Explanatory notes

With reference to the announcement on pages 2916-2922 of BIMCO Bulletin V/1974 of the new editions of the “Baltime 1939” and the “Linertime” Charters, i.e., with the “box layout”, there is reason once more to underline that the “Linertime” Deep Sea Time Charter is intended especially for fixtures for account of Deep Sea liner companies.

The “Baltime 1939” Charter is fully maintained and is still to be recommended for time charter business all over the world. Thousands of fixtures are concluded on the latter form every year.

Background

For a number of years it had been felt that there was a need for a special form of time charter for fixtures for account of deep sea liner companies.

The “pros and cons” of issuing a new time charter, in addition to those already existing and commonly used on the time charter market, had been thoroughly weighed by the Documentary Council. As it was a fact that for deep sea time chartering the principal standard time charters were hardly ever used without a very considerable number of alterations and extra clauses — many of them quite unnecessary — it was realised that a new standard charter was needed which in its printed text would cover in a clear and equitable manner the more important of the subjects usually dealt with in those extra clauses, the aim being to eliminate the individual drafting of extra clauses which very often gave rise to disputes, and likewise to establish a clear and reasonable distribution between owners and time charterers of the liabilities for cargo claims as well as for personal injury claims arising during the charter period.

The final result of the drafting work carried out by a sub-committee, which was truly representative of shipowners' and liner time charterers’ interests and which drew on the wide experience of representatives of Defence Associations and P & I Clubs, was document which the Documentary Council adopted and recommended as a reasonable basis for deep sea time chartering, specifically for fixtures for account of liner companies.

Preamble – Description of Vessel

Care should be taken to describe the vessel, her capacity as regards deadweight, cubic, bunkers, speed and consumption, as accurately as possible, in the boxes provided for these details in Part I. Owners should be cautious not to over-estimate the vessel’s capacity in any respect. The details should apply to her capacity at the time of concluding the fixture and attention should be paid to any alterations to the vessel's construction and her general outfit made after she was delivered from the builders, which might affect her deadweight or cubic capacity or ability of speed, etc.

The indications regarding speed and consumption describe the vessel's ability “fully loaded” and “in good weather and smooth water”. No guarantee of a minimum performance of speed during the charter periods is implied.

Attention is called to the words in Lines 5)1 “as well as stores, provisions and fresh water not exceeding ……… tons”, i.e. the necessity for inserting the proper maximum quantity in Box 10.
It has been emphasized in Lines 7/8 that the figures to be inserted in Box 11 in respect of the cubic capacity refer to the “capacity available for cargo”.

Moreover, according to Line 13 the vessel’s position at the time of the fixture must be stated in Box 14.

Clause 1 — Period

The clause is drafted so as to provide for the period principally to be described in “calendar months”, but ample open space has been provided in Box 15 for the purpose of inserting any other description of the charter period as may be agreed, for instance, in the event of a fixture for a certain “trip” or “round voyage”

The vessel may not be delivered on a Sunday or a legal holiday, unless actually taken over on such a day, but on weekdays between 7 a.m. and 10 p.m., or between 7 a.m. and noon if on a Saturday. The same hours apply in respect of the period within which the vessel may be re-delivered (Clause 8)

Port of Delivery
It is the time charterers’ obligation to nominate a “ready berth” at which the vessel shall be delivered. The berth shall be one at which the vessel “can safely lie” either “always afloat” or “always afloat or safely aground where it is customary for vessels of similar size and draught to be safe aground”.

The alternative agreed must be stated in Box 16.

The vessel must be in every way fitted for ordinary dry cargo service “with cargo holds well swept, cleaned and ready to receive cargo before delivery”. (Lines 26/27).

Time for Delivery
The earliest date on which the vessel may be delivered should be inserted in Box 17.

