Section 20.3 Letters of Protest and Statements of Fact
Essential Documentary Tools
In the commercial operation of a bulk carrier, accurate and timely documentation is paramount for protecting the shipowner’s interests, clarifying responsibilities, and forming the basis for any subsequent claims or dispute resolution. Two of the most important documents routinely prepared or handled by the Master are the Letter of Protest (LOP) and the Statement of Facts (SOF).
1. Statement of Facts (SOF):
Purpose: The SOF is a chronological record of all significant events and times related to a vessel’s port call, from arrival to completion of cargo operations and departure. It is a mutually agreed document, typically signed by the Master (or the ship’s agent on behalf of the Master) and representatives of the charterers, shippers, or receivers.
Importance:
Basis for Laytime/Demurrage Calculations: The SOF provides the factual data (dates, times of arrival, NOR tendering, commencement/completion of loading/discharging, weather delays, stoppages, etc.) used to calculate laytime, demurrage, or despatch.
Evidence in Disputes: It serves as primary evidence in case of disputes regarding port operations or delays.
Record of Operations: Provides a clear overview of the port call for all parties involved.
Content: A comprehensive SOF should include, but not be limited to:
Vessel’s name, port, berth, arrival/departure drafts.
Date and time of arrival at port limits / pilot station / anchorage / berth.
Date and time Notice of Readiness (NOR) tendered and accepted/rejected (with reasons if rejected).
Date and time vessel all fast alongside / gangway down / free pratique granted / customs clearance.
Date and time of commencement of cargo operations (for each hold if applicable).
Records of all stoppages during cargo operations, with reasons (e.g., rain, stevedore breaks, equipment breakdown (ship’s or shore’s), shifting, waiting for cargo/trucks, strikes, holidays). Specify who ordered the stoppage if applicable.
Daily quantity of cargo loaded/discharged.
Date and time of completion of cargo operations.
Date and time of commencement and completion of draft surveys (initial and final).
Date and time of B/L signing.
Date and time of unberthing and departure from port.
Remarks on weather conditions, any incidents, delays, or other relevant observations.
Preparation and Signing:
Contemporaneous Records: The SOF should be compiled based on contemporaneous entries in the ship’s deck logbook and port log.
Accuracy and Objectivity: Entries must be accurate, factual, and objective. Avoid opinions or speculation.
Clarity: Use clear and unambiguous language.
Joint Agreement: The SOF should ideally be agreed upon and signed by all relevant parties (Master/agent, charterer’s representative/stevedores/shippers/receivers) before the vessel sails.
Disagreements: If there are disagreements on certain facts, the Master should try to resolve them amicably. If agreement cannot be reached, the Master may note their reservations on the SOF before signing, or issue a separate LOP detailing the disputed points, and inform the owners immediately. It is generally preferable to sign “for receipt only” or “facts as observed by Master” if significant disagreement persists, rather than refusing to sign altogether, but company policy should be followed.
Master’s Responsibility: The Master is responsible for ensuring the accuracy and completeness of the SOF, as it directly impacts the owner’s financial interests. Close liaison with the ship’s agent is crucial.
2. Letter of Protest (LOP):
Purpose: An LOP is a formal written statement made by the Master to officially record disagreement, dissatisfaction, or to hold another party responsible for any act, omission, delay, damage, or potential prejudice to the shipowner’s interests. It serves as a formal notification that a problem has occurred and reserves the owner’s right to claim for any resulting losses or consequences.
When to Issue an LOP: Masters should consider issuing an LOP in a wide range of situations, including but not limited to:
Delays:
Delays in berthing.
Delays in commencement of cargo operations after NOR acceptance.
Stoppages of cargo operations due to charterer’s/shipper’s/receiver’s reasons (e.g., no cargo, stevedore issues not attributable to ship, customs issues).
Delays in provision of essential port services (tugs, pilots, linesmen) if arranged by charterers.
Delays in sailing after completion of cargo operations.
Cargo Issues:
Cargo not as described or in apparent poor condition upon loading.
Incorrect cargo documents provided by shippers.
Forced loading of cargo in adverse weather against Master’s judgment (if safety is not compromised but potential for damage exists).
Discrepancies in cargo figures (e.g., between ship and shore figures).
Refusal by shippers/charterers to accept claused Bills of Lading for damaged cargo.
Cargo loaded in a manner that could damage the vessel (e.g., improper trimming, high impact loading).
Damage:
Damage to the vessel caused by stevedores, berth, tugs, or other third parties.
Damage to ship’s equipment (e.g., cranes) by stevedores.
Contractual Issues:
Breach of charter party terms by charterers or their agents.
Unsafe port or berth conditions.
Refusal to accept a valid NOR.
Pressure to sign incorrect documents.
Safety/Environmental Concerns:
Pollution caused by third parties in the vicinity of the vessel.
Unsafe practices by shore personnel.
Content of an LOP:
Addressed to the party deemed responsible (e.g., Charterers, Shippers, Receivers, Stevedores, Port Authority, Agents).
Clearly state the vessel’s name, port, date, and time.
Provide a concise and factual account of the event or situation being protested.
Clearly state what is being protested (e.g., the delay, the damage, the incorrect information).
State that the Master, on behalf of the Owners, holds the addressed party responsible for all consequences, losses, damages, and/or expenses that may arise from the protested matter.
Reserve all of the Owner’s rights under the Charter Party and at law.
Signed by the Master and stamped with the ship’s stamp.
Delivery and Acknowledgment:
Deliver the LOP to the relevant party (or their representative) as soon as possible after the event.
Obtain a signed acknowledgment of receipt on a copy of the LOP. If the party refuses to sign, make a note of the refusal (date, time, person who refused) on the copy, preferably witnessed by another officer or the agent.
Send copies to the owners/company immediately.
Importance:
Preserves Rights: An LOP does not automatically create a right to claim, but it formally records the owner’s position at the time of the event and can be crucial in preventing arguments later that the owner acquiesced to the situation or waived their rights.
Evidence: Serves as important contemporaneous evidence in any subsequent dispute or claim.
Deterrent: Sometimes, the act of issuing an LOP can prompt the other party to rectify a situation.
Master’s Judgment: While it’s important to protect owners’ interests, Masters should use judgment and avoid issuing frivolous LOPs. However, the general advice is “if in doubt, protest.” It is easier to withdraw a protest later than to try and make one retrospectively. Always consult company policy and seek guidance from owners if unsure.
Relationship between SOF and LOPs: The SOF records agreed facts. LOPs are used when facts are disputed or when one party wishes to formally protest an action or inaction of another, even if the basic facts of the event itself are recorded in the SOF. For example, the SOF might record a stoppage due to “Stevedores’ break,” but if the Master believes the break was unduly long or not in accordance with local custom or C/P terms, an LOP might be issued.
Effective use of Statements of Fact and Letters of Protest requires diligence, attention to detail, and a clear understanding of their purpose. They are fundamental tools for the Master in managing the commercial aspects of the voyage and safeguarding the shipowner’s position.