A recent London arbitration has decided a dispute concerning whether delay in loading caused by stevedores was the liability of the owners or charterers.
The vessel, a bulk carrier with five holds, was chartered on an amended Gencon form for the carriage of a cargo of urea in bulk from the Ukraine to Ecuador and Peru.
A number of disputes arose between the parties, one of which was the time spent at the loading port where the vessel was delayed due to stevedores’ failing to follow master’s instructions.
The C/P on the Gencon form included a rider clause stipulating that:
“Cargo to be loaded by charterers/shippers’ stevedores, free of expense to the owners at an average rate of 8,000 MT per weather working day…
The cargo to be stowed in vessel’s holds as customary and no cargo to be stowed in bunkers, deep tanks, reefer space or other unusual places not easily accessible… Cargo to be trimmed as per custom of the port only and any extra trimming required to be for owners’ account and time.”
During loading, cargo operations were stopped by the vessel’s master, who had issued a letter of protest to the charterers’ port agents. In this letter of protest, the master stated that
“the stevedores do not follow the master’s and chief mate’s instructions for loading and they do not follow the provision (sic) cargo plan which submitted by master prior to commence loading.
For your information, they load in number 3C over 342 m/tons. I therefore protest for the above condition and I hold stevedores and shippers fully responsible for all the consequences.
Due to the above condition I am obliged to stop the loading operation and to calculate again the loading cargo plan.”
The charterers argued that the stevedores were working under the master’s instructions and cargo plan, and charterers therefore denied that the stoppage in operations was for charterers’ account.
The owners argued that trimming as per the custom of the port was for charterers’ account and that trimming should be performed in such a way that there was no risk to the vessel at any time.
The owners furthermore took the point that due to the alleged improper loading by the stevedores, the balance of the cargo had become precarious and loading had to be stopped to ensure that the vessel did not capsize.
The arbitrators held that this was not a matter of cargo trimming but rather to be seen as a matter of the stevedores’ having loaded 342 MT extra in the vessel’s cargo hold number 3 which caused the master concern as a result of potential excess stress on the vessel’s hull.
In order to decide for whose account the stoppage should be, the arbitrators referred to one of the standard text books namely “Voyage Charters” (2nd ed) by Cook, Young & Taylor. Quoting from Voyage Charters, the arbitrators said that the responsibility for loading and discharging operations and for stowage is normally that of owners and that clear words are necessary to transfer the responsibility for these cargo operations to the charterers.
A clause which allocates with charterers merely the right to appoint stevedores does not (without further specific wording) transfer to charterers the responsibility for the stevedores’ acts or omissions.
It follows that a clause which makes the charterers responsible for the cost/expense of employing stevedores does not (without further wording) transfer responsibility.
The arbitrators therefore decided that the rider clause in the C/P clearly provided that charterers were to appoint and pay for the stevedores, but they also held that the clause did not provide that charterers themselves were to perform the loading and/or trimming operation.
Consequently, the responsibility for the actions of the stevedores remained with the owners.
This conclusion was further strengthened (and it could be argued decisively settled) by a separate rider clause saying that responsibility for the “proper loading” and “stowing” of the cargo was to be the responsibility of the master and owners.
The Tribunal went on to consider (in fairness to the owners) that another consideration should be taken into account: In cases where stevedores are to be appointed by the charterers, but responsibility remains with the owners, there is an implied term that the charterers will appoint competent stevedores.
In this case, the master’s protest had highlighted what he obviously considered to be a shortcoming in the professionalism or ability of the stevedores. The owners had, however, presented no supporting evidence that the stevedores had been negligent or were not generally competent. The owners could have provided the Tribunal with copies of the pre-loading plan prepared by the master and the subsequent, eventual stowage plan for comparison purposes, but this had not been done. There was no other information provided which could support an argument that the stevedores were not competent.
Conclusion: Owners should ensure that clear wording is included in the C/P if they wish to avoid responsibility for cargo operations. Also, if the Master in his professional judgment finds the stevedores to be incompetent, he should make a reasoned protest in writing and – equally important – the Master and Owners must ensure that they obtain, keep and can provide evidence for their actions later.
London Arbitration (2005) 675 LMLN 1.