With coronavirus crisis in China spreading ahead, shipping industry must be ready to face a possible infection of crewmembers, considering quarantine and closures, while be prepared for charterparty issues. In light of the situation, Hill Dickinson law firm outlined major issues that shipowners may have to deal with, based on previous outbreaks such as SARS and Ebola.
“While this outbreak is not currently anticipated to cause the global complications experienced by the Ebola and Sars outbreaks, it is wise for ship operators and charterers to be prepared for any greater spread of this virus” said Beth Bradley, a partner with law firm Hill Dickinson.
In case that a crewmember is affected by the coronavirus, increases the possibility of quarantine for the entire crew and the ship as well.
Under charterparties, if a ship is delayed by quarantined of forced to diverge due to an infected crewmember onboard, the vessel can be placed off hire, depending on the wording of the charter party agreement.
Common wordings of charterparties have been held to place the vessel off-hire due to legal or administrative restraints if they related to the efficiency or condition of the vessel or crew. In spite of this, should the delay be the inevitable result of orders resulting from how the charterers chose to employ the vessel, the vessel may remain on hire.
… Beth Bradley continued.
As Hill Dickinson further explained, under a voyage charter, any deviation to ensure crew’s safety, will be at the shipowners expense while no additional freight will be payable unless a “reasonable deviation” defense can be raised under the Hague or Hague-Visby rules.
Since such disease can make a port legally unsafe, safety measures must be taken in order ports to stay safe. For the records, such measures were taken during both the Ebola and MERS outbreaks, with several ports remain open despite being affected.
At present, the Wuhan virus is not at a stage where it may render a port unsafe, and the severity of the outbreak would need to escalate significantly before owners could reasonably refuse to call at scheduled or nominated ports on the basis of the ports being unsafe.
…the law firm said.
In case the contract is suspended by an extraordinary event beyond the parties’ reasonable control, there is no possibility of a “Force Majeure” clause.
At this time, there have only been internal transport bans affecting certain Chinese cities around the centre of the outbreak. There has not yet been a travel ban to China or any other neighbouring countries. It is unlikely that any given situation will fall within the scope of a force majeure clause, unless the wording of a particular clause is quite broadly drafted.
…John Agapitos, Hill Dickinson paralegal highlighted.
If coronavirus escalates in the future and travel bans are imposed, questions of whether it amounts to a force majeure event may come to the spotlight.
Recently, the International Transport of Workers’ Federation issued advice on the virus, recommending steps and actions to be taken so that seafarers are protected.