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S H I P P I N G L AW

NOTES

V ie w m y com pl et e p r ofi le

LIST OF NOTES▼ 20 0 8 (1 )

▼ Nov ember 2008 (1 ) A r bi tr at ion in

Multimodal

Transport Law:

► 2 0 0 7 (7 )

THURSDAY, NOVEMBER 6, 2008

Arbitration in Multimodal Transport Law:

Containerization and MultimodalTransport Law.

(By V.M. Syam Kumar, Advoc ate, Lecturer for Maritime Law , National

University for Advanc ed Legal Studies, Kaloor, Coch in.)

Arbitration in Multim odal T ransport L aw:

Arbitration as a dispute resolution mechanism has display ed great

agility and dex terity in adapting itself to suit the requirements of various branc hes of law. We hav e in the last sessio n seen the role of arbitration in disputes invo lving ships and its effectiv eness in settlingmaritime disputes of v arious nature. The effectiv eness o f arbitrationin maritime dispute resolution has lead to the rise of a distinct branchof arbitration termed Maritime A rbitration capable of having anindependent existence.Norm making activity is a c ontinuing proc ess and does not come to astand still so long as social intercourse continues. Increase in global

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SHIPPING LAW NOTES Artic les and Notes on M aritime Law by v arious autho rs, compiled by V.M.Syam Kumar,Faculty

member for Maritime Law, National University o f Advance d Legal Studies, Cochin, India. Mat erials herein are intended for free acce ss to students and all othe rs interested in Maritime Law. For more mate rials on Maritime law v isit Editor's personal blo g at:http://admiraltylawkochi.blogspot.com/

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trade and technological advancements in the means of marinetransport have necessitated the creation of new and varied legalnorms even within the field of m aritime arbitration. MultimodalTransport Law is one such innovation o f trade and technology whichcalls for separate co nsideration.

What is Mu ltim odal T ransportation?International carriage of goods may be executed by sea, air, or landor by a combination of all or any of them. If it is done by only one

among such modes, it is a Unimodal transport. Carriage involvingmore than one mode of transport is termed as MultimodalTransportation o r Combined Transportation. Since 1 950’s containersprov ed to be a suitable means for effecting multimodal transport.Consolidation of cargo into c ontainers gave a fillip to multimodaltransportation of go ods across the globe. Containerisation also gaverise to very peculiar legal issues which required separate treatmentunder the regime of Multimodal Transportation.Distinctiveness of Multimodal Transportation.Transport documents are an integral part of international carriage.

The nature and form of these do cuments v aries from one mode of transport to the other. The rights, duties and liabilities arising therefrom also v ary considerably. The liability re gime governing acommo n carrier is different from that applicable to an ocean carrier.Similarly, the regimes applicable to the c arriage of goods by land orrail are distinct from the one pertaining to the carriage of goods by air. This ex plains the reason for distinct doc uments cov ering eachmode of transportation. The liabilities under each mode as evidenced

by the co ncerned document also keeps o n changing from time to timedue to various factors, ranging from modern advancements in

carriage technology to the security conc erns arising from the everchanging global political scenario. With the advent of containerization, wherein co ntainers which wo uld from its point of origin till the place of delivery be subjected to varied modes of transportation, road, rail sea or air, this myriad of liability regimesunder the varied doc uments gave rise to complex legal issues of greatpractical and commercial importance.Factors leading to the growth of Multimodal Transport law:Unimodal transports were governed by separate laws whichdeveloped independently and distinct from each other through both

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legislative enactments and judicial pronounceme nts. Each unimodaltransport law preferred to remain as a water tight co mpartment. They

were reluc tant to adm it into its realm a com bination of two or moremodes of transport. The independent growth o f these unimodaltransport laws both in national and international lev els would bereveled by the plethora of legislations which govern each of them. A great number of International Conventions dealing separately witheach mode of transport like the Convention on the Contract for the

International Carriage of Goods by Road, 1956 (C.M.R. Convention),Convention for the Unification of Rules Relating to InternationalCarriage by Air, Warsaw, 1 929, Conv ention Concerning InternationalCarriage by rail, 1980 (C.O.T.I.F.), International Convention for theUnification o f Certain Rules Relating to Bills of Lading, Brussels, 1 924(The Hague Rules) ev olved. In tandem with the said internationalConventions National laws were also enunciated by nation states, attimes with c onsiderable v ariation from the Conventions so as to meetthe local requirements. The separate norms and liability regimes ineach of these Conventions gave rise to c ertain practical problems.

When more than one transpo rt doc ument is issued and different rulesare applicable to each document, the question as to where and whenthe loss, damage o r delay has occ urred will have to be answered withcertainty. Proving the time and cause of loss or damage withsufficient evidence will be difficult and many time impossible for thecargo owner. Due to this, the ac tual point of time when the loss,damage or delay occasioned or the cause for the same may never beknown with certainty necessary to maintain a claim. Hence theissuance of a numbe r o f doc uments bec ame incompatible with acombined transport o peration. The same prov ed to be

disadvantageous to the operators too since they may not be able togain the optimum economic benefit of new transport techniques.Moreover , with the passage of time and due to the rapid growth of international trade it was rev ealed that c arriages by other modes

were inc idental to the unimodal transport and that there was a needfor elaborate prov isions for co mbined transportation.

All this lead to the ev olution of a single document called Com binedTransport Document o r the Multi Modal Transpo rt Doc ument

whereby the operato r assumes liab ility for the whole journe y instead



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of issuing several do cuments.International attempts towards evolving a Start to FinishDocument:Upon realization of the need for a single document that would gov ernthe rights, duties and liabilities during the journey of a Containerfrom the start to the finish, the initial efforts were to incorporateprovisions enabling the same in the existing Conventions regardingthe particular unimodal transport. Hence many of the Conventions

made pro visions for multimodal transport. But these only confounded the situation further and soo n prov ed to be unworkable.On the other hand the legal difficulties faced by the combinedtransport operato rs when different types of documents were used forcombined transport operations based on different rules compelledthe o perators to issue single document for the entire carriage. Butdue to the absence of compulsory rules governing multimodaltransportation, the terms used in the documents differed widely.

Attempts were made by different international agencies to unify thedifferent documents in use. ICC prepared a set of Rules on Combined

Transport Documents and recommended their use. UNCTAD set upan Inter Governmental Preparatory Group to prepare a draftconvention which was put to discussion in the Diplomatice DraftConference in Geneva and finally the Convention on InternationalMultimodal Transport of Goods, 1980 was adopted. Taking cue fromthe Convention the Indian parliament enacted the MultimodalTransport of Goods A ct, 1993 with certain modification to suit thepeculiar co nditions in India.Indian Law gov erning Multimodal T ransportThe Multimodal Transport of Goods Act, 1993 is divided into five

chapters under the heads (1) Preliminary aspects (2) Regulation of Multimodal transpo rtation (3) Multimodal Transpo rt Document (4)Responsibilities and liabilities of the Multimodal Transport Operator(5) Miscellaneous aspects. A schedule is also attached to the Act

which brings in ce rtain ame ndm ents to (1) The Carriers Act,1 865 (2)The Indian Carriage of Goods by Sea Act, 1925 (3) The Sale of Goods

Act, 1 930.The whole A ct is divided into five chapters under the heads (1)Preliminary aspects (2) Regulation of multimodal transportation (3)Multimodal Transport Document (4) responsibilities and liabilities of



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the multimodal transport o perator (5) Miscellaneous aspects. A schedule is also attac hed to the ac t which brings in certainamendments to 1) The Carriers Act, 1865, 2) the Indian carriage of Goods by Sea Act, 192 5, 3) and the Sale of Goods A ct, 1 930.‘Multimodal transportation’ as defined by Section 2(k) of the Actmeans carriage of goo ds by two o r more modes of transport from theplace of acc eptance of the goo ds in India to a place of delivery o f thegoods outside India. So a transport to be a multimodal transport, 3

conditions has to be satisfied: (1) the goo ds are to be carried by twoor more modes of transport (2) the place of acceptance of the goodsshould be in India.(3) the place o f delivery of the goods should beoutside India.Section 2(j) precisely defines what are the mode s of transport soughtafter by the Act. They include carriage of goods: 1) by road , 2) by rail, 3) by inland waterway s, or 4) by sea. Here the air mode of transport is c learly exc luded. The definition of the ‘modes of transport’ makes the intention o f the framers of the Ac t,unambiguous, in avoiding air mode.