The owners must give the time charterers a certain number of days’ notice — to be agreed upon and inserted in Box 18 — of the date on which the vessel according to a careful and realistic calculation is expected to be ready for delivery, and the owners have an express obligation to keep the time charterers closely advised of possible changes in the position.

Clause 3 – Trade

The alternative applicable as to “always afloat” or “always afloat or safely aground …” in Lines 47/48 must be stated in Box 20.

The trade limits as agreed in each particular case shall be inserted in Box 20.

Lines 52/55 exclude the shipment of “livestock, sulphur and pitch in bulk” but give the time charterers the right to ship injurious, inflammable or dangerous goods up to a limited quantity to be stated in Box 21.

Box 21 is also intended for the possible insertion (typewritten) of U.S. Coast Guard Authorities or other authorities in the particular countries to which the vessel will be trading, or in the country of the vessel's registry. “Board of Trade” in Line 57 does not refer to the British Board of Trade in particular.

Any special measures necessary because of the vessel having such cargo on board are for the time charterers’ account.

Nuclear Fuel
Lines 62-69 include the “Nuclear Fuel” Clause normally recommended by P&I Clubs, specifically excluding shipment of nuclear fuels or radioactive products or waste, except radio isotopes used or intended to be used for the special purposes mentioned, provided the owners' approval is obtained prior to the loading.

Clause 4 — Owners to Provide

The clause, apart from defining the items normally accepted as being for the owners’ account, makes it clear that the owners have to provide “one winchman per working hatch”.

The timer charterers have the option instead of winchmen to ask for totally “two watchmen” to be provided by the owners. It is laid down, however, that if the stevedore labourers refuse or are not permitted to work with the crew, the time charterers have to provide and pay for qualified men.

Independent of the above it is stipulated that the “gangway watchman” has to be provided by the owners, unless the employment of gangway watchmen from shore is compulsory.

Clause 5- Charterers to Provide

It is clearly laid down that at the ports of delivery and re-delivery the time charterers have to pay not only “all dock, harbour and tonnage dues” but also “light dues” unless the dues specifically mentioned are incurred through cargo carried before delivery or after re-delivery, in which event they must be paid by the owners.

At the same time it has been made clear that the time charterers’ general duty to provide and pay for fuel, water for boilers, port charges, pilotage, etc., applies only whilst the vessel is on hire. This eliminates any disputes, for instance, as to whether the vessel may use the time charterers' bunkers during “off-hire” periods without compensation to the time charterers.

As regards consular charges, these are in general for the time charterers’ account “except those payable to the consulates of the country of the Vessel’s flag”.

Lines 95/96 refer to the price which has to be inserted in Boxes 37 and 38 and which has to be paid by the time charterers for meals supplied to officials and persons in the time charterers' service.

From the words in Line 102 “unless already on board” it appears that, whereas the general rule is that the time charterers have to pay for all ropes, slings, special ropes, hawsers and chains, etc., as specified in the clause, they have the use of any such material as is already on board.

In Lines 102/103 the intention is that details shall be given in Box 22 of the vessel’s cargo gear, i.e., the number and capacity of winches and derricks, including heavy lift gear.

The gear must be kept in full working order for immediate use when required by the time charterers, but the time charterers must give sufficient notice of their intention to use heavy lift gear with a view to the time necessary for the rigging.

Cargo Gear Certificate
It is the duty of the owners to ensure that the vessel possesses cargo gear register and certificates in compliance with the requirements of the International Labour Organization Convention No. 32. 

Fuel Consumption in Port
Space is provided in Box 23 for indication of the approximate consumption of fuel when the vessel is in port and working with all her cargo gear.

Clause 6 — Bunkers

The parties may agree to take over and pay for all fuel remaining in the vessel's bunkers at the ports of delivery and redelivery at current price, at the respective ports or at a fixed price (the alternative agreed is to be stated in Box 24).

The minimum and maximum quantities of bunkers with which the vessel has to be delivered or re-delivered, respectively, have to be inserted in Boxes 25 and 26.

