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71. It has already been mentioned that in practice it is very common for cargo
spaces to be found not ready some considerable time after a vessel arrives at or off a port/terminal and has to wait for a berth. The situation is so common that owners should attempt to get particular clauses in their charterparty contracts so that they get compensation for time actually lost waiting for a berth; some usual clauses have been mentioned earlier in Chapters 2 and 3 (e.g. time lost waiting for a berth, reachable on arrival). Charterers, understandably, may be reluctant to agree a ‘‘reachable on arrival’’ provision but may be more amenable to a ‘‘time lost waiting for a berth’’ provision or something similar.
Two decisions by the same commercial judge illustrated the continuing problem and they also evidenced his purposive approach to the construction of the relevant charterparty clauses in circumstances where the cargo spaces were found insuffi- ciently clean after the tendering of a notice of readiness. In The ‘‘Linardos’’17the owners chartered their vessel Linardos to the charterers for the carriage of coal from Richards Bay, South Africa to Antwerp on the terms of the Standard Form Richards Bay Coal Charter (RBCT) the laydays/cancelling days being 1 October and 10 October 1991.
On arrival at Richards Bay, no berth was available for docking. The vessel nevertheless tendered a notice of readiness to load at 16.50 on 4 October 1991, from its position off-shore. The vessel did not dock until 08.50 on 7 October, and was inspected by the marine surveyor who found water and rust in her hatches and failed her for loading. She was not finally accepted as ready until 06.30 on 8 October. A dispute later arose under the charterparty as to whether the 4 October notice was valid given that at the time of tender the vessel was not in truth ready for loading.
The material provisions of the charterparty were as follows: Clause 4 Lines 67–78:
‘‘Time commencing, subject always to the undermentioned provisos, 18 hours after Notice of Readiness has been give by the Master, certifying that the vessel has arrived and is in all respects ready to load, whether in berth or not . . . Any time lost subsequently by vessel not
fulfilling requirements for Free Pratique or readiness to load in all respects, including Marine Surveyor’s Certificate . . . or for any other reason for which the vessel is responsible, shall NOT count as notice time or as time allowed for loading.’’
Clause 24:
‘‘RBCT Regulations to apply to this Charterparty.’’
Clause 25:
‘‘In the event of vessel having to wait for berth at load/discharge port due to congestion then Notice of Readiness may be tendered by cable or telex or off the port whether in berth or not, whether in port or not, whether in free pratique or not, whether customs cleared or not.’’
RBCT regulations clause 2.12:
‘‘Vessels–
2.12.1 shall be required to present a Master’s certificate that the holds have been washed and dried prior to tendering Notice of Readiness;
2.12.4 if berthed and the holds are not passed as clean, will be required to vacate the berth and will lose their loading turn. The Notice of Readiness will only be accepted after receipt of an independent marine surveyor . . . that the vessel is clean, dry and free of contaminants.’’
The reference to RBCT Regulations was to Richards Bay Coal Terminal Regulations.
The charterers challenged the validity of the notice of readiness, the arbitrator found that the notice of readiness was valid and awarded the owners the full amount of their demurrage claim in the sum of $40,277.77 plus interest.
The charterers appealed to the High Court against the finding on the notice. It was held by Mr Justice Colman that:
(1) although in general a valid notice of readiness could not be given unless and until the vessel was in truth ready to load it was always open to the parties to ameliorate the black or white effect of the principle by express provisions to the contrary;
(2) the express provision in clause 4 lines 75 to 78 as to what was to happen in the event of time lost subsequently by vessel not fulfilling requirements for ‘‘ . . . readiness to load in all respect, including Marine Surveyor’s Certificate’’ contem- plated loss of time due to the occurrence of surveyor declaring the holds unfit after the master had already presented what on the face of it was a perfectly valid notice of readiness; the argument that lines 75 to 78 should be construed as confined to loss of time due to events occurring after the giving of notice of readiness would be rejected; and the effect of clause 4 was to contract out of the normal rule that the vessel must be ready at the time of giving notice;
(3) a notice of readiness proved to be given by the master or chief officer with the knowledge that it was untrue i.e. in the knowledge that the vessel was not then ready would be ineffective to start time running; there had to be by implication a require- ment of good faith;
(4) the RBCT regulations and clause 2.12.1 in particular contained nothing to suggest that presentation of the master’s certificate that the holds had been washed and dried prior to tendering notice of readiness was to have any other function than
part of the ‘‘requirements in respect of the Notice of Readiness’’ which the regula- tions required to be satisfied before the vessel would be allocated to a berth; the general incorporation in clause 24 of the general requirement in clause 2.12.1 did not make that requirement a condition precedent to the commencement of time; the arbitrator was right in his conclusion that the regulations did not supplement the effect of clause 4 and the appeal would be dismissed.
