal of off-spec cargoes itself cost several millions of US dollars; in the event of a capsize, the cost of the loss of life goes well beyond monetary terms.
Prevention is always better than cure.
In short, in view of the catastrophic outcome that a cargo’s liquefaction can cause, Members should notify their P&I Club well ahead of time if they are going to load nickel ore cargoes. And Members should always act in accordance with the recommendations of their P&I Club - arrange a pre-loading survey well in advance so that local correspondents and surveyors can be appointed to guard against any bad cargo being loaded in the first place.
Meanwhile, at the stage of fixing the charterparty Members should ensure that all necessary protective charterparty clauses are incorporated and where there is any doubt, please contact your P&I Club at once for assistance.
Stockpiles during typhoon or rainy season
Photo from
www.skuld.com
The article has been originally published on the Skuld P&I Club website and is reproduced here with the author’s kind permission.
Janice Dao Yeung Yeung is Senior Claims Executive, Lawyer, Skuld P&I Club in Hong Kong. 60 | The Report • September 2018 • Issue 85
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