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Wednesday, June 20, 2018

CHARTER PARTY INFORMATION

Back loading clauses contrasted

It is interesting to contrast some of the standard back loading clauses as some have a rather wider ambit that others and careful note should be taken of their effect. To view these clauses and our commentary, please see below.

ExxonMobil VOY2000 – Clause 19

“Charterer shall have the option of loading vessel with a part cargo at any discharging port or place to which vessel may have been ordered, provided that such part cargo is as described in Part I (F) and is compatible with cargo then on board. Owner shall discharge such part cargo at any other discharging port(s) or place(s) previously nominated, provided such port(s) or place(s) lie within the rotation of the discharging ports or places previously nominated. If this option is exercised, additional time consumed awaiting berth and/or cargo and/or tank preparation and/or loading and discharging such part cargo shall count as laytime or, if vessel is on demurrage, as time on demurrage. Any additional expenses, including port charges, incurred as sole result of loading and discharging such part cargo shall be for charterer’s account.”

The essential elements of this clause are that: charterers have an option to load a part cargo at any one of the discharging ports; the part cargo must be compatible with the original cargo; and time and expenses for exercising this option shall be for charterers’ account.

Vitol Voyage Chartering Terms Amended 1998 – clause 29

“Charterer shall pay for any interim load/discharge port(s) at cost. Time for additional steaming, which exceeds direct route from first load port to furthest discharge port, shall be paid at the demurrage rate plus bunkers consumed, plus actual port costs, if any. The reasonable, estimated costs will be payable as an on account payment together with freight, followed by final invoice plus all supporting documents as soon as possible but not later than 90 days after completion of this voyage.”

The effect of this clause is somewhat similar to the ExxonMobil clause, though it provides for an on account payment for the cost of charterers exercising this option.

Shellvoy 5 – clause 38

Shell in their December 1996 revisions to the Shellvoy 5 form of charterparty substituted a new back loading clause 38 for the original one in the printed form. The new clause reads (underlined worded was included as a result of the February 1999 amendments):

“Charterers may order the vessel to discharge and/or back load a part or full cargo at any nominated port within the loading/discharging ranges specified within Part 1 (D/E) and within the rotation of the ports previously nominated, provided that any cargo loaded is of the description specified in Part 1 (F) and that the master in his reasonable discretion determines that the cargo can be loaded, segregated and discharged without risk of contamination by, or of any other cargo.

Charterers shall pay in respect of loading, carrying and discharging such cargo as follows:-

 

1)     A lumpsum freight calculated at the demurrage rate specified in Part 1 (J) on any additional port time used by the vessel; and

2)     Any additional expenses, including port charges incurred; and

3)     If the vessel is fixed on a Worldscale rate in Part 1 (G) then freight shall always be paid for the whole voyage at the rate(s) specified in Part 1 (G) on the largest cargo quantity carried on any ocean leg.”

This clause represents a departure from its predecessor, which stated:

“Charterers may order the vessel to load a part cargo at any nominated discharging port, and to discharge such part cargo at a port(s) to be nominated by charterers within the range specified in Part I (E) and within the rotation of the discharging ports previously nominated…”

The original printed version of the clause makes it quite clear that charterers’ option is to load a part cargo at a nominated discharge port for discharge at another nominated discharge port. The issue with the 1996 version of the clause is whether the clause permits charterers to load and discharge a cargo before the vessel loads the original cargo it was fixed for. Certainly the clause provides that charterers’ option is also in respect of a full cargo and not just a part cargo. The clause provides for discharge and/or back load of a full or part cargo at any nominated port within the loading/discharging ranges and within the rotation of ports previously nominated. It is arguable that the clause does not permit charterers to order the vessel to load and discharge a cargo before the vessel loads the cargo it was originally fixed for because this additional load port would not be within the rotation of ports previously nominated. However, an order for the vessel to load and discharge at terminals within a port nominated before the vessel loads the cargo originally intended may be permissible.