Monday, April 23, 2012

History of Maritime Law - Part 1

 My apologies for the delay in posting, as I was caught up in other activities.

  I intend to devote this article to the history and emergence of maritime law in the context of vessels, which I hope will enlighten my readers as to its current importance.

  Sea trade has been going on for centuries, both in the Western and Eastern civilisations.  While most Western Scholars rely heavily on the European link to maritime law development, it is an undisputed fact that maritime trade and its jurisprudence had its roots much earlier than that. Manu Smriti, the oldest law book in the world and literally meaning " Laws of men", lays down references to commercial sea borne trade. In the Artha Sastra of 4th century BC, Chanakya mentions sea borne commerce with references to a Board of Trade for shipping.
  Similarily, on the Western front, there are documented reasons to believe that Egyptian civilisation had an active sea trade,but there is no mention of a law governing same.The earliest mentions of a concept similar to maritime law were found in the Rhodian Sea Law ( Latin: Lex Rhodia), which was based on the Code of Justinian, commissioned in the 6th century AD. The Roman maritime laws, which followed subsequently, borrowed heavily from  Lex Rhodia. It is to be noted that these laws gave much importance to General Average, as the sinking and loss of sailing ships, either due to weather or other reasons, was quite common. The Roman Maritime laws lasted quite a while, due to the fact that the conquerors of the Roman Empire were not much sea faring and were content to use the Roman maritime laws. Gradually, Italian cities on the Mediterranean sea front gained prominence in Maritime trade and started out by devising their set of rules known as the Consolat de Mar or "Consulate of the Seas" or "Regulation of the Seas". It is surmised that these Rules were devised either at Barcelona or at Pisa in early 11th century. These "Regulations" covered a wide range of subjects including conduct of Masters and seamen, General Average, jettison of cargoes, freight, salvage etc.
  A most significant development that took place with regards to codification of Maritime Law was the formation of the Rules of Oleron in early 13th century. These Rules were named after the island of Oleron in the Bay of Biscay. It is theorised that the Duchess of Oleron was influenced by the Consolat de Mar in her travels and set about consolidating the Maritime Rules into the Rules of Oleron. Theses Rules highly influenced the development of Maritime laws in England, Scotland and much of Continental Europe. A study of these Rules shows an inclusion of issues which are still relevant such as salvage, average, grounding, maritime liens, demurrage, freight , seamen's wages and so forth.

Tuesday, February 21, 2012

Why demurrage ?

 Time is money. This adage is old and true, and never more so than in case of ships ferrying cargoes. A shipowner, in most cases, would be paying a mortgage on the ship, plus crewing and maintenance costs. This means, he has to keep the ship running at its maximum ability all ( or almost all) the time. In case of a time charter, the ship owner does not have to worry about it, as the ship will be earning a fixed rate per day pro rata ,of course excepting the off hire periods (discussed later). In case the vessel is on a voyage charter or COA ( contract of affreightment), then the Owners agrees to allow use of the ship for a specific period for loading/unloading. So what happens when this "specified" period s exceeded? This is where the concept of liquidated damages i.e agreed damages comes in the form of demurrage. So, Charterers agree to pay damages at X pdpr (per day pro rata) for the time in excess of this specified amount. While the calculations are simple based on the charter party agreed, the actual negotation is made complicated due to the "grey areas" in the charter party.
  The natural question is whether Charterers get any credit for the time not used. This is a concept called "despatch" and is commonly found in bulker charter parties. However, this concept is not common in the tanker trade.While I will discuss this at length later, this is not my focus at the moment.
  Hopefully the above article will give a beginner's insight into the working of demurrage in the context of the charter party.

Wednesday, February 15, 2012

Demurrage et all.....

  Since this is the very first post, welcome to my blog. I will try to explain, in simple terms, the plethora of issues that we face in maritime claims. Please note I do not profess to be a maritime lawyer nor do I profess to be an "expert" in this domain. My aim is to present a fresh perspective on already old issues. Often times, a "layman's" view does help to see the picture in its entirety. 
   The views presented here are entirely my own with as minimum plagiarism as possible! Hence, do feel free to leave your comments, suggestions...  and in case I have forgotten to give due credit to any copy righted material, please free to point same out. 
    My initial discussion will be on "demurrage", a topic close to a Owner's heart, as it is second largest revenue earner after freight.. I am talking of spot vessels of course. Initially, we will discuss tanker demurrage and then move on to break bulk and other specialist sectors. Interspersed in between, we will take a look at other issues such as deviation.