The COVID-19 pandemic has created a surge in issues relating to the global supply chain and, in the shipping industry, has shown potential to endanger both vessels and crew. Matters are made more challenging by the fact that there has been no unified approach
to the pandemic, with many ports and countries adopting varying levels of measures to prevent the spread of the virus.
Due to these measures, or their absence, we have seen that many shipowners and charterers have experienced delays and additional costs, in addition to there being concerns regarding risk of infection of crew members while in port.
Here we examine the legal risks and issues relating to unsafe ports following the outbreak of COVID-19. These issues are of particular concern to charterers when nominating a loading or discharging port, especially if the terms of the charterparty are
not in sync with the requirements of the port.
First a proviso: it is common for voyage, time and time-trip charterparties to include an express warranty that charterers are only to direct the vessel to or nominate safe ports/berths. Importantly however, not all charterparties contain safe port warranties
and if they do, such warranties may contain qualifications as to the charterer’s duties. In all cases, parties should check carefully the particular terms of the charterparty in question.
For the purposes of this article, we consider the position where the charterparty contains an absolute safe port warranty.
Definition of a safe port
The classic definition of a ‘safe port’ was provided in the The Eastern City case (1) as follows:
“a port will not be safe unless, in the relevant period of time, the particular ship can reach it, use it and return from it without, in the absence of some abnormal occurrence, being exposed to danger which cannot be avoided by good navigation and seamanship…”
Some further points to note are:
- The safety of the port is not limited to its physical characteristics and a port can be considered legally or politically unsafe.
- The prospective safety of the port is judged at the time of its nomination. It is therefore important for charterers to obtain enough information about the port and its ‘get up’ before a nomination is made.
- It is widely accepted that the threshold for unsafe port claims is high. It is for the shipowner to prove the unsafety of the port and that this could not have been overcome by reasonable measures taken on the part of the vessel.
- While the risk of delay can render a port unsafe, this will usually only be the case where the delay involved is inordinate and it is sufficient to frustrate the adventure.
COVID-19 and port safety
There is no case law directly on the point of whether a pandemic such as COVID-19 could make a port unsafe. In these circumstances, leading textbooks have commented that an unsafe port may arise in cases where there is a danger either (i) to the vessel’s
status or (ii) to the health/safety of the crew. We look at both of these aspects below.
An example of a danger to the vessel’s status is where a vessel is detained or quarantined as a result of having berthed at a disease-affected port. The argument would be that nomination of a port affected by COVID-19 could result in the vessel being
quarantined and unable to leave the port.
The difficulty with this argument, as mentioned above, is that in order for the port to be unsafe on these grounds, the detention or quarantine of the vessel would most likely need to last for an inordinate time. Since ports have generally imposed a maximum
quarantine period of 14 days relating to COVID-19, it is unlikely that this would result in
the port being unsafe.
The second possibility is that the port becomes unsafe due to the risk of infection to the crew. The risk of infection in any given port is a matter of fact and may ultimately be difficult to prove. In particular, where active public health measures are being taken by
the port/state in question to minimise the risk of infection (as has been seen to be the case since the outbreak of COVID-19), it is likely to be difficult to establish that there is an actual risk of crew infection.
In either case, where port unsafety is established by owners, it will be for charterers to show that the pandemic was an ‘abnormal occurrence’ (see the Eastern City definition above), in which case charterers would be found to have fulfilled their safe port
warranty. As times goes on, it is increasingly unlikely that COVID-19 constitutes an abnormal occurrence. As ports have adjusted and adapted to the virus, implementing measures in response, the pandemic may well now be considered as a more normal
state of affairs at ports around the world – for the time being. It therefore seems unlikely that charterers would be able to show that a port being affected by COVID-19 amounts to an abnormal occurrence.
All this is not to say that these arguments will not be advanced by owners who are facing delays resulting from quarantines, detention or sickness of crew due to COVID-19 and we expect that this will be an area that continues to give rise to disputes.
BDM is currently handling a variety of enquiries relating to COVID-19 and if you have any questions relating to such matters please do not hesitate to contact us.
(1) Leeds Shipping Co Ltd v Société Française Bunge (The Eastern City) [1958] 2 Lloyd’s Rep 127
