UNCERTAINTIES STILL ASSOCIATED WITH SAFE BERTH CLAUSES

Since the advent of shipping, vessel owners have been interested in preventing their ships from sustaining damages caused by unsafe berths.

This concern is specifically addressed in most charter parties by safe berth clauses. These clauses frequently state that a vessel shall only be ordered by the charterer to a safe berth where it may “safely lie, always afloat.”

These simple clauses should be subject to precise interpretation so that parties to shipping ventures can predict with certainty their potential liability exposure in unsafe berth situations. Unfortunately, court decisions and arbitration awards indicate that it is impossible to predict how tribunals will interpret safe berth clauses.

Unless these clauses are modified in the charter party, the majority of American courts and arbitration panels will interpret them to be an express warranty by the charterer. This means that berths (including anchorages and offshore moorings) are guaranteed safe for the particular vessel named in the charter party. A safe berth for one ship may, however, be unsafe for another, depending on size and draft.

The above interpretation of the safe berth clause is referred to in maritime law as the “majority view.” The charterer warrants that a properly navigated vessel can proceed to, use, and leave designated berths without being subjected to the risk of physical damage, absent some abnormal and unforeseen occurence.

Theoretically, the charterer bargains for the right to select the precise place for loading and discharging its cargo. The shipowner relinquishes its berth selection prerogative in return for the charterer’s acceptance of the risks involved. If the vessel complies with the charterer’s berthing orders and is damaged, the charterer will be liable. The warranty also is based upon the premise that the charterer controls the vessel’s itinerary and is often familiar with port facilities because of business dealings in specific locations.

The majority view recognizes that the charterer’s safe berth warranty is not absolute. If the shipowner or master accepts a berth with knowledge of its unsafe condition, the warranty is voided. Likewise, the warranty is not applicable if there is intervening negligence by the master that involves an unreasonable risk. Hazards avoidable by good navigation or seamanship are not warranted. If however, the master and charterer are both at fault, damages may be divided proportionately.

Occasionally a tribunal may completely reject the warranty concept and adopt the “minority view” on the subject. Under the minority view, the clause merely exonerates the shipowner from any duty to berth its vessel at a location that the master deems unsafe. The master is on the scene and is in the best position to judge the safety of the berth. He is also a navigation expert who knows his vessel’s capabilities. In comparison, the charterer may be a merchant who knows nothing about seamanship and has limited knowledge of the berth’s condition.

The recent Fifth Circuit Ordeina case (913 F.2d 1149) illustrates the minority view-point. A 75-ton loading arm fell 100 feet from a grain elevator and damaged a vessel berthed below. The shipowner successfully sued the charterer at trial based upon the majority view that the charterer warrants the safety of its berth selection. The appeals court reversed and held that the safe berth clause only imposed upon the charterer a duty of using due diligence in selecting a safe berth.

The Ordeina case demonstrates that it is impossible to predict with absolute certainty how tribunals will interpret safe berth clauses. In practical terms, this means that if a charterer does not want the exposure of warranty liability associated with safe berth clauses, he must bargain in charter party negotiations to specifically exclude it. However, in doing so, the charterer will be relinquishing the valuable privilege of selecting the precise location for loading and discharging its cargo.


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