North of England P&I club warns shipowners
to avoid Rightship charterparty clauses

16 April 2009

The ‘A' rated, 95 million GT North of England P&I club has advised shipowners and charterers to avoid using charterparty clauses that require ships to be ‘approved' by independent ship vetting specialist RightShip. The warning is given in the latest issue of the club's loss-prevention newsletter Signals.

‘RightShip is an independent ship vetting specialist that presents subscribers with a rating of a vessel's suitability for a particular task on a particular date,' says North's head of loss prevention, Tony Baker. ‘However, charterparty clauses that oblige owners to have a vessel "RightShip approved" on delivery - and to maintain such approval throughout the period of the charterparty - can give rise to disputes and problems of interpretation.'

According to the club, the problems stem from the fact that RightShip approvals are specific to the time they are given, and are given to a particular customer of RightShip subject to that customer's confidential requirements. ‘It therefore cannot properly be said that a ship has RightShip approval at any other time,' says Baker.

RightShip approvals are also not time limited and nor do they have a particular period of validity. As such the North says it is not really within the power of an owner to maintain such an approval throughout the period of a charterparty.

Baker points out that the position is further complicated if say, on a given day, a ship is approved for a RightShip customer with one set of requirements but not for another customer with a different set of requirements. ‘Is that ship RightShip approved or not? As there is no decided law on the point, it is impossible to say.'

Until the legal position becomes clearer, North is advising its shipowner and charterer members to avoid charterparty clauses requiring a ship to have or obtain RightShip approval. ‘Their effect is currently unclear and they are likely to give rise to disputes that may be difficult and expensive to resolve,' says Baker.

North of England P&I Association, press release