If there were no express provision in the charterparty as to seaworthiness, there is an implied obligation of seaworthiness at common law. It is an absolute obligation that the ship will be fit for the purpose intended. However, nowadays one would expect a standard form charterparty to contain express provisions as to seaworthiness, although the word “seaworthiness” may well not be present.
Assuming that the Hague or Hague–Visby Rules are incorporated into a charterparty they may have a significant effect on the seaworthiness obligation. If the charterparty provides for an absolute obligation of seaworthiness, the effect will be to reduce the obligation to one to exercise due diligence. This was the effect of the clause paramount in The Saxon Star case.
The burden of proving unseaworthiness is on the claimant who must also show that the ship was unseaworthy before and at the beginning of the voyage. If the claimant can establish that, the burden of proof then shifts to the owner to establish that it exercised due diligence to make the ship seaworthy before and at the beginning of the voyage. This is a fairly heavy burden as the duty cannot be delegated. It is not enough for the owner to say that it exercised due diligence in selecting, for example, reputable ship repairers or surveyors. The owner must also establish that those ship repairers or surveyors themselves exercised due diligence.
It is still not clear, however, under a time charter when the obligation to exercise due diligence under the Hague or Hague–Visby Rules bites. The better view is that it applies at the beginning of each voyage under the charterparty. Hamblen J stated in the case of Onego Shipping & Chartering BV v JSC Arcadia Shipping (The Socol 3) that “Where there is loading at more than one port under a charterparty, the relevant “voyage” is the voyage for the cargo in question and the duty of due diligence therefore arises at each different load port”. This is supported by the continuing obligation to maintain the ship which, although it may appear to be an absolute obligation, is read together with the Rules to become a duty to exercise due diligence. Therefore, more modern standard form charterparties expressly provide that the owner shall exercise due diligence to maintain the ship throughout the charter service.
Exception
Provided the owner has exercised due diligence to make the ship seaworthy it may rely on the exceptions in Article IV rule 2 of the Hague and Hague–Visby Rules. The exception for “act neglect or default of the Master, mariner, pilot or the servants of the owners in the navigation or the management of the vessel” in Article IV rule 2(a), may be of great significance to the owner, not least because the general exception clause in the charterparty may not cover negligent errors of navigation, whereas the Article IV rule 2 exception does.
The exceptions have been interpreted as applying to the wider range of services which are to be provided under a time charterparty than those which would be provided in relation to the loading, handling, stowage, carriage, custody, care or discharge of the goods under a bill of lading.
Where the Rules do not apply the parties are free to agree on any exclusions or limitation of liability. In the case of the existence of cargo the aspect of indemnity comes into play. Hamblen J determined that the Rules did not apply in Onego Ship ping & Chartering BV v JSC Arcadia Shipping (The Socol 3) as the cargo was carried on deck and was stated to be so. He stated that “In the event of deck cargo being carried, the Owners are to be and are hereby indemnified by the Charterers for any loss and/or damage and/or liability of whatsoever nature caused to the Vessel as a result of the carriage of deck cargo and which would not have arisen had deck cargo not been loaded”.
Time Bar
The time bar is also extremely important. The time limit within which claims must be brought under a charterparty is generally six years from the breach of contract, unless the parties have expressly agreed a shorter time limit.
Not all claims under a charterparty will be caught by the time bar in the Rules as there must be a real connection between the loss or damage claimed and the goods being carried, and not just a very tenuous link.
Some standard form charterparties limit the application of the Rules to cargo claims. In The Stena Pacifica case, Evans J concluded that the limited terms of incorporation meant that Article III rule 6 did not apply to claims outside the Hague Rules obligations.
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