Right from the inception of free markets in the world, the historical motto of Laissez-faire has been the guiding light to individuals wishing to enter into a contract. The individuals who contract often seek to exploit the leniencies granted in law by the term, which is often simplified to mean, freedom of contract. A Liberty clause, the understanding of which is of utmost significance to this essay, is one such prodigy of the free markets.
Liberty clauses are often included in the Charter Party [hereinafter, “C/P”] for the purpose of allowing the Carrier or the Ship-owner to depart from the route which the ship would be obliged to follow in the normal course of the voyage. A Liberty clause may be, as short and precise as a Gencon Deviation Clause [hereinafter, “GENCON”] or as wide and elaborate as the Vegoilvoy standard deviation clause. It is therefore the relevant commercial background governing a particular voyage that influences the draftsman to carve the best-suited clause to fit in the C/P appropriately and escape the application of The Hague Visby rules or Common law.
In order to illustrate on the effect of a liberty clause, we shall consider the, very short yet general, GENCON which confers, amongst other liberties, the liberty to “to call at any ports in any order”. The meaning of this phrase was considered in Leduc v. Ward where the ambit of the GENCON was held not to allow a call at Glasgow on a voyage from Fiume to Dunkirk. Lord Esher, clarifying on the scope of application of GENCON to Leduc , interpreted that the order encompassed by the GENCON ought to be understood to include only such ports substantially on the course of voyage in their geographical order. In a later decision, in Glynn v. Margetson , it was further clarified that the order in which the ports are visited must be a natural and reasonable one, although not necessarily in strict geographical rotation.
The judgement in Glynn v. Margetson is particularly important for the purpose of this discussion, to understand the interpretation as provided in the case, which purports that the ports intended by the liberty are those which it is usual to call at as a matter of the carrier’s general business practice, it is submitted that the correct view is that any port which is substantially on the way may be visited without regard to the usual ports of call . The holding in Glynn v. Margetson, has since been followed in later cases, even as late as in The Nour , wherein a vessel under a part charter for a voyage from Callao to Taiwan was not permitted, under a similar clause, to proceed to ports in central Chile, more than 1,500 miles south of Callao, to load further cargo.
Nevertheless, one may often encounter clauses wherein more liberties, than those conferred by the GENCON, are included. These clauses however, need to be interpreted by considering the implication of the prolixity in the words against the commercial groundings of the contract as a whole . In seeking to reconcile the provisions of a liberty clause with the main object of the contract, the correct approach is not to reject entirely the provisions which, literally construed, could offend against the main object, but to read the clause as being subject to an implied limitation that it will only be relied upon by the carrier to such an extent as is consistent with the main object.
In considering the construction of the various liberty clauses, a distinction should be drawn as not to attract the application of the doctrine of deviation in a contract for the carriage of goods by sea. Deviation, in the law of carriage of goods by sea, means the voluntary and unjustified departure of a ship from her agreed route . Deviation, however minor or harmless it may be , is treated as a breach of contract which has special consequences. Historically, the courts had approached the concept of deviation as an act constituting a fundamental breach of contract. However, the doctrine of fundamental breach, in as much as the application to a case of deviation, was discarded by the House of Lords in Suisse Atlantique and Photo Production v. Securicor .
The rules of deviation under common law, post the decision in Photo Production are not, consequently, as important as they once were and in addition, to the permissible deviations under common law, the Hague-Visby Rules permit carriers to make reasonable deviations One cannot, however, completely jettison the applicability of the doctrine of fundamental breach in re deviation and it is therefore a question of facts in each case that would determine whether the exercise of liberties, though conferred by the respective liberty clause, may constitute deviation and thereby constitute a breach of the contract. On this view, the loss or damage resultant from deviation would continue to be recoverable and the application of any liberty clause, after a deviation, would thereby depend on a proper interpretation of the contract.
[1] Leduc v. Ward, (1888) 20 Q.B.D. 475.
[1] Ibid
[1] Glynn v. Margetson, [1893] A.C. 351 per Lord Herschell, at p. 356, on the meaning of “in any rotation”
[1] Ibid
[1] See also U.S. Shipping Board v. Bunge, (1926) 42 T.L.R. 174; White v. Granada, (1896) 13 T.L.R. 1.
[1] Supra n.3
[1] Islamic Investment v. Transorient Shipping (The Nour), [1999] 1 Lloyd’s Rep.1.
[1] Julian Cooke and Ors., Voyage Charters, (London, Informa, 2007, 3rd Edn.) at p. 259
[1] Martin Dockray, Deviation: a doctrine all at sea?, [2000] LMCLQ 76
[1] Hain Steamship v. Tate & Lyle, [1936] 2 All E.R. 597
[1] Suisse Atlantique Soc. d’Armement Maritime SA v. N.V.Rotterdamische Kolen Centrale, [1967] 1 A.C. 361.
[1] Photo Production v. Securicor, [1980] A.C. 827.
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