E.G. Arghyrakis & Co  
  Commercial law firm  
Ebola Virus Disease | Impact for Shipping   15 September 2014  
Can owners receive protection under war risk clauses?

Since the release of our first article on Ebola Disease Virus the disease has spread even further and Nigeria has confirmed its first EDV death outside Lagos – at the port of Harcourt1. As the outbreak of the virus is still ongoing and both charterers and owners revisit the provisions of existing charterparties, we have been asked an interesting question:

whether war risk provisions such as the VOYWAR and CONWARTIME, issued by BIMCO, might assist the parties, particularly if a port is blockaded due to a disease, or a blockade is imposed at a port on vessels previously calling at affected ports.

Disease and war present similar features in the sense that they both represent a kind of peril which will have to be assessed by the master fairly and reasonably. War risk clauses are designed to address the conflict between the charterer's right to give directions regarding the employment of the vessel and the responsibility of the owner and the master to avoid exposing the ship, the crew and the cargo to war risks2.

According to the CONWARTIME and VOYWAR 2013 clauses war risks:

shall include any actual, threatened or reportedwar, act of war, civil war or hostilities; revolution; rebellion; civil commotion; warlike operations; laying of mines; acts of piracy and/or violent robbery and/or capture/seizure (hereinafter “Piracy”); acts of terrorists; acts of hostility or malicious damage; blockades (whether imposed against all vessels or imposed selectively against vessels of certain flags or ownership, or against certain cargoes or crews or otherwise howsoever), by any person, body, terrorist or political group, or the government of any state or territory whether recognised or not, which, in the reasonable judgement of the Master and/or the Owners, may be dangerous or may become dangerous to the Vessel, cargo, crew or other persons on board the Vessel.

CONWARTIME and VOYMAR clauses provide a platform on which parties can operate in the event of war risk. Under such circumstances there may be a right of cancellation of the contract3 or refusal to perform4. It is noteworthy that, as far as time charters are concerned, the right of refusal to proceed to a certain port is available even if the risk existed prior to the conclusion of the charter5. If the owners refuse to call at the loading or discharging ports, they should immediately notify the charterers6. In the case of voyage charters there is also a set a scheme and timetable for alternative orders7.

Whilst standard war risk clauses are widely drafted so as to include a range of factual scenarios, it cannot be safely asserted that their application may be extended to situations where vessels are ordered to call at disease infected ports. There is no indication that those responsible for drafting the standard war risk clauses intended them to be applicable in cases other than warlike situations. Moreover, the case law relating to the construction and application of war risk clauses is until today strictly related to hostile acts or the risk of such acts. The meaning of war as determined by courts leaves no room for an inference that situations such as that of the EDV may fall within its scope.

In Spinney's8, the leading case on the definition of war, the court found that in considering whether a state of war exists, attention must be paid to the following factors:

  • Whether there is a fighting or conflict between recognisable opposing sides who, have territorial, political or other identifiable objectives
  • The scale of the conflict and its impact on local public order

The Government of Spain v North of England Steamship Company Ltd9, a case regarding the meaning of blockade, is also related to a situation of conflict10.

What is missing in the case of EDV is this element of hostility which is present in situations covered by war risk situations and it is therefore arguable that cases of disease infected ports do not fall within the spirit of war risk clauses. It is thus unclear whether tribunals and courts will choose to widen the meaning of war and potentially blockade so as to cover factual scenarios such as that of the EDV.

In light of the above, it would not seem safe for a Master to rely on such clauses at the time of decision making. It is also advisable that parties currently negotiating agreements for the carriage of goods to West African ports, ensure that the contract incorporates a clause specifically drafted to cover the situation of EDV. The provisions of war risk clauses could provide framework for the purposes of drafting an Ebola Virus Disease clause.

Written by Louise Glover and Angeliki Georgouli

This article is a summary of the law and is produced for the benefit of clients. It is general in nature and does not purport to be comprehensive or to give specific legal advice. Before action is taken on matters covered by this article, reference should be made to the appropriate adviser.

1http://www.bbc.co.uk/news/world-africa-28966258 - page last visited on 28/08/2014
2See for example CONWARTIME 2013, VOYWAR 2013, BEEPEETIME 3, BEEPEEVOY 4
3e.g. VOYMAR 2013 and also SHELLTIME 4
4VOYMAR 2013 and CONWARTIME 2013
7VOYMAR 2013
8Spinney's (1948) Ltd v Royal Ins Co Ltd [1980] 1 Lloyd's Rep 406 which is  the leading case for the definition of war; see also Government of Spain v North of England Steamship Company Limited (May 3rd June 1938 – King's Bench) for the meaning of blockade.
9Government of Spain v North of England Steamship Company Limited (May 3rd June 1938 – King's Bench)
10i.e. the Spanish civil war

< Back to News