Deviation - FAQs

What is Deviation? What is the reason for it? 

Deviation at its simplest is an unjustified departure from the prescribed route but also includes unreasonable delay in performing the contractual voyage. In the absence of a term in the contract that stipulates the prescribed route, the contractual route is presumed to be the direct geographical route between the port of loading and the port of discharge. However, evidence is also permitted to show what the usual or customary shipping route is (where this differs from the direct geographical route). 

In a contract of carriage such as a bill of lading, the Carrier must usually call at the ports stated by the usual or customary route and with due or reasonable despatch. Whilst a voyage charterparty will often contain a term that the vessel must undergo the contractual voyage by the route stipulated and without delay (the duty of utmost despatch). If the vessel deviates in the absence of a suitable liberty clause or for any other justified reason, then it could represent a breach of contract. 

The Club previously published an article on deviation in 2012 (see here) and this provides a general overview of deviation and fundamental breach up to 2012. 

When is Deviation justified? 

It is important to highlight that not every deviation will be unlawful. It will always depend on the relevant contractual terms and liberties granted therein, as well as the facts. 

Article IV, rule 4 of the Hague-Visby Rules (such as may govern a contract of carriage) sets out limited circumstances in which a deviation may be permitted and would not constitute a breach of the Convention or the contract of carriage, specifically: 

• To save or attempt to save life – for example to answer the call of a vessel in distress as lives could be in danger;
• To save or attempt to save property/ the relevant cargo carried – for example if the Master reasonably believes that it is necessary in order to avoid capture of the vessel or cargo; or
• Any “reasonable deviation” – for example if it is customary to bunker at a particular port that is not on the route prescribed. This tends to be interpreted narrowly and whether it is reasonable will be treated as a question of fact in each case. 

There is also at common law an implied right to deviate if the vessel needs to do so to save lives/ avoid imminent peril. 

Liberty & Deviation Clauses 

It is not unusual and often dependent on particular trades - for the relevant contract (charterparty or bill of lading) to include a “liberty” clause permitting the Carrier to call at other / additional ports during the voyage. It is also important to note that these clauses do not give the Carrier the right to simply change the route of a ship to suit its own needs or purpose. 

Liberty clauses tend to be drafted narrowly to cater for specific purposes, are construed restrictively, and must not be inconsistent with the contract as a whole. The wording needs to be considered in light of the relevant commercial background, including the interests of all parties involved in the venture, and the specific facts. 

Liberty and deviation clauses originated to provide the liberty to deviate to obtain bunkers (in addition to saving life/property under common law) but over time other types of deviation have become accepted/permitted. The BIMCO clause in particular permits deviation for crew changes/ship safety inspections and ballast water exchanges and is drafted widely enough to encompass “any other reasonable purpose”. 

It is important to note that just because a liberty clause is incorporated into a charterparty, this does not necessarily mean that it will be incorporated into the relevant bill of lading.  A vessel owner could therefore find itself in the position of undertaking a deviation that is permissible under the terms of the charterparty but in breach of the terms of the contract of carriage. 

What happens if a Deviation is unjustified? 

In short an unjustified deviation may mean the loss on certain defences and rights of limitations such as those contained in the Hague or Hague Visby Rules. This is of particular concern where there are third party liabilities to be considered, for example where the cargo has been sold and the receivers expect the cargo to arrive on time at the relevant discharge port. 

When an owner whose vessel deviates without justification, this leaves the charterer/goods owner with the option to either (i) treat the breach as a repudiation i.e. bring the contract to the end / claim damages; or (ii) elect to waive the deviation as a repudiation so that the contract can continue reserving their right to claim for damages.

If the charterer/ goods owner elects to terminate the contract due to a deviation, one view is that the charterer/goods owner can claim the delivery of their goods (as the exceptions in the contract will not apply) and the owner as the Carrier will be liable for any loss or damage which the goods may have sustained unless it can be shown that the loss or damage was due to: 

• An act of God or by the King’s enemies or by inherent vice of the goods; and
• That the said loss or damage must equally have occurred even if there had been no deviation. 

However, there is another view that where the charterer/goods owner elects to terminate that how any exceptions in the contract will be applied will be down to a matter of construction. This is that deviation cases should be part of the ordinary law of contract and not given special treatment (fundamental breach doctrine living on in respect of deviation). 

How does Deviation impact Club cover? 

The Club’s Rules provide that there shall be no recovery from the Club in respect of liabilities costs and expenses arising out of or in consequence of a deviation unless prior or prompt notice is given to the Club and the Club agrees in writing to provide cover. Further, if a deviation is unjustified this could result in Club cover being prejudiced for the period of, and consequences arising from, the deviation. 

There are, however, limited exceptions in the Club’s Rules in relation to specified deviation expenses, for example if incurred solely for the purposes of saving or attempting to save life at sea, to land stowaways or secure necessary treatment for an injured or sick crew member etc, and provided in the opinion of the Club’s Managers such expenses have been reasonably incurred.

What if a Deviation means there is no Club cover?

It is important that Members notify the Club as soon as possible before any proposed deviation so that the circumstances, facts and relevant contractual terms can be considered and a view can be taken on Club cover. 

If a particular situation is considered to be a deviation likely to deprive the Carrier / the Club’s Member of the right to rely on defences or rights of limitation available under the Hague or Hague Visby Rules there is no Club cover for liabilities or losses to which there would otherwise have been a defence or right to limit liability. 

A deviation that on its face may not be justified, may be justified if all relevant parties to the contractual voyage consent to the deviation.  However, if it is not possible to obtain consent then consideration needs to be given to the availability of Club cover/ additional covers.  

Key Takeaway

Deviation is a common issue but one that can carry significant risks. Members should always check with the Club whenever a deviation is proposed. This is so that prompt consideration can be given as to whether the deviation is permissible or impermissible based on the specific facts, circumstances and relevant contractual terms and to enable the Club to assess whether the proposed deviation will prejudice Members’ cover and if so whether additional cover might be available.