Liability to shipowners

The exposure of charterers to the consequences of oil spills and other environmental incidents is not confined to the relatively rare cases where they have been held directly liable to the victims of pollution (such as under US state laws, or for imprudent selection of the carrier, as in the Erika incident).

A more common form of exposure has existed in contractual liability to pay damages or an indemnity under the charterparty, after the shipowner and his insurers have in the first instance borne strict liability for claims pollution, wreck removal and associated costs.

Typically these recourse claims have not depended on fault by the charterer, but on the manner in which the relevant risks have been allocated by the terms of the charterparty.  The most common claims of this kind have been for breach of safety warranties following grounding incidents at or near ports.  In English law such a warranty can be broken by unsafety encountered without fault on the part of the charterer, unless the contract expressly limits his obligation to one of due diligence.

Other recourse claims against charterers include those based on the employment and indemnity clause, or on breach of an obligation not to ship dangerous good.

Notable examples of such cases include the Aegean Sea (following a major oil spill), the CMA Djakarta (following a serious HNS incident), and the Ocean Victory (following a wreck removal operation).  Apart from these reported cases several others have been the subject of private arbitrations.

Claims of this kind, together with issues relating to the right of charterers to limit liability for such claims, are examined in detail in Chapter 15 of Shipping and the Environment, ‘Charterers and Cargo Owners’.  The introductory section is reproduced here.

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