Sat, Oct

Ice clause


Ice clause. In a charter it is the responsibility of the charterer to send the ship to a safe port. A port which is "ice-bound" or in which ice conditions can cause damage to the ship, may not be a "safe port".

To confirm the protection for the shipowner a protective clause dealing with ice conditions is inserted in the charterparty. In addition to the matter of a safe port, the insurers of the ship ("hull insurers"), who are undertaking to indemnify the owner for damage to or logs of the ship, clearly will want to reduce their risks. Therefore they may impose trading limits on the use of the ship. The Institute of London Underwriters, an organisation of insurance companies based in London, working closely with the insurance underwriters in Lloyd's of London, imposes limits beyond which the shipowner "warrants" (undertakes) his ship will not trade, without payment of an additional premium and compliance with conditions imposed by the insurers. These are called "Institute Warranty Limits" (` "IWL"). They are connected mostly with the trading limits of a time-chartered ship but generally, with respect to chartering, the limits include areas in which there are hazards from ice, such as the Baltic Sea and the St. Lawrence Seaway, at certain times of the year. If the ship is trading in ice conditions in breach of the limits warranty, the shipowner could find that the insurer will not be liable for indemnity for any loss or damage if this occurs after the breach. Accordingly a charterparty must contain appropriate clauses that protect the shipowner from ice hazards and insurance problems that could result from trading in ice conditions. Moreover, the laytime clause must contain protection for both parties if the loading and/or discharging is likely to be delayed because of ice.

The clause should be quite specific. Mere "general" words of causes of hazards may nor_ include ice conditions This was the result of an English case in 1908 (Tillmans v. Knutsford) in which a clause
protecting the parties from liability because of "war, disturbance or any ether cause" was viewed as not including ice. Ice was not "any other cause".
If ice conditions are to be protected against, the clause can vary from a very general clause to a more specific and detailed clause. An example of the former would be a clause (in a bill of lading) allowing a carrier to proceed to a convenient port to discharge if it is prevented from entering the original port of destination because of, among other causes, ice.
Because ice conditions can be quite severe in their consequences on the charter and for the shipowner, a better approach is to use one of the Ice clauses published by BIMCO. The BIMCO Ice clauses date from 1938 ("Baltic Conference Ice Clause 1938", code-named: "Iceloadcon".) In 1947 BIMCO published the Baltic Conference Special Ice clause, code-named "NORDICE". This is rather more detailed than the later GENCON General Ice clause. There are other clauses available. In NORDICE, there are eight sub-clauses. A better appreciation of the terms can be obtained by
referring to the clauses in full, available from BIMCO. Because of space, the sub-clauses will be briefly summarised here:

I. The contract can be cancelled without compensation (see Frustration) if there is any risk of damage to the ship or of substantial delay. Cargo loaded before such cancellation can be discharged
at the charterer's expense. If there is a risk of being frozen-in, a partly loaded ship can depart and complete loading elsewhere at the carrier's option unless the charterer chooses to pay deadfreight.
II. If there is risk of damage or substantial delay on the carrying voyage (to the discharging port) the charterer can be requested to nominate an alternative, safer port. If the nomination is not made within 48 hours of the request, the master may himself choose a safer port.
III. If there is risk of being frozen-in at the discharging port the vessel can depart without completing discharge. A safer port has also to be nominated by the charterer or the master himself can choose 
one as, above. 
IV. Detention because of ice is treated. as if the vessel is on demurrage.
V. Change in destination because of expected ice results in adjustment of freight.
VI. The carrier's lien on the cargo is protected.
VII. The vessel is not obliged to force ice or to follow ice-breakers. This means the ship is not required to pass through ice-bound places.
VIII. The carrier is given wide liberty to do or not do any act.

The GENCON General Ice clause is divided into sub-clauses dealing with the port of loading and with the port of discharging. The charter can become null and void if the loading port is inaccessible or if the master sails without cargo because he fears the ship will be frozen-in. The master can also leave during loading with only part cargo on board for a similar reason. The ship can complete elsewhere for the owner's benefit. If ice prevents the ship from reaching the discharging port receivers can detain the ship and pay demurrage or to change the port of discharge within 48 hours from receiving a notice from the master or owners that the original discharging port is inaccessible. The ship is also permitted to leave without completing discharge if there is a chance of being frozen-in. The passage to a substitute port earns the same freight except where the distance exceeds 100 nautical miles, the freight is increased in proportion. (See also Distance Freight.)
The master's failure to give notice of a port's inaccessibility can result in the shipowner's losing the protection of the Ice clause. This is the case under American law. Ice clauses are as important under time charters as, under voyage charters. Two examples are shown below:
ASBATIME: "The vessel shall not be required to enter or remain in any icebound port or area, nor any port or area where lights or lightships have been or are about to be withdrawn by reason of ice,
nor where there is risk that in the ordinary course of things the vessel will not be able on account of ice to safely enter and remain in the port or area or to get out after having completed loading or
ASBATIME was derived from the New York Produce Exchange form and the clause is almost identical in the two charterparties except that, in ASBATIME, the word "remain" is new, allowing the
shipowner the option to depart from the relevant port if ice sets in after the vessel's arrival. Another time charter clause, is LINERTIME.

`The vessel not to be ordered to nor bound to enter any ice-bound place or any place where lights, lightships, marks and buoys are or are likely to be withdrawn by reason of ice on the vessel's arrival
or where there is risk that ordinarily the vessel will not be able on account of ice to reach the place or to get out after having completed loading or discharging. The vessel not to be obliged to force ice, to follow icebreakers when inwards bound. If on account of ice the master considers it dangerous to remain at the loading or discharging place for fear of the vessel being frozen in and/or damaged, he
has liberty to sail to a convenient open place and await the Charterers' fresh instructions. Detention through any of above causes to be for the Charterers' account."