Transcript Document 7339815

NEW ISSUES AND RECENT CASES IN
CHARTERING
Tokyo
May 12, 2009
William J. Honan
Holland & Knight LLP
1
Clause 5, Part II, ASBATANKVOY
5. LAYDAYS. Laytime shall
not commence before the date
stipulated in Part I, except with
Charterer's sanction . . .
2
Clause 6, Part II, ASBATANKVOY
6.
NOTICE OF READINESS.
Upon arrival at
customary anchorage at each port of loading or discharge,
the Master or his agent shall give the Charterer or his agent
notice by letter, telegraph, wireless or telephone that the
vessel is ready to load or discharge cargo, berth or no
berth, and laytime, as hereinafter provided, 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, irrespective of whether
the berth is reachable on arrival or not where delay is
caused to Vessel getting into berth after giving notice of
readiness for any reason over which Charterer has no
control, such a delay shall not count as used laytime or
demurrage. In any event, Charterer shall be entitled to six
hours notice of readiness at loading and discharging ports,
even if the vessel is on demurrage.
3
Issue No. 1
1. If a vessel arrives prior to
commencement of the laydays
and is ready to load, is the vessel
under an obligation to give its
notice of readiness?
4
Issue No. 2
2. If the vessel gives its
notice of readiness prior to the
commencement of laydays, does
the six hour free period begin
running upon the giving of the
notice
of
readiness
or
at
midnight of the first layday?
5
Issue No. 3
3. Does the giving of an
early notice of readiness require
the charterer to commence
loading immediately (or at least 6
hours afterwards)?
6
Issue No. 4
4. If the charterer upon
receipt of the early notice of
readiness, orders the vessel to a
berth, can the vessel refuse?
7
Issue No. 5
5. If the charterer orders the
vessel to its berth upon receipt of
the early notice of readiness and
begins loading the vessel, all
before the commencement of the
laydays, does the time used prior
to the first layday count as
laytime?
8
Mr. Justice Langley’s Holding
1. "[Laytime] never started at all,
with the consequence not only that the
owners have earned no demurrage,
but also that they are obliged to pay
the charterers despatch money for the
whole of the laytime."
2.
Charterer’s awareness that
discharge had commenced without
protesting or reserving its rights was
not itself a “sufficient happening” to
cause laytime start.
9
“Northgate”: Clause 6
Vessel is to give its NOR upon
arrival at the inner anchorage at
Sepetiba but may give its NOR at
the outer anchorage if space is
unavailable
in
the
inner
anchorage.
10
Judge Siberry said:
. . . , I consider that is a matter of
commercial practicality, such an
intended recipient of the NOR must
have implied authority to waive a
condition as to the commencement
of laytime.
11
He continued:
. . . if Charterer did not communicate the
Northgate charter terms to the Terminal/MBR
and/or give specific instructions that NOR
was not to be accepted from the other
anchorage unless the vessel was compelled
to wait there because the inner anchorage
was congested, it seems to me that they
[i.e., the Charterer] took the risk that the
Terminal/MBR would accept a NOR that could
have been rejected under the Northgate
Charter and thereby waive Charterers' right
to invoke the invalidity of that NOR.
12
Clause 6, Part II, ASATANKBOY
Upon arrival at customary
anchorage at each port of . . .
discharge, the Master shall
give the Charterer . . . notice
. . . that the Vessel is ready
to discharge . . . .
13
The arbitrators said:
In the tribunal's view "anchorage" in
clause 6 could not be read too literally.
The situation in the waters off Lagos was
notorious . . . . To deprive an owner of
the right to give a valid notice of
readiness under the Asbatankvoy form
of charter in such circumstances seemed
to the tribunal wholly unreasonable and
not what the parties could have
intended.
14
“Agios Dimitrios”:
Clauses 23(b) and 25
Clause 23(b)
At loading port(s) when tendering notice of readiness,
Vessel's cargo holds and hatch covers shall be clean,
dry of loose rust and otherwise ready and suitable to
receive the intended cargo.
Clause 25
Crew and mechanical failure – time lost at loading
and/discharging port(s) which can be reasonably
attributed to crew and/or ship's mechanical failure,
shall not be counted as laytime or time on demurrage.
15
“Nikmary” Facts Summary

The vessel arrived at the port of Sikka to load a cargo of gasoil on
December 2 and proceeded immediately to its berth.

The vessel's tanks were inspected on December 3rd by an independent
surveyor appointed by the charterer and were rejected.

The supplier, Reliance Petroleum Limited, was prepared to supply the
cargo on December 3rd.



