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Court clarifies what is a vessel’s “usual and customary route”

13.01.2020 Maritime

Antonia Jackson

Antonia Jackson Partner

Alianca Navegacao E Logistica Ltda v. Ameropa SA (Santa Isabella) [2019] EWHC 3152 (Comm).

In the context of a demurrage claim the Court, amongst other things, had to consider whether the route taken by the Vessel amounted to a breach of the charterparty. While the Court ultimately found against the Owners (albeit on a different point), its judgement helpfully clarifies the legal test for determining a vessel’s “usual and customary route”.

The background facts

The Charterers had time-chartered the Vessel from the Disponent Owners to carry a cargo of corn from Topolopambo, Mexico to Durban and Richards Bay, South Africa. About 44,000 MT of Mexican white maize in bulk was loaded at Topolopambo in apparent good order and condition. However, upon the Vessel’s arrival in South Africa, the cargo was found to be damaged and infested, resulting in delays.

The Owners claimed demurrage from the Charterers. The Charterers disputed liability on the grounds that the delays arose as a result of the Owners’ breach of the charterparty, one such breach being that the cargo damage and resulting delay was caused by the Vessel taking the Cape Horn, rather than Panama Canal, route from Topolopambo to Durban. The Owners submitted in response that the Cape Horn route was a usual and contractually permitted route to Durban.

The Charterers also asserted that the Owners had failed to comply with their obligations under Article III Rule 2 of the Hague-Visby Rules and had failed to ventilate in accordance with a sound system.

The Commercial Court Decision

The Court found that the Cape Horn route taken by the Vessel was a contractual route as:

a.  In the absence of a contractual stipulation of the route, the Owners were required to take a route that is both “usual” and “reasonable”;

The “Usual” route?

b.  The “usual” route is presumed to be the direct geographical route. However, evidence may show that the “usual” route is not the direct geographic route and may in fact be a significantly longer route.  It is also the case that the “usual” route might change over time; there can be more than one “usual” route between two ports and considerations which determine which route is the “usual” route include navigational or commercial reasons;

c.  When seeking to establish a “usual” route, it is not necessary for an owner to prove a custom i.e. that the route was uniform and universal in a trade. To the contrary, a “usual” route can be established even if the evidence emanates from a single shipping line seeking to establish what the “usual” route is and may be inferred from charterers’ lack of objection to the same.

A “Reasonable” route?

d.  Turning to what is a “reasonable” route, the Court rejected the Charterers’ submission that: (i) if a vessel takes the direct sea track, i.e. the shortest geographical route, then it has taken a contractual route; but (ii) if a vessel diverges in any respect from the sea track, then a full range of considerations, including the way in which the cargo is best protected, apply when deciding whether the route taken is a usual and reasonable route. This was rejected because:

i.  Such a distinction would seem arbitrary in principle

ii. The consequences to a carrier of being found to have deviated are severe. For such consequences to ensue where a vessel has taken a standard, commonly used route between two ports, as a consequence of the particular nature of the cargo, would be a marked departure from the generally accepted position; 

iii.  To avoid such consequences, an owner would have to comply with a highly uncertain standard. It is also unclear what test an owner is to apply when weighing up the costs/duration of alternative routes with their possible effects on particular cargoes; and

iv.  Although the carrier has the duty to care for the cargo in terms of the on- board operations of the vessel, e.g. ventilation, to extend that duty to routing decisions may well strike the wrong balance between the charterer and the carrier.

e.  Further, the Charterers’ submission and the consequences of such submission, was not supported by the authorities which:

i.  Indicate that if an owner takes a longer route than the direct sea track, then in order for it to be contractual (putting to one side any liberty clauses) it must be both usual and reasonable bearing in mind the interests of all involved; and

ii.  Tend to support the view that cargo considerations may be relevant in the elementary sense that a much longer voyage is likely to be detrimental to a perishable cargo.

f.  On the evidence before the Court, the route taken by the Vessel, i.e. via Cape Horn, was a usual and reasonable route for the purposes of identifying the contractual route and thus did not amount to a deviation.

The Court, however, went on to find that the Owners had failed to properly and carefully ventilate the cargo in accordance with a sound system in accordance with their obligations under Article III Rule 2 of the Hague-Visby Rules. The Owners’ breach in this regard had resulted in the cargo damage which had, in turn, caused the delays that led to the demurrage claim. The Charterers were not, therefore, liable for the demurrage.

Comment

This case provides clarification in terms of routing, namely as to what will be a contractual route in the absence of a specific contractual provision. It also makes clear that, in the voyage charter context, if a charterer wishes an owner to proceed on a particular route, they should ensure that this is included in the charterparty.

This article was co-authored by Ben Orchard, Trainee Solicitor, London.

Article authors:

Antonia Jackson