LAW OF CARRIAGE II

Seaworthiness & Bills of Lading

Presenter:
Irfan Izzat bin Noreffendy 2016239344
Nor Fadlina binti Mohd Lutfi 2016239134
Nur Suraya binti Mohamad Sharif 2016239632
Nurhaliza bt Kamardin 2016239554
December 2013, Part B
The M.V. Karr is a roll on-roll off (RO-RO) vessel designed specifically for the
carriage of cars, trucks and other similar vehicle by sea. The M.V Karr is owned by
Shazwina Kars Karriers Sdn Bhd (SKK) but chartered to Chartered Car Carriers
(CCC) under a time charter commencing on 2 January 2013, for a period of 3
years. The terms and conditions of the time charter were in pari materia with
BIMCO’s Baltime Standard Form.

On 16 September 2013, the M.V Karr was loaded with a cargo of used but
reconditioned Japanese car at the Port of Mikawa, Japan’s second largest export
maritime getaway. However, the M.V Karr could not sail to its destination port of
Northport, Klang.
The Port of Mikawa harbour authority pointed out that the certificate of
competency (COC) of seven of its crew had expired the day before.SKKS’s ship
management company, Maritime Management Malaysia Sdn Bhd (MMM), had not
made the necessary renewals due to an oversight. As the ship was registered in
Malaysia, and the crew was Malaysian, MMM only made the application for a
renewal late on 16 September afternoon, Malaysia’s Marine Department
(MARDEP) only issued the renewed COCs late on 20 September 2013.

On 21 September 2013, the Port of Mikawa authority allowed the M.K Karr to sail
for Northport, Klang. As the Master, Captain Choo Wai Looh, was manoeuvring out
of the port, the M.V Karr collided with the navigation buoy. The collision damaged
the hull plate on the ship’s bow on the starboard side. The captain to re-berth the
ship for repairs which took approximately 48 hours. Although the damaged hull
plate was below the water line and sea-water was leaking into the ship, new
welding technology enabled divers to perform the repair without dry-docking.
After completion of the repairs, the M.V Karr was still not allowed to leave the Port
of Mikawa. The harbour authorities insisted that the Captain Choo Wai Looh pay
for the damaged navigation buoy before releasing the ship, SKK reluctantly paid
for the damaged buoy but informed CCC that it was to ultimately foot the bill.

Advice CCC.
First Issue
The issue is whether the expiry of the certificate of competency of the seven crew
members of the vessel would affect the seaworthiness of the vessel in which, if it
does would render the vessel as off-hire.
Seaworthiness

● The vessel must be in such a state at the start of the voyage that it can
perform the voyage in safety, both as regards the vessel itself and the
particular cargo to be carried on the voyage
● The test for determining seaworthiness was laid down in the following terms
in

Case:McFadden v Blue Star Line

“A vessel must have that degree of fitness which an ordinary careful and
prudent owner would require his vessel to have at the commencement of her
voyage, having regard to all the probable circumstances of it ... If the defect
existed, the question to be put is: Would a prudent owner have required that it
should be made good before sending his ship to sea had he known of it? If he
would, the ship was not seaworthy within the meaning of the undertaking”
Law
Manning

Seaworthiness are not only subjected to structurally fit and cargoworthy, it is must
also have sufficient crew on board. What amounts to ‘sufficiency’ will be a
question of fact in each case.

Case: Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd

The court found that though certain of the vessel’s machinery was in a reasonably
good condition ‘… by reason of its age, it needed to be maintained by an
experienced, competent, careful and adequate engine room staff’.
Salmon J continued that:

‘… Would a reasonably prudent owner, knowing the relevant facts, have allowed
this vessel to put to sea with this engine room staff? … I have no doubt that the
true answer to this question is ‘No’. It is obvious from the owners’ associated
company’s letter … to the owners’ … agents that the owners were informed that as
the engines were very old it was necessary to engage an engine room staff ‘of
exceptional ability, experience and dependability’.
Application
The crew certificate of fitness (7 of them) had expired. A certificate of fitness
(COF) is a document that certifies an individual or organization as being fit or
competent to engage in a particular work activity or industrial project.

What does the certificate entails is that, the crew had the competency, capacity,
expertise and skills to fulfill their jobs as crew of the vessel. The certificate act as
proof as their manning capability. The fact it had expired, made the port authority
can question their manning capability.