The term Multimodal Transport Operation is defined exac tly in thesame way as it is defined in the International Conv ention but goes onfurther to say that the person should be registered under sub-section(3) of Sec.4 . So by the definition, the ope rator may not own orcontrol the modes of transport. It may be a shipping company or anon-shopping but having a minimum annual turnover of 50 lakhrupees. The Ac t also makes it mandatory that the operator has officesor agents in not less than 2 other countries. The operator can enterinto agreement with the sub-contractors, for eg, unimodal carriersand terminal operators.

The term ‘goods’ has also been defined by the A ct. It includes: (1)containers, pallets o r similar artic les of transport used to consolidategoods, and (2) animals.Rights & Liabilities of Multim odal T ransport Operator(MTO) under the Act

Amongst many other ob ligatio ns prov ided in the Act the princ ipalprovisions regarding the rights and liabilities are incorporated inChapter I V of the A ct. Chapter IV contains eight sections, whichexpressly state the liabilities of M.T.O.; and the responsibilities of the



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consignor.Rights of the M.T.O.

Amongst many prov isio ns, which are guaranteed by the Act theprincipal pro v isions regarding the rights o f the M.T.O. is as follows:(i) Rights of an M.T.O. under Sec. 1 2Sec. 12 relates to the responsibility of the consignor which are interalia the rights of the M.T.O. Sec. 12(1) states that the consignor shall

be deemed to hav e guaranteed to the M.T.O. the ade quacy andaccurac y , at the time the M.T.O. takes charge o f the goods, o f theparticulars referred to in Sec. 9(a) and Sec. 9(b) as furnished by theconsignor for insertion in the multimodal transport document. Sec.12(2) states that the consignor shall have to indemnify the M.T.O,against loss resulting from inadequacy or inaccuracy of theparticulars. But this right of the M.T.O. shall in no way limit hisliability under the multimodal transport contract to any person otherthan the consignor.(ii) Rights of M.T.O. while carry ing dangerous goods.Sec. 2 1 assets the r ights of M.T.O, in a specific situation when

dangerous goods are c arried. The co nsignor has the burden of informing the carrier as to be character of the goods and if necessary the precautions to be taken during their transport. Sec.21(2) will not

be inv oked if the operato r has take n the goods, in his charge withknowledge of their dangerous character,.Sec.21(2) states that thefailure of the c onsignor to inform (1) will m ake him liable to theM.T.O. for all loss resulting from the multimodal transportation of goods and (2) if needed the goods may be unloaded, destroy ed orrendered innocuous as the circumstances m ay require, withoutpayme nt of compensation.

(iii) Rights to ex ercise lien on the goo ds.The M.T.O. shall have a lien on the goods for any amount due underthe multimodal co ntract. He is also entitled to a lien on thedocuments in his possession. The period during which the goods arein the possession of M.T.O, while exercising his right of lien shall not

be inc luded for the purposes of ca lculating the tim e of delay underany o f the prov isions of the Act.Scope for Arbitration in Multim odal transport con tractsThe Indian statute governing Multimodal transportation is at

varianc e with the inte rnatio nal co nv ent ion on many notab le aspects



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notwithstanding its general ac ceptance of the norms laid down by theConvention. Though in the Schedule of the Act attempts have beenmade to amend the other statutes in force in India relating to andhaving direct effect on the Multimodal transportation, the saidamendments have failed to plug the inconsistencies remaining in thefield. A detailed discussion thereof would be out of place here. Fromthe point o f view of Arbitration, the Ac t specifically incorporatesSec.26 which pro vides that the parties to a multimodal transport

contract may prov ide that any dispute which may arise in relation tomultimodal transportation under the pro visions of the Act shall bereferred to arbitration. Sub caluse thereto also provides that thearbitration proceeding may be instituted at such place or inacco rdance with such procedure as may be specified in themultimodal transport doc ument.ConclusionContainerization and multimodal transportation is thus the new faceof international trade. The efficacy of the new mode being prov ed andaccepted, reliance on the same is bound to increase in the years to

come. Increase in the number of disputes would be a conco mitantand unavoidable phenomenon. The said disputes are to be resolved with least fric tio n and waste. It is ev en more imperative sinc e incommercial practice time is the essence of commercial ventures andthe same c annot be wasted by recourse to the cumbersomeprocedure of the traditional co urt based settlement process.

Arbitration has been acce pte d by the statute as the desirable meansof dispute resolution. In view of the very peculiar rights, duties andliability regime in e xistence in multimodal transport contracts andthe usages and practices that are endemic to the said branch of

transportation, arbitration of suc h disputes would req uire not only persons trained in the said branch of transport law but also peculiarmethods and processes as ev olved in the c ase of maritimearbitration.* * *

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TUESDAY, DECEMBER 4, 2 007

EVOLUTION OF FLAGS OFCONVENIENCE(By FEBIN A.K., National University of Advanced Legal Studies,Cochin, India.)INTRODUCTIONThe flying of the national flag is visual evidence and a symbo l of aship’s nationality . The 19 58 Geneva Conve ntion oh High Seas makes itclear that the ship will hav e the nationality of the State whose flagthey are entitled to fly. ‘Flag’ is also used as a shorthand for theallocation o f nationality to the v essel and the assumption of exc lusiveurisdiction and control by a State ove r the vessel.

In this work I would be dealing with the evo lution of a concept, whichhas great relevance in the present shrinking world- “Flags of Convenience”. The history of the concept would be traced out by meand then I would discuss why this concept emerged and itsadvantages and disadvantages.

THE CONCEPT OF FLAGS OF CONVENIENCE

Acco rding to Boczek [1] a “flag of convenience” (FOC) can be definedas the flag of any country allowing the registration of foreign owned

and foreign co ntrolled v essels under conditions which, for whateverreasons, are conv enient and opportune for the persons who areregistering the v essels”.

The fact of foreign control, if not foreign o wnership is a featurecommo n to all flags of conv enience. In 197 4 the InternationalTransport Workers' Federation (ITF) defined an FOC as follows:"Where b eneficial ownership and control o f a vessel is found to lieelsewhere than in the country of the flag the v essel is fly ing, the vessel

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is considered as sailing under a flag of conv enience."

ROCHDALE CRITERIA It is the ITF Fair Practices Committee (or the FPC sub-committee),

which decides what is and what isn¹t an FOC. The FPC maintains a listof countries o ffering FOC facilities and from time to time adds ordeletes countries from the list. The basis for me mbership of this selectclub is the so-called "Rochdale Criteria" laid do wn by a BritishCommittee of Inquiry in 1 97 0. These were:Ø The country allows non-citizens to own and control v essels;Ø Access to and transfer from the register is easy ;Ø Taxes on shipping income are low o r non-existent;Ø The country of registration doesn¹t need the shipping tonnage forits own purposes but is keen to earn the tonnage fees;Ø Manning by non-nationals is freely permitted;Ø The co untry lacks the power (or the willingness) to impose nationalor international regulations on its' ship-owners.

