Transport Guidance for Steel Cargoes

American Club: Transport Guidance for Steel Cargoes
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The ICA, by its terms, does not apply where the cargo responsibility clauses in
the charter party have been “materially amended.” For purposes of this
provision, the addition of “and responsibility” to Clause 8 of the NYPE is not
deemed to be a “material amendment.” However, the addition of the words
“cargo claims” at Clause 26 of the NYPE Form (1946 or 1993) or Clause 25 of
the Asbatime Form (1981) will render the ICA allocation of liability inapplicable.
(3) Claims for shortage/over-carriage. Such claims are to be allocated 50%-50%
as between the vessel owner and charterer unless there is “clear and
irrefutable evidence” that the claim arose from pilferage or act or neglect of
one of the parties (including their servants and subcontractors), in which case
liability will be allocated 100% to that party.
(4) All other claims. Liability for all other claims will likewise be allocated 50%-50%
as between the vessel owner and charterer unless there is “clear and
irrefutable evidence” that the claim arose from pilferage or act or neglect of
one of the parties (including their servants and subcontractors), in which case
liability will be allocated 100% to that party.
(5) Additional points for consideration regarding application of the ICA.
• The claim under the ICA may include legal and experts’ fees incurred
in defending the cargo claim in the first instance, but not costs
incurred in making the claim under the ICA or seeking indemnity under
the charter party.
• The underlying cargo claim has been “properly settled or compromised
and paid.”
• Notice of Claim shall be made within 24 months (36 months where the
Hamburg Rules are compulsory applicable.)
• The latest version of the ICA provides for the posting of reciprocal
security between the parties to the charter party.
9.2.2 Jurisdiction and choice of law provisions. Most charter parties provide for a specific and exclusive
dispute resolution venue, such as arbitration in London or New York. Such provisions also specify
the applicable law that will govern such disputes. The decision to arbitrate should not be taken
lightly and it should be done in a clear and unambiguous manner, not just in the charter party
itself, but also in any bills of lading to be issued in connection with the performance of the
charter party.

American Club: Transport Guidance for Steel Cargoes
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9.2.2.1 Vessel owners should always remember to:
(1) ensure that the bills of lading make explicit reference to and incorporate the
relevant charter party;
(2) obtain a copy of the charter party incorporated in the bills of lading and place
it on file as soon as possible after loading;
(3) make it a requirement that time charterers provide a copy of any sub-fixture
within 7 days of being concluded as otherwise a copy may not be obtained
later if needed; and
(4) physically attach a copy of the incorporated charter party to each original and
each copy of the bill of lading.
9.2.3 Delegation of the Master’s duty to issue bills of lading. Such provisions may be a pitfall for vessel
owners because when such duties are assigned to the charterer or its agent, a clean bill of lading
may be issued by the charterer despite the existence of remarks in the Mate’s Receipts which are
inconsistent with respect to the conditions, quality and/or quantity of cargo.
9.2.3.1 Whenever possible, the vessel owner should not delegate this duty to best protect its
interests and avoid unnecessary exposure to a paper cargo claim that, in essence, may
accrue before the vessel even departs the load port limits. If a vessel owner or disponent
owner chooses to make the commercial decision to include such a term in its charter
party agreement, it runs the risk of prejudicing its P&I cover for cargo claims that may
arise in connection with that voyage (see Section 9.3.4).

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