The vessel's crew cleaned the holds and, on December 5, the two
surveyors, one appointed by the owner and the other appointed by the
charterer passed the holds and the vessel gave its valid NOR to the
receiver.
No cargo was forthcoming and, on December 9, Reliance notified the
charterer that due to its other commitments, the “Nikmary” would not
be loaded until the end of the month.
Loading in fact did not commence until January 3.
16
“Nikmary” Clause 30(c)(v)
Owner shall indemnify Charter for
all direct and/or indirect costs and
consequences as a result of the Vessel
not being clean to the satisfaction of
jointly appointed inspector and . . . all
time until connection of hoses, after
the Vessel has been passed as clean to
the satisfaction of jointly appointed
inspector shall not count as laytime or,
if on demurrage, as time on
demurrage.
17
Charterer’s Duty to Provide Cargo
A
voyage charterer owes an
absolute and non-delegable duty to
provide cargo for loading and
 Charter
exceptions will normally be
read as protecting a charterer only
in respect of its duty to load, and
not as covering its duty to provide
a cargo.
18
Clause 23
23.
Charterers shall be discharged
and released from all liability in respect of
any claim for demurrage which Owners
may have under this Charter unless a
claim in writing has been presented to
Charterers together with supporting
documentation substantiating each and
every constituent part of the claim within
90 days of the completion of discharge of
the cargo carried hereunder.
19
Owner argued:
1.
the absence of the vessel officer's
signature was of no relevance; indeed, it was
prepared to sign the pumping logs anytime.
2.
the Charterer was shown to have
received pumping logs signed by its own
representative within the 90 day period.
3.
even if the discharge port demurrage
was time barred, due to the absence of a
signed pumping log, the Owner should be able
to recover the demurrage that it incurred at
the load port.
20
Mrs. Justice Gloster held:
1.
There as a significant commercial
purpose in requiring a signature of a vessel's
officer for someone should be identified that is
willing to confirm its accuracy.
2.
The
Charterer
should
have
the
documents in one package and should not have
to review its own files or make its own
investigation.
3.
Clause 23 refers to a single claim and
there is no suggestion that part of a claim would
be permitted if the Owner's submission was
defective.
21
Mr. Justice Steel ruled:
. . . I am not persuaded that . . .
the
failure
to
provide
all
"supporting documentation" . . .
for one constituent part of the
claim discharged liability for the
entire demurrage claim.
22
Time Bar General Principles
1.
Contractual time bars are enforced.
2.
Arbitrators require strict compliance
to satisfy contractual time bars. Substantial
compliance probably is insufficient.
3.
Contractual time bars are enforced
even if there is no dispute concerning the
claim in question.
4.
Contractual time bars are construed
strictly against the drafter.
23
Time Bar Practice Tips
1. If the Owner:
a) seek to eliminate altogether
b) make the clauses mutually applicable
c) provide as long a period as possible
d) provide training to the persons handling
claims
2. If the Charterer:
a) include all claims not just demurrage and
detention
b) draft the clause so as to avoid obvious
loopholes
24
Eland: S.M.A. 4027 (March 4, 2009)
The term "WVNS," coupled with a description of
the cargo segregation system, exists primarily to
protect owners . . . from being compelled to load
different cargoes in such manner as to result in
potential cargo claims. It is not a descriptive
phrase that charterers . . . can waive in order to
maximize the amount of cargo intake.
. . . Since the Owner did not have to follow the
improper voyage orders, it could impose, within
reason, any conditions it felt necessary to protect
its contractual rights.
25
Elinda: S.M.A. 4006 (May 30, 2008)
Should the vessel be off-hire for
more than
fifteen (15)
days,
charterer shall have the option to
cancel the charter party provided
there is no cargo onboard.
26
Clause 23
Charterer to give 30 days
notice with 10 days notice
laycan speed and Owners to
nominate the vessel latest 10
days prior first day with
complete
itinerary
of
he
vessel . . . .
27
Charterer instructed:
"Baltimore/Constanza shipment #5
under the subject COA: 5/14 Oct.“
then:
". . . would like to move the laycan
for shipment #5 to 21/30 Oct.”
28
Charterer replied:
Actually the stem 5/14 has
moved to 22/30 by the shippers
because of cargo availability in
this port. Therefore requesting
owners for this amendment .
29
Mr. Justice Steel held:
... , in my judgment, as soon as the
notice is given the owners can rely on
it. The idea that over the period of 20
days before the nomination of the
vessel has to be made the charterers
can change the lays on dates as
frequently and as substantially as they
see fit, or even thereafter up to the
stage that an estoppel be clearly
established, is commercially unreal and
uncertain.
30
Redelivery Clause
. . . charterers are to give
Owners not less than 30 days
followed by 20/5/10/7 days
notice of approximate redelivery
date and intended port thereafter
5/3/2/1 days definite notice of
redelivery date and port.
31
Charterer stated:
approximate
notice
of
redelivery
for
the
MV
Zenovia at DLOSP 1 sp
China on about 04 Nov
2007 basis agw, wp, wog,
uce
32
Charterer revised instruction:
Pls note that we hereby revise
the date of redelivery to
owners to about Nov. 20th
within the range of redelivery.
33
Panel held:
1) the
Owner
had
relied
on
Charterer's statement in refixing its vessel
on the assumption that it would have the
vessel back on about Nov. 4 (promissory
estoppel).
2) there was implied a term that,
when an approximate date is given by the
Charterer, the Charterer was obliged "not
to do anything deliberately which prevents
that approximate date being met."
34
Mr. Justice Tomlinson
1)
If the arbitrators believed the acronym
"WP" stood for "without prejudice" those words
should have put the Owner on notice that
Charterer
could
change
the
approximate
redelivery date.
2)
To imply a term in a negotiated
contract, the term must be so obvious that the
parties must have intended it for a part of the
contract.
Pointing to the notice periods
(30/20/10/7 approx; 5/3/2/1 definite), the Court
stated that "[i]n my judgment the very structure
of that regime militates against any argument
that the parties must be bound to have agreed
that the giving of the first notice constrained
35
For Promissory Estoppel:
(i) a
clear
and
equivocal
representation by the charterers that
they were giving up their rights (that is,
giving up their right to retain the vessel
until November 22) and
(ii) owner acted in reliance on that
representation in a way that would
make it inequitable to permit charterer
to change its position.
36
NEW ISSUES AND RECENT CASES IN
CHARTERING
Tokyo
May 12, 2009
William J. Honan
Holland & Knight LLP
37