Here is an article I wrote that will serve as a nice intro. Introduction to  the Time, Demise and Voyage Charter Party A charter party is a maritime contract governed by federal maritime law in the United States. However, the contract is so detailed that this area of the maritime law routinely earns its own treatment in texts. There are many good books on the subject such as Summerskill on Laytime; J. Bess, Chartering and Shipping Terms, Voyage Charters published by Lloyds of London Press, among others. Let me talk a little bit about the word charter party, I was asked a few weeks ago where did the term charter party come from? The old Latin term is "carta partita", and it literally means "divided document". The document was written in duplicate on a single piece of paper (the carta) and divided (partita) with ripped edges. Shipowner and merchant knew that each other was the correct party to the contract if the two divided documents matched. So the story goes. There are various kinds of charter parties. Let me spend just a few minutes on the types of agreements because I think it will be preferable to delve deeper into some of the interesting legal issues that arise out of this most basic form of maritime contract, In the voyage charter, of course, the ship is employed by the charterer to typically carry a full cargo on a single voyage. However, you can voyage charter part of a vessel. The vessel is maintained, operated, manned and navigated by the vessel's owner. The charterer's obligation is to basically provide the cargo that was promised and to pay the freight, and demurrage, if any. The charterer will often also agree to arrange and pay for the costs of loading and discharging the vessel and such a charter party is said to have been fixed on "free in and out" or similar terms. It is a contract of carriage used in countless commercial transactions when a cargo interest needs a shipload of cargo moved from one port to another. There are many standardized pro forma charter parties in use today, For example, the ASBATANKVOY is a standard pro forma charter party for tankers. Typically, the parties will agree to the use of a pro forma and than negotiate terms into and out of the contract as they deem necessary. The shipowner more or less arranges and pays for everything concerning the vessel and the voyage. Charterers pay freight and other cargo related expenses, such as stevedoring if fixed f. i.o. The time charter party is similar to the extent that the owners of the vessel continue to maintain, operate, manage, and navigate the vessel. However, the time charterer takes the vessel's carrying capacity for a period of time, for example, for "about" three month, or "three months to six months", or for some other agreed duration. The charterers pay "hire" which is normally quoted on a per them rate, The time charterers can instruct the vessel to make voyages within the time charter's duration, always subject to the charter party's constraints concerning trade and cargo warranties. If the vessel is unable to perform for various reasons, the vessel goes "off hire" and charterers are relieved of their obligation to pay hire until the vessel's condition is repaired and the ship goes back "on hire". We will talk more about hire and off hire later today. This type of contract is useful if, for example, a charterer needs a vessel under its control for a longer period of time, without undertaking the responsibilities of managing, crewing and maintaining the vessel, nor the responsibilities of servicing the vessel's long term debt. Under the time charter the vessel's owner maintains the vessel's condition and seaworthiness, insures the vessel against hull and third party P and I risks, mans the vessel, stores her and amortizes the vessel's debt. The time charterer pays hire, of course, but must also pay for those expenses that typically arise out of the vessel's employment. These include port expenses such as dockage or wharfage, as well as tug expenses, local pilots, etc. The time charterer routinely also purchases the vessel's bunkers. This is a major difference between a standard time and voyage charter. Most cargo related expenses are for the time charterer's account as well.The demise or bareboat form of charter party is very unique and I want to spend a minute or two talking about it. In this form of charter party, the demise or bareboat charterer for all intents and purposes takes over the ship. The charterer becomes the owner of the vessel pro hac vice. The demise charterer is the "net lessee" of the vessel. The contract is a lease and not really a contract of carriage. A time charter party, a voyage charter and a bill of lading, these are all contracts of carriage. A demise charter party is a form of net lease. You may want to consider entering into a demise when you need the complete and effective control of a vessel, but do not desire outright title or ownership of the ship. For example, a liner company may need additional tonnage to serve its routes but has no interest in buying  or building a vessel for that purpose, A government may have the same desires, especially during a war when it needs an increased sealift. You take the vessel, and with it responsibilities that are normally considered to be within the shipowner's realm, such as vessel maintenance, repairs, crewing, insurance, etc. The law treats you, the demise charterer, as the vessel's owner. You just do not have legal title to the vessel. If the vessel is demised and the shipowner's master and crew remain onboard, they now become the servants of the charterer. They