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					                              Safe port warranty in charterparty contracts
                                             Igor Sterzhantov@2011



Politically unsafe
    In Ogden v Graham (1861) 1 B&S 773, the charterers nominated port in Chili, which at the time
of nomination was closed by the government of Chili and no vessel can call into it without running
the risk to be confiscated. The charterers had no knowledge of this order of Chilean government
when entered into the contract of carriage with the owners. Consequently the vessel was delayed
for 38 days and owners claimed damages on the ground that nominated port was not safe within
the meaning of charterparty. The charterers contended in response that a named port was safe so
far as regards the incidents to navigation, and if it was physically possible for the master to take the
ship inside of such port the charterers have fulfilled their part of contract. The court again took the
owners’ side, stressing that even if the charterers were perfectly innocent as regards any
knowledge of the danger that might be incurred by the vessel, it would be unreasonable to
construct a contract in a way that a safe port in Chili, which the charterers shall name, means even
a port where the vessel will be confiscated the moment she enters it. Blackburn J said in his
judgment:

        I think that, on the construction of this charter-party, the charterers are bound to name a
        port which, at the time they name it, is in such a condition that the master can safely
        take his ship into it; but, if a certain port be in such a state that, although the ship can
        readily enough, so far as natural causes are concerned, sail into it, yet, by reason of
        political or other causes, she cannot enter it without being confiscated by the
        Government of the place, that is not a safe port within the meaning of the charter-party.

    This decision is noteworthy for two reasons. First, it extended meaning of a safe port beyond the
limits of natural obstructions and ‘incidents to navigation15.’ This new notion of an unsafe port was
later described as ‘politically unsafe’16 port. Whether action of war or nature or the order of
government render a port unsafe is always a question of fact17. Secondly, the charterers’ argument,
based partly on Spence v Chodwick [1847] EngR 472; (1847) 10 QB 517 case18, was rejected by the
court as unreasonable construction.

Dahl v Nelson
    Comprehensive analysis of all previous case law related to ‘as near thereto’ clause was done in
Dahl v Nelson, Donkin, and Others, (1881) 6 App. Cas. 38. The House of the Lords held that inclusion
in contract of carriage ‘as near thereto as she might safely get’ has an effect of enabling the vessel
to complete her voyage by proceeding to the alternative destination in cases when unreasonable
delay in reaching the place of loading or discharging caused by an obstacle of permanent
character would give to the parties a right to discharge such a contract altogether.
    Lord Blackburn in his leading judgment cast a doubt on correctness of the ‘ambit test’
pronounced by Lord Cambell CJ in Schilizzi v Derry (1855) 4 E & B 873 – in absence of any clear
definition the limits of ‘ambit of the port’ is very difficult to ascertain. His Lordship admitted that on
the one hand it quite immaterial whether the incapacity to get into the dock was produced by a
15
   ‘I greatly doubt whether, in any fair construction of the charterparty, it is necessary that obstruction should be
of a purely physical character..’ per Lord Watson in Dahl v Nelson, Donkin, and Others, (1881) 6 App. Cas. 38
16
   Per Sankey J in Palace Shipping Co, Ltd v Gans Steamship Line [1914-15] All ER Rep 912 at 913, see also Lord
Roskill judgment in Kodros Shipping Corp v Empresa Cubana de Fletes (The Evia) [1982] 3 All ER 350 at p.360
17
   Palace Shipping Co, Ltd v Gans Steamship Line [1914-15] All ER Rep 912
18
   Case of seizure by Cadis Customs of all cargo shipped from Gibraltar to London. Cargo was not delivered and for this
non-performance the shipowner was held liable, because a) could not bring himself under any exception in contract of
carriage; b) because it did not appear that loss has been incurred through any fault of the cargo owner.

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                                Safe port warranty in charterparty contracts
                                                Igor Sterzhantov@2011


matter threatening the safety of the ship, or some other matter, but on the other hand the
shipowner is bound to go into the dock if he could do so by waiting a reasonable time only.
Commercial soundness would render as absurd an assumption that vessel chartered to go to a
place, or as near thereto as she may safely get, should wait outside unreasonably long time.
    Lord Watson stated at p.57 and 58 that:

        I think it may be taken as settled law, that when, by the terms of a charterparty, a loaded
        ship is destined to a particular dock, or as near thereto as she may safely get, the first of
        these alternatives constitutes a primary obligation; and, in order to complete her voyage,
        the vessel must proceed to and into the dock named, unless it has become in some sense
        "impossible" to do so.

