A shipowner operating its vessel in the oil tanker charter trade is required to properly carry and care for the charterer’s cargo. Most charter parties set forth the types of cargoes that can be carried. This normally assures the shipowner that it will not be required to haul products which might damage the vessel or other cargoes.
If the cargo to be carried does not conform to its description, the shipowner may be entitled to additional freight for the carriage. In the worst-case scenario, the shipowner may cancel the charter and claim damages for lost freight or hire.
Typical tanker charters provide for the carriage of crude oils or petroleum products suitable for the vessel. The master is expected to know the general characteristics of these cargoes and is obligated to give them the necessary care. This means the vessel must be fit to perform a safe carriage under normal expected conditions.
A classification certificate is also a requirement for maritime insurance coverage. Charterers will not hire non-classed vessels; cargo interests will not use non-registered ships.
The charterer is under a duty to warn of inherent dangers in the cargo for which the shipowner would have no knowledge. In such a cse, the charterer should give details of the cargo’s properties. The ship’s master is also expected to take reasonable steps to keep abreast of current cargo care methods. However, he is not required to have the expertise of a chemist.
The recent New York maritime arbitration of the “M/V Stena Consul” (S.M.A. 2987) highlights some of the concerns associated with inadequate cargo descriptions. The dispute arose over a series of charter parties. The head time charter provided for the carriage of crude and/or its dirty/clean petroleum products as may be suitable for the vessel. The voyage charter provided for the carriage of dirty petroleum products, no heat.
Prior to the contemplated voyage the head charterer notified the master that the cargo would be “oremulsion” which the master interpreted as ” ore emulsion,” but which in fact was meant to be “orimulsion.” This indicated that neither party was familiar with the cargo.
At the time of the charter, orimulsion was a new material relatively unkown to the oil industry. It is a slurry consisting of Orinoco bitumen, water and phenol ethoxylate. It was reported not to be a petroleum product, but rather a coal substitute.
No information concerning the product was furnished to the ship by the charterer. The master then made independent inquiries regarding the nature and handling characteristics of the material. He was informed that orimulsion must be maintained within a narrow temperature range. Furthermore, the cargo could not be heated with the vessel’s steam heating coils or mixed with the ship’s equipment as required. Based on this information, the master refused to tender the vessel’s notice of readiness for the voyage in question.
At the arbitration, the sole arbitrator determined that the shipowner was asked to carry the cargo without heat and therefore without evidence that it could be carried safely. Furthermore, the master was justified in not tendering the notice of readiness as orimulsion did not meet the definition of “dirty petroleum product” as described in the charters and understood by the shipping community.
The arbitration also indicates that if a master rejects cargo based upon well-founded concerns for the safety of the vessel or the cargo, his judgment will not be questioned at a later date.