are now subject to the orders of the charterer. A vessel can be demised to a charterer with the crew onboard, However, in many circumstances, the shipowner turns the vessel over to the charterer without crew. The legal consequence of the conveyance is the same. It is still legally a demise regardless of whether the crew goes or does not go with the vessel. We will talk in a minute or two about the legal consequences of a demise. If the charterer takes the vessel by demise without crew, than the arrangement is often referred to as a "bareboat", although again, the correct legal term is still a “demise”. The key to the demise is an outright transfer of effective control. Whether the crew stays or does not stay with the vessel is not totally dispositive of whether a demise has occurred. To constitute a demise, the owner of the vessel must relinquish "possession, command and navigation of the vessel" as to be "tantamount to, though just short of, an outright transfer of ownership". I am quoting the US Supreme Court and this definition is important. Whether or not a demise has in fact occurred can be a very important legal issue requiring litigation. That is because, as we will soon discuss, the owner of a vessel that has been properly demised is relieved of personal liability arising out of the operation of a vessel by the demise charterer, In fact, let's talk about that now. One major consequence of a demise concerns the personal responsibility for third party claims, such as cargo claims, or personal injuries, arising out of the operation of the demised vessel. The general rule is that once the demise has been perfected, the registered owner of the vessel is relieved of it obligations to third party claimants for torts or contract breaches caused by the demise charterer or the vessel during the duration of the charter party, For example, personal liability arising out of contacts of carriage entered into by the charterer, or for any torts caused by the crew, will fall on the demise charterer or the vessel "in rem". The owner is out of the picture. Give me a second or two before I talk about the vessel's in rem liability. For now, please understand, that the registered owner of the vessel is relieved of personal liability Let me give you a case example. This involves the charter of a tugboat called the MV FT. PIERRE, The owners of the tug had entered into a written charter party agreement with the charterer. That contract had numerous clauses including the following  "the charterer shall have exclusive control over and possession of the vessel. The Master, although employed by the tug owner, shall be under the orders and directions of the charterer as regards operation, navigation, control and employment of the vessel". The c/p also contained the following language. "It is the expressed intent of the parties to this charter agreement that it be interpreted as a demise of the vessel. All provisions seemingly contrary to this intent are to be considered as matters of convenience or expedience, or as matters of costs or risk allocation between the parties. The charterer is to remain responsible for the navigation and operations of the vessel and direction of the crew…." What happened was this. A barge company had tendered its barge to the tug FT PIERRE for towing. While traveling downstream on a river, the barge sustained damage when the tug was negligently navigated causing both tug and barge to collide into a dam. The barge owner sought to hold the tug owner responsible for the loss. The question was whether there was a demise. Remember, if the tug was demised than the tug owner is no longer responsible personally for the tug negligence. I will read from the Court's decision: "In order for the tug owner to successfully shift liability for the negligent navigation of the Fort Pierre, it must demonstrate that the charter party agreement created a demise charter. To create a demise the owner of the vessel must completely and exclusively relinquish possession command and navigation of the vessel thereof to the demisee." The barge owner was not content to make a claim against the demise charterer. They were more or less insolvent and collecting from them for the damage to the barge would be near impossible. Their only hope was to hold the tug owner liable. The barge owner argued that the charter party could not be a demise because the tug owner provided its crew and also agreed to maintain a certain level of hull insurance on the tug. However, the court ruled to the contrary and held that a valid demise had occurred. The fact that crew remained with the vessel was not enough to defeat a demise. One has to look to the totality of the circumstances and determine whether "effective control" of the vessel has been shifted to the demise charterer. In this case the court ruled that based upon the language of the agreement, such threshold had been met. There was a demise and the tug owners were not responsible in personam for the damage to the barge even though the tug's crew had been selected by the tug originally. This is an important lesson. The owner of the vessel is relieved of personal liability for claims arising out of the chartered vessel by demise, However, there are some exceptions to this rule. For example, if there is a cargo claim, and that cargo claim arises out of unseaworthiness that pre  existed the demise, in other words, unseaworthiness that existed at the time the vessel's beneficial ownership was transferred to the demise charterer, than the vessel's owner will be responsible for that cargo damage. However, the actual