Thus, it would render the vessel as off-hire until their certificate is renewed.
Conclusion
Seaworthiness are not only subjected to structural fitness(fit for voyage) and
cargoworthiness(capability to carry the cargo safely) as it is also extend to the
manning(sufficient crew of the voyage). Hence, it would be wise for the Vessel’s
captain or carriers to ensure that the certificate of fitness of the crew are renewed
accordingly.
Second Issue
The second issue is whether SKK could claim damages for the amount that they
have paid for the damaged buoy and the total amounts that they have incurred in
repairing the ships.
Law
BIMCO’s Baltime Standard Form

Clause 12: Responsibility and Exemption

The Charterers shall be responsible for loss or damage caused to the Vessel or to
the Owners by goods being loaded contrary to the terms of the Charter or by
improper or careless bunkering or loading, stowing or discharging goods or any
other improper or negligent act on their part or their servants.
Application
The Chartered Car Carriers (CCC) are the Charterers (referred in BIMCO’s Baltime
Standard Form). According to clause 12, the Charterers are to be responsible for
any negligent act on part of their servants.

The vessel had caused damage to the navigation buoy. The charterers
servants/agents Captain Choo Wai Looh was manoeuvring the vessel out of the
port when the collision happened, even though the facts are silent with regards to
whether the Captain are negligent or not, it can be reasonably assumed that the
collision was due to his negligence.

Hence, CCC are to be responsible for the navigation buoy if it was indeed due to
his negligence.
Conclusion
SKK had paid for the buoy. There is a possibility that SKK will seek for
reimbursement for the amount that they had paid. If so, CCC should bring
evidence that the collision are not due to the Captain’s negligence.
Third Issue
The third issue is whether, the vessel would be render as off-hire, due to the repair
made which took approximately 48 hours and was done without dry-docking.
Law
BIMCO’s Baltime Standard Form

Clause 11:Suspension of Hire etc.

A.In the event of dry-docking or other necessary measure to maintain efficiency of

the Vessel, deficiency of men, breakdown of machinery, damage to hull or other
accidents either hindering or preventing the working of the Vessel and continuing
for more than twenty-four consecutive hours, no hire shall be paid in respect of
any time lost during the period in which the Vessel is unable to perform the
service.
Application
The vessel was repaired. Even though the vessel are repaired without dry-docking,
clause 11 had stipulated that in the event of dry-docking or any other necessary
measure to maintain the efficiency of the vessel or damage to the hull that prevent
the working of the vessel that continued for more than twenty-four consecutive
hours it would render the vessel as off-hire.

The repairs (damage to the hull) took approximately forty-eight hours. Within that
time, the vessel are render to be as off-hire.
Conclusion
The effects of such repairs is that the vessel are render as off-hire for forty-eight
hours and thus no amount can be claim within that period of time because the
vessel fail to serve it purpose.
June 2012, Part C
Ship Owners Malaya Bhd (SOM) chartered the M.T. Kapal Tangki to Chartering
Wisely Only Sdn Bhd (CWO) under Gencon standard terms and conditions to
transport a consignment of crude oil from Westport, Klang to Osaka, Japan. An
addendum to the charter contained the following clause:

‘The shipowner is not responsible for any loss or damage or delay caused by the
unseaworthiness of the ship’

One day after sailing from Westport, the ship’s engine started giving trouble and
the M.T. Kapal Tangki had to return to Westport, Klang for repairs. After a brief
inspection of the vessel, the following report was made:
a) Vessel’s engine has to be overhauled as the scheduled maintenance has not
been carried out.
b) Excessive sea water is also leaking from the hull into the bilge compartment
c) Parts of the ship’s electrical system requires re-wiring as some wires have
been chewed through by rodents.

