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Shelltime 4 form – Clause 28 – intention to load illegal cargo sufficient to put charterers in breach.

The Facts

The vessel was let on the Shelltime 4 form for about 8 months.

Relevant clauses were:

“13(a)     The Master (although appointed by owners) shall be under the orders and directions of charterers as regards to employment of the vessel, agency and other arrangements… charterers hereby indemnify owners against all consequences or liabilities that may arise … (i) from signing bills of lading in accordance with the directions of charterers, or their agents … or … from the Master otherwise complying with charterers or their agents’ orders, and (ii) from any irregularities in papers supplied by charterers or their agents…

21(a)      On each and every occasion that there is loss of time for more than 6 hours… (v) due to the detention of the vessel by authorities at home or abroad attributable to legal action against… the vessel, the vessel’s owner or owners (unless brought about by the act or neglect of charterers)… the vessel shall be off hire…

27(a)      Further, neither the vessel, the Master, or owners, nor charterers shall, unless otherwise in this charter expressly provided, be liable for any loss or damage or delay or failure in performance hereunder arising or resulting from … arrest or restraint of princes, rulers or people…

  1. No voyage shall be undertaken, nor any goods or cargoes loaded, that would expose the vessel to capture or seizure by rulers or governments.”

In clause 41 the parties agreed that either party could appeal to the High Court on any question of law arising out of an award.

Charterers sub–chartered the vessel for the carriage of crude oil 1 or 2 safe ports Venezuela, intention Guaraguao Terminal, Puerto La Cruz to a range of ports in sub–charterers’ option.

Charterers gave employment orders as follows:

“Vessel: MT CV Stealth

Charterers: AS Capital Ltd…load port Guaraguao Terminal, PLC, Venezuela

Lay can: 4 – 5 Sep 2014…

Cargo: Mesa Crude – no heating required. Total cargo up to 400 kbbls or as limited by draft at discharge port.

Surveyors: SGS

Load port Agents: Atlantic Marine Services SA

Vessel to arrive load port in all respect ready to load the nominated cargo.

Anticipated discharge destination is TBN terminal in Houston ship channel; complete information to follow”

The vessel proceeded to Puerto La Cruz.

Upon arrival the Master was supplied with a forged authorization letter purporting to emanate from Petroleos De Venezuela SA, the State oil company.

Prior to loading, the vessel was boarded by Port State control officers who discovered the forged authorization. This led to the detention of the vessel pending a criminal investigation into the attempted illegal export of oil.

Charterers paid hire for a further 4 months at which point they claimed that the charter had been frustrated. Three months later they purported to redeliver the vessel to owners.

Owners claimed hire until redelivery and damages for detention for the period thereafter.


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Charter Party Casebook