            …

        In providing alternative destinations, the charterparty does not express the condition
        upon which the second alternative becomes substituted for the first. It does not in terms
        express an distinction between the alternatives, and that the first is to be regarded as the
        primary destination to which the chartered vessel must, if possible, proceed, is, I
        apprehend, an inference based upon what is known to be the ordinary course of
        shipping business, and, on the presumption that parties would, from considerations of
        mutual interest, have agreed to that effect if they had made it matter of express
        contract.

     Awakened by Dahl v Nelson decision, the owners recognised that if amended, a commonly
used construction may drastically shift distribution of liabilities between the parties to the contract.
Although temporarily lack of water was held to be a characteristic of a tidal harbour 19 and
therefore within risks borne by the owner, nevertheless certain wording, when carefully inserted in
the contract, is able to relieve the shipowner from a burden which the law would have otherwise
thrown upon him. In Horsley v Price (1883) 11 QBD 244, 5 Asp MLC 106 the owner was held to be
discharged from liability for delays due to the tide because usual provision ‘so near thereto as she
may safely get’ was amended by ‘at all times of tide and always afloat’. In that case the vessel
arrived at King’s Roads, which although located eighteen miles away from her destination –
Sharpness, was, nevertheless, the nearest place to Sharpness that the vessel could reach with her
full cargo on board in the then state of the tides. Notwithstanding the fact that upon a short and
reasonable delay the shipowner would have be able to carry his whole cargo to destination, the
judge found that charterparty was expressly designed to relieve the owner at the charterer's
expenses from a chance of loss due to any delay related to lack of water at discharging port.
     What is notable, that it was for the charterer now to allege that construction which enables the
owner end his voyage earlier is ‘a hard and unreasonable one’. Naturally, it was suggested by the
learned judge in Horsley v Price that certain amendments20, if inserted into the charterparty, would
dramatically change position of the parties when ‘so near thereto as she may safely get’ has to be
invoked.
     Similar wording ‘so near thereto as she can safely get, always afloat’ let Sankey J in Hall Bros
Steamship Co, Ltd v R and W Paul, Ltd [1914-15] All ER Rep 23421 expand meaning of a ‘safe port’ to
‘a port to which a vessel can get laden as she is and at which she can lay and discharge, always

19
   Parker v Winlow (1857) 7 E & B 942, Bastifell v Lloyd (1862) 1 H & C 388
20
   "in all states of the river" in Schilizzi v Derry (1855) 4 E & B 873 and "at all seasons of the year" in Metcalfe v
Britannia Ironworks (1877) 2 QBD 423
21
   At p.236

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                            Safe port warranty in charterparty contracts
                                          Igor Sterzhantov@2011


afloat’. This notable change embraced not only the passage to and out of port but also safety of
cargo operation within it.

Conclusions

    Analysis of case law shows that right to proceed to alternative destination under ‘as near as she
can safely get’ clause does not arise unless it is either unsafe or impossible for the ship to proceed
to her original destination. Obstruction preventing the ship from getting alongside shall be of
permanent character but not necessary of physical nature, thus political unrest can render the port
unsafe in same way as rocks, shoals, etc. When expressly amended22, the wording ‘as near as she
can safely get’ may discharge the shipowner even from liability accrued from delays occasioned in
the ordinary course of navigation, like tides and other temporary impediments. The rest of this
article you can read here:
    http://www.lawandsea.net/COG/COG_Safe_Port_2as_near4.html




22
  Horsley v Price (1883) 11 QBD 244, 5 Asp MLC 106 and Hall Bros Steamship Co, Ltd v R and W Paul, Ltd [1914-
15] All ER Rep 234

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DOCUMENT INFO
Description: In Ogden v Graham (1861) 1 B&S 773, the charterers nominated port in Chili, which at the time of nomination was closed by the government of Chili and no vessel can call into it without running the risk to be confiscated. The charterers had no knowledge of this order of Chilean government when entered into the contract of carriage with the owners.