Clause 7 — Hire

The hire may be fixed either as a sum covering a period of 30 days or at a daily rate.

Payment
The rate of hire to be paid either per 30 days or per day, is to be stated in Box 27. The manner of payment and the currency are to be stated in Box 28.
The normal principle of the owners’ right of withdrawing the vessel in default of payment of hire when due has been maintained.

Last Hire Payment
Special attention is drawn to the stipulation in Lines 143/152 which provides that if the vessel is on her voyage towards the port of re-delivery at the time when a payment of hire is due, the parties shall agree on the estimated time necessary to complete the voyage and calculate the hire accordingly to cover this estimated period, at the same time making deductions for estimated amounts necessary to cover payment of bunkers to be taken over by owners on re-delivery and possible disbursements for owners’ account. Any difference which may be established will have to be refunded by the owners or paid by the time charterers when the vessel is re-delivered.

Clause 8 — Re-delivery

The vessel has to be re-delivered “at a safe and ice-free port” in charterers’ option within the range to be agreed upon and inserted in Box 29.

As is normal, the time charterers have the duty to re-deliver the vessel in the same good order as when delivered, fair wear and tear excepted; but a special stipulation has been included in Lines 160/166 to the effect that repairs for the time charterers’ account as far as possible have to be effected simultaneously with dry-docking or annual repairs, respectively j if any further repairs are required the owners have to receive compensation at the rate of the charter hire for the time occupied in effecting such repairs. It is implied that the time charterers shall always be given notice of the time and place when and where repairs for their account will be performed, so that they may arrange for their surveyor to attend, if they so require. In this connection, attention should also be paid to owners’ duty according to Clause 14, Lines 294/298, to give time charterers at least four weeks’ notice of their intention to drydock the vessel.

Notice
The charter in Lines 168/172 provides for the time charterers to give owners “not less than” the agreed number of days’ “final notice” of the port and date of re-delivery (Box 30). Moreover, they must advise owners of any changes in the position.

Lines 173/179 contain the provision regarding the time charterers’ right of “overlapping” against payment at market rate if this is higher than the rate of hire stipulated in the charter.

Clause 10 — Master

It is laid down in Lines 190 191 that the Master shall “render customary assistance with the Vessel’s Crew.”

This is a normal condition in a time charter but, as disputes do arise as to the assistance which the time charterers may expect from the crew, it is necessary to comment more elaborately on this provision.

As a general rule, by “customary assistance meant that the crew shall perform the work which is normally done by the crew under voyage charterparties. All the normal functions of the crew when the vessel is trading for account o1 her owners will have to be performed if the vessel is trading under a time charter, the Master being expected to render the same services with the crew to the time charterers.

As an example it may be mentioned that it is usual that the crew, as far as possible during the voyage in ballast to the port of loading, cleans the holds if this is necessary in order to make the vessel fit for the next cargo. This is done when the vessel is going to load for account of the owners themselves; for that reason, it is the duty of the Master to see to it that the crew renders the same assistance to the time charterers. The same applies in regard to the assistance of the crew in preparing beams, tackle, hatches, etc., for loading and discharging, and in opening and closing the hatches before, during and after the loading and discharging, but where it is compulsory to employ men from shore to do such work, it must be paid for by the time charterers. Incidentally it may be mentioned that in the general cargo trade it is often more advantageous for the time charterers to let the stevedore labourers from shore open and close the hatches than to leave the work to the crew because it takes longer for the limited number of crew members on board to do the work, and the saving in time may easily off-set the labour cost. The engine-room officers must attend to the auxiliary machinery during loading and discharging in the same manner as is usual if the vessel is under voyage charter or trading for account of the owners themselves; and if a vessel carries refrigerated cargo, all the normal attendance to such a cargo and the refrigerating machinery can be required by time charterers, including reading and recording of temperatures.

