Faculty of Business, Economics & Accounting

Department of Business Studies

INDIVIDUAL ASSIGNMENT

University of Finance - Marketing

Subject: LAW305
International Business
Law

Subject Convenor: Mr. R. Paneir Selvam

Lecture: Dr. Tran Van Long

 Assignment No.: __

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NGUYEN THY BAO HIEN E1700789

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Module/Subject Code LAW305
Module/Subject Name International Business Law
Mr. R. Paneir Selvam
Lecturer/Tutor/Facilitator Mr. Tran Van Long
Due Date 26th June
Assignment Title/Topic Assignment 2
Intake (where applicable) UFM
Word Count 1677 Date/Time
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Table of Contents
1. INTRODUCTION..................................................................................................................5

2. BODY.......................................................................................................................................5

2.1 THE IMPORTANCE OF REASONABLE DISPATCH IN A CHARTERPARTY................................5

2.2 IMPLIED OBLIGATIONS OF VESSEL IN A CHARTERPARTY...............................................7

3. CONCLUSION.......................................................................................................................8

References:......................................................................................................................................9
 1. Introduction
Ships are trains that do not routinely run on a given route, do not visit certain ports and do not
follow a predetermined schedule. The mode of chartering is to charter a ship to the charterer in
whole or in part to carry goods from one port to another. In the charter process, the relationship
between charterer (owner) and charterer (ship owner) is governed by a document called charter
party.

The charter party is an important document in which the carrier undertakes to transport the cargo
from one port to the consignee at another port, while the charterer undertakes to pay the freight.
The charter party is a contract in which the owner or carrier undertakes to transport the cargo
from one port to the consignee at another port. And the charterer pledged to pay the freight as
agreed by both parties. The charter party is signed when the charterer has a large volume of
cargo to be transported such as open oil, coal, ore, grain, cement, fertilizer, iron, steel,…

2. Body
Reasonable dispatch means “the performance of transportation on the dates, or during the period,
agreed upon by you and the individual shipper and shown on the Order For Service/Bill of
Lading. For example, if you deliberately withhold any shipment from delivery after an individual
shipper offers to pay the binding estimate or 110 percent of a non-binding estimate, you have not
transported the goods with reasonable dispatch. The term "reasonable dispatch" excludes
transportation provided under your tariff provisions requiring guaranteed service dates. You will
have the defenses of force majeure, i.e., superior or irresistible force, as construed by the courts.”

2.1 The importance of reasonable dispatch in a Charterparty

Voyage Charter Party is a charter party for the carriage of a full cargo, not for a period of time,
but at a stipulated rate per ton, for one voyage only, between named ports to be named on
arrival in a given area. It is a frequently used charter party of which there are many varieties,
and most commodities and trades have a particular type to suit their purposes. Shippers
of large quantities of bulk cargo such as phosphate, coal, grain, etc., have charter parties
with special titles such as "Fosfo", "Americanized Welch Coal Charter Party", "Baltimore
Grain Charter Party", etc. In a voyage charter party the charterer assumes no responsibility for
the operation of the vessel but generally pays stevedoring expenses in and out. A statement to
that effect will be included in the charter party. The master is particularly concerned with
voyage charter parties because of the laytime, dispatch and demurrage clauses and the

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necessity of tendering the Notice of Readiness to load or discharge. In this type of charter the
charterer contracts to provide a cargo at a given rate per day. The charter is generally for bulk
cargo, stipulated in tons or cubic feet, for all or part of the carrying capacity of the vessel.

Legally, according to the laws of many countries, if the charterer transports for any reason, in
addition to the legal reasons prescribed by the contract (such as force majeure), which
unilaterally terminate the contract. If they signed, it was clear that they had violated the contract.
The shipowner / carrier is protected by law to the extent that his or her economic interests are
guaranteed as if there were no breach of the charterer's contract - that is, the contract. still done.
However, the law and fairness also require owners / carriers to act to minimize damage by
finding a business plan for the ship as soon as possible.

