Freight & Defence / Crew The Swedish Club Letter 2–2002 The Swedish Club Letter 2–2002

Voyage Berth or port ? – Commencement of  The distinction between the two types of Commencement of laytime Terms of berth charterparty voyage charterparty has been accorded further Substantial sums of money can turn on exactly There are essentially two different types of significance recently, particularly following when laytime begins and ends. For example, voyage charter – namely a berth charter and a the Court’s decision in The Happy Day [see does time begin to run when the vessel arrives port charter. The distinction is important for The Swedish Club Letter Issue 1-2002]. This at the loadport or when it actually begins to load determining when the loading voyage, that is dispute arose under a berth charterparty, but the ? Similarly, what happens if the cargo to say the voyage of the ship to the loadport, because owners did not tender a valid Notice is not ready to be loaded, so the vessel has to sit ends. A berth is a specific place within a port. of Readiness, laytime never commenced at the idle for a day? Even a difference of a few hours It is the place where the vessel actually loads discharge port and no demurrage was payable to can mean thousands of dollars for owners and and discharges. Under the terms of a berth owners (in fact they had to pay despatch!) The charterers. Consequently, there is a need for charterparty, the loading voyage does not end until the vessel is actually in the berth where vessel had tendered notice when she was not yet clear rules as to when time starts and finishes. an arrived ship in accordance with the terms of it will load the cargo. The charterparty will The first place to look for laytime provisions the berth charterparty. usually name the berth or provide that a berth will always be in the charterparty itself. Usually will be nominated as the place for loading or Voyage charterparty the charterparty will stipulate exactly when lay- discharging. This will make the charter a berth In a voyage charterparty, the charterer pays time should begin. Subject to the specific terms charter. The berth is the agreed destination freight to the owner. This is payment, not of the charterparty, the general rule is that and therefore the vessel will be an arrived ship only for the voyage itself, but also for the laytime begins to run when the following three when she is securely moored there. In the case agreed time in which to load and discharge requirements have been satisfied: of North River Freighters Ltd. v President of India his cargo. If a charterer takes longer to load 1. The vessel has arrived at the place specified in [1955] 2 Lloyd’s Rep 668 Jenkins LJ made it and discharge than the laytime provided for the charterparty; clear that laytime in a berth charterparty in the charterparty, then he is usually liable to 2. The vessel is, in fact, ready to load/discharge; could not commence until the vessel has pay damages by way of demurrage. The rate of and arrived at its particular berth as specified in the demurrage is normally fixed on a daily basis 3. A valid Notice of Readiness has been ten- charterparty. and will be payable per day or pro rata for any dered in accordance with the terms of the part of a day. Some charterparties also provide charterparty. Berth or port charterparty that if the cargo is loaded and discharged in less In this article, we are concentrating on the The determination of whether a charterparty than the laytime allowed, then the shipowner first requirement for when laytime begins: when is a berth or a port charterparty can simply will pay a sum of money to the charterer. This is the vessel has arrived at the place specified in be dependent on the order of the words in the despatch and is often set at half the demurrage the charterparty. relevant clause. Donaldsen J, in The Finix rate. Significant changes in the NLRC Rules of Procedure

which gave the NLRC the original and exclu- peal without such a certificate shall not stop the sive jurisdiction to hear the claims of ‘overseas running of the period for perfecting an appeal. Mr Ruben T. Del Rosario Filipino workers’. This amendment leaves no Surety Bond MANAGING PARTNER doubt as to the Labor Arbiter’s jurisdiction to Del Rosario & Del Rosario, Manila hear the claims of Filipino seafarers. The surety bond to be filed together with the appeal shall be accompanied by: Declaration of Non-Forum Shopping a) a joint declaration under oath by the em-  The National Labor Relations A complaint must now include a ‘declaration ployer, his counsel, and the bonding company Commission (NLRC) has jurisdiction over of non-forum shopping’. This is taken from attesting that the bond posted is genuine, and th the claims of Filipino seafarers. On March 18 the Revised Rules of Court of the Philippines, shall be in effect until the final disposition of 2002, the NLRC amended some of their rules which prohibits the filing of two or more suits the case; of procedure. Certain changes deserve some in different forum. Forum shopping consists of b) a copy of the indemnity agreement be- discussion. filing multiple suits involving the same parties tween the employer-appellant and bonding The old rules of the NLRC provide that for the same cause of action, either simultane- company; and Labor Arbiters have jurisdiction to hear and ously or successively for the purpose of obtain- c) a copy of the security deposit or collateral decide claims of ‘all workers’. The new rules ing a favorable judgment. If a seafarer has filed securing the bond. now clearly state that Labor Arbiters also have suit in the NLRC, he is prohibited from filing The requirement on the copy of the security original and exclusive jurisdiction to decide the a similar suit in another forum. This rule has deposit or collateral is new. At the moment, it claims of ‘overseas Filipino workers provided been extended to a respondent or defendant is still not settled as to whether a Club Letter for by law’. The term ‘overseas Filipino workers’ who for some reason commences a new action of Guarantee is considered to comply with the includes seafarers. against a complainant or plaintiff. new requirement. The NLRC amended this provision to A certificate of non-forum shopping is also Another new provision is the recognition by conform to the Migrant Workers Act of 1995, required in cases of appeal. A mere notice of ap- the NLRC rules of a motion to reduce a bond,

12 13 Freight Demurrage & Defence / Crew The Swedish Club Letter 2–2002 The Swedish Club Letter 2–2002

Berth or port charterparty? Charlotte Lacey MANAGER FD&D LONDON The Swedish Club U.K.