The fact that, according to the collective agreement with the crew’s union, extra payment must be made for certain work does not necessarily exclude the work from being part of the assistance which the time charterers may expect. If the work is generally considered “ship's work” to be performed by the crew, and if the owners would normally make the crew do the work, it still comes within the “customary assistance” which the Master will have to render with the vessel's crew, irrespective of whether the crew has to be paid separately for the work by owners.

In the BIMCO Annual Report 1966-1967, pages 82/84, mention was made of an arbitration award rendered in London in March, 1966, in a dispute between time charterers and the owners of a Greek vessel regarding extra payment made to the crew according to the collective agreement with the Greek crews employed in Greek vessels, for the sweeping and cleaning of holds. It was decided that the owners should refund any amounts received from the time charterers for the crew’s work in this respect.

It should be added, however, that if the cargo carried necessitates special cleaning or sweeping of the holds which it would not be possible for the crew to do if the vessel was trading for owners’ own account, or if the crew are not permitted to perform the work themselves according to regulations at the port of call, the time charterers must arrange and pay for the work.

It is expressly stipulated in Lines 192/193 that the Master and engineer must keep full and correct logs, including scrap logs, which shall be accessible to the time charterers or their agents.
Erecting and dismantling of grain fittings must also be considered as coming within “customary assistance” of the crew where it is permissible or possible for the crew to do this work with a view to local regulations or labour agreements existing at the ports of loading and discharging.

Clause 12 – Responsibility

This is perhaps the clause in the new charter which will attract the greatest interest. It represents an entirely new approach to the question of the distribution of cargo responsibility under a time charter and it is the result of careful study and draft work by highly qualified experts from leading Protection and Indemnity Clubs and Defence Associations in the United Kingdom and in Scandinavia.

There is perhaps no single clause in which homemade riders and alterations have caused more uncertainty than the responsibility clause, the main reason being that they, do not really make any clear distinction between the responsibility towards third parties and the internal division of this responsibility between ship- owners and time charterers. In the context of a time charter it is the internal division which is of importance. The system of the present clause makes it possible to adapt it to individual desires by switching various items from the sphere of one party to that of the other, without creating ambiguities.

The general principle underlying the new clause is that fundamentally the time charterers must be finally responsible for all claims in respect of cargo, but the owners shall bear the burden of claims caused by:

a) Failure on the part of the owners properly and carefully to carry, keep and care for the cargo while on board.

b) Unreasonable deviation from the voyage described in the Bills of Lading unless such deviation is ordered or approved by the time charterers.

c) Lack of due diligence on the part of the owners before and at the beginning of each voyage to make the vessel seaworthy.

The time charterers must be responsible for attending to the cargo at the loading and discharging ports and for arranging transhipment and delivery. This is a matter of course. Naturally, the time charterers are also responsible for what may happen during the loading and discharging operations, which have to be arranged by them and are to be performed by their stevedores, tally clerks or other servants, and for all facts stated in the Bills of Lading. Thus, the time charterers are also responsible for shortage claims.

In the vent of the cargo being the property of the timer charterers, it is laid down that the owners shall have the same responsibility as they would have if the cargo were the property of a third party and carried under a Bill of Lading incorporating the Hague Rules.

There is a special stipulation dealing with the responsibility for Customs fines or other fines or penalties relating to the cargo or other property or persons carried with the time charterers’ approval or to the acts or omission of the cargo owners. Such items shall be for the time charterers’ account.

On the other hand, fines imposed by reason of the crew having been guilty of smuggling, will fall to the charge of the crew, and if the ship or its agents may be forced to pay, to the charge of the shipowners.

A special innovation is a stipulation dealing expressly with claims for death and personal injury. It is well known that particularly heavy claims arise in the event of injury to stevedore labourers, etc.

The stipulation in Clause 12 lays down that claims for death and personal injury “shall be borne by the owners unless caused by the act, neglect or default of the Charterers, their servants or agents including stevedores and all others for whom Charterers are responsible under this Charter Party.”

