Tuesday 6 October 2009

Destination dilemma

It is known that the terms of the bills of lading override the terms of the single trip time-charter party. That is why the shipowner have to be very careful to make sure that the destination stated in the bills of lading is exactly the same as agreed in the charter party. Imagine that, in accordance with the charter party, the ports of discharge include e.g. ports out of Saudi Arabian Red Sea or in charterers' option - ports out of Egypt. Unexpectedly, the charterers produced the drafts of the bills of lading for the owners prior approval, where the charterers include the ports out of Saudi Arabian Persian Gulf as well - apparently not in line with the governing charter party. The owner is very surprised! Since the freight rate does not take the Persian Gulf ports in to account, it is unclear how the ship will execute the voyage around the Arabian Peninsula. Yet, the shipowner will be obliged to do so! Therefore the shipowner rejects the Persian Gulf ports at once.

Suddenly, the charterers revert saying that they may sign a letter of indemnity in accordance with the shipowner's wording saying e.g. that the charterers should not discharge in the Persian Gulf ports. Yet, where is the guarantee that they won't do it, since the cargo receiver is not defined? It is a kind of dilemma a shipowner may practically face.