Glossary of Maritime Law Terms, 2Nd Ed., 2004

Glossary of Maritime Law Terms, 2nd Ed., 2004

By William Tetley, Q.C.

Charter Parties

Charterparty [Fr.:"charte-partie"] [Span.: "fletamento"] [Ital.: "noleggio"] [Gr.: "Chartervertrag"] - A charterparty is a contract of lease of a ship in whole or in part for a long or short period of time or for a particular voyage. It has been said that its origin lies in the mediaeval Latin "carta partita" or "charta partita" or "chartadivisa", where an agreement was torn into two pieces and one half was given to each party. Proof of the whole contract was no doubt difficult if one party was obstinate - modern methods of photocopying the contract for each party seem preferable. A charterparty is part contract of hire (affreightment (supra)) and part contract of transport (carriage). The proportion of "affreightment" decreases as one moves from a demise charter, to a time charter and then to a voyage charter, while the proportion of "carriage" increases from a demise charter through a time charter to a voyage charter. Affreightment is essentially placing a ship at the disposal of another party, while transport is essentially the carrier (supra) taking charge of goods. Hire (infra) is the consideration paid under demise and time charterparties; freight (infra) is the consideration paid under voyage charterparties and bills of lading (supra).

a) Charterparty by demise [Fr.: "contratd'affrètementcoque-nue"] [Span.: "fletamento (arrendamiento) con cesión de la gestiónnáutica"] [Ital.: "noleggio con cessionedellagestionenautica"] [Gr.: "Chartervertragfürein Schiff ohneBesatzung"] - A charterparty by demise is a contract by which the lessor (shipowner) places a ship in the hands of the lessee (the demise charterer) who assumes possession and control. The consideration paid by the charterer is "hire" (infra), which is payable at specified intervals during the term of the charter. Under a demise charterparty, the shipowner appoints the master and the crew, although they are paid and controlled by the demise charterer. See Tetley, Int'l. M. & A. L., 2003 at pp. 160-172.

A bareboat charter (also sometimes called a "net charter") is a demise charter whereby the bareboat charterer names, pays and controls the master and the crew. See Tetley, Int'l C. of L., 1994 at pp. 249-250.

Among the most common forms of demise charter are the "Baltic and International Maritime Council Standard Bareboat Charter" (Code Name: "Barecon '89"); and the "BIMCO Standard Charter" (Code Name: "Barecon 2001") forms of BIMCO and the SHELLDEMISE form of demise charterparty. Barecon 2001 is reproduced in Tetley, Int'l M. & A. L., 2003, Appendix "U" at pp. 887-898.

b) Consecutive voyage charter [Fr.: "contratd'affrètement pour voyages successifs"] [Span.: "fletamentoporviajesconsecutivos"] [Ital.: "noleggio per viaggiconsecutivi"] [Gr.: "FortlaufendeReisecharter"] - A consecutive voyage charter party is a voyage charterparty for a determined number of consecutive voyages.

c) Slot charter - A charterparty whereby the shipper (infra) leases one or more "slots," each capable of holding a 20-foot container, aboard a container ship.

d) Space charter [Fr.: "contrat de tonnage"] [Span.: "COA"] [Ital.: "contratto di trasporto di caricoparziale"] [Gr.: "Raumchartervertrag"] - A space charter, or a "contrat de tonnage" as it is known in French (sometimes confusingly called a "contract of affreightment" (COA) in English), depends, like any contract, on its terms. It can resemble a charterparty (i.e. a lease of a ship or ships) or a contract of carriage. It is a contract whereby a capacity of carriage is put at the disposal of the shipper (infra) for the carriage of his goods during a period of time under particular terms and conditions. Whether it is a contract of hire or a contract of carriage or even a contract of agency like a freight forwarder's (infra) contract, depends on its terms. (For charterparties under law, Tetley, Int'l. C. of L., 1994 at pp. 247-252).

e) Time charterparty [Fr.: "contratd'affrètement à temps"] [Span.: "contrato de fletamentoportiempo"] [Ital.: "noleggio a tempo"] [Gr.: "Zeitchartervertrag"] - A time charterparty is a contract whereby the lessor (the shipowner or demise charterer) places a fully equipped and manned ship at the disposal of the lessee (the time charterer) for a period of time for a consideration called "hire" (infra) payable at specified intervals during the term of the charter. Among the most common forms of time charterparty are the New York Produce Exchange (NYPE) and NYPE '93 forms, issued by the Association of Ship Brokers and Agents (U.S.A.) Inc., the "BIMCO Uniform Time-Charter (As Revised 2001)" (Code Name: "Baltime 1939") form of BIMCO and SHELLTIME. See NYPE '93 reproduced in Tetley, Int'l M. & A. L, 2003 Appendix "T", at pp. 875-886, and Baltime 1939 (Revised 2001), reproduced (ibid.), Appendix "S", at pp. 869-873. A "time charter for a trip" is a time charter for a particular voyage or voyages, rather than for a period of years, days or months, with hire (infra) payments made at periodic intervals (as under a time charterparty), rather than "freight" (infra) being payable, at the completion of the voyage, on the quantity of cargo carried (as under a voyage charterparty). See Tetley, Int'l. M. & A. L., 2003 at pp. 145-159.

f) Voyage charterparty [Fr.: "contratd'affrètement au voyage"] [Span.: "contrato de fletamentoporviaje"] [Ital.: "noleggio a viaggio"] [Gr.: "Reisechartervertrag"] - A voyage charterparty is a contract whereby the lessor (the shipowner or demise or time charterer) places all or part of the carrying capacity of a ship at the disposal of the lessee (the voyage charterer) for the transport of goods agreed upon, on one or more voyages, for a consideration called "freight" (infra), based on the quantity of cargo carried and is payable as provided for in the charterparty. Among the most commonly used forms of voyage charterparty are the "Asbatankvoy" form of tanker charter of the Association of Ship Brokers and Agents (U.S.A.) Inc., and the "Baltic and International Maritime Council Uniform General Charter (As Revised 1922, 1976 and 1994)" (Code Name: "Genneo") form of BIMCO. See Tetley, Int'l. M. & A. L., 2003 at pp. 134-144 and the Gencon form, reproduced (ibid.), Appendix "R" at pp. 865-868. .