Justifiable Deviation under Time Charter Party

I. Time charter party

A time charter party is a contract between two parties, wherein the lessor i.e. the owner of a ship or the demise charterer places a fully equipped and manned ship at the disposal of the lessee for a certain period of time for a consideration called hire, which is payable at specified intervals during the term of the charter. It is the duty of the carrier to provide a vessel, which is seaworthy and with having received the cargo on board to his care to perform the voyage as dictated in the contract of carriage and if there is no such agreement, the carrier is obliged to carry the cargo directly to its destination².

II. Deviation

The route of the voyage is a very crucial criterion for the proper fulfilment of a contract of carriage, as any deviation that is unjustified from the agreed, direct or the customary route, amounts to serious breach of the contract of carriage. Whenever there is a delay in the voyage or deviation from the agreed, direct, or customary route, it is the duty of the Master to notify the owners immediately. He should also record the reasons for the said delay or deviation accurately in detail in documents such as the log book. Also, the course records, ship to shore communications and as well as the charts should be made available to owners.

The term deviation is described as³ “A serious matter that changes the character of the contemplated voyage so essentially, that a ship owner that has been guilty of a deviation cannot be considered as having performed his part of the bill of lading contract but something fundamentally different and therefore he cannot claim the benefit of stipulations in his favour contained in the bill of lading.”

The true underlying principle of deviation was affirmed by Lord Wright MR⁴, who stated that: Loss of the insurance is sometimes stated as the reason why deviation is treated so drastically under a contract of affreightment. In the case of Leduc v Ward⁵ the carriage contract permitted the ship owners “Liberty to call at any port in any order”, but when the ship loaded a cargo at Fiume for carriage to Dunkirk, instead of proceeding directly to Dunkirk, deviated via Glasgow adding around 1000 miles to the voyage, the court held that the said deviation to Glasgow was unjustifiable.

The House of Lords in Hain Steamship Co. v. Tate & Lyle Ltd⁶, held that the obligation of not to deviate is a condition of the contract and the breach of it entitles the goods-owner if he desires to treat the contract as repudiated and it is open to the party not in default to treat the contract as at an end or to waive the breach and treat it as subsisting. Also a contract is put to an end as soon as there is a voluntary or unwarranted deviation, but it is left to the discretion of the goods owner to waive the same.

It is the duty of the master of the vessel to make sure that the vessel proceeds with utmost care and caution not only in view of the main contract of the voyage, but also during a charter party to the port of loading. If the delay amounts to deviation, the charterer can treat the same as a breach and refuse to load the ship. But on the other hand if the delay does not amount to deviation, he can claim for damages only.

III. Justifiable and unjustifiable deviation

Even thought the master of the vessel has full authority to deviate from the intended route, the deviation is said to be justified only in the cases such as, when there is an apprehension of immediate danger and the deviation occurred so as to protect and preserve the cargo, for the purpose of saving human life or aiding a ship in distress where human life may be in danger or when there is "liberty to deviate” clause specified in the contract.

According to Hague and Visby Rules,: “Any deviation in saving or attempting to save life or property at sea or any reasonable deviation shall not be deemed to be an infringement or breach of these Rules or of the contract of carriage, and the carrier shall not be liable for any loss or damage resulting there from.” A Deviation is considered from the point of view of carrier and also from that of the cargo owner. It is the bound duty of the carrier to make sure that the vessel reaches its destination on time as per the contract of carriage. As such, unnecessary delay would be treated as deviation.

There may be one or several reasons for deviation which include justifiable ones as well as that are non-justified. When the master of the ship deviates or delays the vessel in order to save the lives of people on board of another vessel, the deviation or delay is held justifiable, but subject to the condition that after the said purpose is completed, he needs to continue with the regular course of the journey. But if the deviation was done with an interest of saving property or if the deviation is continued, without falling to the regular route, then the deviation is said to be unjustified.

If a vessel carrying cargo sees another ship in distress and rescues the crew, it is a justified one. Whereas if the vessel tries to tow the entire ship even though the weather condition was fine and the crew could be rescued without any difficulty and suffers damage, the deviation would not be held as a justifiable one and as such the ship owner was held liable for the loss⁷.

If a master of the vessel apprehends any danger as such to the cargo or the vessel by hostile cruisers, it is left to the discretion of the master of the vessel to delay the vessel. In that case, it amounts to a justifiable deviation as the cargo and the vessel would have been put into risk if they had continued the journey, but if a vessel takes a different route due to a temporary impediment then the ship-owners would held liable for losses⁸.

A deviation is held to be justified, if on the discretion of the master of the ship the deviation was done in the interest of the ship⁹, as well as that of the cargo. Also, whenever it is necessary to save a ship from perils of the sea, a deviation to the nearest safe port of refuge is a justifiable deviation, even if the ship was not sea worthy. If there is a liberty clause included in the bill of lading or the charter party, then also the ship owner has the liberty to deviate into other ports during the voyage. But if the ports are restricted only to the ports that come in the course of the voyage, the deviation from the regular route amounts to an unjustified delay¹⁰.

