Legal Analysis of Safe Port in Tanker Charter Parties and its Challenges in the Context of Economic Sanctions

Document Type : ISI

Authors

1 Department of Public and International Law, Faculty of Law and Political Sciences, University of Tehran, Tehran, Iran.

2 Department of Public and International Law, in Oil and Gas Law, Faculty of Law and Political Sciences, University of Tehran, Tehran, Iran.

Abstract

Today, the chartering of oil tankers for the purpose of transporting oil cargo, oil products and liquid natural gas plays an important role in this industry. With the intensification of economic sanctions in recent decades, we have witnessed the seizure and confiscation of ships due to the carrying of sanctioned cargoes or going to the ports of the sanctioned governments, which raises various questions regarding the legal aspects of the challenges facing these contracts.
In search of obtaining a theoretical basis for analyzing the effect of economic sanctions on the performance of oil tanker charter party contracts, regardless of the general rules of contract law such as force majeure, frustration and economic hardship and the like, we come across the obligation of the charterers towards the safe port, which in short, its purpose is that the charterer does not allow the tanker to go to unsafe ports. The basic question is whether economic sanctions can be considered a risk that can be placed in the framework of the charterer's obligation to the safe port? If this is the case, what remedy is there to protect the rights of the owners of the tankers based on the violation of the safe port guarantee by the charterer?
As a preliminary answer, it may be said that the safe port guarantee, due to the background of its formation, includes the physical and purely inherent risks of ports and refrains from economic sanctions. In this article, by inductively examining scientific sources, judicial practices, and standard charter party contracts of oil tankers, it is briefly concluded that economic sanctions as a political risk can cause port unsafety, as a result of which the charterer is considered responsible to the ship owner.