UNIV ERSALITY OF ROCHDALE CRITERIA

It is in no way universal even though all the criteria are present inFOCs. With regard to the second point, most flags of conv enience now impose age-limits on v essels entering their registry for the first time,and survey s are insisted upon in a number of cases prior to issuanceof the permanent c ertificate of registry (for example, Panama,Bahamas, Barbado s)Like wise the sixth po int is also becoming irrelev ant now.

GENERAL LINK THEORY

Flags o f convenience are now defined by reference to the ex istence orotherwise o f a genuine eco nomic link between a v essel and itscountry of registry. Thus, the ad hoc Intergov ernmental WorkingGroup, established under the auspices of UNCTAD, on the EconomicConsequences of the Existence or Lack of a Genuine Link between

Vessel and Flag o f Registry co ncluded in its Repo rt that:

The following elements are normally relevant when establishing



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whether a genuine link ex ists between a vessel and its co untry of registry:

Ø The merchant fleet contributes to the national economy of the StateØ Revenues and e xpenditure of shipping, as well .as purchases andsales of vessels are treated in the national balance-of-paymentaccounts.Ø The employ ment of nationals on vessels;Ø The beneficial ownership of the vessel.

In today's world with second registers, bareboat charterarrangements and other methods designed to get around ITF policy,defining an FOC is becoming more and more difficult. However, shipsregistered in an FOC register, which can demonstrate that they aregenuinely owned in that country , are not treated as FOCs. Equally,ships from countries not on the list will be treated as FOCs if the ITFreceiv es information that they are beneficially owned in anothercountry . The list is as follows:

Antigua & Barbuda, Aruba (added June 1997 ), Bahamas, Barbado s,Belize, Bermuda, Burma, Cambodia (adde d June 1 997 ), Canary Islands, Cayman Islands, Cook Islands, Cyprus, Germany SecondRegister GIS, Gibraltar, Honduras, Lebanon, Liberia, Luxembo urg,Malta, Marshall Islands, Mauritius, Netherlands Antilles, Panama, SriLanka, St Vincent & the Grenadines, Tuvalu, Vanuatu.Ships entered on the following “seco ndary” registers may beconsidered as flying under FOCs; their status depends upon whetheror not they are owned by nationals of the flag country and whether or

not crew wage agreements acceptable to that country’s unions have been entered into: Norwegian Internatio nal Ship' Register, DanishInternational Ship Register, Isle of Man (UK), Luxembourg (in respectof Belgian-owned ships only), Madeira (Portugal), Kerguelen(France). The German International Ship Register and the Spanishsecondary register in the Canary Islands are considered "fully-fledged" flags of convenience by the ITF and all ships registered thereare treated as FOC vessels.



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ORIGIN OF FOC

The use of flags of convenience is generally trac ed back to the use of the Spanish flag by English merchants in, orde r to avoid Spanishmonopoly restrictions on trade with the West I ndies. In the 17 thcentury English fishermen off Newfoundland adopted the French flagin o rder to av oid fishing restrictions imposed by Great Britain. Britishfishermen made similar use of the Norwegian flag in the 19th c entury.

U.S. merchant vessels flew Portuguese flags during the War of 1812 toavoid difficulties with the British. Slave-trading ships owned by citizens of both the U.S. and v arious Latin American co untries flaggedelsewhere to avoid detection in the 19th century when internationalagreements prohibited the slave trade.[2] Even earlier, British shipsflew flags of obscure German principalities during Napoleon’sshipping b lockade.[3]

Widespread use of suc h flags, however, came only with the decisio n by ce rtain states beginning aro und the 1920s to create openregistries, where ships were not r equired to have onerous ties to astate in order to re gister. Open registries are generally characterizedas those that do not require citizenship of ship owners or operators,levy no or minimal taxes, allow ships to be worked by non-nationals,and have neither the will nor c apability to impose do mestic orinternational regulations on registered ships.[4] The first state tocreate such a registry was Panama, followed shortly thereafter by Honduras and later Liberia. One of the first incidents occurred on

August 191 9 when a vessel nam ed Belen Quezada was transferredfrom the Canadian flag to the Panamanian flag and was used in rumrunning to avoid American prohibition laws.[5] In 1922, two cruiseliners, the Reliance and the Resolute, were transferred from theUnited States flag to the Panamanian for the same reason. Prohibitionthus prov ided the boost for the Panamanian flag and in 1925; Panamaenacted a liberally drafted maritime law intending to attract foreigntonnage. The United Fruit Company's fleet of banana vessels wastransferred from the United States flag to that of Honduras during thesame period.

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An officer of the first shipping c om pany to transfer a U.S.-flagged shipto Panamanian registry explained the appeal: “The chief advantage of Panamanian registry is that the owner is reliv ed of the continual . . .

bo iler and hull inspec tions and the regulations as to c rew’s quartersand subsistence,” pointing out that as long as the ships pay theregistry fee and y early (low) tax, “we are under absolutely norestrictions.”[6]

The worsening political situation in Europe in the 1930s providedconsiderable impetus to the flags of co nvenience. I n 1 935, the 5

vessels forming the Esso Baltic fleet were transferred from the flag o f the Free City of Danzig to that of Panama. During the Spanish Civil

War a number of Spanish vessels made use o f the Panam anian flag andmany Greek owners re-flagged their ships in Panama to av oid thenon-interve ntion bloc kade imposed by Great Britain and otherpowers. High crewing costs under the Greek flag in the pre-war yearsalso led to growing use of the Panamanian flag by Greek operators. In

1932 , Manuel Kulukundis registered the Mount Athos under thePanamanian flag; this was followed by a number o f vessels in theOnassis fleet. Following the outbreak of war between the Europeanpowers in 1939, the Panamanian flag saw a further influx of UnitedStates tonnage seeking to avo id the prov isions of the United StatesNeutrality Act preventing the carriage In American ships of cargoesdestined for belligerents on either side.

After the WWII there was an inc reasing dissatisfac tio n with some o f

the aspects o f the of the Panamanian flag; like the co ncern for thestability of the Panamanian Gov ernment and excessive c onsular fees. A former United States Secretary of State, Edward R. Stettinius, Jrsaw the saw the deve lopment of an off shore shipping register as auseful innovation. In 1948, the Liberian Government promulgatedthe Liberian Maritime Law and the Liberian Corporation Law, whichcontained provisions from United States' legislation. Stettinius

Asso ciates, whic h had a profit -sharing arrangement with the LiberianGovernment, based the ship registry in New York and ran a well off

b h h k h f h



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business in co ntrast with the Panamanian network. The first shipentered in the new Liberian register was the World Peace in 1948. By 1967 , the Liberian register had passed the UK to become the largestin the world. I n spite of all the hostile Governments, by the end of 1996, Panama and Liberia acc ounted for 7 7 89 ships tallying142 ,11 9,57 6 gross register tons, over a quarter of the world tonnage.

ARGUMENTS FOR FOC

From the ship owner’s point of view, the characteristics of a flag of conv enience would be seen as follows;

Ø The avoidance of tax in the country which he is established;Ø Lower c rewing costs, sinceØ (a) Registration under a flag of convenience generally means anunrestricted choice o f crew in the International market;(b) He is not subject to onero us national wage scales;Ø Less regulatory controlØ Anonymity: Ascertaining the beneficial ownership of the vessel is

v irtually impossible.