A case law on how to assess damages at contract termination which the British court hears can
be considered a typical case:
The ship owner chartered the vessel to Rheinoel under a voyage charter party. After the ship
arrives at the port of loading, the cargo is still not available for loading. The charterer notifies the
shipowner of his / her offer to terminate the contract but is not accepted by the shipowner. A few
days later, the ship owner considered the charterer's behavior to be a breach of contract and
accepted the charterer's offer to terminate the contract. On this basis, the ship owner has signed a
new voyage charter contract, replacing the terminated contract, and sending the ship to unload
cargo at different ports than those of the previously signed contract.
The time limit for making goods under the original contract (signed with Rheinoel) started at 0: 1
minute on January 29, 1982 and ended at 0: 1 minute on February 1, 1982. On February 2, 1982,
the ship owner accepted Rheinoel's proposal to terminate the contract and sign a contract of
voyage with the new Marathon charterer. The ship started loading goods under the contract
signed with Marathon at 12:00 AM on February 13, 1982 and ended at 8:00 PM on February 15,
1982. As a result, under the contract signed with Rheinoel, the ship was able to leave the
discharge port at 8 o'clock on February 16, 1982 if the contract (terminated) was still in effect.

The referees rejected Rheinoel's defense of the contract's termination and decided to allow the
shipowner to claim damages for differences in freight, storage and departure costs. Rheinoel
appealed on how to determine the damage.

The court ruled that the arbitrators were correct in making the decision in principle that the
damage of the ship owners must be determined on the basis that they are financially secured as if

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they were a contract with Rheinoel. is terminated. They had to do a complicated job and come up
with an appropriate solution. It is to sign a new contract for the ship to leave the port for loading
and transport to the port of discharge; only a short period of time coincides with a part of the
contract terminated (the price as a contract with Rheinoel is done).

2.2 Implied obligations of vessel in a Charterparty

In the contract, it is clearly and specifically defined the rights and obligations of the tenant and
the lessor by the terms stated in the contract. Therefore, in the course of contract performance, if
a dispute occurs between the carrier and the tenant, one will get the contract to resolve the
dispute. All provisions of the contract are legally binding to govern the behavior between the
parties. These terms compel the signatories to comply with its content. Any party who does not
comply with the provisions of the contract means a contract breach. When violating the terms
committed, the violating party will be fully responsible for the consequences caused by its
violations. There are provisions in the charter forms of charter party that any disputes arising out
of the contract will refer to the maritime law of a certain country; reference to any country's
maritime laws and tribunal trials.

There are many types of voyage charterers, but generally in this essay we refer to the following
two provisions regarding the obligations of the ship:
 Seaworthiness of Vessel

In the charter party without a provision that the shipowner is responsible for the ship's ability to
sail, it is evident that the ship's absolute responsibility for seaworthiness lies with the carrier.
When the voyage begins, the ship owner must make sure that the ship is absolutely seaworthy,
they must apply each solution to ensure that the ship is actually seaworthy. If there is a
deficiency in making the ship capable of sailing, the ship owner is responsible. However, this
"guarantee" indicates that the ship is only resistant to the threat of normal storms and waves, but
does not mean any weather.

This guarantee of seaworthiness cannot be specified between "condition" and "guarantee".

Under certain circumstances, this guarantee is broken, potentially causing the charterer to give
up his responsibility to take a step of contract performance. In some other situations, the
guarantee is broken, the fact that the charterer has the right to claim damages. For example,
before the departure of the ship, the charterer and the shipper discovered that the ship was
incapable of sailing, making a defect that could not be repaired and could not be repaired within
a reasonable time, then they reserves the right to cancel the contract.
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If the "cause of the loss" and "the ship's inability to go to sea" do not have a causal relationship,
then the ship owner can rely entirely on the terms of the contract's liability to protect himself.

 Safe port

The two sides agreed on the name of a port or several ports of loading. The loading port
specified in the contract must be a safe port for ships in terms of maritime and socio-political. In
order to extend their right to change the loading port when necessary, the ship owner usually
adds a sentence or so near thereto as ship may safely get and lie always afloat.

When signing a contract, we should agree to cross out this paragraph. Particularly the term
always afloa should be added to or safe aground especially when the loading port is influenced
by alluvial and tidal sediments. In case the port of loading / unloading has not been determined,
the port of loading may be specified at the charterer's choice. The geography of the port of
loading and unloading to reduce the time and cost of travel of the ship, the geographic order of
the port of loading depends on the flow of the ship and the owner's choice.

The number of loading ports has a direct effect on the rate of chartering. Therefore, charterers
should try to clearly identify specific loading ports, avoiding general signing of loading ports.

