By: Kemfon Josephneke esq.
Upon the outbreak of Covid19 in Nigeria, the Federal Government decided to declare a total cessation of movements of all persons and goods in Lagos, Ogun and the federal capital territory, Abuja. This decision was reinforced by some state governors that also proceeded to ban movement of persons and goods within their territory. The declaration of the Federal Government exempted some seaports and gave direction for seaports in Lagos to remain operational provided the Port Health Authority thoroughly screens all essential services providers at the ports.
Review of NIMASA Marine Notice
A notice was published by Nigerian Maritime Administration and Safety Agency (NIMASA) that Nigerian ports would only be open to International vessels which had earlier planned and given prior information to NIMASA of their call into a Nigerian Port not later than 1st February. All international vessels or any member of its crew or passenger with a travel history of visiting any of the COVID-19 affected countries since 1st Feb, 2020 shall not be permitted to enter any Nigerian port until 30th March, 2020 and 12th of April, 2020. This circular further imposed that all vessel must have been on sea for two weeks before berthing and also impose an obligation for such vessels to have thermal screening gadgets, directed self reporting form for all crew and passengers and for master of vessels to submit travel details of all its crew members.
NIMASA further directed that no sick passengers/crew shall be allowed to board any ship by the Shipping agent and/or Master of Vessel and that updated information on COVID-19 shall be provided to each international marine vessel and should be as per guidelines of The Federal Ministry of Health Nigeria and Nigeria Centre for Disease Control. Port and /or Local hospitals were mandated to assist Port Health Officers by supplying additional doctors and medical staff and logistics if any passengers and or crew members showed signs or symptoms of the disease. Disembarking of such passengers/crew is prohibited.
That such passenger shall be quarantined on the ship and samples of the patient shall be collected and sent for testing. If sample is tested positive, the passenger shall be taken to the isolation facility attached to the Port and the ship shall be required to cast off. If sample is negative, the passengers and crew members may be allowed shore excursion. A declaration to follow this procedure shall be taken from all ships before they are allowed to enter the Port.
In the said direction, NIMASA provided for flexibility on a case by case basis if seafarers certificates expire and there is need to renew within the prevalent condition in relation to COVID-19. The circular advised that strict compliance with Port Health and Nigerian Immigration Services laws should be adhered to in relation to the issuance of shore pass to local and international seafarers and that where a seafarer is confirmed to have contacted the COVID-19, the Shipping Company, Agent or Crewing/Manning Company should report to the NIMASA in addition to submission of daily situational report on action taken.
All Marine vessels are required to take these special measures to prevent COVID 19 patients from boarding vessels which include but not limited to the following:
- Any cruise guests who have traveled through China, Hong Kong, Iran, South Korea and Italy and other affected countries as defined by WHO in their daily reports in the past 14 days are automatically denied boarding by the marine vessel lines.
- Any person having contact with anyone within the last 14-days prior to travel who has travel history to mainland China, Hong Kong, Macau, Iran, South Korea, or Italy or any other affected countries is automatically denied boarding.
iii. Mandatory screenings shall be performed on persons with influenza like illnesses (ILIs) in boarding ports terminals.
- All guests onboard have to fill out self-declaration health forms.
- At the check-in counter of the boarding ports, the guest’s passports are verified for any stamps from COVID-19 affected countries.
- The passports are double checked by marine vessel personnel inside the terminal at boarding ports as double measure to ensure prevention of boarding such crew.
vii. All passports are also checked onboard by marine vessel staff alongside Nigerian Immigration Officers, wherever the Immigration Officers boarded in the previous foreign ports for enroute clearance.
viii. All ships shall be regularly sanitized.
- All cruises carry out daily examination of all passengers for symptoms for COVID-19.
- All cruises shall have sufficiently oriented health staff with adequate logistics like masks, personal protection equipment etc. along with sufficient isolation beds where any crew/passenger suspects can be isolated in case of detection of any symptoms.
Off-Hire Consideration in Covid-19 Impacted Charterparty
A charter party is a contract that outlines the terms on which a shipowner will allow the use of its vessel by another for a voyage or specific time. Charter party may be a voyage charter party, time charter party or demise charter party. A voyage charter is the hiring of a vessel from port of loading to port of discharge, a time charter is the hiring of a vessel for a specific period and bareboat charter or demise charter is the hiring of the vessel, without the crew, bunkers and provisions included in the agreement.
Generally, if a vessel is unable to perform the work under the charter party and time is lost due to COVID-19-related issues, the question is whether the owner remains entitled to the charter hire for the lost time or whether the vessel will be deemed off-hire. This must be decided on basis of the wording of the relevant charter party and the governing law.
