India - Free Pratique - Standardizing and Harmonizing For Relevance And Convenience

07 Jan 2018

Pratique in general parlance is the permission granted to a ship to have dealings with a port, after quarantine or on showing a clean bill of health. In the shipping industry, it is a certificate from the port-healthauthorities that the ship is without infectious diseases or plague on board and therefore, should be permitted to enter port and to allow people to board or disembark. Such permission is usually under the authority of medical/ health officers situated around the port of entry in apprehension of ships from other territories carrying contagious diseases on board among crew members or passengers. However, if the ship is carrying any serious infectious illness on board or has arrived from a place where such illness is known to be widespread, then the ship may have quarantine restrictions imposed upon her and may not get the clean bill of health for entry to the port for carrying out intended operations.

In olden days, before being allowed to trade, ships would be quarantined or had to wait for long periods at waiting docks or berths before being inspected by port authorities for being granted free pratique for carrying out trade. In the shipping industry, the cargo ships, upon arrival at the port where they intend to carry out operations, tender a notice of readiness. The notice of readiness is a notice under the contract between parties that the ship is ready in all respect for operation as envisaged in the contract. Such delays, on account of the boarding of port authorities, had severe impact on the lay-time of such vessels, which in essence meant that the ship took much longer due to delays that were beyond their control and such delays had direct impact on their business as time in trade is of great importance and delays have adverse consequences.

Therefore, in order to overcome such shortcomings for the convenience of parties in trade, the system of obtaining such free pratique has since evolved for present day businesses. Now the shipmaster may at certain ports even give notice of readiness whether in free pratique or not. (The same is also applicable to certain ports in India and to certain ship owners free pratique may not be necessary for tendering a notice of readiness). This means the concept of free pratique has become a territorial concept and has no universal application. Despite the ports authorities and territories taking steps to make the concept of free pratique less hazardous to business undertakings, the same advantage is not available at all trade ports and need for homogeneity is not met. Therefore, the contracts must necessarily provide for minute deviations in order to determine and agree upon the method of calculation of lay-time and avoid conflict between the parties. It is necessary for the parties to draw up contracts with clear intentions for discharge at different ports. This need also stems from the fact that such requirements are not mandated in law (including in ports in India) and the obligations of parties merely take shape from commercial agreements, tailored with an intention to harmonize and standardise shipping related activities. However, such standard contracts fail to provide for specific deviations and therefore parties are forced to compromise or enter dispute resolution processes, which, needless to say, are lengthy and onerous.

In the shipping industry, steps to bind parties to location specific terms is not an easy proposition as the trade system is based on immediacy (with stakes being high), and involvement of multiple parties at various locations worldwide. Any time lost in drawing up shipping contracts between two parties would necessarily entail lengthy negotiations which in turn would lead to heavy losses due to time loss. Such issues may also discourage parties from exploring new territories impacting the growth of the shipping industry.(and the same holds true for India, where ports are looking to make trade at Indian ports attractive to big consumers worldwide). However, if a contract clearly delineates the port specific requirements this may help to standardise and harmonise shipping related activities leading to fewer conflicts between parties, resulting in flourishing, hassle free industry trade. 

Despite the growth in the shipping industry, there are only a handful of associations that are formed with the intention of harmonising contracts. The law makers worldwide must also take steps to make proper laws to fill the lacunae in the shipping laws and governance of ports, for trade and industry to flourish and for growth in international trade. If shipping industry in India or other ports around the world where location specific terms including not just free pratique but other terms of shipping, are diverse, it would be prudent to have ready contracts that are location specific which would give impetus to the organic growth that the shipping industry is seeking in recent times.

Therefore, just as free pratique has seen flexibility in application in recent times, the charter parties must provide for flexibility in requirements thereof (which would burden port authorities with compromise) or provide for location and ship owner specific contracts, better filling systemic gaps for ease of business and trade.


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