Keywords

Main Subjects

References

1. Association of Ship Brokers & Agents (1977). Tanker Voyage Charter Party. Available at: http://www.petrogas.es/transporteatk/pdf/asbatankvoy.pdf (Accessed 18 Augest 2022).
2. Bogesjo, Victor (2014). Charterer’s Liability for Unsafe Ports - A Comparison of English and Scandinavian Law. Faculty of Law, Lund University. Available at: http://lup.lub.lu.se/student-papers/record/4584086 (Accessed 30 December 2021).
3. Boviatsis, M; Daniil, G (2022). “Legal Analysis of the U.S. Supreme Court Position Upon a Safe Berth Warranty and Evaluation of the UK Legal Position”. The International Journal on Marine Navigation and Safety of Sea Transportation, Vol 16, No 1, pp 27-32.DOI: 10.12716/1001.16.01.01
4. BP Shipping Limited (1998). BPVOY 4 (BP Voyage Charter Party). 1st Edition, pp 1-35.Available at: https://pdf4pro.com/cdn/bpvoy4-voyage-charter-party-1cfcfa.pdf (Accessed 30 December 2021).
5. CITGO Asphalt Refining Co. v. Frescati Shipping Co, Ltd (ATHOS I), (2020). Available at: https://www.supremecourt.gov/opinions/19pdf/18-565_3d93.pdf (Accessed 18 Aguest 2022).
6. Department of the Treasury, Department of State & United States Coast Guard (2020). “Sanctions Advisory for the Maritime Industry, Energy and Metals Sectors, and Related Communities: Guidance to Address Illicit Shipping and Sanctions Evasion Practices”. pp 1-35.Available at:  https://home.treasury.gov/system/files/126/05142020   global_advisory_v1.pdf (accessed 30 Dec 2021).
7. Eleni Shipping Limited v Transgrain Shipping B.V (2019). EWHC 910 (Comm). Available at:  https://www.bailii.org/ew/cases/EWHC/Comm/2019/910.html (Accessed 30 Dec 2021).
8. Girvin, Stephen (2017). “The Safe Port in Maritime Law: Decade of Certainty or Muddier Waters?”. NUS Center for Maritime Law Working Paper 17/02, PP 1-27.    DOI:https://dx.doi.org/10.2139/ssrn.2933945
9. Gard Marine & Energy Limited v China National Chartering Company Ltd (2017) UKSC 35. Available at:  http://www.bailii.org/uk/cases/UKSC/2017/35.html (Accessed 25 Augest 2022).
10. Kharchanka, Andrei (2014). The Meaning of a Good Safe Port and Berth in a Modern Shipping World. PhD Thesis, University of Groningen. Available at:     https://pure.rug.nl/ws/portalfiles/portal/32037387/Complete_thesis.pdf (Accessed 30 December 2021).
11. Kassai, Lucia; Dipaola, Anthony (2020). “UAE Sheikh Lays Claim to Oil Cargo U.S. Says is from Iran”. Bloomberg. Available at:   https://www.bloomberg.com/news/articles/2021-03-12/fujairah-owned-company-claims-stake-in-oil-cargo-seized-by-u-s (Accessed 30 December 2021).
12. Kilmashkina, Liudmila (2014). The safe port warranty in charter party agreements: The certain problematic aspects under English Law. University of Oslo. Available at: http://urn.nb.no/URN:NBN:no-46494 (Accessed 19 Agueest 2022).
13. Kodros Shipping Corp of Monrovia v. Empresa Cubana de Fletes (The Evia), (1982). 1A.C. 334. Available at: https://www.i-law.com/ilaw/doc/view.htm?id=148728 (Accessed 30 December 2021).
14. Kotelnikov, Andrei (2020). “Contracts Affected by Economic Sanctions: Russian and International Perspectives”. Transnational Dispute Management, Vol 17, Issue 1, PP 294-326.
   DOI: https://doi.org/10.1163/9789004447875_018
15. Lamesa Investment Ltd v. Cynergy Bank Ltd (2020). EWCA Civ 821. Available at: https://www.judiciary.uk/wp-content/uploads/  2020/07/Lamesa-v-Cynergy.APPROVED-JUDGMENTS.pdf (Accessed 20 Augest 2022).
16. Leeds Shipping Co Ltd v Sociètè Française Bunge (The Eastern City), (1958). 2 Lloyd’s Rep 127, 131. Available at: https://www.i-law.com/ilaw/doc/view.htm?id=147006 (Accessed 30 December 2021).
17. LNG Time Charter Party (2015). Between Golar Grand Corporation and Golar Trading Corporation. Available at:https://www.sec.gov/Archives/edgar/data/1415916/000141591615000020/exhibit41timecharteragreem.htm (Accessed 18 Aguest 2022).
18. Marathon Petroleum Company LCC and PI 2 Pelican State LLC (2007). Time Charter Party. Available at:https://www.sec.gov/Archives/edgar/data/1507571/000119312511092861/dex1010.htm (Accessed 30 December 2021).
19. Motor Oil Hellas (Corinth) Refineries S. A v. Shipping Corporation of India (The Kanchenjunga), (1990). 108 N. R, 280(HR). Available at: https://ca.vlex.com/vid/motor-oil-corinth-v-680918289 (Accessed 30   December 2021).
20. Plomaritou, Evi (2014). “A Review of Shipowner’s & Charterer’s Obligations in Various Types of Charter”. Journal of Shipping and Ocean Engineering, 4, PP 307-321. Available  at: https://fliphtml5.com/qaad/auim/basic (Accessed 30 December 2021).
21. Salthouse, Mike (2020). “Sanctions Compliance in the Shipping Industry”. North P& I Club, PP 1-10. Available at:https://www.nepia.com/articles/sanctions-compliance-in-the-shipping-industry/ (Accessed 30 December 2021).
22. ShellInternational Trading and ShippingCompany Limited, Shelltime 4 (Shell Time Charter Party), (2003).  amended December 2003. Version 1.1, PP 1-18. Available at: https://www.sec.gov/Archives/edgar/data/1507571/  000119312512143649/d307623dex1012.htm (Accessed 30 Dec 2021).
23. Stavis, Katherin Elizabeth (2018). Interpreting BIMCO’s Standard Sanctions Clause for Time Charter Parties in Light of U.S Sanctions Against Iran. Master Thesis, University of Oslo. Available
  at: https://www.duo.uio.no/handle/10852/63757 (Accessed 30 Dec 2021).
24. Thomas, D. Rhidian (2006). “The Safe Port Promise of Charterers from the Prospective of the English Common Law”. 18 SACLJ, PP 597-628. Available at:https://journalsonline.academypublishing.org.sg/Journals/Singapore-Academy-of-Law-Journal-Special-Issue/e Archive/ctl/eFirstSALPDFJournalView/mid/513/ArticleId/400/Citation/JournalsOnlinePDF (Accessed 30 December 2021).
25. UK Defense Club (2020). Trading in Uncertain Times: The Impact on Charter parties and Issues for Consideration, PP 1-28. Available at: https://www.ukdefence.com/insights/september-2019-trading-in-uncertain-times-150000/ (Accessed 30 December 2021).
26. Ullises Shipping Corporation v. Fal Shipping Co Ltd (The Greek Fighter), (2006). 1Lloyds Rep 99. Available at:  https://i-law.com/ilaw/doc/view.htm?id=153514 (Accessed 30 December 2021).
27. Uni-Ocean Lines Pte. Ltd. v. C-Trade S.A. (The Lucille), (1984). 1 Lloyds Rep 244. Available at: https://www.i-law.com/ilaw/doc/view.htm?id=148760 (Accessed 30 December 2021).
28. U. S. Department of Treasury (2020). Treasury Sanctions Five Iranian Captains Who Delivered Gasoline to the Maduro Regime in Venezuela. Available at: https://home.treasury.gov/news/press-releases/sm1043 (Accessed 30 December 2021).
29. U. S. Department of Justice (2020). Largest U. S. Seizure of Iranian Fuel from Four Tankers. Available at: https://www.justice.gov/opa/pr/largest-us-seizure-iranian-fuel-four-tankers (Accessd 30 December 2021).
30. Vardinoyannis v. The Egyptian General Petroleum Corp. (The Evaggelos), (1971). 2Lloyds Rep 200. Available at:https://www.i-law.com/ilaw/doc/view.htm?id=147051 (Accessed 30  December 2021).
Journal Of Researches Energy Law Studies
Volume 9, Issue 1
August 2023
Pages 99-118

Files

Share

How to cite

Statistics