Given the ongoing spread of the Covid-19 (Coronavirus), where on Wednesday March 11th, 2020 the WHO Director-General’s declared the outbreak as a pandemic, we wish to highlight a number of issues and considerations that will concern Shipowners and Charterers in this context.
We believe it is useful and vital to continue to inform and educate both seafarers and staff ashore on the virus itself, i.e. provide specific information on the virus itself and offer insight on the precautions that should be taken to minimize risks to seafarers, passengers and others on board ships. For that purpose, useful advice can be found on the P&I Club websites but also directly from relevant institutions such as World Health Organization (WHO), the International Maritime Organization (IMO) or for instance the Johns Hopkins University (JHU). Please herewith see the following links
WHO: Coronavirus disease (COVID-19) outbreak
- CDC: Coronavirus Disease 2019 (COVID-19)
- ECDC: COVID-19
- Johns Hopkins: Status update on spread of COVID-19 worldwide
- Steamship Mutual https://www.steamshipmutual.com/publications/Articles/coronavirus012020.htm
- Britannia https://britanniapandi.com/focus/novel-coronavirus/
- Shipowners Club https://www.shipownersclub.com/novel-coronavirus-2019-ncov/
- UK Club https://www.ukpandi.com/knowledge-publications/industry-issues/industry-developments/coronavirus-outbreak-2020/
- GARD http://www.gard.no/web/updates/content/29112071/coronavirus-implications-for-ships-and-crew
We also believe that it is important to highlight the issues that the Coronavirus outbreak may have for both owners and Charterers on the commercial operation of a vessel, as governed by the contractual arrangements that are in place. In other words we wish to highlight Charter Party concerns such as the question of whether an owner can refuse orders to call a port (for instance on the grounds of unsafe port) where there has been an outbreak or where his vessel might be arrested or quarantined. Equally a Charterer might find himself in a position where he considers putting the chartered vessel off-hire if same is severely delayed or quarantined. What are the implications, rights or obligations under the underlying charter party if a crew member has been tested positively for COVID-19? Due to the fact that circumstances and the individual clauses of charter parties vary from case to case, it is highly advisable that shipowners and Charterers first consult with their legal advisors, P&I or Charterer’s Liability insurers before acting (e.g. refusal of calling a port or serving an off-hire notice). Atlantic’s claims company St. Clement will also be able to offer valuable advice, if so desired.
Finally, we wish to touch upon what P&I Clubs will cover when it comes to cover aspect. Generally spoken, and we must naturally remind readers that test of cover always depends on the facts and circumstances of the particular case, the Clubs will cover.
Owners’ Liability P&I
Although there will be some differences between the 13 Clubs of the International Club, most Clubs will cover additional costs and expenses incurred with occasion of the outbreak of any infectious or contagious disease, such as (1) the disinfection of any Insured Vessel, (2) the fuel consumed or towage expenses when being order to or from a specific location, (3) direct expenses from the deviation to a port or place of refuge and the resuming of the Voyage. Furthermore, if a crew member falls ill then the medical, hospital, repatriation and other reasonably incurred expenses by reason of the illness will be covered. Allow us to stress that the Clubs’ cover might extend to cover a number of other scenarios but again same will depend on the particular circumstance.
The cover afforded by the Clubs for Charterers is in line with the one offered to owners, being applicable on the basis that Charterers could be held liable for any of the above described quarantine Expenses.