owner of the vessel is not responsible for unseaworthy conditions that arise and that cause damage while the vessel is under demise. That is for demise charterer's account. Now I have just talked about a major consequence of a demise, that is, the elimination of the owner's in personam liability in the event of a valid demise charter. The vessel, however, remains a separate legal entity under the law and may be liable 'in rem", even for those acts caused by the demise charterer. I repeat, the vessel remains liable in rem, for the torts or contractual breaches of its demise charterer/ operators. So, by way of example, the vessel may be liable in rem to cargo interests and injured seamen caused by vessel unseaworthiness that arose during the demise charter party. In the FT PIERRE case just described, the tug itself becomes liable in rem for the barge damage even if the owners were personally excused, Now I am often asked the following question because the in rem concept is confusing to many. If the vessel is liable in rem, than does not that actually mean that the vessel's owner is liable. In other words, what is the good of being relieved of in personam liability, as is the case when an owner has perfected a demise, if your vessel is liable in rem. Well, the answer is the following. First, the vessel's liability in rem means that the injured party can seek redress against the vessel by foreclosing its lien. This would mean an arrest of the vessel. However, the liability in rem is as only as good as the value of the vessel, In other words, the general rule is that if the outstanding claim in favor of the third party is greater than the value of the vessel, the injured party cannot seek the deficiency from the registered owner personally. The third party can only realistically collect from the vessel an amount equal to the vessel's sale value at the foreclosure and auction, There may also be many other lienholders lining up to collect from the sale proceeds. Second, the claimant will have to find her. The vessel's owners can play all kinds of games such as changing the vessel's name, flag, color etc. That will not extinguish the liens against the vessel but you cannot arrest what you can't find. Third, if the vessel is lost, for example an actual or constructive loss, the lien is extinguished. Again, the injured party cannot go after the vessel's owner in personam as there was no direct liability assuming the demise was valid. Fourth, if the owner sold the vessel to a third party, that new purchaser takes the vessel with the lien attached. Again, the original owner (and even the vessel's new owner) is not responsible personally. That is why when you buy a ship it is a good idea to try as best as possible to determine if any liens are attached. That is not always so easy to do accurately. Lastly, not all wrongs create maritime liens that can be asserted against a vessel, So, yes, sometimes even though the owner is excused personally, he/she may have to answer for the vessel's faults. But not always. One last note about the demise. The demise charterer is the "owner" of the vessel pro hac vice and operates the vessel as if it were its own. Of course, at the expiry of the charter party, the charterers are expected to return or redeliver the vessel back to her actual owners and the contract normally provides that the vessel must be redelivered "ordinary or reasonable wear and tear excepted". The demise charterers have the duty to maintain the vessel during the charter party period and return it reasonable wear and tear excepted. This can, of course, cause disputes. The usual practice is to have the vessel surveyed prior to delivery to determine its pre charter condition and than to have the vessel surveyed again at the time of redelivery. The term “wear and tear excepted” generally encompasses normal depreciation of the vessel and deterioration due to normal and proper use, the passage of time and operation. What is normal or not normal really depends upon many factors including the trade that the vessel was expected to engage in at the time of the fixture. Okay, so let us move on to discuss some legal issues that might arise out of the various forms of charter parties. You will have to forgive me here. This is worthy of an entire course, All I can do here is touch upon a handful of what I think are some of the more interesting issues. Let's look at the time charter. As I stated above, the charterer pays the hire and directs the employment of the vessel. The standard time charter party contains an "Employment Clause", It reads: "The Captain (although appointed by the owners) shall be under the orders and directions of the Charterers as regards employment and agency ….”. Note, that unlike the clause in the charter party for the tug Ft. Pierre, the Master is not under charterer's direction with regard to navigation or vessel operation. This is a time and not a demise charter. Under the time charter party's employment clause the Master and crew are employed by the shipowner and remain its employees. The time charterer, however, having paid the hire, has the right to instruct the Master as regards the vessel's "employment". The Master in essence wears two hats. He is owner's employee. But, he is to be directed by the charterer with regard to vessel employment. This can cause a conflict. The time charterer's right to give orders to the Master is by no means absolute. The Master may justifiably refuse unsafe orders. Thus, the Master may refuse to proceed to ports that are considered to be unsafe. In fact, charter parties routinely contain a "safe port / safe berth" warranty that confirms this understanding. The Master can refuse to proceed to the nominated port and request new instructions. However, the Master had better be right, Otherwise, the owners have breached the contract. Similarly, the Master may refuse to carry cargoes that are not permitted in the c/p agreement, There can be more than one route between two ports. The route to be taken between ports can cause a dispute. Remember, the time charterer is paying hire on a daily basis. Therefore, the time charterer may ask the Master of the vessel to proceed from one port to another via a certain route. By way of example, the mileage between two ports may be shorter if the vessel proceeds along the "great circle" route between the ports, as opposed to the "rhumb line"'. The time charterer may have employed a weather routing service to assist in choosing the most economical route between ports. The time charterer, based upon the routing service's advice, may ask the Master to proceed along the great circle, thereby cutting the voyage distance and optimistically, the amount of hire payable for the voyage, However, the Master may see things differently, The great circle route may very well take the vessel into rather extreme Northern latitudes for a North Atlantic or Pacific Crossing, or extreme Southern latitudes for a South Atlantic or Pacific crossing. That could mean heavy weather. Can the Master say no to the charterer's request / orders? If so, is the Master's discretion unlimited? What is the role of charterer's weather routing service? A recent example is the decision in the arbitration involving MV White Manta, In that case the Panel held the Master's decision to ignore the advice of several weather routing services to be unreasonable given the information available to him, The Panel was also influenced by the fact that the Owner made no serious attempts to discuss with the Master the validity or reasonableness of his ignoring charterer's voyage directions. The Panel held this to be a breach of the Master's obligation to comply with charterer's orders. The Panel in that case reiterated that to come to its conclusion it was not necessary to challenge, or in any way dispute, the authority of the Master. He is the Captain. However, the Master's decision is subject to a test of reasonableness, which requires a consideration of all the information available to him. The Master's authority, as demonstrated in White Manta, is sometimes litigated, I was just involved in a case in which the Master insisted that the charterer spend additional sums of money to secure or strap a grain cargo in one of the vessel's holds. The Master had the opinion that this was necessary to provide better vessel stability. The charterers had employed their own stowage expert who presented to the Master a stowage plan that charterers believed would provide adequate stability, little risk of cargo shifting and that did not require the expense of strapping. The charterer rejected the Master's concerns, The Charterer believed the Master was being too cautious and acted unreasonably, There was time lost to the vessel, Is the Master always right? Can the time charterer challenge the Master's decision. If so, under what circumstances? We saw in the White Manta case that arbitration panels may question the Master's decision if it was deemed to be unreasonable. The general rule is that the Master is obligated to, and in fact owes a duty to the charterer, to act reasonably under the circumstances and arbitration panels have so confirmed, as demonstrated by the White Manta case. However, I will suggest that the Master's authority will not easily be challenged. There has to be clear evidence of the Master's unreasonableness, and just because he got it wrong does not mean that the charterer will be able to hold owners responsible for any extra time or expenses arising out of the Master's decision. One of my graduate students Just wrote a thesis paper in which he explored the historical and current roles of the ship's master. He was examining whether modern communications and related technology has in fact eroded the Master's shipboard authority in any meaningful way. It seems that while more and more decisions that use to be made directly on the vessel are now being made in the home office, the law still maintains a strong presumption in favor of the master's overall authority and responsibility. The law will seldom allow the second guessing of a Master's actions, by the shipowner or charterer, although it is possible as we have seen. Let's talk about hire. A recurring issue under a time charter party concerns the circumstances under which the vessel goes off hire and time charterers can withhold hire. Time charter parties typically contain an "off hire" clause that describes the circumstances under which hire stops. For example, the off hire clause in the ASBATIME charter party, which is a well recognized and standard time charter party for dry bulk vessels, states the following  "in the event of the loss of time from deficiency and / or default of officers or crew or deficiency of stores, fire breakdown of, or damages to the hull, machinery or equipment, grounding, detention by average accidents to ship or cargo, drydocking for the purposes of examination or painting bottom, or by any other similar cause preventing the full working of the vessel, the payment of hire and overtime, if any, shall cease for the time thereby lost. Should the vessel deviate or put back during the voyage, contrary to the orders and directions of charterers, for any