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The Selected Aspects of the Calculation of Laytime – “Reachable on Arrival”

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The Selected Aspects of the Calculation of Laytime – “Reachable on Arrival” Maritime Law, vol. XXXIV ISSN 0860-7338 DOI 10.24425/pm.2018.125834 MAREK CZERNIS* THE SELECTED ASPECTS OF THE CALCULATION OF LAYTIME – “REACHABLE ON ARRIVAL” Abstract The purpose of this analysis is to deal with the first of the conditions for commencement of laytime, i.e. obligation of the vessel to arrive at the agreed destination. The position, prima facie, with regard to berth, dock or port is relatively straightforward, it having been established that the vessel only becomes an arrived ship when it enters the specified berth, dock or port, respectively. In all three cases, in principle, the risk of delay in reaching the specified berth, dock or port is borne by the shipowner. In many cases, the shipowners, for obvious reasons are not prepared to bear such a risk for loss and take appropriate action. In particular, they demand the inclusion, in the charterparty, of a specific clause shifting the risk of such loss. We will deal therein below with one of the most commonly used forms of such a clause namely – “Time lost waiting for a berth clause” against broader picture of current English jurisdiction. Keywords: “Time lost waiting for a berth clause”, laytime, arrived ship. INTRODUCTION English law is relatively clear and precise when looked at in general terms re- garding the commencement of laytime. It is the application of the general prin- ciples to detailed commercial events, circumstances and activities which results in complications and difficulties. In general, there are three requirements which have to be satisfied for laytime to commence under English common law, as fol- lows: (1) the vessel has arrived at the agreed destination – the destination may be * Marek Czernis, Member of the Maritime Law Codification Commision. 226 Marek Czernis a port, dock, mooring, berth, etc.; (2) the vessel is ready to load or discharge the cargo; (3) notice of readiness is tendered to the charterers or their agents. When the three requirements above are satisfied, the vessel is considered an arrived ship and, under English law, laytime then commences. In practice, char- terparties usually provide that laytime is not to commence until a stipulated time (e.g. 8 a.m. on a next working day), alternatively, after a prescribed time (e.g. 24 hours) after tendering of a notice of readiness and, naturally, such an express pro- vision governs the precise moment that the laytime clock is triggered off. How- ever, there are still some charterparties which do not include such an express pro- vision, in which case the common law position applies so that laytime commences at the very moment that the notice of readiness is tendered to the charterers or their agents. The words “arrived ship”, emphasized above, are somewhat confusing since they sometimes lead persons to think that they refer to one requirement only, that is, the vessel arriving at the agreed destination. While many people talk about the arrival of vessels, and charterparty clauses often refer to vessels having arrived, the position is that, under English law, the words “arrived ship” only come into effect when all three requirements have been satisfied. The fact that a vessel has arrived at the agreed destination does not determine that the vessel is an “arrived ship” within the context of the commencement of laytime; the other two requirements also have to be satisfied. Despite that, what has just been stated, many persons use the words “arrived ship” when speaking of the first requirement only; it is com- monly used in this way by judges and arbitrators so that, when reading judgments and awards, allowance has to be made for the licence displayed therein. The purpose of this analysis is to deal with the first from the above mentioned conditions for commencement of laytime, i.e. obligation of the vessel to arrive at the agreed destination. The position, prima facie, with regard to berth, dock or port, is relatively straightforward, it has been established that the vessel only becomes an arrived ship when it enters the specified berth,1 dock2 or port,3 re- spectively. In all three cases, in principle, the risk of delay in reaching the specified berth, dock or port is borne by the shipowner. In many cases, the shipowners, for an obvious reason, are not prepared to bear such a risk for loss and take appropriate actions. In particular, they demand the inclusion, in the charterparty, of a specific clause shifting the risk of such loss. In the international shipping, there are three main types of the clause designated to achieve this objective: (1) clauses requiring charterer to nominate “reachable 1 Stag Line v. Board of Trade [1950] 2 KB 194; The Isabelle [1984] 1 Lloyd’s Rep. 366; The Mass Glory [2002] 2 Lloyd’s Rep. 244. 2 Thorman v. Dowgate SS Co [1910] 1KB 410. 