The experienced shipowner may himself evaluate which of the above enumerated types of injury claims should be for the owner’s account and which should be for the charterers’ account.

Finally, there is a stipulation to the effect that if one party should be obliged to pay claims or fines, etc., which should be for the account of the other party, that other party must indemnify the owners or the time charterers, respectively, for the amount paid, but it is provided that the owners’ indemnity to the time charterers is restricted to the amount to which the owners’ liability would have been limited had they been sued directly.

Clause 13 – Exceptions

The general exceptions clause, referring to responsibility for loss, damage, delay or failure in performance of the charter, prevents the parties from raising any claims for damages against each other if the loss, damage, delay or failure in performances results from any of the causes mentioned in Lines 251/252. As regard the special exceptions in Lines 252/259 covering the owners, the clause follows the principles of the Hague Rules.

It is emphasized that the provisions of this clause do not in any way refer to the counting of the hire which is affected only by the provisions of Clause 14.

Clause 14 – Suspension of Hire, etc.

It is left to the parties to agree for each particular fixture the “threshold” as to the period of lost time to be passed in order for the vessel to come “off hire” for the causes mentioned in the clause.

It is normally 24 consecutive hours. The number of hours agreed has to be inserted in Box 31.

The clause especially includes strike of Master, officers and crew amongst the causes which bring the vessel “off hire”.

A “put back” clause has been included in Lines 271/276.

Attention is drawn to the special stipulation in Lines 277/283 concerning the manner of calculating the loss of time for the purpose of suspension of hire in the event of winch breakdown. Such breakdowns as are due to careless handling of the winches by shore labourers do not bring the vessel “off hire”.

Moreover, the stipulation in Lines 294/298, for the owners to give the time charterers at least four weeks’ notice of their intention to drydock, requires special attention. The time and place for such drydocking must be mutually agreed.

Clause 15 – Cleaning Boilers, etc.

The cleaning of boilers or – in the event of motor vessels – the opening of pistons must, whenever possible, be done during service but if this is impossible the time charterers must give the owners the time necessary for the work. It is expressly laid down, however, that this may not happen more frequently than at an interval of three months. In Box 32 the parties must insert the number of hours the vessel will remain “on hire” if she is detained for the purpose mentioned in the clause. In other charters it is normally 48 hours. The owners or the Master must always give the time charterers reasonable notice of their intention to clean boilers or open pistons.

Clause 16 – Advances 

The time charterers are entitled to charge one per cent commission for funds advanced by them to cover owners’ disbursements. Space has been provided in Box 33 for inclusion of any special agreement as regards advances to be paid by the time charterers.

Clause 17 – Excluded Ports – Ice 

This clause follows the normal pattern as regards ports and places excluded. In the section dealing with icebound places, etc., special attention is drawn to the fact that the vessel may not be obliged to force ice “nor to follow ice-breakers when inwards bound”.

Naturally, possible detention through any of the causes mentioned in the clause are to be for the time charterers’ account.

Clause 19 – Overtime

The principle of agreeing a fixed lumpsum per period of 30 days to cover overtime to officers and crew has been adopted. Besides, there is a space in Box 34 for inserting any special agreement.

Clause 20 – Lien 

Apart from the usual stipulation regarding the owners’ right to a lien on cargoes and sub-freights belonging to the time charterers, and the time charterers’ rights to a lien on the vessel for all monies paid in advance and not earned, the clause known as “’Baltime 1939’. Permissible Addition. Lien on Vessels. Issued 1958.” Has been incorporated in the text, i.e., in Lines 346/348. The text is analogous with the stipulation in Clause 18 of the New York Produce Exchange Time Charter, and on several occasions during recent years decisions in U.S. Courts have proved that it is very useful to shipowners. It is intended to cover owners again the risk of creditors exercising a lien on vessels for unpaid bills for which time charterers should be liable, but which they were unable to pay because of financial difficulties.

