Lesson 4 Maritime Law and Personnel Management MA2026

Singapore Maritime Academy

CoC 1/2

Maritime Law and Personnel Management

LESSON 4

Role of Master in Shipping

Objectives:

At the end of this lesson you should be able to:

 Discuss the role of the various parties involved in commercial shipping.

 Distinguish between Private and Common Carrier.
 Examine the legal role of Master as Agent of his Owners.
 Discuss the concept of Agent of necessity.

References:

1. Maritime and Port Authority of Singapore,

<https://www.mpa.gov.sg/web/portal/home>, assessed 01 Aug 2019

2. Hopkins, F. N. (1990) Business & Law for the Shipmaster 7th ed. Brown, Son
& Ferguson Ltd.

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Introduction
The underlying principle of the carriage of goods by sea is that the carrier (a term that usually
includes the shipowner) is entrusted with transporting property of another person from one
place to another. In the process of transportation, a number of parties described below are
involved. For a understanding of the carriage of goods by sea the student must know the role
the various parties place in the transportation of goods, both when the goods are delivered in
sound condition as well as when disputes arise for damage or loss of the goods.

4.1 Shipowner
The person in whose name is recorded in the Certificate of Registry of the ship as being the
owner of the ship.

4.2 Shipowning Company

It is a shipping company, where the ship or ships belonging to the owner or part owners
register the ship or ships as a corporation. In this case the name of the company will be
recorded in the certificate of registry instead of the owner.

4.3 Ship’s Operator

It is a managing owner of the ship. This term is purely a commercial and has no legal
expression. In practice a ship operator may be an actual owner or part owner. On the other
hand the ship operator may be a person employed by the owner or owners to manage the ship.

4.4 Carrier
Means any person by whom or in whose name a contract of carriage of goods by sea has been
concluded by the shipper.

4.5 Actual Carrier (same as Performing Carrier)

Means any person to whom the performance of the carriage of goods or part of the carriage,
has been entrusted by the carrier, and includes any other person to whom such performance
has been entrusted.

4.6 Private Carrier

Where a carrier declines to accept the status of a common carrier, or refuses to carry goods
other than those of a particular kind, and makes a special contract of carriage with each
consignor in turn, is known as a private carrier or special carrier.
Although the private carrier is bound by certain common law obligations, he is permitted to
include an exception clause in the contract relieving him from specified liabilities. The private
carrier is also entitled to the same exceptions from liability as a common carrier.
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4.7 Common Carrier

Is a carrier who, for hire or reward, holds himself ready to carry from one terminus to another
the goods of any person who chooses to employ him for the purpose. Such a carrier cannot
pick and chose his customers. He is bound to charge a reasonable price for his services but is
not bound to charge a uniform price.

The Common Carrier must accept and carry whatever goods are offered for carriage unless: -
 His carriage is already full.
 The goods offered are not of a kind he is accustomed to carry.
 The destination of the goods is not on his accustomed route.
 The goods are of an especially dangerous nature and the carriage of them would involve
extraordinary risk.
 The goods would be harmful to other goods that he has already accepted.

4.8 Shipper
Means any person by whom or in whose name or on whose behalf a contract of carriage of
goods by sea has been concluded with a carrier. A shipper can also be any person by whom or
in whose name or on whose behalf the goods are actually delivered to the carrier in relation to
the contract of carriage by sea.

4.9 Ship’s Agent

Is a person who acts on behalf of the shipowner and master whilst the ship is in port. The ship
agent makes arrangements for loading and discharging cargo, embarking and disembarking
crew and passengers, bunkering, obtaining supplies, having repairs effected and other details
of the ships requirements given below.

The ship agent also makes advance arrangements for berthing or unberthing the ship, collects
freight that is due to the shipowner, assists with customs requirements and attends to crew
formalities. The agent’s fees for services rendered are base on a fixed scale.

4.10 Forwarding Agent

Many manufacturers do not ship their products by themselves. Instead they employ a firm to
look after the shipping side of their business. These firms are known as Forwarding agents.
Such agents have knowledge of the requirements of the country to which the goods are
despatched. On behalf of their principal, they book space on the ship, prepare all the
documents needed to clear the through customs and if required arrange insurance cover for the
goods. The agent may collect the goods from the place of manufacture or from another place
where the exporter has delivered the goods at an agreed time.

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4.11 Consignee
Means the person entitled to take delivery of the goods at the destination.

4.12 Receiver
Means the same as consignee. However, the consignee or cargo receiver entitled to take
delivery of the goods must show proof that they are authorised to take delivery by producing
the original bill of lading.

4.13 The Role of a Master

The Master of a ship must be a person who has acquired the respect and confidence of his
employers as well as his subordinates and those personnel that he will have to deal with
during the course of the voyage. The shipowner relies on the master to manage his ship with
regard to the safety of the ship, cargo, passengers and crew. He is a man of great
responsibilities and is deemed responsible for anything that goes wrong.