Advise CWO.
Issue
The issue is whether SOM could be made liable towards CWO due to the
unseaworthiness of the M.T. Kapal Tangki.
Law
- Seaworthiness is the state when a ship is fit to undertake a particular voyage and
to carry a particular cargo
- According to the case Burgess v Wickham, it was provided that the concept of
seaworthiness covers the ship, its equipment and its supplies.
- According to Article 3, paragraph 1, the First schedule of the Carriage by Goods
Act , the carrier is bond to exercise due diligence to make the ship seaworthy
- Clause 2, Part II of the Gencon Charter states that the owner or manager of the
vessel shall be made liable for any loss, damage or delay of the goods due to the
unseaworthiness of the ship, if the unseaworthiness of the ship was caused by the
owner or manager’s own due diligence.
- Unseaworthiness can be divided into three parts, namely the physical condition of
the vessel, the crew of manning and the cargoworthiness of the vessel
- The physical condition of the vessel includes the leaking of the hull, the
maintenance of the vessel engine etc
- The seaworthiness of a vessel is an innominate term where it can either be a
warranty or a condition, depending on the situation
- According to the case of Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha
Ltd, the situation in each case will determine whether the innocent party could
claim for damages or repudiate the contract
- An exclusion clause may be incorporated to exclude liability. However according
to the case of Nelson Line v Nelson, the exclusion clause must use clear and
unambiguous language.
- However, if the breach of the owner of the vessel is a fundamental breach (caused
by his own due diligence) the exemption clause may not be enforced.
a) The vessel engine not maintained according to schedule
- The physical structure of the vessel includes the engine of the vessel and the
engine of the M.T. Kapal Tangki is not in good condition due to not being
maintained according to its schedule
- According to Article 3, paragraph 1, the First schedule of the Carriage by
Goods Act and Clause 2 Part II of the Gencon Charter, SOM shall exercise due
diligence to make the ship seaworthy.
- According to the Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd,
the vessel’s engine in this case was not maintained by an experienced,
adequate and competent engine room staff,thus rendering the engine to not
be in its best potential.
- Relating the case to the scenario, the M.T Kapal Tangki’s engine is not at its
best quality due to not being maintained, thus rendering the vessel
unseaworthy.
- Thus, the SOM could be made liable for not keeping the vessel
seaworthy.
- Although the SOM has provided an exclusion clause with clear and
unambiguous language to exclude liability for loss, damage and delay
cause by unseaworthiness of a ship, SOM may not be able to enforce the
exemption clause.
- This is because the breach of not keeping the M.T.Kapal Tangki
seaworthy is a fundamental breach caused by SOM’s own due diligence,
as they did not maintain the engine as scheduled.
- Thus, the SOM shall be made liable towards CWO for the
unseaworthiness of the M.T. Kapal Tangki’s engine
b) Leaking of sea water from the hull

- The physical structure of the vessel includes the hull of the vessel and in
the scenario, the hull of the M.T. Kapal Tangki is not in good condition as
there are leakings from the hull.
- According to Article 3, paragraph 1, the First schedule of the Carriage by
Goods Act and Clause 2 Part II of the Gencon Charter, SOM shall exercise
due diligence to make the ship seaworthy.
- According to the case of Cauvin v Landsberg, the hull in this case was
not in good condition and not in proper shape as it caused the hull to leak
and damage the goods.
- Similarly, in the scenario, there is a leaking of sea water from the hull,
thus rendering the M.T. Kapal Tangki unseaworthy
- Thus, the SOM could be made libale for not keeping the vessel
seaworthy.
- Although the SOM has provided an exclusion clause with clear and
unambiguous language to exclude liability for loss, damage and delay
caused by unseaworthiness of a ship, SOM may not be able to enforce
the exemption clause.
- This is because the breach of not keeping the M.T.Kapal Tangki
seaworthy is a fundamental breach caused by SOM’s own due diligence,
as they did not maintain the hull, causing it to leak.
- Thus, the SOM shall be made liable towards CWO for the
unseaworthiness of the M.T. Kapal Tangki’s hull.
c) Damage of the electrical system by rodents

