With no immediate end to the Ebola outbreak in sight, special liberties and indemnities being incorporated in charterparties, bills of lading and purchase and sale agreements will soon be put to leg.

By
Hazel Brasington and Andrew Robinson,
Norton Rose Fulbright
As the West African Ebola virus outbreaks remain uncontrolled, even operators not serving West African routes are now seeking guidance on protective clauses. Clearer information has emerged on some aspects, but responses from officials and from individuals who are in fear of the disease continue to complicate the picture. For operators, who are charterers, and shippers trading to affected African ports, a key question is whether conditions at ports within a known outbreak area pose an actual serious risk to the safety of the vessel and crew. It is only a matter of time until some of the special liberties and indemnities that are being incorporated into charterparties, bills of lading and purchase and sale agreements are tested in arbitration or court proceedings. When charterparties, clauses closely modelled on “war risk” provisions are in use. They are likely to be effective in voyage or time charterparties, if a port is closed so that it is impossible or unlawful to enter. If a port is closed after nomination, an analysis of the contract provisions will be needed to determine the parties’ rights and options. Separate obligations under sale contracts and bills of lading must of course be considered too. A time charterer must continue to give valid orders for the vessel’s employment, while a valid nomination under a voyage charter fulfils, and brings to an end, the charterer’s choice. In a voyage charterparty context, shipowners may prefer to fix on “port” rather than “berth” charterparty terms, to be able to tender a notice of readiness at anchorage if there are local difficulties.

Port unsafety

As to the prospective unsafety of a port, objective proof of actual serious risk to the crew or the vessel may be a challenging task, not only because it is hard to source reliable data where medical and administrative infrastructure is lacking, but also because expert opinion would take account of known means of avoiding the hazard by restricting access, tightening up on anti-stowaway procedures, using protective clothing and implementing hygiene procedures. Arguably, good shipboard management in this context is akin to “good seamanship” for purposes of the well-established legal test of the safety of a port. Protocols and industry practices for the prevention of infection are gaining more consensus and are being well publicised (including in P&I Club publications) so that there is less room for argument that these matters call for more than ordinary skill.

The Ebola virus is relatively difficult to catch… the risk of claims and disputes under charterparties, sale contracts and bills of lading is, by contrast, disproportionately high

Not to be forgotten, it is ships’ crew who are on the front line. Managing the legitimate fears and expectations of crew would certainly be assisted by some public industry-wide consensus on appropriate shipboard management protocols. Building confidence among seafarers and port personnel can only assist to reduce instances of shore personnel refusing to board, or crew refusing shore contact or refusing to leave the vessel for necessary operational purposes.

Paying “danger money” to local officials raises ethical concerns, particularly where companies or individuals are subject to the United Kingdom’s Bribery Act, or other legislation where facilitation payments are proscribed and no defences are available. Obtaining a record of published port tariffs and avoiding payment to individuals is therefore advisable.

Until there are positive signs of the Ebola virus epidemic running its course or being successfully contained, events may prove too unpredictable to avoid a dispute. For example, it was reported on October 20, 2014 that WHO officially declared Nigeria to be free of Ebola virus transmission – on the basis of no new outbreaks for 42 days. Beyond October 20, 2014 however, port control measures remain in force in Nigeria. In this situation, clauses that use definitions like “Affected Area” that are based on a World Health Organisation declared status for a region or country may fail to trigger the liberties or indemnities that operators were hoping would protect them. Circumstances could, of course, change again without warning in response to situation reports that are made on a daily basis by WHO.

South Africa response

Coincidentally, on the day of writing this article, news came through that one of Africa’s busiest ports, Durban, (South Africa being a non-Ebola affected African country) had closed for a short time, while port authorities conferred with all its pilots on new developments relating to the Ebola threat. Ms Lynne Brown the Minister for Public Enterprises of South Africa, has also responded to questions in parliament about current measures in place at eight of South Africa’s main commercial ports (Richards Bay, Durban, East London, Ngqura, Port Elizabeth, Mossel Bay, Cape Town, and Saldanha). Ms Brown said that “the West African states of Guinea, Liberia, and Sierra Leone were rated as high-risk to the Ebola exposure, while Nigeria, Kenya, and Ethiopia were rated medium-risk.” She confirmed that all vessels arriving from designated countries “are required to be stringently screened by port health officials at anchor, prior to the vessels entering into any South African commercial port”.

The ports authority is a division of Transnet, and manages all the main South African ports. Attention has lately shifted from the ports located in outbreak countries to subsequent ports of call. It is here that new and rapidly changing port requirements are likely to be seen. For example, if a sanitation certificate is required in connection with previous port calls, the scope of the certificate may suddenly become more extensive so that it cannot be complied with retrospectively.

Alternatively, additional crew movement history enquiries may be required and may extend the time spent waiting at port – and potentially also spent “off hire”. Traders who run commodities into West Africa on a regular basis on long term agreements with customers, are faced with the possibility that the load port authorities may require ships that have sailed from West African ports to wait at the non-Ebola affected load port for 14 days before declaring Free Pratique and allowing the ship to enter to load. Apart from the spectre of a large demurrage bill, the delay can cause havoc with production schedules and storage space.

When considering the best clauses to use, some difficulties can be avoided. On our list of things that can cause concern are:

–    wording that requires a party to prove circumstances for which evidence will be almost impossible to collect;
–    clauses that could fail to operate when some other event intervenes following an Ebola related circumstance (for example the cause of delay is another affected vessel in a queue); and
–    sale contracts that are not updated to reflect vessel demurrage exceptions and vessel related costs to be passed on.

The Ebola virus is relatively difficult to catch, not being airborne – compared with say tuberculosis or SARS – and the available authoritative medical sources indicate that infection can be prevented by thorough implementation of precautions. The risk of claims and disputes under charterparties, sale contracts and bills of lading is, by contrast, disproportionately high. This is the result of a combination of the deep and justified fear of the disease, as well as of the inconsistent and constantly changing regulatory responses. The best ‘protective gear’ for vessel operators of all kinds includes staying closely attuned to new developments, taking account of expert guidance as it evolves, and being prepared to revisit shipboard practices and contract terms as frequently as the changing circumstances require.

Author information<

>Hazel Brasington is a partner at Norton Rose Fulbright based in Melbourne. Her current practice includes contentious and advisory work in shipping, commodities, international trade, insurance, ports and logistics and energy. She can be contacted on or hazel.brasington@nortonrosefulbright.com. Andrew Robinson is head of transport, South Africa for Norton Rose Fulbright, based in Durban. He specialises in both commercial and the litigation aspects of shipping, admiralty, marine insurance, transport, logistics, international trade and marine environmental law, as well as maritime casualty response and subrogated recoveries. Andrew can be contacted on or andrew.robinson@nortonrosefulbright.com.