The coastguard contract : A time charter pary where the Master is employed by the charterer

Abstract

"…there is all the difference between the contract which a man makes when he hires a boat in which to row himself about and the contract he makes with a boatman that he shall take him for a row."

Mackinnon L.J. in Sea and Land Securities v. William Dickinson (1942)

The Norwegian Coastguard has, since its establishment in 1977, operated both governmental owned vessels and vessels chartered into service from private shipowners. Traditionally the chartered vessels had been older fishing vessels or offshore supply vessels, but in the beginning of this century the Coastguard chartered five smaller vessels of the Nornen-class and three larger vessels of the Barentshav-class to be used in the North Sea and the Barents Sea. All vessels were purpose built and on fifteen year time charter contracts. The new contracts were based on the existing time charter contract already in use, albeit with one distinct difference. Earlier vessels were crewed with one Master from the shipowner and one Commanding officer (CO) from the Coastguard. The CO made decisions on how to best execute the mission and the Master sailed the vessel to where it needed to be. In the newer contracts the two roles were merged and the Coastguard employed a single CO who also fulfilled the Master’s role. In 2011 the government decided to buy the smaller vessels in the Nornen-class. The Coastguard are however still chartering three vessels of the Barentshav-class and the former National Guard vessel "Magnus Lagabøte" of the Reine-class on charter contracts. The changes made to crewing also represents a shift in the ability of the shipowner to command his vessel. A consideration of the degree of control over the vessel raises the question of whether the contract should be interpreted as a bareboat charter rather than a standard time charter. Although the perceived difference in the contracts is small, the consequences may prove to be major. In some instances, the difference could entail shifting legal responsibility and liability from the (legal) shipowner to the Coastguard. The change could also have knock-on effects on several other clauses in the contract. This paper will analyse the contract made to charter the NoCGV Barentshav and explain why it should be considered a bareboat charter. Furthermore, it will provide examples of the consequences this interpretation could lead to, both within and outside the contract. Finally the paper will also suggest some potential amendments to the contract. As a career officer and former employee of the Norwegian Coastguard, these contracts have puzzled me for years. There were several reasons for the curiosity: Why was there a mix of civilians and servicemen on board a naval vessel? Could the Norwegian government not afford to buy its own vessels? Why did vessels doing the same work have different set of rules and regulations? An interest in the charter contracts peaked while studying Contracts in Maritime Law at the University of Oslo when I realized that the crewing arrangements I had come to know lacked a basis in typical examples of charter contacts. In my current position as a project manager in information and communication technology, the contracts remain relevant to my work. When placing equipment on board vessels there is challenges both to the cost allocation between shipowner and the Armed Forces as well as challenges relating to compliance with the The Security Act, as there is often a prerequisite that the government own the area where the equipment is to be stored and used.