ARGUMENTS AGAINST THE FOC

The arguments can b e discussed on 3 grounds. (1) Labour (2)Economic distortion(3) Safety

1. LABOUR

Organized labour opposition to flags of c onv enience b egan in the1935 in the United States as a consequence of the transfer of

Americ an Ships to the Panamanian and Honduran flags. The ITF afterthe WWII adopted a re solution to boy cott such ships. The mainobjectiv es of this meeting held in July, 1 958 were-

Ø To establish by international gov ernmental agreement a genuinelink between the flag that a ship flies and the nationality or residence

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of its owners, managers and seafarers, and so to eliminate the flag of convenience system entirely;Ø To e nsure that the ship owners pro tect the seafarers who serve onflags of conv enience ships, whatever their nationality, fromexploitation.

Acco rding to the Internatio nal Shipping Federation, the campaignhas been most enthusiastically pursued in Australia and Scandinavia.

Although the campaign is ex pressed to be direc ted against allegedly substandard labour conditions on board flags of convenience ships,the chief motivation has been to prevent loss of work opportunitiesfor seafarers in the traditional maritime c ountr ies where spiraling

wage costs hav e rende red the operation of ships increasingly uneconomic.

Many seafarers working on FOC ships rec eive shockingly low wages,live in very poor on-board conditions, and work long periods of ov ertime without proper rest. They get little shore leave, inadequatemedical attention, and often safety procedures and vesselmaintenance are neglected (in many cases reported to theInternational Transport Workers' Federation (ITF), FOC ships have

been unseaworthy ). In some of the worst cases , seafarers are v irtualprisoners o n FOC vessels. The FOC countries do not enforce minimumsocial standards or trade union rights for seafarers. If they did, ship-owners would soon lose interest in them. The countries from whichthe crew is recruited can do little to protect them, ev en if they wantedto, bec ause the rules, which apply on bo ard, are those of the country of registration.

BLUE CERTIFICATE

One tac tic in the I TF campaign has been to insist that ship ownersoperating v essels under flags of co nvenience employ their crewsunder the ITF Collective Agreement which contains terms andconditions for the employment of seafarers unilaterally determined

by the Federation. Signature of the agreement is ev idenced by theissuance of a "Blue Certificate" and failure to produce such a

tifi t t I TF i t l d t i d t i l ti b i



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certificate to an I TF inspector can lead to industrial action beingtaken against the vessel. The ITF will issue a Blue Certificate provided,that:

(a) The ship owner signs the ITF Collective Agreement - or an ITF,approved national agreement. The former provides for rates of pay irrespectively of the nationality of the crew based on an average of European wage levels incre ased to allow for inflation;(b) Each c rewmember receiv es an individual contract of employment

incorporating the current ITF wage scale endorsed, if necessary by the authorities of the labour-supplying country ;(c) A ll crew members not already belonging to a Union affiliated withthe ITF arc enrolled in the ITF's Spec ial Seafarers' Departm ent;(d) The ship owner makes an annual contribution in respect of eachseafarer to the Federation's Seafarers' International Assistance

Welfare and Protectio n Fund(e) The Federation is advised of future crew or c ontract c hanges andhas access to all records(f) On demand, the c rew is paid back pay cov ering the difference

betwe en the ITF rate and the prev ious rate to the date of commenc ement of the ITF-approv ed contract.

2. ECONOMIC DISTORTION

The 1981 report by the UNCTAD Secretariat[7 ] blamed the freedomfrom fiscal obligations in flag-of-conv enience countries for theliberalization of tax concessions and increases in Government

assistance in traditional maritime nations. Certainly, this policy wassuccessfully followed by Greece in the early 195 0s in an effort torepatriate the substantial number of Greek-owned ships operatedunder flags of conv enience. The report stated that

There is no doubt that the existence of open registries is the majorcause of the distortions that governments have been forced to maketo their fiscal regimes.

3. SAFETY



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Oil spills from Liberian-registered tankers in the 1 960s and 197 0scalled attention to issues of inadequate training, communication, andequipment.[8] Working conditions aboard FOC-registered ships fromsuch states as Panama, Honduras or Romania are often abysmal andeven “life-threatening.”[9]

Much of the widely publicized maritime disasters of recent y ears areinvolv ed v essels registered under flags of conv enience-the Torrey Canyo n in 1 968; the Amoc o Cadiz in 197 8; the Exx on Valdez in 1989,The Scandinavian Star in 1990 and the Sea Empress in 1996. It is alsoa fact that the c asualty rec ords o r open registry fleets reveal aconsiderably higher rate of losses than in the traditional maritimecountries.

A report by the UNCT AD Secretar iat in 1981 identified 1 0 reasons why the non observ anc e of safety standards is likely to be greaterunder open-registry flag's than under the flags o f States hav inggenuine economic links with vessels:

Ø Real owners are not readily identifiable.

Ø Real owners can change their identities by manipulating brass-platecompanies and c onsequently avo id being identified as repeatedsubstandard operators or risk-takers;

Ø Since the master and other key shipboard personnel arc notnationals of the flag State, they have no need or incentive to visit the

flag State and can av oid legal action;

Ø Owners who reside outside the jurisdict ion of the flag State can defy the flag state by refusing to testify at an inquiry b y the flag State andavoid prosecution

Ø Since open-registry owners do not have the same interest inpreserving good relations with the flag State, they do not feel the needto c o-operate with inspectors of the flag State;

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Ø Open-registry shipping lacks the union structure whic h is soessential to the application of safety and social standards in countriesof normal registry: namely, a national trade union o f the flag Staterepresenting basically the interests of national seamen on board

vessels owned by owners who hav e econom ic links with the flag State ;

Ø Open-registry owners arc in a better position to put pressure onmasters and o fficers to take risks, since there is no really appropriate

government to which shipboard personnel can complain;Ø Port State co ntrol is weaker because the port State can only reportsubstandard vessels and practice to a flag State which has no realcontrol over the owner;

Ø Owners can suppress any signs of militancy among crews by v irtueof their freedom to change nationalities of c rews at whim:

Ø Enforcement of standards is basically inconsistent with theoperation of registry with the sole aim o f making a profit.

Many people ho wever consider these c riticisms as unjustified asthere are many factors that are present in the Flags of Convenience,

which are present in all the maritime nations aro und the world . A llthese problems are faced by all the nations of the world which haveshipping registries.

THE MODERN SCENARIO

Many steps are being taken in all the Flags of Convenience states toprov ide for better safety . Some of the most mo dern ships areoperating under flags of conv enience and a number of registers havetaken steps to ex clude v ery old tonnage. Liberia, for example,stipulates that vessels seeking registration (or re-registration) mustnot be more than 20 y ears old, although subject to certain conditions

vessels ex ce eding that age-limit may be accepted for re-registrat ion,Panama presc ribes no age limitation, but ve ssels over 20 y ears of ageare subject to a special inspection before the Permanent Certificate of Registry can be issued. Bahamas generally applies a 12-y ear age-limit,

whilst Vanuatu follows the 20 -y ear rule Cyprus has a basic 17 -y ear



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whilst Vanuatu follows the 20 -y ear rule, Cyprus has a basic 17 -y earage-limit, but older' vessels may be be registered subject to a numberof conditions, including the existence of a rent and effectiveownership or management link between the v essel and the island.

The flags of Conv enience states are parties to the major safety conv entions and mo re re sponsible registries ensure a strictercompliance. Liberia needs a “decision maker” who is contactable 24hours in the ev ent o f any incident rising with the ship. Exasperation

among the I nternational community at the unwillingness or inability of many flag States to ex ercise proper control has led in recent y earsto increasing reliance o n port States to monitor c ompliance withinternational standards, Interv ention by port States is sanctioned by the 1 982 Convention on the Law of the Sea (see articles 25 and 218)and numero us other international conv entions; including SOLAS,MARPOL and STCW.