Even when Hague Rules apply, the doctrine of deviation subsists¹¹ and as such, even though if a deviation taken on replacement crew would be termed as reasonable, the subsequent route taken from the port which might sacrifice safety for speed would not be justified. When there is a deviation from the regular course, the ship owner is not only held liable for the delay caused, but he also would be liable if there is any loss or damage caused to the cargo if the vessel did not proceed directly to the port of discharge¹².

The term deviation is also used to describe a delay beyond the shortest reasonable time in which a voyage can be carried out. A Delay also amounts to deviation when the voyage made was different from that of the voyage contracted¹³. If a vessel is unable to render the chartered service for a certain period due to it un-seaworthiness, the charter can be cancelled on the grounds of frustration alone¹⁴. The parties are free to agree over the conditions put up in the contract¹⁵ and if there is a deviation from the agreed route, the ship owner is liable for the deviation and if the deviation was unjustified and if there is no connection between the damages and the deviation, then there is no breach of contract¹⁶. The bill of lading has to be considered as the whole contract and the exemption clauses¹⁷ cannot be regarded as part of the contract.

Even as of this date, the doctrine related to the construction of the contract and that of the intervention of the parties differs from that of the olden days¹⁸. Even thought there are not enough rules to cover whether the deviation can be considered as fundamental breach or not, after development of the development of Carriage of Goods by Sea Act¹⁹, there had been some changes with respect to the liabilities of the parties.

Although a deviation is said to happen when there is a change in the customary or agreed route, it always does not mean that every time the ship ventures off course would amount to deviation, because there would be no deviation that would amount to breach of contract if the ship deviated as a result of factors such as storm, defect in the navigational equipments, illness of the officer of the ship and so on²⁰. It is only necessary that until the bill of lading or the charter party agreement specifies a route of voyage, it is the duty of the master to follow the usual customary route for the voyage²¹

The parties are also not bound by the direct geographical route but can make use of commercial trade lines during the voyage for factors such as fuelling, for supplies, etc²². But that does not mean that they can create their own routes. As per the opinion of Swinfen Eady L.J.²³, there cannot be a 'hard and fast rule' to see if a certain stop was in the course of the voyage or not and as such, several factors such as the size of the ship, nature of voyage, customary route, usual ports of call, etc should be taken into account. This factor also helps the ship owners in making the voyage safer, efficient and as well as profitable.

Any unjustified deviation results in the suspension of a carriage contract²⁴ and in such a scenario, the carrier cannot rely on the exemption clauses contained in the contract²⁵, but if the cargo owner gives clearance and instructs the vessel to continue with the usual route, at that point of time, the exemption clauses get revived and the carrier is entitled to rely on the exemption clauses of the contract.

IV. Deviation in marine insurance

Section 3 of the Indian marine insurance act 1963 defines Marine insurance and section 48 deals with deviation. The effect of deviation is that any loss arising during or after the deviation will be borne by the ship owner. According to Lord Atkin, a breach in the contract of voyage is a serious character, irrespective of how small the deviation is²⁶ and any form of unreasonable and unjustifiable delay in commencing a voyage also amounts to deviation and therefore the insurer was discharged²⁷.

Deviation without a justifiable cause is catastrophic, because the insurance policies become null and void from the moment of deviation and even if the damages occur after the deviation is completed and the vessel has regained the normal route, the insurers cannot be held liable for the loss. In the case of an unjustifiable deviation, the ship owner not only loses his normal insurance cover but also the defences that are available to him under the relevant Carriage of Goods by Sea Act.

Goods carried by sea are first insured by the cargo owners and again by the carriers for a third party liability cover from a Protection and Indemnity Association/Club (P&I Club), who charge a premium called as the advance call, based on the risk rating of the carrier and will pay for the damages caused by the carrier. Whereas, if the carrier avoids his liability via an exemption clause or via Article IV of the Hague-Visby Rules, the cargo owner will have to make claim through their insurer.

V. Notification of deviation

Whenever there is deviation for any reason, not limited but including an accident or any other extraordinary circumstance and the vessel needs to proceed to a port or place of refuge, the Master of the vessel needs to provide a sketch, showing the actual deviation of the vessel along with the exact date and time of both reaching the point of deviation and as well as of the resume of its voyage. He should also record the details of the fuel consumed, wages, and costs of maintenance of crew and as well as additional expenses incurred if any during the said deviation.

VI. Conclusion

As of today, the origins of the doctrine of deviation have not yet been firmly established and probably they will never be. However, that does not detract from the fact that the doctrine itself has influenced shipping and general contract law and continues to do so even in the modern times. House of Lords judgements in Photo Productions v Securicor²⁸, Suisse Atlantique²⁹ and their interpretations pose a great threat to the continued existence of the deviation doctrine.

Though transportation has evolved in leaps and bounds over the centuries, even today sea transportation is if one of the major modes of transportation across the globe. The legal aspects of modern day shipping are so complicated that it will take quite some more time to specify the important aspects of law involved, especially in these days, when the deviation varies in degrees of seriousness. Hence, the principle of deviation should not be merely limited to geographic deviations, but it should also cover other egregious departures from the contract of voyage that may result in damage to the cargo.

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