UK Defence Club advise on Gulf oil pollution’s impact on charterparties

News Release The UK Defence Club Thomas Miller Defence Ltd, July 16, 2010

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The
Deepwater Horizon oil spill in the Gulf of
Mexico has prompted a flurry of queries from members of
the UK Defence Club about safe ports, time and voyage charterparties and hull
fouling.
 
The
Club has responded with advice in its latest ‘Soundings’ bulletin while
acknowledging that the situation---and official requirements---can change
suddenly.
 
At
present, the main shipping lanes towards the Mississippi appear to be clear of oil. The US
Coast Guard has advised it has no plans to restrict traffic using the
Southwest Pass, the river’s main channel for commercial
shipping but the oil spill area is under constant surveillance.

 
The
Coast Guard has organised two ship cleaning stations near Southwest Pass where ships fouled by oil stains should
stop for cleaning before proceeding into the river. It has placed restrictions
on three other passes to the Mississippi and imposed a “no wake zone” near the booms deployed to help protect
sensitive coastal areas from the spill. 
 
Although
there are no court decisions on the point, a port could be considered as unsafe
if its approaches are covered with oil which could damage a ship or cause it to
incur penalties, delays or fines. Assessing whether a port is unsafe is a
question of fact but if the danger can be avoided by an alternative safe route
or good seamanship, it is unlikely the port will be considered
unsafe.
 
Gulf
of Mexico ports close to the oil spill may not be
considered as sufficiently unsafe  to allow an owner to refuse
an order to go to such a port under a time charter or refuse such a nomination
under a voyage charter. Nevertheless, acceptance of such an order 
should not normally preclude an owner from claiming damages later for
losses resulting from the oil. 
 
Delays are likely to occur. A master might take a longer route to a
Gulf of Mexico port to avoid an
oil slick, perhaps to comply with USCG requirements. Moreover, a port may be
temporarily closed as the slick develops. In these situations, a ship is likely
to remain on-hire unless there are specific clauses to the contrary in a time
charterparty. 
 
Restrictions imposed on shipping might cause delays in
entering and departing from ports in the area. Much will depend on the wording
of each charter. Unless demurrage is already running, the risk of delay will
fall initially on the owner. However, if a nominated port becomes closed prior
to its arrival, the ship may earn demurrage once she proceeds “so near as she
may safely
get.”                    
                          
Ships
trading recently in the Gulf’s affected areas should ensure there is no hull
fouling before entering ports outside the area, thereby complying with oil
pollution regulations. In terms of compensation for cleaning costs or lost time,
an owner may have a claim against a time charterer under an implied indemnity
for following the charterer’s orders, or perhaps under a safe port warranty.
Claims might be submitted to BP and others. However, claimants should consider
the likelihood of any recovery given limitations of liability currently in place
in the US.

 
 Updates on the situation can be found on a
US Coast Guard
website dedicated to the oil spill response – www. deepwaterhorizonresponse.com.
P&I related updates can be found on www. ukpandi.com. UK Defence Club managers 
can be contacted for advice and assistance re legal issues. Bimco has
issued a guidance clause re voyage charterparties, designed to address the Gulf
incident rather than oil spills in general. Owners and charterers should visit
www.bimco.org 
 
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