In The ‘‘Jay Ganesh’’18the owners chartered their vessel to the charterers for the carriage of bagged rice from Ben Qasim in Pakistan to various ports in West Africa. The charterparty was on the World Food Programme voyage charter (‘‘Worldfood’’) which provided:
‘‘8(a) At each port of loading and discharging notice of readiness shall be given by the Master to the Charterers . . . when the vessel is in the loading or discharging berth and has obtained customs clearance and free pratique and is in all respects ready to load and discharge.
(b) At loading port before tendering notice of readiness the Owners . . . shall ensure that all holds . . . are clean, dry and free from smell and in all respects suitable to receive the cargo to the . . . Charterers’ satisfaction.
(c) If a loading/discharging berth . . . is not available upon the vessel’s arrival at or off the port, notice of readiness may be given upon arrival at the customary waiting place at or off the port, whether cleared at Customs or not and whether in free pratique or not.
However if upon the vessel’s arrival at or off the port she is prevented from proceeding to the loading/discharging berth by her inefficiency . . . notice of readiness may only be given when such hindrance(s) has (have) ceased . . .
9. Laytime Counting (Loading and Discharging).
(c) If the notice of readiness has been tendered while the vessel is at or off the port, in accordance with Clause 8(c) the laytime shall commence to count and shall count as if the vessel were in berth . . .
(e) If after berthing the Vessel is found not to be ready in all respects to load/discharge, the actual time lost until the Vessel is in fact ready to load/discharge (including customs clearance and free pratique if applicable) shall not count as laytime or as time on demurrage.’’
The vessel proceeded in ballast to the anchorage of the loading port and gave notice of readiness on 10/11 August 1990. There was no berth available. On 28 August the vessel was inspected by the charterers’ representative and the master was instructed to clean the holds and remove the infestation of insects.
On 7 September the vessel shifted from the anchorage into berth. On 8 September the vessel was inspected and the surveyor found that the infestation was still present. She was declared unfit to load the rice cargo and her holds needed fumigation.
On 9 September she was reinspected and declared fit to load. Loading com- menced on 10 September.
The owners claimed demurrage and the dispute was referred to arbitration. The arbitrators found that when the master gave notice of readiness to load on 10/11 August he believed that the vessel was physically ready to load but in truth she was at that time unknown to the master infested with insects and mites. The arbitrators held that the shipowners were entitled to recover demurrage and that a valid notice had been given.
There was an appeal. The issue for decision was whether the notice of readiness given on 10/11 August was a nullity because the vessel’s holds were then infested so
that time did not commence until the commencement of loading on 10 September, or whether as the shipowners contended that notice was valid so as to start the running of laytime from 10/11 August but subject to the deduction of about 21
2days from berthing on 7 September to being ready to load on 9 September.
It was held by Mr Justice Colman that:
‘‘(1) the charter imposed on the owner, as a matter of contract, exactly the duty as to physical readiness of the cargo spaces which he would have had at common law; to make sure before giving notice of readiness that they were in all respects fit to receive the cargo and only to give notice if he had ensured that; just as the effect of clause 9(e) in relation to free pratique was to deal with additional delay arising from the fact that the master gave the notice of readiness under a misapprehension as to the medical condition of the crew, so must its effect in relation to physical unreadiness be to deal with additional delay which the master gave notice contrary to the owners’ duty at common law and under clause 8(b) under a misapprehension as to the physical condition of the cargo spaces; time being thrown away in both cases it was the scheme of the contract that the owners should bear the expense of the delay;
(2) the overall effect of clauses 8 and 9 was that this form of charter required that the charterers must pay for waiting time at the anchorage when they had not provided a berth, but that if the vessel then caused delay after arrival in berth because she was not in truth then ready to load or discharge that loss of time was to be borne by the owners;
(3) the failure to obtain free pratique or to obtain charterers’ satisfaction would be analo- gous to the failure to obtain a marine surveyors’ certificate and it was no less unrealistic to distinguish between delay cause by unreadiness attributable to events existing when the notice was given and delay caused by subsequent events; the purpose of the clause was to make the owners pay for the loss because the master, albeit innocently, gave notice that his vessel was ready when in truth it was not and to make the charterers pay for the delay caused by their failure to provide a berth; the appeal would be dismissed.
The ‘‘Linardos’’ [1994],17
applied.’’
