19 Aug 2014

Ebola outbreak

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Marine and international trade briefing note

The current outbreak of Ebola virus disease in West Africa raises concerns in relation to situations where vessels may travel to countries where Ebola has been reported. A number of ports have put in place special measures regarding vessels which have called at ports in affected countries, and there have been some cases of fixtures being terminated.

This note outlines some of the legal issues which will need to be considered. However, it is important to obtain up-to-date advice when a problem arises, as the situation is rapidly changing.

Orders to proceed to a port where there may be a risk of Ebola
Where the vessel is subject to a time charter, charterers will usually be obliged to order the vessel only to ports which are safe. The usual test is that a port will be safe only if it can be used without the vessel being exposed to danger which cannot be avoided by good seamanship. Most cases concern safety of the vessel itself, but it is probable that risks to the crew can also make a port unsafe (although this is not certain).

Whether a port is safe or not depends in each case upon the facts at the relevant time. In relation to a disease such as Ebola, the risk of transmission and the effectiveness of available precautions are likely to be particularly important. It may be that a port would be found to be safe if the risk of infection is low. (The advice issued by the World Health Organization on 7 August 2014 was that the risk of infection was very low.)

The obligation on charterers applies at the time when the port is nominated. If the port is not prospectively safe (that is, safe for the time when the vessel will be there), owners can refuse to go there, and can call for fresh orders. If the port is prospectively safe when the nomination is made, charterers are not in breach, and the vessel must go there. A port may become unsafe after the nomination has been made; if this happens the charterers must nominate a new port which is safe.

Whether a similar obligation arises under a voyage charter depends upon the wording of the voyage charter. In general, safe port obligations are less common in voyage charters. A failure to proceed to a named port may well be a breach of contract, unless it is covered by a deviation clause in the voyage charter.

If owners refuse to go to a port which is in fact safe, that will constitute a breach of contract which will make the shipowners liable in damages. Depending upon the circumstances, the breach may be sufficiently serious to entitle the charterers to terminate the contact and also to claim damages.

Owners will need to be aware that there may well be separate obligations under bills of lading. For example, it is possible that owners may be entitled to refuse time charterers' orders to call at a port, but would still be subject to a contractual obligation to go there under a bill of lading. It is important to check the wording of the relevant bill, to see whether it contains any relevant provisions such as a deviation clause (or whether it incorporates such clauses from a charterparty).

Indemnity
As a general rule, time charterers will be obliged to indemnify shipowners against loss or damage suffered by reason of complying with charterers' orders (unless the shipowners agreed to bear that risk). The same may, in some cases, be true under a voyage charter.

In some Ebola-related circumstances it might be argued that such an indemnity should be implied. For example, a time chartered vessel may be ordered to a port in an affected country where owners incur expenses arising from quarantine and disinfection. Whether owners can recover those expenses by way of an indemnity from charterers will depend upon whether owners accepted that risk, and also whether the expenses were caused by compliance with charterers' orders.

Off hire
There may be circumstances in which, if delay is caused to a vessel because of Ebola-related issues, time charterers may be entitled to put the vessel off hire. In each case, this will depend upon the wording of the charterparty off hire provision.

Laytime and demurrage
The presence of Ebola may cause delays at load or discharge ports. Whether laytime will continue to run and demurrage to accrue under a voyage charter or whether these matters fall within exceptions will be a matter of the wording used in the voyage charter.

Defences to claims
The fact that a vessel has called at a port in an affected country may cause delay or damage to cargo. For example, the vessel may be quarantined at a subsequent port, or even prohibited from entering.

In each case, it will be a matter of examining the wording of the relevant contract, to see whether there are provisions which protect the shipowners from liability. Charterparties and bills of lading may contain defences on which shipowners may rely, such as the Hague Rules "quarantine restrictions" defence.

Frustration and force majeure
It may be that where the presence of Ebola prevents performance (eg, where loading proves impossible) or where it causes delay, then a party to a contract can rely on frustration or force majeure as a defence to any claim for breach of the contract. In practice frustration by delay often proves difficult to establish; the length of the actual or potential delay will be relevant. Force majeure can only be relied upon if the contract contains applicable provisions.

Negotiating and drafting contracts
Anyone involved in negotiating charterparties (or other contracts) under which the vessel may have to call at a port affected by Ebola should ensure that the contract contains provisions dealing with any situation which may arise as a result.

Practical guidance
Anyone involved in negotiating charterparties (or other contracts) under which the vessel may have to call at a port affected by Ebola should ensure that the contract contains provisions dealing with any situation which may arise as a result. Properly drafted clauses will deal with (amongst other things) the matters noted in this bulletin.

  1. The Master should ensure that the crew are aware of the risks, how the virus can be spread and how to reduce the risk.
  2. The ISPS requirements on ensuring that unauthorised personnel do not board the vessel should be strictly enforced throughout the duration of the vessel being in port.
  3. The Master should give careful consideration to granting any shore leave whilst in impacted ports.
  4. The shipowner / operator should avoid making crew changes in the ports of an affected country.
  5. After departure the crew should be aware of the symptoms and report any occurring symptoms immediately to the person in charge of medical care.

Useful information
The World Health Organisation has issued the following (available on the WHO website):

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