Lloyd's Maritime and Commercial Law Quarterly
BOOK REVIEW - CHARTERERS’ LIABILITY INSURANCE
CHARTERERS’ LIABILITY INSURANCE by Dieter Schwampe. Verlag Versicherungswirtschaft e.V., Karlsruhe (1984, xlviii and 152pp., plus 6pp. Appendix and 4 pp. Index) Paperback DM 58.
In this study, Dieter Schwampe presents, on a comparative basis, a thorough analysis of charterer’s liability and available insurance cover both in the Federal Republic of Germany under the Allgemeine Deutsche Seeversicherungsbedingungen and the English Marine Insurance Act 1906. The study covers the more frequent cases of charterer’s liability, such as liability for damage to vessels when they enter into unsafe ports or berths, and damage to the vessel caused by the cargo, as well as the charterer’s liability to contribute in general average. Quite rightly, the author points out that charterers are frequently unaware of the need for a particular charterer’s liability insurance in these cases. Although, perhaps, the book may not be readily available to the shipping community, since it is in the German language, it does serve a very useful purpose. The author gives a thorough analysis of the difficult problem of the charterer’s liability for unsafe ports and berths and his up-to-date description of the position in Anglo-American and German law is most valuable.
In some respects, the analysis of Anglo-American law seems to rest—perhaps a little more than necessary—on the traditional approach, basing the analysis on the intention of the contracting parties. In later years, this traditional approach has been challenged by the standardization of contract terms. Hence, the question whether or not a Paramount Clause incorporating the Hague Rules into a charterparty should override any express or implied safe port warranty is extremely difficult to answer simply by referring to any real or presumed intention of the contracting parties (pp. 48 et seq.). It may well be that the resolution of this question will depend upon the applicable law. Thus, in Continental and Scandinavian law, it is natural to base the charterer’s liability on the negligence concept of the Hague Rules in such a case, while the “warranty approach” under Anglo-American law could prevail in spite of the reference to the Hague Rules.
As the author points out, it is quite important for the charterer to protect himself against the risk of having to pay contributions in general average. This is normally done already by the ordinary cargo insurance under the Institute Clauses A, B, or C (and the old All Risk or F. P. A. cover). However, serious difficulties may arise where the charterer is not identical to the cargo owner. Thus, the charterer may incur liability to the shipowner under an employment clause in a time charterparty (such as cl. 9 of the Baltime Charterparty) where he orders the master of the vessel to issue bills of lading extending the shipowner’s liability beyond the liability under the time charterparty itself. In such a case, the charterer may have to indemnify the shipowner for any loss which he might incur when the bills of lading prevent him from recovering general average contributions from cargo interests. It may be argued that the time-charterer’s ordinary P.&I. insurance would provide sufficient cover for such an obligation to indemnify the vessel under the employment clause of the time charterparty, and even if the P. &I. cover specifically excludes general average contributions. But it might be worthwhile to clarify the position so as better to avoid any unnecessary argument with the insurer. Also, it would have been worthwhile to explain the particular position of the so-called Non Vessel Owning Common Carrier
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