LAYTIME AND DEMURRAGE

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1 LAYTIME AND DEMURRAGE BY JOHN SCHOFIELD, M.A. of Cray's Inn, Barrister FOURTH EDITION LLP LONDON HONGKONG 2000

2 Contents Preface to the Fourth Edition Table of Cases Table of Statutes PAGE vii xvii xxxvii CHAPTER 1. GENERAL PRINCIPLES CHAPTER 2. LAYTIME CLAUSES FIXED AND CUSTOMARY LAYTIME 9 FIXED LAYTIME 9 Calendar days 10 Conventional days 11 Running days 12 Working days 12 Weather working days 16 Calculation of weather interruptions in weather working days 20 Saturdays and other incomplete days 25 Voylayrules Working days, running hours, running days, weather permitting 27 Working hours, working days of 24 hours, weather permitting 31 Working hours per working day 33 Working days of 24 consecutive hours, working days of 24 running hours, weather permitting 34 Weather working day of 24 consecutive hours 35 LAYTIME BY REFERENCE TO RATES OF WORKING CARGO 36 Rate per working hatch (or available workable hatch) 36 Availability of holds 40 Rate per hatch 41 Rate per hook 42 Laytime expressed as a total daily rate 43 Laytime expressed as a total daily rate basis a specified number of available workable hatches 47 ix

3 X CONTENTS CUSTOMARY LAYTIME 50 What is a reasonable time? 50 Effect of custom 53 Commencement of the obligation to load/discharge 55 Delays due to charterers/shippers/receivers 57 Failure to provide a berth on arrival 57 Failure to have a cargo in readiness 58 Alternative methods of discharge 59 Provision of defective cargo 60 Delays arising without the default of either shipowners or charterers 61 Congestion 61 Strikes 62 Actions of port and other authorities 63 Delay due to other third parties 63 Weather and other natural phenomena 64 Other terms of the charterparty 65 Where customary laytime is exceeded 65 CHAPTER 3. COMMENCEMENT OF LAYTIME 67 The specified destination 67 Berth charters 73 Dock charters 74 Port charters 76 Arrival within the port 77 At the immediate and effective disposition of the charterer 79 READINESSTO LOAD AND DISCHARGE 92 Physical readiness 93 Overstowed cargo 99 Equipment 99 Other physical matters 102 Legal readiness 102 Common law 104 Free pratique and quarantine 105 Additional requirements 108 Implied requirements 111 The Indian cases 111 Notice of Readiness 113 When and how to be given 114 Express provisions 115 Notice in advance of arrival 119 Time lapse between readiness and commencement of laytime 119 Notice given before commencement date for laytime 120 Correctness of notice of readiness 121 Notice of Readiness and clause 6 of the Asbatankvoy form of charter 124

4 CONTENTS Xi Acceptance of notice 126 Readiness and readiness 132 Work before laytime commences 134 CHANGES TO THE BEGINNING OF LAYTIME 135 Custom 136 Obstacles created by the charterer 137 Failure to have cargo available or arrangements for discharge 137 Congestion due to charterer's other commitments 138 Charterer's duty to act to enable a vessel to become an arrived ship 140 Whether in berth or not 142 Whether in port or not 147 Time lost in waiting for berth to count as laytime 148 How time lost should be counted 153 Time lost in waiting for berth to count in full 153 Norgrain charter waiting for berth 154 Reachable on arrival/always accessible 154 Baltic Code Always accessible for how long must the berth be accessible? 160 So near thereto as she may safely get 162 A. Nature of the obstacle 164 B. Length of time actually spent waiting 165 C. Length of anticipated delay 166 D. Degree of risk known to exist. 166 E. How close to the intended port the vessel can get 166 F. Proportion of cargo to be loaded/discharged at the obstructed port 168 In regular turn/in usual turn 168 Limits of delay 171 Custom and practice 171 Loss of turn 172 Delay after berthing 172 Demurrage in respect of waiting time 172 Time to commence on being reported at the Custom House 173 To be loaded as per colliery guarantee 174 CHAPTER 4. INTERRUPTIONS AND EXCEPTIONS TO LAYTIME 175 The contra proferentem rule 176 General principles 177 Fault of the shipowner 178 Bunkering 181 Ballasting and deballasting 182 Non-production of bills of lading 183 Communications with vessel 184 The Alms 184 Exclusion of fault 185

5 Xii CONTENTS General exceptions clauses 186 "Any other cause beyond the control of charterers" 189 Cases relating to principle A 189 Cases relating to principle B 192 Cases relating to principle C 194 Overtime ordered by port authorities to count as laytime 196 Congestion 197 ADVERSE WEATHER 197 The limits of weather 199 Particular types of weather 200 Frost 200 Ice 202 Surf 204 Swell 205 Bore tides 206 Causation and weather 207 Interruptions 207 Exceptions 209 Conoco weather clause 212 HOLIDAYS 213 What is a holiday? 213 Regulations and law 214 Custom and practice 216 Particular types of holidays 216 "General or local holidays" 217 "Legal holidays" 217 "Official and local holidays" 217 "Charterparty holidays" 218 "Non-working holidays" 218 The BIMCO calendar 219 Holidays and working days 219 Part holidays 220 Saturdays 222 Overtime 223 Custom 223 Local law 224 Saturdays today 225 Baltimore Form C Saturday clause 226 Weekend clause 227 Working in excepted periods 227 Where provided for 227 Where not provided for 229