- The physical structure also includes the electrical system of the vessel
and in the scenario, the electrical system of the M.T. Kapal Tangki has
been damaged by rodents
- According to Article 3, paragraph 1, the First schedule of the Carriage by
Goods Act and Clause 2 Part II of the Gencon Charter, SOM shall exercise
due diligence to make the ship seaworthy.
- According to the case of The Subro Valour, a fire broke on the vessel due
to a mechanical damage towards the wiring in the vessel.
- Relating the case to the scenario, There also exist a damage towards the
wiring in the vessel, caused by rodents chewing the wiring. Thus
rendering the M.T. Kapal Tangki unseaworthy
- Thus, the SOM could be made liable for not keeping the vessel
seaworthy.
- Although the SOM has provided an exclusion clause with clear and
unambiguous language to exclude liability for loss, damage and delay
caused by unseaworthiness of a ship, SOM may not be able to enforce
the exemption clause.
- This is because the breach of not keeping the M.T.Kapal Tangki
seaworthy is a fundamental breach caused by SOM’s own due diligence,
as they failed to prevent the ship’s electrical system from being chewed
by rodents.
- Thus, the SOM shall be made liable towards CWO for the
unseaworthiness of the M.T. Kapal Tangki’s electrical system.
Conclusion
SOM shall be made liable towards CWO due to the unseaworthiness of the M.T.
Kapal Tangki. This is because, although there is a clear and unambiguous
exemption clause, not keeping the M.T.Kapal Tangki seaworthy is a fundamental
breach caused by SOM’s own due diligence.
June 2013, Part C
Shazanah Vessel Ownership Sdn Bhd (SVO) was the registered owner of the Malaysian flagged general cargo vessel, the
M.V. Leemar. On 2 January 2013, she was chartered by Chartering Khabal Bisnez Sdn Bhd (CKB) for a voyage from Kota
Kinabalu, Sabah to Singapore. Under the Gencon standard form charterparty, the freight payable was USD 100 per ton and
the ship had the capacity to carry 4000 tonnes of plywood.

On 3 January 2013, the M.V. Leemar arrived and docked at Kota Kinabalu Port. Loading commenced an hour later at 9 a.m.
After half the cargo of plywood was loaded on board, the M.V. Leemar had problems maintaining her trim and stability.
Loading of the remaining 2000 tonnes was stopped by CKB and the cargo was left on the dock side. A ship's technician
who arrived at the scene investigated the problem and concluded that that it was a software glitch which caused the ship's
computer to miscalculate the ship's trim. At that point in time, there were no Internet services available at the port because
'Anonymous' hackers had launched 'global denial of service' attacks which crippled the World Wide Web.

As there was no way to download the software security patch to repair the glitch in the ship's computer, the port authority
advised the master of the M.V. Leemar, Captain Ida Tazia, to leave the remaining 2000 tonnes of plywood on the dock,
arrange for it to be warehoused at the port, and then proceed with whatever that was loaded on board the ship.
On 4 January 2013, Captain Ida Tazia heeded the port authority's advice and set the ship on
a voyage to Singapore. Whilst sailing right in the middle of the South China Sea, the M.V.
Leemar received the following radio transmission: Mayday mayday. SOS from the M.T. Dijay
Tamhar. We have lost our engines. Floating with the current, 30 nautical miles south of the
Spratly Islands.'

Upon receiving this message, Captain Ida Tazia ordered the M.V. Leemar to deviate from its
charted route and instead head northwards towards the Spratly Islands. About 3 hours later,
the M. V. Leemar made contact with the M.T. Dijay Tamhar. Captain Ida Tazia refused to tow
the M.T. Dijay Tamhar as the M.V. Leemar did not have engine capacity for that type of
salvage work. Instead, only the crew of the M.T. Dijay Tamhar were allowed on board.
After collecting the crew from the vessel in distress, the M.V. Leemar headed to Port of
Bangkok and dropped off the crew from the M.T. Dijay Tamhar. The ship then headed
southwards towards Singapore.

Just off the coast of Kuantan, Malaysia, a fire was detected on board the M.V. Leemar.
Captain Ida Tazia attempted to put out the fire by engaging the inert gas suppression
system, but this was not effective in putting out the fire. Finally, the first mate Haifa'ah
managed to put out the fire by using a traditional hose and water fire fighting system.

The M.V. Leemar arrived at Singapore on 6 January 2013 and discharged her cargo.