(1975) 2 LLR 668, held that the words in a port that she was at ‘the immediate and effective have entered into a berth or port charterparty charterparty ‘one safe berth, London’ would disposition of the charterers’. If she is at a place so that in the event that the vessel cannot steam be a berth charterparty, but the words ‘London, where waiting vessels customarily lie, then there straight to the berth, owners know whether or one safe berth’ would be a port charterparty. is a presumption that she has arrived unless the not they can tender a valid Notice of Readiness. The charterparty must be construed fully to charterers can show otherwise. Conversely, if There are several other clauses, often within a determine whether or not it is a berth or port she is at some other place within the port, then it charterparty, which will impact on when the charterparty. However, when it comes to is for the owners to show that she is nonetheless vessel can validly tender notice, for example in the tendering of Notice of Readiness and the at the charterer’s disposition. the Asbatankvoy charter – clause 9, which puts commencement of laytime, it is important that With a port charterparty then, if the berth an additional obligation on charterers that a owners know whether they have a port or berth is free, the vessel will only be an arrived ship berth will be ‘reachable on arrival’. Therefore, charterparty to ensure that a valid Notice is when she is all fast at the berth. However, if if there is a berth charterparty (under which tendered and to ensure that time commences. she is unable to proceed directly to the berth laytime would not start because the vessel has A berth charter therefore puts the risks of because of congestion, tides, bad weather, the not reached the berth) that contains a reachable- delays and congestion in the port on the own- lack of availability unavailability of tugs etc. she on- arrival warranty, charterers would pay for ers. Of course, each charterparty will be worded will still have arrived at her agreed destination the time lost waiting to berth because they differently and a WIBON (Whether In Berth under a port charterparty if she has satisfied would be in breach of their obligations to Or Not) clause may transfer the risk for the de- the Lord Reid test above: i.e., she has reached provide a berth reachable on arrival. In the lay back to charterers even in a berth charter if a position within the port and at that position absence of other such provisions in a berth the reason preventing the vessel getting into the she is at the immediate and effective disposition charterparty, owners must consider whether berth to be an arrived ship is caused by charter- of the charterers. the vessel has reached her destination pursuant ers (The Kyzikos (1989) 1 LLR 1). In the case of a port charterparty, a WIPON to the charterparty. Is the vessel where she (Whether In Port Or Not) clause can assist should be to tender notice? As The Happy Day Under a port charterparty owners if they are unable to enter the usual confirmed, an invalid notice will not become By contrast, under a port charterparty, a vessel port area, providing all other requirements of valid. A new and valid notice must be tendered becomes an arrived vessel for the purpose of readiness are met. to commence laytime. calculating laytime once she arrives within the The concept of an arrived ship is a complex confines of the port as stipulated by Lord Reid Valid Notice of Readiness one under English law and this article has only in The Johanna Oldendorff [1973] 2 Lloyd’s Rep Therefore, for owners to ensure that they touched on one or two major aspects; the well- 285. In this case, Lord Reid said that the test was are serving a valid Notice of Readiness, it is known London arbitrator Mr Donald Davies whether the vessel was at such a place within the important to establish whether or not they managed to write a whole book on the subject! 

sion. Even if such a petition is filed before POEA implements the Court of Appeals or the Supreme Court, Significant changes in the NLRC Rules of Procedure execution proceedings will still proceed unless Amended Standard the aforesaid courts issue a temporary restrain- provided a ‘bond in a reasonable amount’ is ing order. Under the old procedure, the Labor posted. If a shipowner claims that his liability is Arbiters do not issue a writ of execution in def-  The Philippine Overseas Employment only USD 60,000 and the decision of the Labor erence to the petition for certiorari filed with Administration (POEA) issued Memorandum Arbiter is for USD 100,000, the shipowner may the higher courts. Now, under the new rules, Circular No. 02 dated June 5th 2002 imme- file a motion to reduce the amount of the bond it is quite clear that execution may issue unless diately implementing the amended POEA together with the appeal. However, it is still a temporary restraining order is issued by the Contract. The Philippine Supreme Court has unclear as to what is to be considered a ‘reason- higher court. finally dismissed with finality the two petitions able amount’. It would appear, however, that the Unfortunately, when an execution of the de- filed by seafarers groups questioning the provi- appeal could be considered perfected provided a cision is effected and the higher court reverses sions of Section 20 of the amended Contract. bond in a reasonable amount is posted. the decision, it is quite difficult to retrieve the The amended Contract has added provisons judgment award from the complainant. on work-related injury, illness or death, release Execution Proceedings from ‘all claims’ upon payment of benefits, a Whereas under the old rules, execution may Conclusion third physician to resolve disputes on disability issue after the decision of the NLRC Commis- The new provisions on the jurisdiction of La- gradings, concealment of past medical condi- sion has become final, under the new rules, it is bor Arbiters and the certification of non-forum tion and voluntary arbitration. required that a pre-execution conference is held shopping may impact on actions filed in foreign  within two (2) working days from the of jurisdictions by Filipino seafarers. The new pro- We are pleased to report on the latest developments visions on appeal may cause the non-perfection referring to the implementation of the amended POEA the motion for the issuance of a writ of execu- contract of 2000 as per the above statement received from tion. Thus, there will be no surprises for the of the appeal if the new rules are not followed. our correspondents Del Rosario & Del Rosario. Should respondents as to the execution of a decision. It is important that expert advice be obtained you have any questions in relation to the relevant contract Another rule change deals with the filing on the new rules. which is now in force or in connection with other crew of a petition for certiorari, with a higher court  contracts, please do not hesitate to call us. Birgitta Hed - Claims Executive, Claims and Legal Support Department, assailing the decision of the NLRC Commis- Göteborg +46 31 638 431.

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