In general, the starting point in a time charter is that hire must be paid unless there is a specific provision to the contrary. If a charterer wishes to invoke the off-hire provisions they will have the burden of proof. The same applies if the owner alleges that any exceptions apply. The relevant clauses are there to determine which party bears what risk. The wordings of the actual off-hire clauses are therefore very necessary and the wording differs within the various charter parties. A vessel will only be deemed to be off-hire where such circumstances fall within the off-hire provisions in the contract.
The New York Produce Exchange Form (NYPE) 2015 for example, provides the circumstances where a vessel will be deemed to be off-hire. According to the NYPE,
“a vessel shall be deemed to be off-hire when the vessel experiences loss of time from deficiency and/or default and/or strike of officers or ratings, or deficiency of stores, fire, breakdown of, or damage to hull, machinery or equipment, grounding, detention by the arrest of the Vessel (unless such arrest is caused by events for which the Charterers, their sub-charterers, servants, agents or sub-contractors are responsible), or detention by Port State control or other competent authority for vessel deficiencies, or detention by average accidents to the vessel or cargo, unless resulting from inherent vice, quality or defect of the cargo, drydocking for the purpose of examination, cleaning and/or painting of underwater parts and/or repair, or by any other similar cause preventing the full working of the vessel”.
In today’s global circumstances, the most practical or likely event is “deficiency of crew”. If a sufficient number of crew are ill due to COVID-19 and as a consequence the vessel is unable to perform the services required, this should trigger the clause on as “a deficiency of Crew” and entitle the charterer to off-hire. It is quite likely that an outbreak such as COVID-19 or even suspected COVID-19 will impacts on the efficiency of the crew and/or prevents the full working of the vessel. This is equally the case, where the vessel is held in quarantine due to an actual or suspected case of COVID-19. If, on the other hand, the remaining crew is healthy and is able to perform the services without any actual loss of time, the vessel is not off-hire. Aside deficiency of crew, Shelltime 4 specifically places a vessel on off-hire where time is lost for (a) obtaining medical advice or treatment for or landing any sick or injured person, or (b) due to any delay in quarantine arising from the master, officers or crew having had communication with the shore at any infected area without the written consent or instructions of the charterer.
The off-hire clause in Supplytime 2017 exempts from off-hire if the reason preventing the vessel from working is “quarantine unless caused by the crew having communication with the shore other vessel at any infected area not in connection with the employment of the Vessel”. This means that if a vessel suffers quarantine in the next port when coming from an affected area or because a member of the crew is infected, it will remain on-hire except it may be shown that it arose from the xposure of the crew in an unrelated activity from the employment of the vessel. If a vessel cannot work until a crew change and the incoming observe quarantine before mounting the vessel, the vessel will be off-hire, since providing crew is the owner’s risk in a time charter.
If the charter party incorporates the Hague or Hague-Visby Rules, then the owner should be able to benefit from an exception for quarantine. Article IV (2)(h) of the Rules provides that neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from quarantine restrictions. As such, owners of vessels should be protected should COVID-19-related quarantine that may cause loss or damage to charterers.
The Infectious or Contagious Diseases clause as Covid 19 Response Options
Most charter parties are today entered into on Baltic and International Maritime Council (BIMCO) recommended forms and often governed by English law. BIMCO Infectious or Contagious Diseases Clause for time or voyage charter parties permits the owner of a vessel to refuse to proceed to or remain at a port or place which in the reasonable judgment of the Master/Owners is “an Affected Area”. This clause was drafted during the Ebola outbreak in 2015but drafted generally to address equally serious strains of existing or newly identified contagious diseases that can occur from time to time. The clause was modeled on the BIMCO War and Piracy Clauses and thus enables owners to refuse to conduct business in an area of danger. Where the Infectious diseases clause is inserted in a voyage or time charter party, the provision will govern situations when there is outbreak of infection, such as the COVID-19 pandemic. The dual qualification for this clause to come into effect is for such diseases to fall under the category of infectious disease and for there to be an affected area, usually a port or any area in which the crew or other officers of a vessel suffer the risk of exposure to the disease, quarantine or other government imposed restrictions in relation to the outbreak.
The World Health Organisation has declared COVID-19 a pandemic and a Public Health Emergency of International Concern (PHIEC). The Nigerian president issued the COVID-19 Regulations 2020 pursuant o his power under the Quarantine Act, which declared COVID-19 an infectious disease. The president issued certain directives to combat the spread of the disease and declared, amongst others, a state of lockdown in Abuja, Lagos and Ogun states. Even though the directive provided for the seaports to remain functional and allowed movement of goods and services upon being screened by the port health Authority, the seaports may still be considered an infected area because of the strenuous restrictions introduced in response to the pandemic by government and the reality that crew and passengers are exposed to the risk of contracting the disease
Where an area is said to be an Affected Area, the burden is on the owners of the vessel to decide whether or not the vessel should continue to the Affected Area or if the infection clause shoud be invoked. Where the owner decides to redirect the voyage and avoid the affected area, The charterer under a time charter party is to be immediately put on notice of the decision of the owners. The charterers may then give alternative voyage orders where the vessel has been ordered not to proceed or continue to the Affected Area. Where the charter party was for a voyage trip, the owners has the right to invoke the clause and cancel the voyage charter party before loading has commenced and without further liabilities towards the charterers and vice versa.
