A recent UK decision on a voyage fixture has caused surprise and concern, and after examining it this article considers the US view.
A common clause
Voyage charterers frequently warrant that a berth is “always accessible”, and for a long time many English practitioners and several textbook commentators thought this meant that a vessel just had to be able always to get to the berth, and that it was synonymous with another standard clause – “reachable on arrival”.
However, the 26 March ruling in the “ACONCAGUA BAY” ( EWHC 654 (Comm)) has thrown a spanner in those works.
As far as material, the fixture provided:
“Loading port or place … 1 good safe berth always afloat always accessible 1-2 good safe ports in the USG …”
Damage elsewhere during loading prevented the vessel from leaving, and owners sought to recover for about a fortnight’s detention.
In a remarkably short judgment, Mr Justice Knowles CBE recorded that many previous decisions dealt only with arrival, the textbooks and dictionaries gave little guidance, and (though according to the Baltic Code and some BIMCO commentary departure was here included) London Arbitration 11/97 ((1997) LMLN 463) had held that such a warranty did not include leaving, hence perhaps around two decades of settled understanding.
But the judge ruled that the key issue was whether the parties had intended also to cover departure. Without any elaboration he said it was decisive that commercial people would reasonably consider both aspects : they would include leaving, and would not restrict themselves to reaching, the berth.
Charterers had therefore warranted that the vessel would always be able to depart, and were liable.
This was a rare successful appeal from an Arbitration Award, and (while it would probably be difficult) charterers might be able to get the Court of Appeal to review this.
We will post an update if there is any change, but as things stand – whether for standard or spot text – parties should as always consider the entirety of their fixture wording. It should be easy to restrict such a warranty to entry, if that is what is wanted, which might depend for example on any known difficulties amid the various call options.
Such might be achieved by saying that the berth is “reachable on arrival”, or using similar wording, but at the moment simply reciting “always accessible” will ordinarily risk the charterer being liable for delay if the vessel cannot also readily depart.
The US approach
The “ACONCAGUA BAY” is the first English High Court ruling on this issue, and US authority is similarly scarce.
Some Awards offer discussion, but none decides the point.
Thus on 26 May 1971 in SMA No. 611 the Panel did not interpret “accessible” as synonymous with “always accessible”, and said that “accessible” meant that:
“the vessel has to be able to enter the port in question safely and leave it safely [our italics] but … temporary obstructions do not make a port either unsafe or inaccessible.”
However, on 8 September 1999 in SMA No. 3560, where the fixture provided for loading at “ONE SAFE BERTH–ALWAYS AFLOAT ALWAYS ACCESSIBLE”, according to the Panel:
“ … “always accessible” under BIMCO terms [means] “that the charterer undertakes that when the ship arrives at the port there will be a loading/discharging berth for her to which she can proceed without delay.”
So in that case there was no mention of leaving the berth.
Those urging that the US approach would follow the UK decision might get some support from commentary in SMA No. 3704 in 2001 (albeit another safe port matter) that:
“ … it is well-known and accepted practice in the industry that charterers assume responsibility for any port risk involved when negotiating a charter party with a range of unnamed ports.” (our italics.)
It is tempting to venture that the US would take the UK approach, but one might speak with more confidence if Mr Justice Knowles CBE had given fuller reasoning, with perhaps other or different context than consideration of what a “reasonable commercial party … would bear … in mind …”. We can though see the attraction in applying a plain English meaning of “accessible” as involving both entry and departure. Put another way, is a place always accessible if you can only get to it but cannot return from it?
That said, there is detectable dissatisfaction among UK practitioners, and we suspect that those in the US would prefer to join in waiting to see whether the unsuccessful charterers get this matter before the Court of Appeal and if so what is the outcome.
At present, a point that to many might never have arisen is suddenly very topical, and likewise in the US parties can easily address it with suitable wording, so it can be clear whether this common phrase means also that a vessel must always be able to leave a berth.
If you would like to discuss anything arising from this commentary please contact Ed Floyd at email@example.com and +1 (917) 999 6914 or Luke Zadkovich at firstname.lastname@example.org and +1 (917) 868 1245 / +44 (20) 8068 6844. This article is to be considered general commentary only and not to be relied upon as legal advice for any particular circumstances.