Advise SVO of its rights, obligations and liabilities under the terms of the charterparty.
Issue
The issues are:

1. Whether SVO has fulfilled its obligations as a shipowner of M.V.Leemar..

2. Whether SVO breach any terms in the charterparty with CKB ( the charterer).
3. Whether SVO has the rights to earn delivery freight for the goods chartered.
First Issue

Whether SVO has fulfilled its obligations as a shipowner of

M.V.Leemar.
Law
Responsibilities of a shipowner

 Clause 2, Part II of Gencon, the the owner would be responsible for any loss/damage/delay of the
goods caused by personal due diligence on their part/manager but they would be liable for
unseaworthiness of the vessel upon loading or commencement of the voyage
 Article 3, paragraph 1 of the First schedule of the Carriage by Goods Act , the carrier is bond to
exercise due diligence to make the ship seaworthy
 In every contract of affreightment there is an implied obligation to provide a seaworthy vessel ‘fit to
meet and undergo the perils of the sea and other incidental risks to which of necessity she must be
exposed in the course of a voyage.
 It covers the competence and adequacy of the crew, the sufficiency of fuel and other supplies, and
facilities necessary and appropriate for the carriage of the cargo.
 The test would appear to be objective in that ‘the vessel must have that degree of fitness which an
ordinary careful and prudent owner would require his vessel to have at the commencement of her
voyage having regard to all the probable circumstances of it’.
 Shipowner’s obligation to provide a seaworthy vessel was classified as an innominate term by the
COA in Hong Kong Fir Shipping Co v Kawasaki.

 2 obligations of the shipowner: 1) the vessel must be suitably manned and equipped to meet the
ordinary perils likely to be encountered while performing the services; 2) it must be cargo worthy in
the sense that it is in a fit state to received the specified cargo.

 A vessel will clearly be unseaworthy where it has defective engines, or a defective compass, or
where deck cargo is stowed in such a way to render the vessel unstable.

 Voyage charter; the obligation to provide a seaworthy vessel attaches at the time of sailing on the
charter voyage. It is immaterial that defects exist rendering the vessel unseaworthy during the
preliminary voyage to the loading port or even during the loading operation, provided that they can
rectified by the time of sailing. Similarly the obligation is discharged if the vessel is seaworthy at
the time of sailing irrespective of what happens afterwards.
Application
 In the present case, during the loading of the plywoods, the ship was found to
have problems maintaining her trim and stability and it was due to a software
glitch which caused the ship's computer to miscalculate the ship's trim. There
was no way to download the software security patch to repair the glitch in the
ship's computer.

 Defects in maintenance of trim and stability affect the ship propulsion and this
would render the ship to be unseaworthy. The ship won’t be able to sail
properly, thus forcing the captain to leave half of the total amount of the
plywoods to ensure the ship’s trim and stability is balanced.
Conclusion
SVO has failed to provide a seaworthy ship for the chartering of the 4000 tons of
plywood. By the time the glitch was detected, they were already unable to fix it
due to technical problems. The glitch in software used affects the ship’s
propulsion and this causes the ship to be of unseaworthy.

Thus, SVO can be said to have failed to fulfil its obligation as a shipowner in
providing a seaworthy ship for the purpose agreed in the charterparty.
Second Issue

Whether SVO breach any terms in the charterparty with CKB

(the charterer).
Law
Charterparties: contract by which the owner of a ship lets it to others for use in
transporting a cargo. The shipowner continues to control the navigation and
management of the vessel, but its carrying capacity is engaged by the charterer.

1) Voyage Charterparty - he undertakes to carry a cargo between specified points

2) Time Charterparty - he agrees to place the carrying capacity of his vessel at the
disposal of the charterer for a specified period of time
Law
Voyage Charterparty

Laytime provisions

● Clause which specifies the amount of time allowed for loading and unloading cargo.
These ‘lay days’ are available free of charge to the charterer, who is regarded as having
paid for them in the freight.
● If these lay days are exceeded, however, then the charterer has to pay compensation to
the shipowner either in the form of demurrage or damages for detention. Demurrage
rate is usually fixed in relation to current freight rates
● Once the vessel becomes an arrived ship, then laytime will begin to run within a
specified period of the shipowner giving notice of readiness to load
Law
“GENCON”-General Charter Conditions (agreement), or Gencon Charter Party, is the most commonly form of voyage charter
party used worldwide, and particularly known also as “Gencon 1994”.

GENCON consists of two main parts.