3. Conclusion

The charterparty is a legal contract of chartering (employing) a vessel. this paper

constitutes a review of the important of charterparties in the main types of charter. The ship
owner needs to ensure that the course of the trip is reasonable dispatch; If not so, the charterer
may suffer a claim. If the ship owner breaches the contract, obstructing the objective of the
contract, the charterer may also cancel the contract.

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References:
Andrews, N. (2011). Contract Law. Cambridge: Cambridge University Press.

Association of Ship Brokers & Agents (U.S.A.) Inc. TANKER VOYAGE CHARTER
PARTY (ASBATANKVOY 1977) available at
http://www.lawandsea.net/1documents/ASBATANKVOY.pdf.

Baatz, Y. (2008). Charterparties. In Institute of Maritime Law (Ed.), Southampton on

Shipping Law, (pp.45-93), London.

Informa. Baughen S. (2009). Shipping Law. (4th ed.). London and New York: Routledge
Cavendish.

Carr, I. (2009). International Trade Law. London: Routledge Cavendish.

Derrington, S. & Panna, A. (2000). In M.W.D. White (Ed.), Australian maritime law. (2
Ed.). (pp.121-161), Annandale, N.S.W.: Federation Press, Australia.

Dockray, M. (2004). Cases & Materials on the Carriage of Goods by Sea. (3rd ed.). London:
Cavendish Publishing Limited.

Eder, B., Foxton, D., Berry, S., Smith, C & Bennett, H. (2011). Scrutton on Charterparties
and Bills of Lading. (22nd ed.). London: Sweet & Maxwell Ltd.

Edwinton Commercial Corporation v. Tsavliris Russ (Worldwide Salvage & Towage) Ltd
(The “Sea Angel”). (2007) vol.1 Lloyd's Law Reports.

The Baltic and International Maritime Council, Uniform General Charter (Gencon 1994)
available
https://www.bimco.org/Chartering/Documents/Voyage_Charter_Parties/∼/media/Chartering/Do
cument_Samples/Voyage_Charter_Parties/Sa mple_Copy_GENCON_94.ashx.

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 The International Convention on Liability and Compensation for Damage in Connection
with the Carriage of Hazardous and Noxious Substances by Sea, 1996 (HNS Convention)
available at http://www.hnsconvention.org/Documents/HNS%20Convention%201996.pdf.

United Kingdom. Department for Transport. (1997). Merchant Shipping Dangerous Goods
and Marine Pollution Regulation, art.2 (1). London: HMSO.

Time Charter New York Produce Exchange Form Issued by the Association of Ship Brokers
and Agents (USA), Inc.(NYPE 1993) available at
https://www.bimco.org/Chartering/Documents/Time_Charter_Parties/∼/media/Chartering/Docu
ment_Samples/Time_Charter_Parties/Sample _Copy_NYPE_93.ashx

Soyer, B. (2005). Warranties in Marine Insurance. (2nd ed.). London: Routledge Cavendish.

Tanker VOYAGE CHARTER PARTY (Tankervoy 1987) available at

https://www.bimco.org/Chartering/Documents/Voyage_Charter_Parties/∼/media/Chartering/Do
cument_Samples/Voyage_Charter_Parties/Sa mple_Copy_TANKERVOY_87.ashx.

Tetley, W. (2008). Marine Cargo Claims. (4th ed.). Montréal: Carswell.

Canada. Transport Canada. (1992). Transportation of Dangerous Goods Act, c. 34, art.2.
Ottawa: Minister of Public Works and Government Services Canada. US Code of Federal
Regulations title 49-Transportation, available at http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?
c=ecfr&tpl=/ecfrbrowse/Title49/49tab_02.tpl.

Wilson, J.F. (2010). Carriage of Goods by Sea. (7th.ed.). London: Longman.

Treitel, G. & Reynolds, F.M. B. (2005). Carver on Bills of Lading. (2nd ed.). London: Sweet
& Maxwell Ltd.

Dockray, Martin cases & materials on the carriage of goods by sea 3rd ed. London;
Portland, or Cavendish Pub., 2004.

John Wilson Carriage of Goods By sea

Shipbroking and chartering practice / by Lars Gorton 6th Ed London: LLP, 2004.

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 Hughes, A. D. Casebook on carriage of goods by sea. 2nd ed London: Blackstone Press,
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Ivamy, E. R. Hardy (Edward Richard Hardy) Payne and Ivamy’s Carriage of goods by sea.
13th ed. London : Butterworths, 1989

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