3 The Johanna Oldendorff [1973] 2 Lloyd’s Rep. 285. The Selected Aspects of the Calculation of Laytime… 227 berth”; (2) clauses designated for specific ports; (3) “Time lost waiting for a berth c l a u s e”. The main task of this presentation is to consider, in a more detailed way, the first of the above mentioned types of clauses. 1. “REACHABLE ON ARRIVAL” – THE MODERN INTERPRETATION The potential in a “reachable on arrival” provision in a voyage charterparty has not been fully realised until the 1960s. The modern interpretation of the words by the courts has been very favourable to owners whereby they receive compensa- tion (damages), usually based upon the demurrage rate but not necessarily so, in respect of delays in berthing because of charterers not providing a berth which is reachable at the time of the vessel’s arrival at or off the port. The first important case before the courts concerned the port congestion. It had started as an arbitration and then, was passed to the High Court as a special case – The Angelos Lusis.4 The charterparty stipulated (inter alia) that: […] a voyage from Constanza to […] The vessel shall load and discharge at a place or at a dock or alongside lighters reachable on her arrival which shall be indicated by Charterers […]. The vessel anchored in the roads off the loading port of Constanza on 28 Janu- ary 1962. She was not permitted, by the port authorities, to enter the port until a berth was available and this occurred on 2 February. Cargo was ready at all times for loading but loading by lighters was impracticable in the surrounding weather conditions. The owners claimed against the charterers for damages in respect of the time that the vessel was delayed in the roads waiting for a berth. They alleged that there was an absolute obligation on the charterers to have a place for loading reachable on the arrival of the vessel at Constanza; further, even though the ves- sel might not have been an “arrived vessel” for laytime purposes she had arrived within the meaning of the above-mentioned clause. The charterers contended that the charterparty was a port charter and the risk of any loss of time, before the vessel became an “arrived vessel”, had been on the owners unless either (a) there was a clear provision in the charterparty to the con- trary or (b) the vessel’s inability to enter the port and become an “arrived vessel” was caused by the charterers’ breach of contract. “Reachable on arrival” meant ar- rival in the port and the charterers were not obliged to nominate a loading berth until the vessel entered the commercial area of the port on 2 February. 4 [1964] 2 Lloyd’s Rep. 29. 228 Marek Czernis In the arbitration, the umpire decided the case in favour of the owners subject to the opinion of the court on a question of law as to whether the charterers were in breach of contract in failing to provide a reachable berth for the vessel when she arrived off Constanza on 28 January. It was held by Mr Justice Megaw that the charterparty provisions referred to above were intended to impose, on the charterers, a contractual obligation of value to the owners; that the charterers’ obligation was to nominate a reachable place where she could load (i.e. a berth which the vessel, proceeding normally, would be able to reach and occupy), at the point, whether within or outside the fiscal or commercial limits of the port, where in the absence of such nomination she would be held up; that it was the charter- ers’ responsibility to ensure that there was at that point of time a berth which the vessel, proceeding normally, would be able to reach and occupy; that the charterers were in breach of contract in failing to provide a reachable berth for the vessel (oc- casioned by port congestion) when she required such on her arrival. In deciding as above, the judge emphasised: (a) The roads were the normal and proper place for a vessel to lie while awaiting per- mission to enter the port and that the words in the charterparty “on her arrival” did not have the technical meaning of “arrival” in respect of an “arrived vessel” in a port charterparty. The words denoted the physical arrival of the vessel at a point, wherever it might be, whether within or outside the fiscal or commercial limits of the port, where the indication or nomination of a particular loading place became relevant if the vessel were to be able to proceed without being held up. (b) When the vessel had arrived as in (a) above, the charterers had to nominate a reach- able place, which meant that it was the charterers’ responsibility to ensure that there was, at that point of time, a berth which the vessel, proceeding normally, would be able to reach and occupy (c) (c) The time of the vessel’s arrival, within the above-mentioned charter party words, had come when the vessel had gone as far as she could go, whether to the verge of or within the port, in the absence of a nomination by the charterers of a place, which she could not reach without being held up, where she could load.
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