Standard Club updates on Qatar crisis legal implications

Jon Boaden of Mills & Co Solicitors has provided an update for Standard Club on the legal implications of the Qatar crisis.

Terms Of Carriage: Members who had contracted to carry cargo to or from Qatar, but were unable to do so due to the restrictions, were advised to “check carefully the written terms upon which they have agreed to carry the cargo (bill of lading, charterparty or other terms) and to take legal advice on how best to proceed if the terms are unclear”, Boaden wrote, noting that in some contracts of carriage there would be provisions specifically dealing with the parties’ obligations where government actions prevented cargo from being shipped or delivered.

Change Of Destination: Members were advised in particular to examine the relevant terms of carriage to see if, as a result of the restrictions put in place, they were entitled to deliver the cargo to a destination other than the destination originally agreed. However, members were warned that, prior to carrying cargo to a destination other than that originally agreed, it was essential that members check with the club that they had cover from the club to carry the cargo to the revised destination.

Liberty To Deviate: Many contracts of carriage contain liberty clauses which permit members to deviate the vessel from its originally intended route, for example by changing the order in which the vessel will call at certain ports.

However, prior to deviating a vessel from its intended route, members were advised to check carefully whether any relevant contract of carriage contained a liberty clause and, if so, the extent to which the clause allowed the vessel to deviate.

Deviation And The Hague / Hague Visby Rules: The Club noted that most bills of lading, and many charterparties and other contracts of carriage, incorporated the Hague or Hague Visby Rules, or national legislation that gave effect to those Rules.

Article IV Rule 4 states that ‘any deviation in saving or attempting to save life or property at sea or any reasonable deviation shall not be deemed to be an infringement or breach of these Rules or of the contract of carriage, and the carrier shall not be liable for any loss of damage resulting therefrom’.

Boaden noted that Members whose contracts of carriage incorporated the Hague or Hague Visby Rules or national legislation giving effect to those Rules would therefore be entitled — in the absence of any contrary terms in the contract that take precedence — to deviate vessels to deal with the restrictions that have been put in place, but only to the extent that the deviation is ‘reasonable’.

However, he added that whether a deviation is reasonable depended upon the exact circumstances in which the deviation was made, and could be a difficult matter to judge. Members were also advised to check with the club that they would not prejudice their club cover if they deviated a vessel from its originally intended route.

Charterparty Orders: Boaden noted that Members whose vessels had been ordered by charterers to proceed to temporarily inaccessible ports could be entitled to demand revised orders from those charterers, adding that Members who had chartered vessels and ordered them to proceed to temporarily inaccessible ports “should closely check the relevant charter terms to see what obligations they may have to give revised orders”.

Time Charter Hire: Under time charters a question would also arise as to whether hire would continue to be payable for the vessel during any delays caused by the restrictions that have been put in place.

Termination Of Contracts Of Carriage: Members were advised to take legal advice before terminating any contract of carriage on the basis that the restrictions put in place had made the contract impossible to perform.