Coronavirus – Guide For Members On Potential Legal Issues

· Duty of care towards to crew

Employers owe a duty of care towards their crew. The Club has set out some recommended precautions for minimising the spread of the disease which can be found in our News Item 24 January 2020.

· Notice of Readiness

When the notice of readiness is given, the vessel must be physically ready but also legally ready. It is common to provide for the commencement of laytime “whether in free pratique or not”. In the majority of cases such matters are irrelevant to the giving of a notice of readiness And even where there is no such express provision, if those matters are reasonably believed to be “mere formalities” and routine, notice of readiness may be given without having obtained the necessary clearances. However, where there is a known, or even perhaps just a suspected infection problem, this “mere formalities” exception to the general principle of readiness will not apply, in which case owners should ensure that they have the necessary clearances before a valid Notice can be issued.

· Deviation

A member of crew may become ill after visiting a port affected by the outbreak. A deviation for the purpose of saving life is permissible. Many standard charters will give the owner the right to deviate in such circumstances (Gencon 1994 clause 3 and NYPE 1946 clause 16). Unless the charter states otherwise, the vessel will not be off hire if the ship has to deviate in order to save the life of an infected crew member. Charterers will also not be able to claim for the additional bunkers used. Members may be able to make a claim against the Club for the net cost to the Member (over and above the expenses that would have been incurred but for the diversion or delay) of fuel, insurance, wages, stores, provisions and port charges. Members may wish to refer to the Club’s Claims Guide on “Guidance on the Submission of Diversion Expenses” below.

With regards to owners under a voyage charter, although the deviation would be permissible, owners would not be able to claim additional freight. Owners may want to add a clause providing for additional freight is the vessel is forced to deviate to safe the life of a crew who was infected as a result of visiting a port.

Under a bill of lading contract, a similar deviation would most likely be permissible if the Hague Visby Rules are incorporated (article IV rule 4).

· Safe Port

Under most standard charter party forms charterers are generally obliged to nominate a safe port. The owners must generally comply with the order to proceed to a port unless there is an unacceptable risk that the port is unsafe. The Master does not have to instantly obey charterers’ orders if in doubt about the prospective safety of the port. He will have reasonable time to make enquiries.

It is arguable whether a port could be said to be unsafe due to the coronavirus outbreak at a port. There do not appear to be any authorities on whether a port impacted by an epidemic can be considered unsafe. The vast majority of authorities relate to the safety of the port being determined by either its physical or political characteristics. It is suggested that risks to the crew can render a port unsafe even where there is no risk of damage to the ship.

Charterers have an obligation to nominate a safe port. Under time charter parties, if the port becomes unsafe after the first nomination, charterers then have an obligation to nominate another (safe) port. If the port becomes unsafe during the stay, charterers may order the ship to leave.

In the case of a voyage charter party, where the port has already been nominated, the general view is that charterers have no general duty or right to re-nominate. If the charter (and the bill of lading) have a liberty clause (e.g. “so near thereto as she may safely get”), then the owner may discharge the cargo at some other port.

If the owners accept charterers’ orders in full knowledge of the unsafety of the port owners may have waived their right to refuse to obey charterers’ orders but this will not necessarily mean that owners have waived their rights to damages.

*Source: West of England