THE PARIS MEMORANDUM OF UNDERSTANDING OF 1982

This represented the first step towards e stablishing uniformity of portState control on a regional basis. The maritime authorities of 17European States (including the Russian Federation) and Canada haveadhered to the MOU which r equires eac h authority to maintain aneffective system of ports State control in order to ensure that,

without discr imination as to flag, foreign merc hant ships v isit ing itsports c omply international co nventions relating to safety of life atsea, prevention of pollution and working and social conditions on

board.

INSPECTIONS

Ø Maritime authorities carry out inspections, a v isit on board the shipto ensure that she has all the necessary ce rtificates and documentsØ A more detailed inspection is carried out in case the documents areabsent and if there is a doubt that the ship does not follow theinternational standards.Ø If there are some problems found then the authorities will refuse

the ship to proceed to sea.



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the ship to proceed to sea.

Special attention is paid to

Ø Passenger ships, ro-ro ships and bulk carriers;Ø Ships, which may present a special hazard for instance oil tankers,gas carriers, c hemical tankers and ships c arry ing harmful substancesin package form;Ø Ships flying the flag of a State appearing in the three year rolling

average table of abo ve average delays and de tentions in the MOU'sannual report;Ø Ships, which have had seve ral recent deficiencies.

The MOU requires each authority to consult, co-operate andexchange information with other authorities in order to further theaims of the Memorandum. The success of the MOU has led to theestablishment o f regional port State c ontrol in other parts of the

world, notably under the 1992 Vina del Mar Agreement signed

betwe en the maritime autho rit ies of ten Latin Americ an c ountr ies,the 1993 Tokyo Memorandum of Understanding on Port State Controlfor the Asia/Pacific region and the 1996 Memorandum of Understanding on Port State Contro l in the Caribbean Region.

At a European Unio n lev el, the Comm ission’s com munication in1993, A Common Policy on Safe Seas, urged the strengthening of thelevel of interve ntion of port and coastal States in order to reduce sub-standard shipping in Community waters. Council Directive 95 /21 /ECestablishes common criteria for control of ships by port States andHarmonizing procedures on inspection and detention throughout theCommunity. The Directive builds on the experience gained throughthe operation of the MOU, but seeks to develop a better targetingsystem. Certain categories of ships, including passenger ships, oldertankers and bulk-carriers are subject to "expanded" inspections. Themaritime authority in each Member State is re quired to publishquarterly information c oncerning ships detained during the previousthree month period and which have been detained more than onceduring the past 24 months; this information must include the flag

States of the vessels conc erned. The Directive is implemented in the



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States of the vessels conc erned. The Directive is implemented in theUnited Kingdom by the Merc hant Shipping (Port State Control)Regulations 1 995. The Inte rnational Safety Management Codeadopted by the International Maritime Organization and the 1995amendments to the I nternational Convention o n Standards of Training Certifications and Watch keeping for Seafarers 1 97 8 (STCW 197 X) are likely to hav e a major effect in improv ing operatingstandards.

THE OFFSHORE NATIONAL REGISTRIES

To try to do away with the FOC would be pav ing the doom of themaritime nations, as it is not possible. The only way to do so is toplace severe limitations on national sov ereignty, which cannot bedone. The response of a number of the traditional maritime powershas been, o ften additionally to the traditional tax and other financialincentives to the shipping sector, either to enable the barebo ating outof v essels under their flag (e.g., Italy ) or to establish offshore orinternational registries, o ffering many of the adv antages of flags of convenience, but nonetheless retaining a link between beneficialownership or management and the national flag. Some like the Isle of Man registry have arisen out of accident of history. Torschlusspanik has led to the establishment of "designer" registries, such as theNorwegian International Ship Register (NIS) and the MadeiraShipping Register (MAR), which seek, to halt the decline of themerchant fleets of the traditional maritime powers by allowing shipowners to operate in a low-cost env ironment whilst retaining therespectability of the national flag. This retention of the link with thenational flag preserv es the jurisdiction of the maritime power ov er

vessels owned by its nationals.

In 1 986 the French Gov ernment started a registry at KerguelenIsland. The ships c ould b e o perated with a c rew consisting of only 25% French nationals.

Unlike the Kerguelen registry , the NIS is open to all self-propelled

passenger and cargo ships and hove rcrafts, as well as drilling



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p g g p gplatforms and other moveable installations (but not fishing vessels)

whether Norwegian or foreign owned prov ided they meet minimumtechnical standards. Norwegian safety rules are among the strictest inthe world. However, in the c ase of foreign-owned ships, not only mustan agent for service of process be appointed in Norway, but asubstantial part of the technical or commercial management of' the

vessel must be delegate d to a ship managem ent com pany establishedin Norway .

The most impo rtant bene fit of the NIS is his freedo m to appointforeign nationals to all positions on board, with the exception of themaster, who must be a Norwegian citizen. In the latter case, a waivermay be granted by the Norwegian 'Maritime Directorate. TheNorwegian Seamen's Act applies to vessels entered in the NIS and theNIS Act itself lays do wn maximum wo rking hours. Its succ ess can benoted from the fact that between 1987 and 1989 the number of

vessels fly ing the No rwegian flag inc reased by 25 0%.

Denmark and Germany have followed Norway's example inestablishing the ir own international r egisters (DIS and GISrespectively) and Portugal has recently established an offshoreregister on the island of Madeira (MAR). Spain operates a secondary register in the Canary Islands (CSR). The German internationalregister is open only to German-owned v essels. DIS is not an openregistry-in orde r for a ship to qualify for registration; her owner must

be a Danish national.

The Brazilian second register (Registro Especial Brasileiro) becameoperational in 1 997 . The clo sest Am erican equiv alent of an offshoreregister is the Marshall Islands, which enjoys a Compact of Free

Asso ciation with the United States under the terms o f whic h MarshallIslands v essel may avail them of United States consular assistance. In1989, the Commission of the European Communities submitted aproposal for a Council Regulation establishing a Community shipregister ("EUROS").

CONCLUSION



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Flags of convenience are manifestations of international free riding ina way that is particularly obv ious. A s long as the flag states gain fromrunning open registries and ship owners can benefit from avo idinginternational standards, the phenomenon is not going to disappear.The improv ements we can ex pect to see in addressing FOC issues may therefore be modest. The changes co me largely through increasingthe cost to FOC v essels o f not adhering to international standards. A combination o f international pressure and individual incentiv es may

therefore be what is needed to hold ships to international standards.Most frequently that international pressure has led to increasedstandards when actors have been able to create some a way to deny access to a benefit to those that do not accept the standards inquestion. I ronically, then, it is through creating mechanisms of exclusion that the ability to include the widest number of actors ininternational regulatory efforts is most likely to succ eed.

BIBLIOGRAPHY

1. Rodney Carlisle, Sovereignty for Sale: The Origins and Evolution of the Panamanian and Liberian Flags o f Conv enience . (Annapo lis:Naval Institute Press, 1981 )2. Boleslaw A dam Boczek, Flags of Convenience: A n InternationalLegal Study. Cambridge: Harvard University Press, 1962)3. Frank L. Wiswall, Jr., “Flags of Convenience,” in William A. Lovett,ed., United States Shipping Policies and the World Market (Westport,CT and London: Quorum Books, 19 96)4. Jim Morr is, “Lost at Sea: ‘Flags of Conv enience’ Give Owners aPaper Refuge,” Houston Chronicle, A ugust 22, 1996, p. 15(Lexis/Nexis)5. Jane Marc Wells, “Vessel Registration in Selected Open Registries,”The Maritime Lawyer 6 (1981), p. 2 26; Rodney Carlisle, Sov ereignty for Sale: The Origins and Evolution of the Panamanian and LiberianFlags of Convenience. (A nnapolis: Naval Institute Press, 1981 )6. H. Edwin Anderson II I, “The Nationality of Ships and Flags of Convenience: Economics, Politics, and Alternatives,” The MaritimeLawyer 21 , p. 162; Carlisle, p. 17 5

7 . Jim Morris and Kevin Moran, “Lost at Sea: Uneven Regulation andd l f h b dd d h d li



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a Ready Supply of Cheap Labor Have Added a Harsh Modern Reality to the Romance of Going to Sea,” Houston Chronicle 18 August 1996,p. A1 (Lexis/Nexis);8. Jim Morris, “Lost at Sea: Accident Underscores Potential Hazardsof Foreign V essels,” Houston Chronicle December 16, 1 996, p. A1 2(Lexis/Nexis).

