chapter  9
18 Pages

Grace periods 16

Unlawful cargoes 9.1 Lawful merchandise may include military stores and munitions. But goods will not be

lawful merchandise if their loading amounts to a breach of the local law nor if they cannot lawfully be discharged at the nominated discharge ports. It is suggested they must also be lawful under the law of the ship’s flag and the governing law of the charter. The prohibition upon unlawful merchandise is ‘absolute’: ‘‘the charterer is taken to warrant the lawfulness of the cargo and not merely [to give] an undertaking . . . that the cargo is lawful to the best of his belief. . . . In other words, this is an absolute warranty.’’ (The Greek Fighter, below, per Colman, J., at paragraph 283). The Dodecanese was chartered on the Baltime 1920 form for employment ‘‘in lawful trades for the conveyance of lawful merchandise’’. She was loaded at various Mediterranean ports with ammunition and other explosives and ordered to discharge these to the British forces at Adabiya in Egypt, although the charterers knew this was prohibited by the Egyptian authorities. Having obeyed these orders and been black-listed by the Egyptian authorities for so doing, the ship loaded again, at Port Tewfik, with military stores for Aqaba, but she broke down before sailing. Because she was black-listed, the authorities delayed her repairs so that they took 26 days longer than they should have done. Pilcher, J., held that, as the goods loaded for Adabiya could not be discharged at the nominated port without a breach of local law, they were not ‘‘lawful merchandise’’ and the charterers were, therefore, liable to pay damages for the delay caused (effectively restoring the loss to the owners from the ship being off-hire during the 26 days).