OUR KNOWLEDGE / PUBLICATIONS / HEAVY LIFT CARGOES - CONTRACTUAL ISSUES AND RISK ALLOCATION

In May 2009, the International Council of Heavy Lift and Project Cargo Carriers (the “Heavy Lift Club”) was established in order to create a forum for exchanging ideas on industry issues that interest and concern carriers operating in the heavy lift and project cargo sector. The creation of the Heavy Lift Club reflected the concern by major players in this specialised area that technical, operational and safety considerations relating to their market were not always properly understood.

Apart from the practical considerations that arise in relation to heavy lift cargoes, there are also diverse contractual needs in the heavy lift sector that need to be met. To assist those entering into charterparty contracts for heavy lift cargoes in identifying suitable terms to govern their contracts of carriage, BIMCO has produced two heavy lift forms, which are both classed as special voyage charter parties for the heavy lift trade. However, there are significant differences in their application and use.

One primary difference is the applicable liability regime and whether the form incorporates a knock-for-knock regime or the Hague/Hague-Visby Rules. Under a knock-for-knock contract, each contracting party bears the responsibility for its own personnel and property without recourse to its counterparty, irrespective of fault. By contrast, the Hague/Hague-Visby Rules impose on the carrier an obligation to exercise due diligence to provide a seaworthy vessel and to properly carry, keep and care for the cargo.

HEAVYCON 2007

BIMCO's HEAVYCON 2007 voyage charterparty form is a re-issued and revised version of the original 1985 form and is accompanied by its own bill of lading. It is a knock-for-knock contract designed primarily for use by semi-submersible vessels in the super-heavy lift (float-on/float off) market where cargoes are almost always loaded on deck and are usually sole cargoes. The HEAVYCON terms are flexible in that they cover a variety of loading and discharging methods as well as single or multiple loading and discharging ports.

Whilst the HEAVYCON is also used to a certain extent in the midsized (lift-on/lift-off and roll-on/roll-off) sector, it is less appropriate for that market. This is partly due to the fact that its knock-for-knock liability regime is considered unsuited to cargo in the midsized sector, which is often split 50/50 between cargo carried both on and below deck. Such conventional cargo is generally more suited to the Hague/Hague-Visby Rules regime. As a result, BIMCO developed the HEAVYLIFTVOY.

HEAVYLIFTVOY

The HEAVYLIFTVOY form was adopted by BIMCO in early 2007. Whilst it was originally developed from the BIMCO CONLINEBOOKING Note and was intended to create a booking note for the heavy-lift industry, its provisions were ultimately expanded beyond liner terms and the result was a specialist voyage charter rather than a booking note.

HEAVYLIFTVOY operates on the basis of the Hague / Hague-Visby Rules liability regime and is designed for multiple shipments both above and below deck. A standard bill of lading was also issued to accompany the HEAVYLIFTVOY form. Among the many comprehensive clauses in the HEAVYLIFTVOY form, standards have been set for the cargo in respect of its fitness to be transported, how it should be marked and how it should be lifted (i.e. lifting points / centres of gravity). Provision has also been made for the carrier to have the option of requesting transport drawings for items of sizeable physical dimensions.

Issuing bills of lading

Whilst both the HEAVYCON and the HEAVYLIFTVOY forms are intended to be used in conjunction with their specifically drafted bills of lading, certain issues may nonetheless arise. For example, the HEAVYLIFTVOY envisages that a different form of bill of lading may be used and incorporates a standard indemnity provision to protect the carrier in cases where a different and more onerous bill of lading is issued than the HAEVYVOYBILL. Furthermore, where the Hague/Hague-Visby Rules apply to the bill of lading and the cargo in question is damaged, the carrier may argue package limitation. In circumstance where the cargo is a sole or entire cargo, the amount of damages recoverable may then depend on whether the cargo in question has been described in the bill of lading as a single package or unit or whether its weight has been recorded.

Minimising risk

Shipowners should review their Safety Management Systems and perform a risk assessment before any heavy lifting operations are undertaken. It is important that lifting operations for heavy cargo are planned properly. The detailed planning should be done jointly by the shipper's representative, a cargo superintendent and the carrier's surveyor. Detailed information should be provided in relation to the cargo, including a description of the cargo, its gross weight and its principal dimensions (including drawings where appropriate). Where appropriate, vital information such as gross weight and centre of gravity should be marked individually on each unit so that it is clearly visible to the crew and stevedores. There should also be a careful assessment of the arrangements at both the load and discharge ports.

Voyage details, including the weather forecasts and worst case scenarios for stability conditions should also be studied to promote safe conditions throughout the voyage. The lashing material should be checked to confirm that it is appropriate in strength and design for the cargo being secured. The crew should also be alerted to the need to halt any lifting operations in respect of which they have safety concerns.

The vessel's cargo-handling equipment (including its on-board cranes) and the cargo spaces should be checked to verify their adequacy. It may be necessary to consult with the vessel's classification society and flag state to confirm this, particularly where the vessel may need to be modified in any way that requires class approval. The vessel's Cargo Securing Manual and the IMO's Code of Safe Practice for Cargo Stowage and Securing should also be consulted. Where a vessel regularly carries heavy lift cargoes, it may be useful to prepare a standard checklist for loading and discharging such cargoes which can be incorporated into the vessel's Cargo Securing Manual.

Finally, ensuring that the loading and discharging of heavy lift cargoes is conducted only during daylight and in suitable weather conditions should minimise the type of risks that arise where heavy lifts are handled during the night. One way of ensuring that this is done is to incorporate suitably drafted provisions in the charterparty.

Faz Peermohamed
Partner, London
faz.peermohamed@incelaw.com

Fionna Gavin
Partner, London
fionna.gavin@incelaw.com