reason other than accident of cargo, the hire is to be suspended from the time of her deviating or putting back until she is again in the same or equidistant position from the destination and the voyage resumed therefrom. All fuel used by the vessel while off hire shall be for owner's account, In the event the vessel being driven into port or anchorage through stress of weather, trading to shallow harbors or to rivers or ports with bars, any detention of the vessel and / or expenses resulting from such detention shall be for the charterer's account, If upon the voyage the speed be reduced by defect in or breakdown of any part of her hull, machinery or equipment, the time so lost, and the cost of any extra fuel consumed in consequence thereof, and all extra expenses shall be deducted from the hire" This, again, is just one example of an off hire clause and it is fairly comprehensive. However, it is not the only form of off hire clause. This is important because the most basic of all rules is that the time charterer has the legal burden of demonstrating that a cause exists for which it is capable of stopping the payment of hire. The presumption remains that hire is payable for each and every day that the vessel is under charter. If, however, the charterer can point to a specific event expressed in the charter party for which it is excused from the payment of hire, than hire stops for the duration of that event and all time thereby lost arising out of the event. Not all off hire clauses are the same. Not all events that cause a loss of time are "off hire" events. Let me give you an example. You will note that the ASBATIME off hire clause provides for the suspension of hire in the event of a "deficiency and / or default of officers and crew". Clearly, if there is not enough crew onboard such that the vessel cannot sail, or if the crew defaults, let's say refuses to work because of bad wage or working conditions, than the vessel will go off We for the time lost. The charterer will not have to pay hire for that time. Let's however vary the example. Some of you may be aware of an organization called the ITF, which stands for International Transport Workers Federation. This is an international labor organization that will target for labor unrest vessels that are flying so called flags of convenience, and whose owners are thereby allowed to employ crew from nations unrelated to that flag. The wage rates are often considered substandard. By way of example, the vessel might be flying the flag of Panama and have onboard a Philippine crew. If the ITF decides to target the vessel at a port, labor unrest may arise. The ITF may cause a disruption in the port as a protest against the owner's crewing and wage practices, For example, tugs and stevedores may not be made available to work the ship. The ship's crew is willing and able to work. Enough men are onboard. There is no crew default or deficiency, However, because of the ITF activity due to the vessel's flag, crew and wage conditions, the vessel loses time in port. Stevedores refuse to work. No tugs are made available. Who pays for this loss of time? Under the standard off hire clause, time charterers can only place the vessel off hire in the event of a default or deficiency in officers or crew. Well, that is not what happened here. There is no crew shortage or default. Thus, the charterers are really unable to place the vessel off hire. Hire would remain payable during the time lost due ITF activity. Charterers have not met the burden by pointing to an express off hire event in the c/p. To better protect themselves, the charterers would probably be best served by an amendment of the off hire clause, in which it is agreed that the vessel will maintain wages at certain approved ITF levels, and that if there is any time lost arising out of the shipowner's failure to do so, and ITF activity arises, that loss of time will be off hire. My point is simply this, Just because there is loss of time to the vessel, one cannot automatically assume there is an off hire. The language of the charter party expressly provides for off hire under certain specified events. The burden is on the charterer to prove the off hire event occurred. Thus, you will note that the off hire clause in the ASBATIME contains various and specific causes of off hire such as breakdown of the vessel, default of crew etc. However, it also contains a broader aspect to it, that is the words “or by any other similar cause preventing the full working of the vessel". What does that mean? Does that mean that any delay to the vessel that causes the full working of the vessel is an off hire event? The answer is no. This has been interpreted to mean that the vessel will go off hire for events that are "any other similar cause" that are similar to or ejusdem generis to the causes specifically enumerated in the off hire clause. In the case involving the Apollo, 1978 1 Lloyd's Rep, 200, the vessel was placed off hire when she underwent a disinfection. The crew had typhus. The Panel ruled that time lost due to the disinfection (even though disinfection was not expressly mentioned in the off hire clause) was an "any other cause preventing the full working of the vessel". Let me talk now about some interesting issues that might arise out of the voyage charter. Of course, under the voyage charter, the charterer pays freight. In exchange for the payment of freight, the carrier carries the cargo between ports and gives to the charterers an agreed amount of "laytime" in which the vessel must load and discharge the vessel at the load and discharge ports