The role of the Master may be divided into a number of separate categories as follows: -

1. The Manager of a Commercial Enterprise.

2. The Safety Officer.
3. The Law Officer.

In certain cases, the master has to take all the above roles at one and the same time, as he is
responsible for keeping several groups of people happy i.e. owners, charterers, cargo owners,
port authorities and his own crew. In managing his ship as a commercial enterprise, he must
ensure the safety of the crew, ship and cargo at all times. Failure in any of these aspects may
have serious consequences both to the ship under his command and his employers, the
shipowner.

4.14 The Legal Role of the Master

The Master is in law the servant or agent of the ship's owner. They are his employers and thus
are vicariously responsible in law for the consequences of his acts, neglects or defaults. To
take a simple example, the act of signing a Bill of Lading by the Master, or even on his behalf,
evidencing a contract of carriage of goods creates a contractual relationship between the
shipper to whom the Bill of Lading is initially issued and the carrying shipowner.

The previous paragraph is an example of a situation where the Owners for their own account
are trading the ship. However, it also applies to a ship, which is under Time Charter because
the Master, under the terms of a Time Charter remains the servant in law of his owners and
bind them by his signature, not the charterers, which leads us to a second legal role of the
Master.

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In all Time Charter Parties there is a Clause which stipulates "The Master must obey the
orders of the Charterer who has taken the ship on hire for a specified period of time and
are entitled by this clause to use and employ the ship". Here it should be noticed that
frequently the master will run into a difficult situation, because by charter party stipulations
the master may be required to sign and issue Bill of Lading or alternatively to authorise the
charterers or their agents to sign where to refuse could expose his owners to a breach of
contract. In each of the above cases the master is creating a contractual relationship between
the person to whom the Bill of lading is issued and his owners.

To overcome the above problem, most common forms of Time Charter Parties contain an
Employment and Indemnity Clause designed to protect the shipowner against any adverse
consequences to them as a result of the Master following Charterers orders.

It cannot be too strongly emphasised that the Time Charterers right to interfere with what the
Master does is confined purely to their employment of the ship and in no way are they entitled
to have any say or interfere with the safety or navigation of the ship which falls within the
Master's exclusive responsibility. To illustrate this simply, the Charterers have the right to tell
the Master where to sail to, what cargo to load and discharge, but they have no right to tell
him when to sail because that is a matter of safety and navigation.

4.15 The Safety of Life, Property and Environment is the Prime Responsibility
of the Master

The Master has overall responsibility for all aspects of safety on board ship though he may
delegate certain responsibilities to his officers. Safety may be considered under a number of
different headings of which the following are a few: -
(a) The safety of the crew and passengers must be ensured at all times. The working
conditions of seamen are frequently of a hazardous nature and despite the many
precautions that are taken accidents still occur. The only way to instil safety into the
crewmembers is to bring to their notice the hazards to which they are exposed since
many of the accidents that do occur may have been avoided by the exercise of ordinary
and reasonable care.
Where an accident occurs due to a breach of a statutory duty there is practically no
defence to a claim for damages and the shipowner may have to meet heavy claims for
loss of life and personal injury resulting from such accidents. It is essential that a
Master brings to the attention of his Officers and crews the various publications in
respect of safety.
The safety of shore personal, shore workmen, and other parties is very much the
concern of the Master since they require particular care owning to their inexperience
and ignorance of shipboard conditions.

(b) The health and welfare of the crew are of paramount importance and it is the duty of
the Master, together with a responsible member of the catering staff, to regularly
inspect the supplies of food and water provided for the crew and enter the results of
such inspections in the Official Log Book.
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Ships carry a wide variety of cargoes, some of which may be of a hazardous nature.
Certain ships are built with specific hazardous cargoes in mind, i.e. LPG's, LNG's,
Tankers, and Chemical Carriers. Such ships must not only be specifically constructed
to carry such cargoes but the Officers and Crew must be well trained in the carriage of
these cargoes, the prevention of contamination of these cargoes, pollution of the seas
and the environment hazards to which they are exposed.

(c) Finally, it is also the Master's duty to ensure the safe navigation of the ship, that the
course laid off on the chart is safe, that his Officers are conversant with the course of
action he is taking, that, appropriate, traffic schemes are strictly adhered to. It is
necessary for the Master to have a sound knowledge of meteorology and weather
routing so that he can select the safest and most economical route bearing in mind the
prevailing climatic and weather conditions. Owners may advise but cannot direct the
Master to follow any particular route and the Master is solely responsible for ensuring
a safe, speedy and economic passage between ports.

4.16 The Role of the Master as Agent or Representative of His Owners

This may be to some extent being called the Master's main role. The Master has the authority
to bind his owners by entering into contracts, on reasonable terms, e.g. for ancillary services,
stevedoring contracts, towage contracts, etc, acting at all times in the ship's best interest. The
Master must, however, act within the scope of his authority, either express or implied, if his
owners are to be legally bound and this is particularly worthy of being borne in mind when it
comes to the signing of Bills of Lading.

A Master may delegate his authority to a Charterer or his Agent to sign Bill of Ladings on his
behalf but should ensure that such authority is conditional to their being signed in accordance
with the relevant Mate's Receipts. The Master may not or allow to be signed, Bill of Ladings
which create a contractual relationship at variance with the Charter Party.