[1] Flags o f Convenience- A n I nternational Legal Study , 1962,Harvard University Press, p.2[2] Rodney Carlisle, Sovereignty for Sale: The Origins and Evolutionof the Panamanian and Liberian Flags of Convenience. (Annapolis:Naval Institute Press, 1981) p.8[3] Boleslaw A dam Boczek, Flags of Conv enience : An InternationalLegal Study. Cambridge: Harvard University Press, 1962), p. 8.

[4] Wells, p. 222; Frank L. Wiswall, Jr. , “Flags of Conv enience,” in

William A. Lovett, ed., United States Shipping Policies and the WorldMarket (Westport, CT and London: Quorum Books, 1996), p. 116; JimMorris, “Lost at Sea: ‘Flags of Convenience ’ Give Owners a PaperRefuge,” Houston Chronicle, A ugust 22, 1996, p. 15 (Lexis/Nexis)[cited hereafter as Morris 8/22/96].[5] Jane Marc Wells, “Vessel Registration in Selected OpenRegistries,” The Maritime Lawyer 6 (1981), p. 226; Rodney Carlisle,Sovereignty for Sale: The Origins and Evolution of the Panamanianand Liberian Flags of Convenience. (Annapolis: Naval Institute Press,1981), pp. 14-18.

[6] W.L. Comyn, of Pacific Freighters, quoted in Carlisle, pp. 1 0-11 .[7 ] Ac tion on the Question of Open registries TD/B/C.4/220[8] H. Edwin Anderson III, “The Nationality of Ships and Flags of Convenience: Economics, Politics, and Alternatives,” The MaritimeLawyer 21 , p. 162; Carlisle, p. 17 5

[9] Jim Morris and Kevin Moran, “Lost at Sea: Uneven Regulation anda Ready Supply of Cheap Labor Have Added a Harsh Modern Reality

to the Romance of Going to Sea,” Houston Chronicle 18 August 1996,

A ( i / i ) i i “ S A id d

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p. A 1 (Lexis/Nexis); Jim Morris, “Lost at Sea: Ac cident UnderscoresPotential Hazards of Foreign Vessels,” Houston Chronicle December16, 1996, p. A12 (Lexis/Nexis).


DEVIATION AND DELAY DURING

VOYAGE

(By VI DY A VENUGOPAL, National University of A dvanced LegalStudies, Cochin.)

Deviation in the course of vo y age

Deviation is desc ribed by Scrutton as thus- In the absence of expressstipulations to the contrary, the owner of a vessel impliedly

undertakes to proceed in that ship by a usual and reasonable route without unjustifiable depar ture from that route and withoutunreasonable delay.[1 ] This undertaking o f the ship-owner is to beunderstood with reference to the circumstances that arise during theperformance of the contract. Deviation is not just straying from theroute, but may also include a deliberate reduc tion of speed along theroute. However he is not answerable for delays or deviations whichare occ asioned or become necessary without default on his part.[2]

The ship therefore ought to take the most direct, safe, course to her

destination subject to her customary practice. If the voyage is to around of ports they ought to be taken in the order in which they arenamed in the contract. Howev er if the intended place of call have not

been nam ed, but rather denoted by a general de scription, then they must be taken in the order in which they occ ur on the agreed voy age.

Where however there is a set tled usage for ships upo n the agreed voy age to take some particular course, or to call at part icularintermediate ports, that usage will form part of the contract, unless itis expressly excluded.[3] In suc h cases ex trinsic ev idence is

admissible as to what is the usual and customary route between thet i i f th d if th hi h f ll d th t t th h

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termini of the v oy age and if the ship has followed that route then shehas not dev iated from the c ontract vo yage. In Frenkel v.MacAndrews[4], the bill of lading stated that the goods were destinedfor Liverpool. However the ship proceeded towards Cartagena but

was lost in a storm. The shipper co ntended that the ship had dev iated.Howev er on ev idence being adduced that the she was on her usualcommercial route of calling at Malaga and therefore she was on hercontract v oy age when she was lost.

Further more a departure by the vessel from the geographical routeto a b unkering po rt for consideration of cheapness and conv eniencedoes not amount to a deviation.[5] The test applied is “Was thedeparture necessary in the business sense?” Similarly calling at

whether statio ns to inquire about ice or a ca ll at a usual coaling portare not departures from the usual and customary course of the

voy age . However the taking of a vessel in tow is equiv alent to adeviation.The law was appropriately summed up by Lord Porter in the case of Reardon Smith Line v. Black Sea and Baltic General Insurance thus

“It is the duty of the ship when sailing from one port to another totake the usual route between those two po rts. If no ev idence is therethen the route is presumed to be the direct geographical route, but itmay be modified in many cases, for navigational and other reasons,and evidence may always be given to show what the usual route is,unless a specific route is prescribed by the charter party o r the bill of lading.”Justifiable deviations1) Dev iation to save pro perty

A dev iation purely for the purpose of sav ing property belonging to

third persons is not justifiable at commo n law. This was evident fromthe decision of Scaramanga v. Stamp.[6] Here the steamer Oly mpiacarry ing a c argo o f wheat for the charterparty spotted anothership indistress. The weather was fine and there would have been no difficulty in taking off the crew. However an agreement was reached whereby Olympia was to tow the ship for a specified amount. Howev er on the

way the Olympia and her cargo were lostin sea. It was held that the deviation was not justifiable and thereforethe shipowner was liable for the loss.

2) Deviation to av oid dangerWhere the safety of the adventure under the master ’s control requires

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Where the safety of the adventure under the master s control requiresthat he should delay , or go out of his course, he is not only justified indoing so, but that becomes his duty in the right performance of thecontract made with the owners of the cargo. Thus the master isentitled to delay in a neutral port if he is under a reasonableapprehension of capture by ho stile cruisers.3) Temporary obstacleThe master is not justified in altering the course of the voy age in such

a way as to m ake a substantially different voy age from that which wasagreed upon, in order to avoid a merely temporary impediment ordanger. In Crosby v. Fitch[7 ] a vessel bound from New York toNorwich in Connecticut performed her v oy age by going out to sea tothe south of Long Island, instead of by the regular route through LongIsland Sound, which was o bstructed by ice at the time. It was heldthat the deviation was not justified and that the ship-owners wereliable for a loss by perils of the sea.4) Danger peculiar to ship or to c argo

A dev iation may be justified although the danger to be av oided

threatens the ship o nly and not the c argo. The master is bound tomake all reasonable efforts for the safety of each portion of the cargo.But he is not generally bound to deviate from his course in order topreserve a part of it. Thus it cannot be contended that if the goods on

board became wet while on voy age and liab le to be dam aged, themaster would be bound to putinto the nearest port in order to transship and dry the cargo.[8] Onthe other hand the master is bound to take into account the interestsof the cargo as well as those of the ship. And if it is reasonable andprudent to deviate in order to do necessary repairs, he ought to doso, though that may be in the interest of the cargo only . In Phelps v.Hill[9] the master hav ing put into Queenstown for distress proceededfor repairs towards Bristol where the ship-owners had a repairing

y ard. However on the way the ship was sunk by a collision withanother vehicle. In an action by the cargo owners it was contendedthat the proceeding to Bristol was a deviation which was not justified.Howev er it was held that the maser had exerc ised the discretion of areasonable m an in the interests of the ship and the cargo in going to