● The “PART I” is the box form that includes the main information of the voyage, which each time is agreed between the
parties and completed accordingly. This information mainly includes the contact details of the parties
(owner/charterer/broker), the vessel’s details (name and main description), the loading and discharge ports, the
freight rate, the total laytime available to Charterers, the demurrage rate as well as the vessel’s expected readiness
and cancelling date. The boxes in Part I have their reference to Part II where they are further explained.
● The “PART II” includes the detailed terms and conditions which apply in each voyage fixed with the GENCON c/p and
they are standard unless something different agreed in main terms, during fixing negotiations. This second part
describes in detail the Owner’s responsibilities in regards with vessel’s condition, the detailed terms about the
payment of freight, the laytime and demurrage as well as Owner’s and Charterer’s responsibilities on the loading &
discharging costs. Further conditions which are described in Part II of the Gencon are related with the signing of bills
of lading, vessel’s deviation, general average, strikes and port’s unsafety due to ice or warlike events.
Obligation of reasonable dispatch

● In a Voyage Charter there is an implied undertaking that the vessel will proceed with voyage, load and discharge at time agreed
or within a reasonable time. In a Time Charter, the master is expected to prosecute each voyage with the ‘utmost dispatch’

Obligation not to deviate from the agreed route

● Deviation has been defined as ‘an international and unreasonable change in the geographical route route of the voyage as
contracted’. A few standard charter forms make express provision for the route to be followed but, if it has not been specified,
then it may be taken to the must “direct” and “safe” route.
● Davis v Garratt (1830) 6 Bing 716 “...the law does imply a duty in the owner of the vessel, whether a general ship or hired for a
special purpose of the voyage to proceed without unnecessary deviation in the usual and customary course”.

Justifiable deviation at common law

● departure from the proper route is permissible. The two main situations are deviation to save human life and for the purpose of
avoiding danger to the ship or cargo.

Justifiable deviations to save human life or to communicate with a vessel in distress in case lives may be in danger under common law;
● This type of deviation is protected and involves neither forfeiture of insurance nor liability to the goods’ owner in respect of loss
which would otherwise be within the exceptions of “perils of the seas” Deviation for the purpose of communicating with a ship
in distress is allowable
Deviation to save life on board of another vessel
● Case: Scaramanga v Stamp (1880) 5 CPD 295 CA, 304
The Olympia which had been chartered to carry a cargo of wheat from Cronsteadt to Gibraltar, deviated to save
another, The Arion which is in distress following a breakdown in her machinery. However instead of only attempts to
save the crew, The Olympias also tried to earn salvage by towing The Orion into the port of Texel. While attempting
the towage, The Olympias herself grounded and was lost with all her cargo.
● Principles: If The Olympias deviate solely to save life, the deviation could be justifiable. The exception does not cover
collateral motive.
● Held: In these circumstances, the COA found that the deviation was unjustifiable. The claimant charterer was entitled
to recover the value of the cargo against the defendant as owner of the ship.

Most standard charter forms include a clause giving the master a liberty to deviate for specified reasons.
● Clause 3 of the Gencon form; ‘The vessel has liberty to call at any ports in order, for any purpose, to sail without
pilots, to tow and/or to assist vessels in all situations, and also deviate for the purpose of saving life and/or property.

Justifiable deviations to save human life or to communicate with a vessel in distress in case lives may be in danger under
Hague and Hague-Visby Rules;
● Art IV rule 4 provides 2 further heads: ‘deviation in saving or attempting to save… property at sea’, and ‘any
reasonable deviation’. The courts in UK have given an extremely restricted interpretation to the term ‘reasonable
deviation’
A fire was detected on board the M.V. Leemar.

Article 4, paragraph 2(b) of the First schedule of the Carriage by Goods Act in cases of fire, the carrier nor the ship
shall be responsible for the loss/damage unless it was caused by the actual fault or privity of the carrier

The Hague-Visby exceptions to the common aspects of contracts of affreightment:

● Fire, unless caused by actual fault of the carrier - The exception under the Hague-Visby excludes the carrier
from responsibility for loss or damage
● Lennard’s Carrying Co v Asiatic Petroleum Co Ltd, shipowners sought to limit their liability for fire damage to
a cargo of benzine resulting from the vessel running aground in a storm due to lack of power caused by
defective boilers. The shipowners had delegated management of their vessel to a fim, the managing
director of which took an active part in the operation of the vessel. Although he was aware or had
reasonable means of knowing, of the defective condition of the boilers, he gave no special instructions to
the ship’s officers and took no steps to prevent the vessel going to sea in an unseaworthy condition. His
negligence in this regard was held constitute ‘actual fault or privity’ on the part of the shipowners.
Application
The sub issue pertaining the deviation of M.V. Leemar from its charted route