respectively. The amount of laytime is agreed to in advance by the parties, It is negotiated into the contract. If the laytime is exceeded, than, of course, the voyage charterers must pay additional compensation to the vessel. That compensation is called "demurrage". An issue that often arises is when does laytime commence? How close to the port, or dock, at which the vessel will be asked to load or discharge, must the vessel reach before she can tender a Notice of Readiness and commence the running of laytime? Suppose the vessel cannot berth immediately upon her arrival at the port because of port congestion. Who pays for the loss of time? Is this time awaiting berth part of the laytime? Or does the vessel await the berth on her time? A leading case today, is the M.V. POLYFREEDOM, which can be read at 1975 AMC 1826. The POLYFREEDOM was trading under a voyage charter. She had loaded a grain cargo in the US for discharge at Rotterdam. She was unable to berth immediately at Rotterdam because of port congestion. She was ordered to anchor off of the Hook of Holland, which is outside of the legal, fiscal or geographic limits of the discharge port, In fact, the anchorage was in the North Sea. That is where she waited for her berth. The vessel anchored outside at an anchorage recommended for vessels waiting for berths at Rotterdam, She was at a great distance from the berth. The pilots for Rotterdam kept track of the arrival and departure of vessels there. Could this vessel commence laytime? Was the ocean voyage over? Must the vessel get within the port limits or to the berth to commence the laytime, as charterers contended. Who pays for the time Polyfreedom spent at the anchorage awaiting berth? In this case, the charterer unsuccessfully argued that the vessel had to reach a point somewhere within the limits of the port in order to tender a valid notice and commence the laytime. The majority of the Panel ruled that POLYFREEDOM was an arrived ship at the anchorage off of the port and that the "peculiarities of the port limits of Rotterdam cannot be allowed to become a tool by the charterers to frustrate their contractual obligations". The Panel also explained the now familiar test for an arrived ship under US law: "... if a vessel has reached a point as close as she may reasonably arrive to the designated discharge berth, and can prove that it was not possible or practical to get nearer, then the physical and geographic location of the waiting point (provided that it is in the usual waiting area) is of no importance." There are many cases on this subject. Commencement of laytime is an important and recurring issue. Ships seldom berth immediately upon arrival at a port. There is congestion, delays due weather, among other causes. The question is always the same. Does the ship wait for the berth on shipowners time, or can laytime start and the vessel wait for her berth on charterer's time? An entire book has been written on this subject, called Commencement of Laytime and published in the UK. The charter party will also contain clauses that describe the circumstances under which laytime stops, once it has commenced. There are inevitable delays to vessels in port. For example, when I worked onboard ship years ago, I was often in ports in the US Gulf of Mexico at which the vessel was loading grain cargoes. It would routinely rain for a few hours, than stop, and than start again. We would have to close and than reopen the hatches to protect the cargo. In other words, there was delay in port due weather. Who pays for this loss of time? Is the time that the vessel lost due bad weather part of the allowed laytime? Or does time stop? In other words, is loss of time due bad weather for the owner's account (laytime stops) or for voyage charterer's account (laytime runs.) Well, that depends upon the language of the voyage charter, Some charter parties are fixed such that laytime runs only during "weather working days", in other words, time stops if the vessel cannot work due bad weather. However, the charter party may have been fixed such that time runs continuously, and is not stopped by inclement weather. Stoppage of laytime is also a subject that can consume this entire lecture, if not more, However, I just want you to understand that the stoppage of laytime is often a question that needs to be resolved by arbitration panels as there are a million reasons why a vessel is delayed once in the port and after laytime commences. The charter party's terms may very well have to be interpreted to decide who must bear the loss of time. Let me give you an example. Let's talk about strikes. As one can appreciate, strikes routinely occur in ports throughout the world. Some ports are more prone to strikes than others. Again, who pays for this loss of time9 It all depends upon the language of the charter. A few minutes ago I spoke about ITF activity, crew strikes, etc. as it related to hire. That is a different issue. If there is a crew strike, hire stops. ITF activity will usually require an ITF clause for there to be an off hire. Under a voyage charter, the strike clause exists to deal with the issue of laytime. A charter party's strike clause may read as follows: “... or if the cargo cannot be discharged by reason of riots, civil commissions, or of a strike or lockout of any class of workmen essential to the discharge, the time for loading or discharging as the case may be shall not count during the continuance of such causes, unless the vessel is already on demurrage, provided that the strike or lockout of Shippers and/or Receivers' men shall not