Sat, Oct

Time lost waiting for berth


Time lost waiting for berth. In a berth charter the vessel is not an "arrived ship" unless it reaches its contractual destination, which is the berth.

Before the vessel is an arrived ship, its Notice of Readiness will not be valid and laytime will not commence. If the vessel has to wait for a berth, unless an express clause shifts the burden of delay to the Charterer, the risk of delay will fall upon the shipowner. An express clause is found in the GENCON charterparty clause dealing with laytime. This will be mentioned shortly.

It may be worth noting that the phrase "reachable on arrival" may place a burden on the Charterer, especially after the decision in the case of The Laura Prima 1982. The reason for the burden is that if the vessel cannot reach its berth for reasons within the charterer's control it cannot tender Notice of Readiness and laytime cannot commence. The delay would be at the charterer's risk.

Some hindrances to the commencement of laytime may lie outside the charterer's control and the vessel may be unable to get into the loading and/or discharging berth. The case of The Notos, 1987, dealt with such a hindrance and there was time lost in waiting for a berth.

The vessel, an oil tanker, was chartered on the STB VOY standard charter form. (Note that STB VOY has given way to the newer, and possibly better, ASBA II, 1984 for oil tankers.) The Notice of Readiness clause stated:

"Upon arrival at customary anchorages at each port of loading or discharge, the Master shall give the Charterer notice . . . that the vessel is ready to load or discharge cargo, berth or no berth, and laytime . . . shall commence upon the expiration of six (6) hours after receipt of such notice, or upon the vessel's arrival in berth ... whichever first occurs. However, where delay is caused to vessel getting into berth after giving Notice of Readiness for any reason whatsoever over which Charterer has no control, such delay shall not count as laytime . . ."

and, in the Demurrage clause,

“ . . . Laytime shall not run or, if the vessel is on demurrage, demurrage shall not accrue, for any delay caused by . . . or any other cause of whatsoever nature or kind over which the Charterer has no control."

On arrival at the loading port swell prevented the vessel's berthing for about 20 days. When the vessel could berth at the sea-line, another vessel was in that berth and a further three days' delay occurred. Two days after berthing at the sea-Line, the Notos had to leave the berth again owing to swell and could not reberth for another five days. Before berthing the laytime expired. Demurrage became payable. When the dispute came before arbitrators it was held that no demurrage was payable for that period because the charterers had no control over the swell conditions. The owners appealed from the High Court to the Court of Appeal and up to the House of Lords. In each case their appeal was unsuccessful. It was held that the exception to delay in the Notice of Readiness clause was wide enough to embrace swell conditions.

The GENCON dry cargo charterparty "Laytime'' clause and the effect of "time lost in waiting for berth" came under consideration in The Radauti, 1988. The relevant clause states, .among other matters, when laytime for loading or discharging commences. It then continues: Time lost in waiting for berth to count as loading or discharging time, as the case may be." In the charterparty there was also a general exception clause, as a rider clause, stating:

"Force majeure; strikes or lockouts . . . restraints of established authorities or any other causes or hindrances happening without the fault of the charterers . . . preventing or delaying the . . . discharging. . , of the cargo are excepted and neither Charterers nor shippers should be liable for any loss or damage resulting from any such excepted causes and time lost by reason thereof shall not count as lay days or days on demurrage . . ."

The vessel arrived at the discharging port on 21 October 1977. Notice of Readiness was tendered on 22 October. No berth was available until 1 S December. Discharging of cargo was completed on 18 January 1978. Laytime for discharging was just over 10 days. The shipowners claimed that time on demurrage began at the end of the laytime, before the vessel berthed. The charterers argued that the general exceptions clause protected them and that time on demurrage began only when the vessel berthed on 15 December. It was held that because the port was congested, the delay in the vessel's berthing was outside the charterer's control. The "time lost" provision was in a printed clause in a standard form while the general exceptions clause was a rider clause. There was no reason to consider that the printed clause superseded the rider clause. Hindrances outside the charterer's control can prevent the risk and cost of time lost in waiting for berth being laid at the door of the charterer. Congestion may be such a hindrance, especially if there is a general exceptions clause relieving the charterer from liability for lost time. The drafting of the exceptions clause is important. An example of a congestion situation which did not protect the charterers is the case of The Kalliopi A, 1988. In that case, there was also an exceptions clause ". . . all and every unavoidable hindrances which . . . (prevented) . . . the loading and discharging . . . always mutually excepted." In the Court of Appeal, the words "mutually excepted" did not expressly include demurrage and the charterers were not protected from paying demurrage.

If there is no exception clause the "Time lost . . ." provision in the GENCON charterparty shifts the burden of delay, before actual laytime commences, to the charterer. The effect of the provision is the same whether the charter is a "berth charter" or a "port charter". A number of court cases reported from 1956 until 1976 explored the effect of the words similar to the words found in the current edition of GENCON: "Time lost in waiting for berth to count as loading or discharging time, as the case may be." The effect was finally established in the English House of Lords in The Darrah, reported in 1977.

The Darrah was on a port charter from Novorossisk to Tripoli. The charterparty contained the words "Time lost in waiting for berth to count as laytime" and "laytime" was held to mean the same as "discharging time". (Presumably, this would also be valid for "loading time".) When the vessel arrived at Tripoli on 2 January 1973, the master gave a valid Notice of Readiness.

Owing to congestion in the port, the vessel was unable to berth until 9 January. During the waiting time there were periods which were excepted from laytime: a Friday and a legal holiday, and the time before noon on the day before Friday and the legal holiday. The shipowners argued that the entire waiting period was "time lost" and should be counted against laytime in full. The result of this argument, if it was correct, would have been that the vessel would have come on to demurrage very soon after berthing, and there would then be no further exceptions to demurrage because of the principle of "Once on demurrage, always on demurrage". The House of Lords decided against the owners and established that if there was "time Lost" under this provision, it was to be treated exactly as laytime, with any exceptions, before berthing.

If the vessel meets the requirements of an "arrived ship", the time lost provision will hardly be relevant because a valid Notice of Readiness will be given and laytime will commence after the usual "notice period". The waiting time will then count in the same manner as laytime.

In a "port charter" the vessel can generally become an "arrived ship" and laytime can commence after a Notice of Readiness is given. The "time lost" provision in GENCON will not be applicable. However, even in a port charter the vessel may sometimes have to wait outside the port limits and this may not be the "place where waiting ships usually lie". The vessel cannot then be an "arrived ship". In this situation, the "time lost" provision may protect the shipowner.

In a "berth charter" the contractual destination is the berth. Therefore the vessel will not become an "arrived ship" until the destination is reached. The Notice of Readiness is not valid until the vessel becomes an "arrived ship". In this situation, the "time lost" provision can certainly help the shipowner if the vessel has to wait for the berth, for example, because of congestion. The time lost will then be counted as laytime, with all the exceptions to laytime, if any, and if the allowed "laytime" expires before berthing, the vessel can come on to demurrage, during which no exceptions will apply.