Looking at the question of whether an owner can refuse to call an affected port law firm Ince said that generally an owner was obliged to comply with the charterers orders under a time charter unless doing so exposes the vessel to a safety risk.
“It is currently unclear whether the virus is at a stage where it may render a port ‘unsafe’ according to the legal definition. The position will have to be assessed on a case-by-case basis,” Ince said.
The World Health Organization (WHO) has declared the coronavirus to a Public Health Emergency of International Concern (PHEIAC) but also recommended against travel restrictions, however, some countries are imposing restrictions on vessels that have called at Chinese ports.
“If an owner refuses to follow a charterer’s order without sufficient grounds, the charterer may in principle be entitled to claim damages and potentially even to terminate the contract if the owner’s conduct can be said to be repudiatory or renunciatory,” Ince said.
Fellow lawyers Stephenson Harwood noted many charter parties contain warranties, either express or implied, given by charterers that vessels are ordered to ports that are safe. “If a particular port is not safe, then owners may be able to refuse to comply with the charterers’ order,” the law firm said.
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However, defining whether a particular port is safe in the case of the coronavirus is not straightforward. “This can be a complex issue because whether a port is safe is a question of fact and is likely to depend on medical evidence such as the likelihood of the crew being exposed to the coronavirus and the fatality rate,” Stephenson Harwood explained.
Law firm Reed Smith cited a 1915 case between Ciampa v British India Steam Navigation Co Ltd where a vessel was held to be unseaworthy due to coming from a port that had been contaminated with the plague resulting in it requiring fumigation at the next port.
“By extension, a port infected by the virus could arguably be construed as causing actual damage to a vessel if it led to restrictions at a future port, rendering it unseaworthy. If the vessel could not avoid exposure to such danger, this may lead to an unsafe port argument,” Reed Smith said.
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