If the loading port was already a known Affected Area when the charter party was concluded, the owners would be demed to have acquiesced to that fact and is therefore not entitled to cancel the charter party. The charterers can make a claim for damages against the owners for breach of contract in th event of cancelation of charterparty to a known Affected Area. If the loading port becomes an Affected Area only after the date of the charter party, then the owners’ cancellation would be in accordance with the IOCD clause and the charterers would not have a basis for a claim against the owners.
Health of Crew members
Owners of vessels have a duty to ensure that crew members are in good health and remain so while on board a vessel. The Merchant Shipping Act 2007 provides thus:
“where a master, seaman or cadet belonging to a Nigerian ship…suffers from any illness, not being an illness due to his own willful act or default or to his own misbehavior, the expenses of: (a) providing the necessary surgical and medical advice and attendance and medicine; and
(b) the maintenance of the master, seaman or cadet until he is cured, or he dies or is returned to his proper return port and of his conveyance to the port; and (c) in the case of death, his burial, shall be defrayed by the owner of the ship without any deduction on that account from the wages of the master, seaman or cadet.”
The safety measures specifically put in place for crew men in relation to the COVID-19 pandemic, as stipulated by NIMASA include the prevention of sick crew men from boarding their vessel, thermal screening of all crew members on board the vessel, non-visitation of shore by crew men until clearance of port health authority, prohibition of the disembarkment of any crew member that is showing symptoms of Covid-19 until quarantined and samples shall be collected for testing etc.
Concept of Force Majeure
A force majeure event is an unforeseeable event and which is outside the ordinary control of the claiming party and which prevented the party from fulfilling its obligations under a contract. Since force majeure is a civil law defence, it must be included expressly in a contract because Nigeria is a common law country. The concept is different from frustration in common law and unlike force majeure, frustration brings the contract to an end “forthwith, without more and automatically.”
Since force majeure clauses are creation of contract in Nigeria, parties are free to include circumstances, which in their opinion, constitute force majeure events. Charter parties often have a standard form and these contracts all contain varied details of force majeure. BIMCO has a standard force majeure clause which accommodates all plagues and epidemics as constituting force majeure. Acts of God, acts of Government, war, terrorism, sabotage, earthquake, fire and a broad provision which caters for any other similar cause beyond the reasonable control of either party are considered as force majeure events.
For a party to raise force majeure successfully, such a party must show that the non-performance of the contractual obligations was due to circumstances beyond the seeking party’s control, the seeking party had taken every reasonable step to mitigate or avoid the event or its consequences and said party seeking to invoke force majeure had notified the other party in writing within the contractual timeline since the day of the occurrence of any such event or condition.
Seaworthiness of Vessel
It is an implied and fundamental obligation on vessel owners to ensure that their vessels are all seaworthy. In Nigerian, seaworthiness does not merely apply to the hull, machinery and proper workings of the vessel but to the totality of the vessel and this is measured from the time of departure. The failure to strictly adhere to all safety requirements which contaminates cargo on board a vessel can make such a vessel to be unseaworthy. There is greater obligation on vessel owners and masters to ensure that their vessels are frequently fumigated to avoid the risk of unseaworthiness.
Expiration of Certificate
Classification and statutory certificates are mandatory for vessels and failure to renew and maintain is considered a breach of contract. Such a vessel is generally considered unsafe and liable to detention by port state. The International Maritime Organisation (IMO) has issued a circular to address this problem, but all the IMO is limited as the body cannot issue a general exemption from the mandatory provisions of the relevant statutory conventions, nor delay implementation of mandatory regulations, even in a pandemic. IMO has advised all the major classification societies to generally accept the COVID-19 situation as an exceptional circumstance in terms of granting postponement for surveys where such are impossible to perform based on class rules and statutory conventions, and invite customers to use already established remote survey schemes where possible. However, postponement must not exceed three months from the certificate expiry date. NIMASA provided for flexibility on a case by case basis if seafarer’s certificates expire and there is need to renew arose within the prevalent condition in relation to COVID-19.
Conclusion
The impact of covid19 is evolving but it leaves a lot of uncharted areas. In the context of charterparty, parties are advised to seek very tailored legal advice on the implication of the covid-19 outbreak by reviewing the terms and conditions of their current charters in order to assess exposure and ensuring provision for the impacts of COVID-19 in any new contract that is negotiated.