Bristol.5) Deviation necessitated by unseaworthiness



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5) Deviation necessitated by unseaworthiness A dev iation to a port of refuge that is reaso nably nec essary to sav ethe ship from sea pe rils is justifiable eve n though the ship wasunseaworthy, and though, but for that unseaworthiness, she wouldnot hav e bee n in any danger.[10] A master is not only justified indeviating but bound to do so if the safety of the adventure isthreatened.6) Deviation to save life

The master may deviate, either by going out o f course, or by delaying, in order to assist or sav e the lives of those on board another

vessel in distress. Howev er he is not justified in dev iating for the me repurpose of saving property, nor in continuing a deviation, made inthe first instance to save life, after that has been effected, with a view of rescuing the property also.7 ) Liberty Clauses

A dev iation may also be justified by the terms of a specific c lause inthe bill of lading or charterparty giving the ship-owner a ‘liberty’ tocall at additional ports during the v oy age. However courts tend to

construe these narrowly. I n Glynn v . Margetson[11] on a voy age fromMalaga to Liverpoo l, the ship-owner dev iated from the direct route toa port on the East Coast of Spain. This delay caused damage to thecargo of oranges. It was held that the liberty clause contained in the

bill of lading was restr icted to ports in the course of v oy age andtherefore did not co ver this particular deviation.The Hague and Hague-Visby Rules both prov ide in Art IV(4) a liberty for the carrier to make ‘reasonable deviations’.In Stag Line Ltd v.Foscolo Mango and Co Ltd[12] a deviation to take on replacementcrew was ‘reasonable’ although not the subsequent route taken out of

the port o f which sacrificed safety for speed.Hague and Hague- Visby RulesIn Stag Line Ltd it was held that the doctrine of deviation subsistseve n when the Hague Rules apply . The argument that the Rules were aself contained c ode was rejected. Whether the commo n law doctrineof dev iation should be disregarded in dec iding whether a ship-ownercan rely on the defence of an exc eption provided by the Hague-Visby Rules would de pend by reference to the language o f the Rulesthemselves

Effect of dev iationWhere a vessel has dev iated from her pro per co urse the ship-owner



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Where a vessel has dev iated from her pro per co urse, the ship-owneris not only liable for the delay, but he becomes responsible for any loss or damage that happens to the goods unless the goods owner

waives the dev iation, The ship-owner is not protec ted by the ex ception of perils in the co ntract. In Thorley v. Orchis SS.Co[13]locusts beans were shipped in a ve ssel which was bound for London.Howev er the ve ssel did not protect directly to London but proceededtowards to ports in A sia Minor On arrival in London, the beans were

damaged. The ship-owners were held liable notwithstanding anexc eption of negligence in the bill of lading. Specifically it was statedthat a deviation is such a serious matter and changes the character of the voyage so essentially that a ship-owner who has been guilty of adeviation cannot be considered as having performed his part of the

bill of lading co ntract, but something fundamentally different , andtherefore he cannot claim the benefit of the stipulation in his favorcontained in the bill of lading.The precise effect of a breach of the obligation under a contract of carriage by sea to proceed without deviation was a matter of some

doubt until the decisio n of the House of Lords in S.S Co. v . Tate &Lyle[14]. I n this c ase, a ship was c hartered to proceed to Cuba forloading a cargo sugar and from there to a port in San Domingo andthen pro ceed to Queenstown for orders. Howev er after loading atCuba, due to the de fault of the o wner’s agents and post officeauthor ities in Cuba, the owners failed to inform the master that hehad been ordered to the port of San Domingo. Later when the parties

became aware of the mistake, the master was ordered to return back to the port of Domingo and the ship after leaving this port becamestranded. It was held by the House of Lords that the ship had dev iated

after leav ing Cuba, but the charterers had waived the dev iation. It was set tled by this case , that the ob ligatio n not to dev iate is acondition of the c ontract and that the breach o f it entitles the goods-owner if he desires to treat the co ntract as repudiated. Further moreit is open to the party not in default to treat the contract as at an endor to waive the breac h and treat it as subsisting. Further more waiverof a deviation by a charterer will not usually affect the position of aconsignee or indorsee to whom he has transferred the bills of

lading.[15] A vo luntary and unwarranted deviation puts an end to thespecial contract, unless the goods owner waiv es it.



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special contract, unless the goods owner waiv es it.Effect o f delay

As observ ed e arl ier , the ship must proc eed with reasonab le diligenc e,not only on the main contract v oy age but also when proceedingunder a charter party to the port of loading. The effect of delay on thecontract of carriage appears to depend o n the question whether ornot the delay amounts to a deviation. Where the delay amounts to adeviation, the charterer is entitled to treat it as a breach of condition

and to refuse to load the ship, but that where the delay does notamount to a dev iation his remedy is in damages.Delay amounts to a dev iation when it is such as to substitute anentirely different service from that contemplated, it must make the

voy age different from the co ntract v oy age.[16] The term dev iation issometimes loosely used to desc ribe any delay bey ond the shortestreasonable tome in which a voyage can be carried out but this is amisuse of words. The proper test to apply in order to decide whetherthere is a delay is whether that delay is such as to frustrate thecommerc ial purpose of the venture.[17] Where the neglect of the

ship-owner to proceed to the po rt of loading with due diligence doesnot generally entitle the charterer to refuse to load. But when thedelay is such as in effect to frustrate the intended adventure, thecharterer will be entitled to reject the ship. In Mount v. Larkins it wasa marine insurance case which decided that an unreasonable andunjustifiable delay in c ommencing a v oy age amounted to a deviationand therefore discharged the insurer.Further more if the ship is unfit to receive the cargo, and the delay entailed in making her fit would amount to a dev iation, the chartereris entitled to rescind the charterparty. However if the defect of the

ship had been remedied b y the ship-owner, without such delay as tofrustrate the adv enture, probably the charterer would not have beenentitled to reject the ship, though he might have claimedcompensation for any loss sustained through the delay. Where a

vessel is chartered for a specified perio d of tim e, the charterer willnot be bound to take her if she can be made fit for the charteredservice only after such delay as will frustrate the commercial purposeof the charterparty.[18] In Snia Societa v. Suzuki[19] the ship wasunable to perform her chartered servic e for a period owing to

unseaworthiness, and it was held by the Court of Appeal that thecharterers were entitled to canc el the c harter on the ground of

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charterers were entitled to canc el the c harter on the ground of frustration. The principle applicable for time charters is what appliesto charters in general-only such delay as makes the chartered servicesomething materially different from that which was contemplated, inthe sense that the commerc ial object of the charter-party isfrustrated, entitles the charterer to cancel the c harterparty.Damages for de lay

Where the delay does not amount to dev iation, dam ages will not be

recoverable for loss or damage occurring during or after such delay unless the delay caused the loss or damage in question. Hence nodamages will be recoverable for loss resulting were a vessel is stuck

by lightning which she would hav e av oided had she sailed withreasonable dispatch. Damages for delay are recoverable if the eventin question wo uld not have occ urred but for the delay and was in factanticipated. Where the o utbreak of war prev ents the co mpletion of a

voy age , which but for the delay would hav e been com pleted beforethe war, the liability o f the ship-owner depends on whether he oughtto have re asonably foreseen such likelihood

Bibliography

Baughen, Simon, Shipping Law, 2nd ed., Cavendish PublishingLimited, 2001.