Clause 23 – War

Unfortunately, it is frequently observed that in private forms of time charters, war clauses are added or appended which are actually intended for voyage charters and which are entirely inadequate and inappropriate in time charters. This may also happen to the New York Produce Exchange Time Charter, which has no proper war clause in its printed text.

The text of Clause 23 follows closely the text of the War Clause included in the “Baltime 1939” Charter, with a few additions only. In Section © the words “and/or war bonus” have been included in Line 386, and the words “and/or war risk insurance” have been included in Line 388.

Moreover, the Cancellation Clause in Section € is an innovation. In its first part it defines the mutual option, which is not limited to the country of the vessel’s flag being involved – such as in the “Baltime 1939” Charter. The option is widened to what may loosely be described as a world war, or a major war involving great powers. It was agreed in the subcommittee, and stated in the Documentary Council, that this form of charterparty was not expected to be fixed for very long periods, and therefore the option of cancelling should be kept fairly narrow. It was the intention to allow cancellation by reason of local conflicts. The technique of expressing this by way of enumerating certain powers is copied from a standard British insurance policy.

In the second part of this clause the manner in which the cancellation shall be effected has been regulated in more detail than in the “Baltime 1939” clause.

Clause 25 – Fumigation

The clause confines the time charterers’ responsibility for expenses in connection with fumigation and/or quarantine to such cases where the fumigation or quarantine results from cargoes carried or ports visited under the charter. All other expenses for these purposes are for the owners’ account.

Clause 27 – Supercargo

The agreed price per day to be paid by the timer charterers for lodging and victualling of the supercargo has to be inserted in Box 37.

Clause 28 – Meals

The agreed price per man per meal to be paid by the time charterers for meals served to officials, tally clerks, stevedore foremen and the time charterers’ guests, has to be inserted in Box 38.

Clause 29 – Light

The owners must supply, free of charge light on deck and in holds, as on board, but where the use of electrical clusters from shore is compulsory, the expenses are for the time charterers’ account.

Clause 30 – Stevedoring Damage

It is important for owners to instruct the Master to report in writing on any stevedore damage to the parties mentioned in the clause. The reports must be made immediately after the damage is done unless the damage could not be detected at once “in spite of close supervision of the stevedoring”.

Clause 31 – Ballast

It is made clear in the text what would nevertheless be the position according to the law in most countries.

Clause 32 – Arbitration

Arbitration in London is provided for. The text of the clause known as “’Baltime 1939’. Permissible Addition to Clause 23 – Arbitration: Issued 1954” has been incorporated especially for the event that the parties should nevertheless agree on arbitration at a place other than London, where no legislation exists concerning arbitration, nor any laws or regulations as to what will happen if one of the parties fails to appoint an arbitrator.

Clause 33 – Commission

The clause pays due regard to the interests of the brokers who have been instrumental in making the fixture, stipulating for indemnity to the brokers in the event of the full hire not being paid due to breach of charter and also in the event of the charter being cancelled.

Additional Clause Regarding Passengers

The Documentary Council, following the advice of the sub-committee, decided not to include in the text of the “Linertime” Charter any special clause relating to the transportation of passengers, but instead to issue as a recommended additional clause the following stipulation:

“Owners agree to place at Charterers’ disposal the available passengers’ accommodation:
……………………………………………………………………….......................................................................
……………………………………………………………………….......................................................................
– excluding supercargo – the Charterers paying the Owners at the rate of ……. per passenger, per day, for accommodation and victualling. The Charterers hereby indemnify the Owners for all liability resulting from the presence of passengers on board.”

The two lines open space is intended for possible details as to the accommodation available and the number of passengers which may be carried. The time charterers’ right to place a supercargo on board is dealt with separately in Clause 27 of the “Linertime” Charter.