Changes

BORCO denied Owners’ entitlement to limit their liability, on the ground that they had waived their right to do so under a contract for the use of the berth, which the parties had agreed immediately before the vessel’s berthing operation. The contract was contained in or evidenced by a document called “Conditions of Use” which was signed by the Master.

“1. … In all circumstances the Master of any vessel shall remain solely responsible on behalf of his owners for the safety and proper navigation of his vessel …

The Board noted that BORCO’s case primarily depended on clause 4 of the Conditions of Use. Where there was, as in this case, no dispute as to the relevant principles, the question was essentially the construction of the clause.

As the Board accepted, the object of construing a contract is to identify the parties’ objective intention by reference to the language used, the factual background which was known or ought to have been known to both parties and the commercial purpose of the contract.

The presentation of conditions of use by ports and terminals is becoming more common and represents a major risk to owners, charterers and their P&I clubs.

As P&I clubs often cover owners and charterers on the condition that the right to limit liability is not compromised, care needs to be taken in accepting conditions of use.