Contracts of affreightment and voyage charter parties, Law of The carriage of Goods by Sea

Owner’s Implied Obligations III

April 25, 2022July 25, 2022By Tan Pui Yen
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Owner’s Implied Obligations III – The Duty Not To Deviate From The Agreed Voyage

1. Establishing the contractual route

At common law, there is an implied obligation to proceed by the usual and reasonable route, which is prima facie the direct geographical route (The Nour). As part of the general obligation to proceed with reasonable despatch, the carrier is obliged to follow the direct geographical route unless some other route is taken in practice by that carrier (Frenkel v MacAndrews). It is not necessary to show a custom of the trade, merely that the route taken is a usual one for a voyage between the ports concerned (Reardon Smith Line v Black Sea & Baltic Ins).

On the question of what constitutes a ‘usual’ route, Philip LJ in Morrison v Shaw, Savill stated:

“…instances, such as calling at weather stations to inquire about ice, or going to some station for a Government pass through territorial waters, or to pick up a pilot, or calling at a preliminary port to lighten the ship in order that she may finish the voyage with a less draught…are not, in my view, departures from the

usual and customary course of the voyage.”

Once the route is established, any departure from it is a deviation that the carrier must justify, unless it is unintentional as being beyond the carrier’s control (e.g. where the ship goes off course because her navigational systems have been disabled by fire).

2. Justified deviation at common law

Deviation to save life at sea is always justified, but the common law does not permit deviation to save property (Scaramanga v Stamp). Any deviation for the safety of the ship or her cargo is, in principle, justified. Hence, a deviation for urgent repair is ustified even in cases where the reason for repairs is the unseaworthiness of the vessel at the beginning of the voyage (The Europa and Kish v Taylor).

Thus, deviation to effect repairs is justified, as is deviation to avoid capture by enemy forces (The Teutonia) but, in contrast to the Hague-Visby Rules (Art. IV, r.4), there is no general justification for reasonable deviation, although the provision in Art. IV, r.4 clearly suggests that any deviation in saving property is considered to be justified.

3. Interpretation of liberty clauses

Clauses giving the shipowner freedom to depart from the contractual route must be interpreted by reference to the contractual route and in a commercially sensible way (Leduc v Ward).

This case reveals how the drafters have sought to overcome each restrictive interpretation by the courts. Liberty to call ‘at any ports’ means in their geographical order, so the words ‘in any order’ are added. They must, however, still be ports substantially on the course of the voyage.

Whatever ingenuity the drafter has displayed in covering every eventuality, a liberty clause will only justify a deviation if it passes the test in Glynn v Margetson. There, the House of Lords laid down that a liberty clause, however widely drafted, will not be applied if that would ‘defeat the main object and intent of the contract’. In the words of Lord Halsbury LC, ‘one must reject words, indeed whole provisions, if they are inconsistent with what one assumes to be the main purpose of the contract’. The court will have regard to:

  • the nature of the cargo
  • whether the liberty clause is part of a standard printed form to use with different kinds of cargo.

A clause giving ‘liberty to call at any ports in any order for bunkering or other purposes, all as part of the contract voyage’ was held to cover only purposes that are business purposes which would be contemplated by the parties as arising in carrying out the contemplated voyage (Stag Line v Foscolo, Mango).

4. Legal effect of unjustified deviation

Deviation is undoubtedly a serious matter: it changes the nature of the adventure and in earlier days would have invalidated the cargo owner’s

insurance. In Thorley v Orchis the Court of Appeal followed earlier authority to the effect that deviation ‘displaced’ the express contract in the bill of lading.

It held that the carrier was liable for damage to the cargo following deviation even though the deviation had not caused any of the damage. The carrier could not rely on any of the exemption clauses: as they were displaced the carrier was precluded from setting them up.

So also with express provisions for laytime and demurrage (US Shipping Board v Bunge y Born).

In Morrison v Shaw, Savill, where the vessel was torpedoed by a German submarine in 1915 after departing from the usual route followed by the line from New Zealand to London, the carriers did not even have the benefit of the common law exception of act of the King’s enemies, since they were ‘wrong doers’ and could not show that the loss would have occurred in any event even if they had not deviated. However, in The Nour, the Court of Appeal held that the deviation was not causative of the damage and that the vessel’s self-heating problem would have caused the delay, even if the vessel had not deviated. Hence, the carrier was not liable for the deviation.

This draconian approach to the effects of unjustified deviation was, however, abandoned by the House of Lords in Hain SS v Tate & Lyle. With characteristic understatement, Lord Atkin ‘venture[d] to think that the true view is’ that deviation is a breach of contract by the shipowner ‘of such a serious character that however slight the deviation the other party to the contract is entitled to treat it as going to the root of the contract, and to declare himself as no longer bound by any of its terms’. Lord Atkin emphasises that the contract is not brought to an end automatically: the party affected by the breach has the right to treat it as at an end but may elect to treat the contract as subsisting.

Although Lord Atkin confines his remarks to carriage by sea and marine insurance, thus treating deviation as a special case in the law of contract, his formulation presents deviation as a classic example of a contractual condition. However, the judgment left open the question of whether the affected party’s election to bring the contract to an end takes effect retrospectively (i.e. displacing the contract right from the beginning) or prospectively (i.e. displacing the contract at the date of election).

Since Hain, the question of the effect of deviation has only arisen indirectly, particularly in the context of the Hague-Visby Rules, in situations that are sometimes referred to as quasi-deviation, such as unauthorised deck carriage. The cases there support the view that deviation is not subject to special rules (Kenya Railways v Antares (The Antares); Daewoo v Klipriver (The Kapitan Petko Voivoda). The compelling reason for this view was the wording of the specific provisions in the Hague-Visby Rules.

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