Carver’s Carriage by Sea, Vol.II: Colinvaux Raoul, 13th ed, Steven &Sons, 1982Cases Referred

1) Taylor v. G.N.Ry.(1 866) L.R.1.C.P.2) Cormack v . Gladstone (1809) 11 East 3473) Frenkel v. MacA ndrews [1929] A.C. 5454) Reardon Smith Line v. Black Sea and Baltic General Insuranc e5) Scaramanga v. Stamp (1880) 4 C.P.D,3166) Crosby v. Fitch (1838) 12 Conn. 4107 ) Notara v. Henderson (187 0) L.R 5 Q.B 3548) Phelps v . Hill [1891]1.Q.B.605

9) Glynn v . Margetson [1893] AC 35110 ) Kish v. Taylor [191 2] A.C. 604



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y11 ) Stag Line Ltd v. Fosc olo Mango and Co Ltd [1932] A C 32812) Thorley v. Orchis SS.Co [190 7 ] 1K.B.66013) S.S Co. v . Tate & Lyle (1936) 41 Com.Cas.35014) Leduc v . Ward (1936) 41 Com Cas. 35015 ) Verren v . Anglo- Dutch Brick Co. (1929) 34 I.L.R 21016 ) Snia Societa v . Suzuki (192 4) 29 Com Cas. 28417 ) HongKong Fir v. Kawasaki [1962] 2 Q.B. 26

18) Universal Cargo Carriers v. Citati [1957 ] 2 Q.B. 401

[1] Scrutton, Charterparties and Bills of Lading[2] Taylor v. G.N.Ry.(1866) L.R.1.C.P.[3] Cormack v. Gladstone (1809) 1 1 East 347[4] [1929] A.C. 545[5] Reardon Smith Line v . Black Sea Insurance [1 939] A.C. 562, 57 5[6] (1880) 4 C.P.D,316[7 ] (1838) 12 Conn. 410[8] Notara v . Henderson (187 0) L.R 5 Q.B 354

[9] [1891]1 .Q.B.605[10] Kish v. Tay lor [191 2] A.C. 604[11] [1893] AC 351[12] [1932] AC 328[13] [190 7 ] 1K.B.660[14] (1936) 41 Com.Cas.350[15] Leduc v . Ward.(1936) 41 Com Cas. 350[16] Verren v . Anglo- Dutch Brick Co. (192 9) 34 I.L.R 210[17] Universal Cargo Carriers v. Citati [1957 ] 2 Q.B. 401[18] HongKong Fir v . Kawasaki [1962] 2 Q.B. 26

[19] (1924) 29 Com Cas. 284


MONDAY, DECEMBER 3, 20 07

PROTECTION OF MARINE ENVIRONMENT AND

CONVENTI ONS ON POLLUT ION

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(By MANJERI SUBIN SUNDER RAJ, National University of Adv ancedLegal Studies, Cochin.)

INTRODUCTION

It seems that almost ev ery day there is another story about pollutionof one form or another, in the food we eat, the water we drink and the

air we breathe. V ery often our own actions lead to that pollution andin many cases we can do som ething about it.

The oceans are a vast resourc e whose usefulness to the global society is continuing to be realized. Thus, it is in the best interest of humanity that they are exploited in a manner that is protectiv e and sustainable,in o rder to preserve their health and guarantee their continuing

v iability . They however are one of the most polluted. Over 80% of allmarine pollution comes from land-based activities and many pollutants are deposited in estuaries and c oastal waters.

Currently, the b iggest threats to the health of the marineenvironment are:Ø Habitat destruction and alterationØ Over fishingØ Pollution from sewage and chemicalsØ Increasing eutrophication[1]Ø Changes to hy drology and sediment flow Ø Global climate c hangeØ Ship pollutio nIn this work, I would be dealing with the pollution to the marine

environment basically from ships and other vessels. They really prov ide an insight to man’s carelessness and how far negligent we areat protecting our resources.SHIP POLLUTION

Ship pollution is the pollution of water by shipping. It is a problemthat has been accelerating as trade has become increasingly globalized. The pollution produced affects biodiversity , climate, food,and human health. There are numero us causes for this, out of which I

would discuss some important ones.



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CAUSES :

1.OIL SPILLSMost commo nly assoc iated with ship pollution are o il spills. Tankersillegally cleaning their tanks while out at sea and dumping the dirty

water ov erbo ard cause significant oil po llut ion. 7 2 per ce nt of oilpollution caused by shipping is e stimated to be deliberate and illegal.

Only 28 per cent is caused by tanker accidents. Many of the major oilspillages during the last 40 years have been caused, or made worse

by hum an error. Human error can mean carelessness, but it alsoincludes c ontinuing to use old, unsafe ships and employ ing crews

with inadequate tra ining. While being toxic to mar ine life, poly cy cl ic arom atic hy droc arbo ns(PAHs), the components in crude oil, are very difficult to clean up,and last for y ears in the sediment and marine environment.[2] Marinespecies constantly exposed to PAHs can exhibit developmentalproblems, susceptibility to disease, and abnormal reproductiv e

cycles.There hav e been a number o f serious oil spillages caused by oil tankeraccidents in the last 4 decades. The Torrey Canyon was the first of the

big supertankers, capable of carry ing a cargo of 12 0,000 tons of crude oil. On March 1 8, 1 967 , owing to a nav igational error, theTorrey Canyon struck Pollard's Rock in the Seven Stones reef andcaused major env ironmental damage on the Cornish and Frenchcoasts. This was the first majo r oil spill and no plans had beenprepared beforehand to deal with it. The ship broke apart after beingstranded on the reef for several days. Around 120 miles of Cornish

coast and 80 kilometres of France was co ntaminated and around15 ,000 sea birds killed along with huge numbers of marine organisms

before the 27 0 square mile slic k dispersed. Further dam age wascaused by the heavy use of detergents to break up the slick.

The disaster led to many changes in international regulations, forexample the Civil Liability Convention (CLC) of 1969, which imposedstrict liability on ship owners without the need to prove negligence,

and the 197 3 International Convention for the Prev ention of Pollution from Ships.I 8 Th A C di k d f ll i i f il

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In 1 97 8, The Amoco Cadiz was wrecked following engine failure onthe co ast of Brittany , releasing 223,00 0 tonnes of oil into the sea.Thousands of migrating seabirds were killed when they landed on theoily waters, and many French oy ster fisheries and beaches werecompletely ruined.The Exxo n V aldez was accidentally steered into a reef in Prince

William Sound, Alaska in 1989. Emergency equipment did not arriv e

quickly, and this allowed the 37 million litres of spilled oil to form aslick cov ering 6,7 00 square kilometers. The delay in prov idingequipment, both by the oil co mpany, Exx on, and by the State of

Alaska, was unforgivable, and caused the needless death of thousandsof animals, including 350 ,000 sea otters.The tanker Braer broke up off Shetland having run aground, and inFebruary 1 996, the Sea Empress spilled around 7 0,00 0 tonnes of crude oil off the Pembroke shire coast in Wales. The Prestige, whichsunk off the Spanish coast in 2002, is also one o f the most destructiveoil spills ever .

Oil-covered seas look calm, but if a bird land in a slick, the oil co ats itsfeathers, affects its buoy ancy and the insulating power of its feathersand makes it unable to fly away. An animal killed by oil may then beeaten by fish or birds, which in turn are poisoned by the oil. These oilspills have a catastrophic effect on the marine environment as a

who le.Major Oil Spills Since 1 967PositionShip name

Y earLocationSpill Size(tonnes)1

Atlantic Empress19 79Off Tobago , West Indies287 ,0002

ABT Summer1991

ti l il ff A l



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7 00 nautical miles off Ang

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