ABSTRACT

Under a time charter, upon delivery commercial exploitation of a ship is placed in the hands of the charterer in exchange for payment of hire. During the agreed charter period, the charterer can send the ship to anywhere within the geographical limits of the charter. There is, therefore, nothing in principle that prevents the charterer from ordering the ship to proceed to tropical waters unless the charter contains a restriction in this regard. Such an order of the charterer is accepted as legitimate employment order and the shipowner is required to comply with it. If the shipowner refuses this order without any good reason, his conduct may constitute a repudiatory breach, so that entitles the charterer to terminate the charter. The problem is that where the ship remains in tropical waters for a long period, hull fouling mostly arises. This natural event can be defined as an accumulation of marine organism such as barnacles and weeds on the ship’s hull. It may affect performance of the ship and cause that the ship proceeds at less speed and consumes more fuel than the specified in the charter. In such a case, if the charter contains an undertaking by the shipowner that the ship proceeds at particular speed and consumes particular amount of bunker on that speed during the period of charter, it is likely the shipowner exposes the charterer’s claim for underperformance of the ship.

Following these explanations, it is clear that the charterer’s order concerning the employment of the ship in tropical waters for a prolonged period is not a kind of order which the shipowner can follow without any concern. Upon the charterer’s this order, the shipowner usually confront a dilemma. On the one hand, there is an order which the law requires him to comply with it, but on the other hand his continuous undertaking as to the ship’s speed and bunker consumption under the charter. The purpose of this paper is to evaluate the limits of the shipowner’s liability for underperformance caused by hull fouling that arises as a result of complying with the charterer’s employment order. The paper also aims to analyse to what extent incorporation of BIMCO Hull Fouling Clause for Time Charterparties into the charter reduces underperformance disputes arising from hull fouling.