6 CONTENTS Xiil STRIKES 230 Meaning of "strike" Causation A. Provision of cargo B. Congestion and consequential delays Where consequential delay allowed When consequential delay not allowed C. Duty to lessen effect Alternative action Alternative port Alternative cargo Alternative methods of loading/discharging and/or change of berth within the port Alternative labour D. Length of delay Centrocon strike clause First part The specified causes Obstructions beyond the control of the charterers in the docks or other loading places Obstructions beyond the control of the charterers on the railways Stoppages Riots and civil commotion Strike or lock-out of any class of workmen essential to the loading/discharging Second part Third part Fourth part Gencon strike clause First paragraph Second paragraph Third paragraph SHIFTING AND LIGHTENING 259 Shifting 259 From anchorage to berth 259 Clauses providing for time not to count 260 Custom 261 Shifting from anchorages outside the port 261 Reachable on arrival 262 The limits of The Laura Prima decision 264 From one berth to another 269 Enforced shifting 270 Shifting expenses 271 Warping 274 Lightening 275 Time used in lightening 277

7 Xiv CONTENTS CHAPTER 5. OTHER LAYTIME MATTERS 279 COMPLETION OF LAYTIME 279 Dry cargo 282 Loading 282 Discharge 286 Liquid cargo 288 AVERAGING AND REVERSING 292 Laytime "averaged" 293 "Reversible" laytime 294 Cases on averaging 294 Cases on reversing 297 Other similar clauses 300 MULTIPLE CHARTERS 300 Are the charters to be read separately or together? 301 Commencement and running of laytime 303 Time lost in waiting for berth 304 Demurrage 308 Carriage of edible vegetable oils 310 Nomination of loading and discharging berths 310 Commencement of laytime and waiting time 310 Laytime and demurrage 310 Squeegeeing and sweeping 314 Transhipment 315 CHAPTER 6. DEMURRAGE 317 Meaning and nature 317 Length of demurrage 319 Rate and payment of demurrage 321 New Worldscale Full title: New Worldscale Tanker Nominal Freight Scale 322 Payment 323 Damages in addition to demurrage 323 Mitigation and proof of loss 331 Default of charterer 333 Default of shipowner 336 Exceptions clauses and demurrage 342 Shifting 346 Half rate demurrage 346 Storm 348 Notices of readiness, periods of notice and commencement of demurrage 349 Tanker warranties 351 The effect of deviation on demurrage 357 The end of demurrage permanent and temporary absence from the port 360

8 CONTENTS XV LIABILITY FOR DEMURRAGE 362 General principles 362 Incorporation of charterparty terms into bills of lading 364 Liability of shippers, consignees, indorsees and receivers 365 Liability of charterers as bill of lading holders 370 Nature of lien for demurrage 371 Cesser clauses 373 Construction of the charter 374 Effectiveness of the lien 376 Waiver of cesser clause 379 Liabilities before and after shipment 379 Master's rights to claim demurrage 380 Liability of bills of lading holders inter se 381 One calculation or many calculations 381 How much must each pay? 382 Demurrage time bars 384 Time of payment 386 CHAPTER 7. DESPATCH 387 Some later cases 391 Notice provisions 392 Reversing and double despatch 393 The Centrocon strike clause 395 Delay after loading or discharging 396 CHAPTER 8. DETENTION 397 Delay before the vessel reaches its specified destination 398 Delay after arrival at the specified destination and during the running of laytime 404 Delay during the running of demurrage 406 Delay after the end of laytime and/or demurrage 406 Delay by agreement 409 Exception clauses 410 Lien for damages for detention 411 CHAPTER 9. FRUSTRATION 413 A. Destruction of ship or cargo 415 B. Inordinate delay 416 C. Illegality 422 Self-induced frustration 424 The Law Reform (Frustrated Contracts) Act

9 Xvi CONTENTS APPENDIX 425 A. Laytime definitions 425 B. Charterparty Laytime Definitions C. Voyage Charterparty Laytime Interpretation Rules D. Baltic Code 2000 Charterparty and Laytime Terminology and Abbreviations 435 Index 439

Code name: SYNACOMEX It is this day agreed between 1 2. Owners. Owners of the of tons gross/nett Register and classed 3.

Code name: SYNACOMEX It is this day agreed between 1 2. Owners. Owners of the of tons gross/nett Register and classed 3. C O N T I N E N T G R A I N C H A R T E R P A R T Y adopted PARIS 1957 - amended 1960 - amended 1974 - amended 1990 by SYNDICAT NATIONAL DU COMMERCE EXTЙRIEUR DES CЙRЙALES amended 1960,1974,1990 in agreement