Vetting - Selected Legal Aspects of the Vessel Selection Process. With special focus on seaworthiness, duty of care and charter party vetting clauses

''Vetting'' is the general name used to describe the oil and chemical companies' process of selecting ships for their cargoes. This is a process which is not entirely harmonized and which has not been described or treated to any greater extent in literature, especially not from a legal point of view. This thesis therefore has several purposes, both legal and purely descriptive and informative. The perspective is mainly international law or common law, as the latter is the predominant legal system and principles applied to maritime law. Firstly, the thesis aims to examine and describe the vetting process and how it is conducted by using the Swedish oil company Preem Petroleum AB's vessel selection process as an example. The process consists, among other things, of a physical inspection of the vessel. The inspection report is entered into an electronic database but does not yield a result of pass or fail. Rather, this report is used as one integral part of the selection process. The other parts of this process may be investigation into vessel history and classification, as well as the experience of the crew and master. Also information concerning the quality of the ship owner's organization as well as reports from Port State Control and statistics from Equasis are gathered. Furthermore, the thesis aims to compare the vetting inspection to other types of inspections. The physical inspection differs from the type of inspections carried out by other organizations within the shipping industry, such as Flag State and Port State Control inspections. The latter are mandatory while the vetting inspections are voluntary, at least from a legal perspective, and are conducted upon company initiative. Among the legal aspects treated in this thesis are the division of liability for pollution damage from an international perspective, how this division of liability can be broken and what in common law constitutes a duty of care for the charterer/cargo owner in relation to the division of liability. Finally, contractual regulations and common vetting clauses with related problems are discussed. As concerns the focus on liability disbursement for pollution damage and the break through of these rules, the thesis treats ship owner's duty to supply a seaworthy ship and the owner's strict liability for pollution damage. This strict liability is regulated in international conventions, such as the 1969 Civil Liability Convention. However, this strict liability channeling through the ship owner can at times be broken and protected parties such as the charterer or cargo owner may be held directly liable. For the strict liability channeling to be broken, the complainant has to show intent, mens rea, or gross negligence. To determine whether these conditions are met, the normal process is to decide whether the party has broken a duty of care. For a long time, vetting has been deemed a completely voluntary process without legal consequences for the neither the charterer nor the cargo owner. During the last decade, however, voices have been raised in support of the opposite view, claiming that the selection process can in fact constitute such a duty of care that could break through channeling provisions if breached, at least from a common law perspective. In this respect, the thesis provides a brief comparison to Swedish law concerning the duty of care issue. Finally, the contractual regulations most commonly seen concerning vetting are treated. There is generally a lack of harmonization and transparency in the vetting process which is also visible in the clauses sued to regulate vetting in charter parties. Many clauses are phrased in such a manner that they are impossible to satisfy. For instance, many charterers require approval by certain companies, but the oil and chemical companies no longer issue such approvals. Other similar Catch 22 regulations are, for example, the requirement of inspection for contract signing, but without a signed contract there may be no business interest in the vessel why the vessel cannot be signed or inspected. The general purpose of the thesis is, in conclusion, to describe vetting and compare it to other inspection regimes used today as well as to treat three main legal areas of interest: vetting and seaworthiness, the duty of care and contractual regulations. In the analysis, these issues are further discussed as to how vetting and seaworthiness may interact and affect each other, whether vetting can constitute a duty of care, and the many contractual problems arising from the most commonly used vetting clauses. The breadth is consciously chosen on the expense of depth as vetting is a generally unknown institution and there therefore is relevant to point to and introduce a few different ways in which vetting in fact could have a legal effect