● The act of Captain Ida Tazia deviating the charted route fall under the exception to save life. It is permissible under
common law. Besides that, Clause 3 of the Gencon c/p gave him the liberty to deviate for that purpose. Under Article
4, paragraph 2(b) of the First schedule of the Carriage by Goods Act, in cases of fire, the carrier nor the ship shall be
responsible for the loss/damage unless it was caused by the actual fault or privity of the carrier His act is also
permissible under Art IV rule 4 of the Hague/Hague-Visby Rule. In contrast with Scaramanga v Stamp, The act of
Captain Ida deviate solely to save life instead of towing the M.T. Dijay as well, could render the deviation to be
justifiable.. Hence, CKB may not entitled to recover the value of the cargo against the SVO as owner of the ship.

The sub issue pertaining to the fire on board

● Gencon does not provide any clause that covers on fire. Since the Carriage by Goods Act should be read together
with Gencon. Article 4, paragraph 2(b) of the First schedule of the Carriage by Goods Act in cases of fire, the carrier
nor the ship shall be responsible for the loss/damage unless it was caused by the actual fault or privity of the carrier.
However this Act is only applicable if it’s within Malaysian’s territory. The fire was detected on board just off the
coast of Kuantan, Malaysia. Hence Article 4, paragraph 2(b) of the First schedule of the Carriage by Goods Act is
applicable. The exception under the Hague-Visby excludes the carrier from responsibility for loss or damage
Third Issue

Whether SVO has the rights to earn delivery freight for the
goods chartered.
Law
 Freight is the consideration paid by the charterer to the shipowner for performing his part of the
contract of carriage. In most cases, the quantity of cargo will determine the amount of freight
payable.

 It will also undertake to load and discharge the vessel within a set of period of time “lay time”. If
it exceeds this period, it will become liable to pay liquidated damages to the shipowner -
Demurrage

 Types of freight
- Delivery freight
- Advance freight
- Pro rata freight
- Lump sum freight
- Back freight
 Metcalfe v Britannia Ironworks Co (1877) - the carrier will not be allowed to
claim freight if he is unable to deliver the goods to the port of destination , even
if it due to circumstances beyond his control.

 Daxin v Oxley (1864) - The charterer refused to pay freight on a cargo of coal
shipped, alleging that the coal was so damaged on arrival it was worth less
than the freight. The court have judgement for the shipowner, stating that
freight was to be paid if the contract was substantially performed.

 Ritchie v Atkinson (1808) - where only a part of cargo is delivered, freight is

payable on that part. Delivery of a complete cargo is not a condition precedent
to the recovery of freight
 Shipowner is entitled to freight if either he is willing and able to deliver
according to the charterparty of if he is only prevented from delivering by
some act or omission of the cargo owner.

 Cargo Ex Galam (1863) - The carrier is entitled to claim freight if he is

prevented from delivering the goods to the port of discharge by some act or
omission of the cargo owner.
Application
 In absence of facts to the contrary, it can be assumed the freight agreed in the
charterparty is an ordinary/ delivery freight where freight is payable at the discharge
port. Based on the general rule in Dakin v Oaxley, SVO can only get paid for the
amount it has delivered.

 Instead of chartering 4000 tons of plywood, SVO was only able to charter half of
that amount which is 2000 tons of plywood.

 Although SVO was unable to charter the full amount of plywoods which is 4000
tonnes as agreed in the charterparty, it had however, chartered half of that amount.
It should be noted that CKB was aware of this matter as they are the ones who stop
SVO from loading full amount of plywoods after discovering defects in the ship’s
trim and stability.
Conclusion
Although SVO was unable to charter the full amount of plywoods which is 4000
tonnes as agreed in the charterparty, it had however, chartered half of that
amount. It should be noted that CKB was aware of this matter as they are the
ones who stop SVO from loading full amount of plywoods after discovering
defects in the ship’s trim and stability.

By virtue of the courts’ decision in Ritchie v Atkinson and Cargo Ex Galam, SVO
may claim for the delivery freight for the goods chartered.