CASE STUDY ON A BULK CARRIER

FACTS

·         Subject vessel was employed on long-term Time-Charter and was further under a Trip sub-Charter during the material time. 

·         She loaded about 30,000 MT cargo comprising of 3 grades of bulk grain at a port in Argentina for discharge at Casablanca, Morocco.

·         No Surveyor was appointed by sub-Charterers or Shipper at the port of loading for Draft Survey.
Prior to and on completion of loading, the Vessel carried out draft survey as per usual practice and noted a shortage of 152 MT (being about 0.6% of total cargo loaded) as compared to Shore Scale figure.

·         The Master prepared a Note Of Protest (NOP) letter which was e-mailed to all concerned, including the sub-Charterers, Head-Charterers, Head-Owners and Port Agents (nominated by sub-Charterers).

·         Master issued CLEAN Mate's Receipts (MR) as presented by Shippers with cargo quantity as per Shore Scale and without any mention of Ship’s Figure as per Draft Survey carried out by Vessel.
Master further provided standard Letter Of Authority (LOA) to the Port Agents for issuance of Bills of Lading (BL) on his behalf. Amongst other things, this letter stated that BL to be issued “in accordance with MR”.

·         Accordingly CLEAN B/Ls was issued by the Port Agent on Master's behalf with cargo quantity as per Shore Scale.

·         Vessel arrived at discharge port in Morocco and had to await discharge berth for several days however on Vessel’s arrival at anchorage itself (and before vessel berthed or any Draft Survey could be conducted or discharge commenced), Cargo Receivers lodged a claim of US$ 36,000 on Head-Owners for alleged cargo shortage with quantity tallying exactly as per NOP issued by the Master at load-port, being the difference between Shore Scale and Draft Survey figures.

·         Incidentally, the sub-Charterer, Shipper and Consignee were all sister-concerns.

ANALYSIS:

·         Whether the Vessel is under Time Charter or further Trip/Time sub-Charter, the Bill of Lading is ALWAYS issued by the carrier (Vessel) who remains ultimately responsible for delivery of the cargo quantity/quality to the consignee/receiver/notify party named therein.

·         In this case, the Master issued a NOP but also CLEAN MRs without mentioning Draft Survey quantity which was short of Shore Scale quantity.

·         The NOP was Master's own admission of short receipt of cargo at load-port which the Consignees/Receivers used to their advantage at the discharge port in claiming damages from the Vessel/Owners.

WAY FORWARD:

1.       Cargo Quantity to be stated on MR/BL:

On receipt of Voyage Instructions from Charterers/sub-Charterers, the Master must check in it whether the cargo quantity to be stated on MR/BL would be as per Shore Scale or as per Draft Survey.

If not clearly mentioned in the Voyage Instructions, the Master must expressly check with Charterers/sub-Charterers on this account and seek absolute clarity.

2.       Draft Survey:

·         Sometimes Charterers/sub-Charterers/Shippers/Consignees arrange for their Draft Surveyors at the load and discharge port. When the Surveyor comes on board, and prior commencing the Draft Survey, the Master must seek his details (Name/Company) and which party is he representing. In such cases, the Draft Survey must be performed jointly (Surveyor and Vessel) and same agreed upon accordingly. The Draft Survey Report must be jointly signed by the Vessel and the Draft Surveyor, who must state all the details (Name, Company Name, Party being represented etc.) along with Surveyor's Signature/seal.

·         Should there be any disagreement between the Vessel and the Draft Surveyor, no efforts must be spared to resolve same amicably on board however should disputes remain unresolved,the Master must contact Owners immediately by telephone followed by sending full details by e-mail. It is important that Owner's P&I Club correspondents at the load port are immediately notified, either through the Owners or directly by the Master in case of emergency, and their attendance requested.

·         Even if no Surveyor is appointed by any external parties, Vessel must, in all cases, carry out Initial and Final Draft Survey on her own per usual, to determine cargo quantity loaded (at load port) and discharged (at disport).

3.       Discrepancy between Shore Scale Figure and Draft Survey Figure:

a)      At Load Port:

·         Though ideally both these figures must tally, it is not uncommon for there to be some difference between them.The reason for these could be many, such as Shore Scale not correctly calibrated or Draft Survey in error due to rough sea/swell conditions at berth/anchorage, etc.In spite of best efforts, if discrepancies do exist, same must be clearly stated on MR/ BL. However in most cases, it is a requirement to issue CLEAN MR/BL and the Shipper and/or Agents may refuse to accept MR/BL claused to such effect.In such cases and especially in every case when the discrepancy exceeds 0.5% of the total cargo quantity, Master must contact Owners immediately by telephone followed by sending full details by e-mail. It is important that Owner's P&I Club correspondents at the load port are immediately notified, either through the Owners or directly by the Master, and their attendance requested. The Correspondents are expected to be aware of and appreciate the local issues and are expected to effectively sort out the matter without compromising Vessel/Owner's position, and this needs to be done prior Vessel's departure from the load-port.

b)      At discharge port:

·         It must be remembered at all times that the Vessel/Owners remain responsible for delivery of cargo as stated in the BL. Regardless of the number of Charterers or sub-Charterers in the chain, nothing dilutes this position. This applies as regards cargo quantity/quality as also the party to whom it is delivered.

·         Vessel must NEVER break and commence discharging of the cargo unless in receipt of "duly discharged" ORIGINAL  BL or unless the Owners specifically instruct the Master to commence discharging in absence of ORIGINAL  BL on the basis of Letter Of Indemnity (LOI) issued to them by the Head-Charterers. A reminder message for surrender of ORIGINAL BL on arrival at disport must be sent by the Vessel to Port Agent several days ahead of Vessel's ETA at disport.

·         Total cargo discharged at disport may be arrived at basis either a Draft Survey or based on Shore Scale. Once again, the Draft Survey must show the cargo quantity to closely match the figure stated on the BL; else there could be Customs Penalties imposed on the Vessel/Owner (for mis-declaration as in case of excess cargo on board than stated on BL) or claims lodged by Receivers/Consignees on the Vessel/Owner (as in subject case of shortage of cargo discharged than stated on BL).

·         On completion of discharging, Vessel must obtain (1) Empty Hold Letter and (2) Total Cargo Discharged (quantity) Letter signed by Stevedores/Port Agents.

Should Vessel be presented with any letter(s) by Stevedores/Consignees-Receivers/Port Agents stating short discharge, Master must immediately contact Head-Owners by telephone followed by sending full details by email. Once again, in such cases, it is important that Owner's P&I Club correspondents at the load port are immediately notified, either through the Owners or directly by the Master, and their attendance requested. The Correspondents are expected to be aware of and appreciate the local issues and are expected to effectively sort out the matter without compromising Vessel/Owner's position, and this needs to be done prior Vessel's departure from the disport.

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