The ship's Master may be a part or co-owner, in which case it may have to be determined after
the happening of an incident in which he is personally involved resulting in loss or damage to
third parties, i.e. a collision, as to whether at the time when he committed his negligent act,
default or omission, he was acting in his capacity as co-owner of the ship or as Master (merely
agent for the co-owners). This will have a definite bearing on the owner’s eventual right to
limit their liability in respect of the third party claims.

4.17 Circumstances under which the Master acts as an Agent of Necessity,

Agent of the Cargo Owner and Agent of the Charterer

This is a role which goes back deep into history, long before the days of sophisticated
communication. In those days, once the ship had put to sea on a cargo-carrying voyage her
owners lost all effective control over the vessel. The Master was on his own and on the arising
of trouble, distress or danger he had to make decisions in the best interests of all and on behalf
on all. In the early days of sea commerce the Cargo Owners were considered to be joint
adventurers with the Shipowner and the Master, being the man on the spot on the voyage,

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was deemed in times of peril and/or emergency as agent both of the Shipowner and by
necessity of the Cargo Owner as well.

The Agent of Necessity idea has survived through to modern times in the sphere of Salvage
and General Average. When a Master for example, signs or agrees to sign a Lloyd's Open
Form (no-cure-no-pay) Salvage Agreement he is deemed to binding separately and not one for
the other, the Shipowner and the Cargo Owner (if a ship is laden with cargo of course) to the
terms of that agreement and does not by his own signature bind himself at all.

Similarly, in performing a General Average Act, i.e. in voluntarily sacrificing (jettisoning)

cargo or incurring an expenditure for the common good, the Master is acting just as much in
the interest of the Cargo Owner with cargo on board as he is in the interest of the Ship Owner
whose servant in law he is deemed to be. If the vessel was under charter at the time the Master
would be said to be acting in the Charterers interest, also to the extent that they had an interest
and would benefit from the successful completion of the voyage.

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Tutorial

1. The role of the Master may be divided into separate categories as follows:

a) law of the sea, limited ambassador and manager of a commercial

enterprise.
b) law officer, safety officer and manager of a commercial enterprise.
c) disciplinarian, doctor and servant of the law.
d) ship's commander, diplomat and lawyer.

2. The ship owner relies on the Master to manage his ship with regard to:

a) safety of the ship, cargo, passengers and crew.

b) safety of the ship, cargo, passengers, crew and protection of the marine
environment.
c) safety of the ship, passengers, crew and protection of the marine environment.
d) safety of the ship and protection of the marine environment.

3. The Master as an Agent of the Charterer means that:

a) he has to obey all orders of the charterers that take priority over the owners.
b) he has to comply fully with the charterers orders at all time throughout
the voyage.
c) charterers have a right to tell the master where to sail to, what cargo to
load and discharge, but have no right to order him on matters of safety
and navigation.
d) charterers are fully responsible for the actions of the master thus exonerating
the owners against any claims that may arise during the period of charter.

4. The Master may act as an Agent of Necessity in instances whereby:

a) he feels it necessary for the safety of the ship and the marine environment.
b) there is real and immediate danger to the vessel and crew.
c) he finds it necessary to pledge the ship/cargo to complete the voyage.
d) 'on the spot assessment' of the degree of danger and the consequent need for
emergency measures may only be made by him.

5. The Master can give a bottomry bond or a respondentia bond in cases of dire
necessity:

a) where he needs to raise money to complete the voyage and is left with no other
option than to pledge his ship/cargo.
b) to dispose of goods which are a danger to the ship and/or crew.
c) where the ship is being traded by the owners for their own account.
d) where he is a servant of the law and an agent of both his principal and
owner.

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6. The person whose name is recorded in the Certificate of Registry is known as:

a) the shipper.
b) the consignee.
c) the chartering owner.
d) the registered owner.

7. On 20 May 2015, a bill of lading was issued by the master acknowledging that 25,000
tons of Argentine soya beans in bulk had been shipped in good order and condition
on board the vessel Avenger in the port of Rosario in Argentina for delivery to Italy.
On 27 May 2015, Avenger took the ground in the river Parana and was stranded. Her
master was unable to refloat her without assistance and by an agreement in writing
made on 30 May 2015; he engaged the European salvors to refloat the vessel on the
terms contained in Lloyd's standard form of Salvage Agreement (L.O.F.).

The salvors were successful in their efforts to refloat Avenger and claimed
remuneration. An arbitrator was appointed. The claim of the salvors against the
shipowners was settled by agreement between the parties. The cargo-owners
contended that the master had no authority to engage salvors on their behalf and they
attended the arbitration under protest. The arbitrator made his award and on appeal
the cargo-owners paid their proportion of the salvage reward.

The cargo-owners contended that it was unreasonable for the master or shipowners to
make a salvage contract with the salvors and it was not in the best interest of the
cargo-owners for such a contract to have been made.

a) Does the master of a ship had implied actual authority to make reasonable
contracts with salvors on behalf of owners of cargo on reasonable terms?

b) If so, whether, if a contract was made in writing on 30 May 2015 between the
master of Avenger and the salvage officer, Captain Marino, was a reasonable
contract on reasonable terms.

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