prevent demurrage accruing if by the use of reasonable diligence they could have obtained other suitable labor at rates current before the strike or lockout. In case of any delay by reason of the before mentioned causes, no claim for damages or demurrage shall be made by charterers or receivers of the cargo or owners of the vessel. For the purpose however of settling despatch rebate accounts, any time lost by the vessel through any of the above causes shall be counted as time used in loading, or discharging, as the case may be". The first question that may arise is whether there was a strike. There may be a loss of time to the vessel due labor unrest. However, is it a strike that caused it? For example, there was one case in which stevedores refused to work because they were celebrating the birthday of a popular labor leader. Time was lost to the vessel. However, this was not a strike. Laytime ran even though charterers could not work the vessel. The classic definition of the term "strike" within the meaning of a charter party's strike clause, and as it applies to laytime, was made by Lord Denning in the case The New Horizon, (1975) 2 Lloyd's Rep. 314. Lord Denning stated: "I think a strike is a concerted stoppage of work by men done with a view to improving their wages and conditions, or giving vent to a grievance or making a protest about something or other, or supporting or sympathizing with other workmen in such an endeavor, It is distinct from a stoppage which is brought about by an external event such as a bomb scare or by apprehension of danger," Arbitrators in this country are in agreement. There must be a commercial motivation behind the withholding of labor. Thus, a strike exists if men withheld their labor for purposes of improving their working conditions. Suppose, however, there is not a complete stoppage of work. The stevedoring labor, as a protest, engage in a "go slow or work to rule". In other words, they slow work down to a virtual standstill, but do not stop completely. Is this a strike? Who pays for this loss of time? Owners and charterers may have a difference of opinion as to the question of whether a "go slow action" is a strike within the meaning of the charter party's strike clause. It is noteworthy that the authorities that have addressed this issue are not only somewhat limited in number, but are split in their views. A leading text entitled Voyage Charters, by Cooke, Kimball, Martowski, and published by Lloyd's of London Press, 1993, expresses the opinion that there are no valid reasons why a go slow or work to rule should not be considered a strike for purposes of stoppage of laytime. It says; "It may be concluded, therefore, that the concerted effort of a group of people to withdraw their labor and cease working for any part of a day, in order to claim or demand improvement in wages or conditions, or to support any grievance, can amount to a strike, What is unclear, from the above formulation, is whether a "go slow" or work to rule, where work at no time ceases but is performed less efficiently, is nevertheless within this definition of strike or lockout. It is submitted that the distinction between a cessation of work, even if for part only of a day and working to rule, albeit the work continues for 24 hours in a day, is in the modern context somewhat artificial, The purpose of a go slow, within the terms of a dockworkers contract of employment, is to cause maximum disruption and delay while at the same time giving vent to a grievance, Save for the symbolic act of withdrawing labor, the action is for all intents and purpose a strike." A NY arbitration panel in the matter of the Rio Blanco, SMA 1791 expressed its opinion on the interpretation of the strike clause. The issue in that case did not involve application of the strike clause to a "go slow strike" or work to rule. The Panel in that case was asked to determine whether a political boycott was covered by the strike clause. The Panel, nonetheless, opined that strikes come in many different varieties so long as the root purpose of the action is to improve labor conditions. It said "There is no question that strikes occur in many forms such as slow downs, and partial strikes and total strikes, economic, general and jurisdictional strikes, secondary strikes, sit down, sympathy and wildcat strikes..." At least one other commentator has taken an opposite view. The author of the text Laytime and Demurrage (Schofield: Lloyd's of London Press, 1996), writes about the impact of a go slow and states that: "there can be no doubt that such action does amount to time lost by an employment dispute, it is perhaps doubtful whether the time so lost could also be referred to as time lost due to a strike, It is suggested that to come within the term "strike", there must be a cessation of work, although this need not be continuous, nor is there need for it to be the whole of each day. It might however, be excepted where the exclusion clause covers not only strikes but any other cause outside the control of charterer's as well." I disagree with Schofield. Is his approach commercially reasonable? The charter party's strike clause has the purpose of protecting against loss of time due to unexpected labor grievances. It should make no difference whether that grievance is expressed by labor's complete withholding of services or by the partial withholding of services. The impact is the same, After all, should an entire layday be counted if, by way of example, only 5 tons were actually discharged during any given 24 hour day? That seems patently unfair. What do you think?