The duty of utmost dispatch and the concept of deviation are central to understanding the operation of charterparties and the requirements which such contracts place upon owners and carriers. This article provides a short introduction to these concepts. For more detailed guidance, please contact the Club’s Claims team, who will be happy to assist.
Understanding the duty of utmost dispatch
When entering into a contract of carriage—whether through a bill of lading, seaway bill, or contract of affreightment—a carrier agrees to transport cargo from the loading port to the designated discharge port. A fundamental obligation of the carrier is to proceed with utmost dispatch along the agreed route, avoiding any unreasonable geographical deviations or delays. However, unforeseen circumstances can necessitate changes to the original plan. These can be unrelated to the operation of the vessel such as political instability, or adverse weather, or directly linked to vessel operation such as vessel repairs or the need for fuel and other supplies.
It is essential to note that an intentional and unreasonable deviation from the designated route, unless covered by appropriate liberty clauses, may constitute a breach of contract.
In various jurisdictions, unjustified deviation can lead to severe repercussions for the carrier, including the loss of the right to limit or exclude liability for cargo claims linked to the deviation. This means the carrier could be held fully responsible for losses that might otherwise be mitigated under the Hague and Hague-Visby Rules. As a result, carriers may face significant liabilities that potentially fall outside the Club’s P&I cover.
Justified vs. unjustified deviation
It is difficult to find a set of rules which provide a specific definition of what would constitute as a reasonable or justified deviation. Most of the time, they mainly describe potential scenarios which do or do not constitute an unjustified deviation. For example, the Hague and Hague-Visby Rules state that:
“Any deviation in saving or attempting to save life or property at sea or any reasonable deviation shall not be deemed to be an infringement or breach of this convention or of the contract of carriage, and the carrier shall not be liable for any loss or damage resulting therefrom.”
Determining whether a deviation is reasonable relies heavily on the specific circumstances of each case. Courts are continually refining what constitutes a “reasonable” deviation, but generally, a deviation may be deemed unreasonable if it significantly alters the nature of the voyage and, as a result, increases its risk without justification.
Potential examples of unjustified deviations are:
- A vessel deviates to proceed with repairs or surveys not necessary for the particular voyage.
- A vessel deviates before the discharge port to exercise a lien, without an express contractual provision.
- A vessel deviates from the contracted voyage for the owner’s advantage, increasing risk for others.
When assessing whether a deviation is reasonable, courts may consider:
- Extent of deviation: While there is typically a degree of leeway in the route taken, even minor deviations can be classified as significant if they diverge from the agreed path.
- Reason for deviation: Certain deviations, like bunkering calls, may not be classified as deviations if they are customary for the route. Deviations undertaken for safety, such as necessary repairs, may also be justified, provided they remain reasonable in scope.
- Nature of trade: Courts will take into account the type of service involved, whether it is a liner service or a tramp service, and the specific contractual obligations regarding cargo transport.
The role of liberty clauses
The criteria mentioned above will be relevant to determining if the decision to deviate is justified. However, it should be noted that when evaluating such a decision, express terms in a charterparty or bill of lading or any other applicable contract will prevail; with the most relevant being a liberty clause.
Liberty clauses play a crucial role in defining the parameters of whether a deviation would be considered as justified or unjustified. These clauses may explicitly permit certain deviations, which must be clearly outlined in the contract. In the absence of a liberty clause, it is implied that the owner of a vessel is to proceed via the reasonable route without unjustifiable deviation and without unreasonable delay.
Therefore, Members should give extra consideration while negotiating a contract and what liberty clause they should include in the wording (inclusive or not) but also during the voyage when determining their operational decisions. For instance, The GENCON Charterparty liberty clause reads as follows:
‘”The Vessel shall have liberty to sail with or without pilots, to tow or go to the assistance of vessels in distress, to deviate for the purpose of saving life or property and for any other purpose reasonably necessary for the safe continuation of the voyage, including calling at any place for bunkers, taking on board spares, stores or supplies, repairs to the Vessel, crew changes, landing of stowaways or persons rescued at sea, medical emergencies and ballast water exchange, and the Owners shall not be liable for any loss or damage (including delay) arising or resulting therefrom.
This Clause shall be incorporated into any sub-charter and any bill of lading issued pursuant hereto.’’
This is quite inclusive and allows the vessel to sail without pilots, assist vessels in distress, and deviate for various justified reasons, including bunkering and necessary repairs, without liability for losses arising from such actions.
Meanwhile, the Shellvoy Charterparty liberty clause proves:
‘’The vessel shall be at liberty to tow or be towed, to assist vessels in all positions of distress and to deviate for the purpose of saving life or property. On the laden voyage the vessel shall not take on bunkers or deviate or stop, except as allowed in this clause 31, without prior permission of Charterers, Cargo Insurers, and Owners' P&I Club.’’
This clause permits the vessel to assist distressed vessels and allows deviations for saving life or property, but places limitations on bunkering during laden voyages without prior approval.
It’s vital to approach liberty clauses cautiously, as ambiguities are often interpreted against the owner. Even a wide liberty clause requires that any decision to deviate during the voyage must make business sense. For example, a deviation to call at a port for major repairs, dry-docking or major surveys that are not necessary for the contracted voyage would generally be considered unjustified.
Incorporation into the bill of lading
As mentioned, it is important to ensure that any Charterparty liberty clause is also incorporated into the relevant bills of lading. While this topic is beyond the scope of this article, it is important to note that incorporation should by expressly restating the clause or through a clear incorporation clause.
Conclusion
Unfortunately, despite the best efforts of an operator, there may be circumstances where deviation is unavoidable. A recent example being the situation in the Red Sea - for more detail on this please see our previous article.
In the event of a deviation, consider the following actions:
- Obtain documentation and document everything: Secure a statement confirming the exact circumstances which led to the decision to deviate. Maintain comprehensive records of all decisions and actions taken.
- Evaluate options: Choose the most efficient alternative route available.
- Cargo precautions: Ensure that cargo is adequately protected and inform relevant parties.
- Seek additional coverage: Consider supplementary insurance for geographical and contractual deviations (SOL cover), although this may not always be a pressing concern especially if a well drafted and inclusive liberty clause has been incorporated.
- Get consent: Communicate with charterers and cargo interests, updating them on the situation and seeking their approval for the deviation.
Our Members are reminded that if they are concerned about a legal issue arising out of the points discussed in this article, they may be entitled to some initial legal advice free of charge, from a select panel of external lawyers under the Club’s Legal Advice Benefit. If Members wish to take advantage of this benefit, please contact the Claims department to discuss.
All the guides released in the series so far can be viewed here.