In a much later arbitration LMLN 636—31 March 2004 (already referred to in Chapter 1 regarding geographical arrival and also later in Chapter 7 regarding exceptions), one of the issues was whether, as the owners argued, the notice of readiness given on 29 July was valid, and only the period following the refusal of the local inspector at the loading port to be satisfied as to the cleanliness of the vessel’s holds for loading until he passed them should be regarded as:
‘‘ . . . all time lost due to the vessel’s holds not being ready to receive the cargo until vessel’s holds are ready to receive the cargo not to count as laytime . . . ’’ (Recap clause 11);
or whether, as the charterers argued, the vessel’s uncleanliness prevented a valid notice of readiness being given so that laytime did not commence until the surveyor was satisfied.
The owners relied on the decisions of Mr Justice Colman in The ‘‘Linardos’’17and The ‘‘Jay Ganesh’’.18 The charterers contended that those decisions should be distinguished on the facts and/or that they should be regarded as clearly out of step with other judgments which stressed the importance of the accuracy of the facts stated in the notice of readiness before it could be effected. They said that in the present case the notice of readiness was clearly inaccurate in stating that the vessel was ready to load.
It was held that, it was true that in the present charter the recap clause 11 was quite separate from the notice of readiness provisions in clause 24, whereas in The
‘‘Linardos’’ the notice of readiness and requirement for a Marine Surveyor’s certifi- cate as part of the vessel’s readiness were both in clause 4 of that charter. However, in The ‘‘Jay Ganesh’’ the two aspects (giving of NOR and cleanliness, and loss of time due to the vessel being found not to be ready) were in separate clauses (8 and 9). Mr Justice Colman said, at page 362:
‘‘The overall effect of clauses 8 and 9 is accordingly, that this form of charterparty requires that the charterers must pay for waiting time at the anchorage when they have not provided a berth but if the vessel then causes delay after arrival in berth because she was not in truth then ready to load or discharge, that loss of time is to be borne by the owners. That is an entirely logical division of the risk of delay between the parties.’’
Accordingly, the tribunal considered that it had to follow the guidance so provided by Mr Justice Colman as the wording and layout of the present charter could not be distinguished from The ‘‘Jay Ganesh’’ provisions.
Nor was there a sufficient, if indeed any, distinction that could be drawn between the facts of the present case and the two previous cases. The charterers had sub- mitted that Mr Justice Colman regarded it as being necessary that there had to be a requirement of good faith in the giving of the NOR, without which it would not be effective to start time running. The charterers asserted that extensive cleaning, descaling and preparation of the holds was required before they were ready. The owners had challenged that assertion. The tribunal’s finding was that, whatever was the exact cleaning that was required (and there were few facts about that), there was no evidence that the notice of readiness was given in anything other than good faith.
As to the charterers’ submission that the decision in The ‘‘Linardos’’ and The ‘‘Jay Ganesh’’ were out of step, both decisions originated from awards by extremely experienced LMAA tribunals, and the judge in question (Mr Justice Colman) had spent his career frequently involved in charterparty cases. Far from being out of step with shipping law and decision in this area of maritime jurisprudence, the tribunal considered that those decisions represented a wholly logical and commercial excep- tion to the readiness requirement in a notice of readiness, and was one which followed from the language used in the charter.
Accordingly, the wording of recap clause 11 was sufficient to qualify the normal readiness requirement of the notice of readiness. The plain and ordinary meaning of the words ‘‘all time lost . . . ’’, when included in a clause dealing with the satisfaction of ‘‘local inspectors’’ as to the readiness of the holds, could only be that where there was dissatisfaction, then the time involved from the inspection to the satisfaction of the inspector was excluded from laytime which was otherwise run- ning from the expiry of the notice of readiness. The issue would be decided in favour of the owners.
The above cases and arbitration are very good examples of charterparty clauses not being sufficiently clear regarding what happens in respect of the very common type circumstances of a vessel having to wait for a berth and subsequently cargo spaces failing to pass the required standards of readiness. While the decisions by Mr Justice Colman were eminently sensible and showed a purposive approach to the inter- pretation of the charterparty clauses in question there would have been no necessity for the arbitrations and the court proceedings if the parties had agreed simple and
clear wording which left it in no doubt that the owners would have received com- pensation for the period that their vessels were waiting for berths and subsequently were found to be not ready to load/discharge their cargoes. Before suggesting an appropriate clause to cover the situation, the commercial justice of such a clause was put by Mr Justice Colman in his ‘‘Linardos’’ judgment:
‘‘If it were not for lines 75 to 78, owners whose vessel, having given notice of readiness at the anchorage, then had to wait for a period of several days or even weeks because no berth was available, was found on getting into berth to need one final washing of one or more of her cargo spaces, perhaps only a few hours work, could lose the benefit of all time lost at the anchorage. The printed form of this charterparty avoids that very commercially unbalanced
result.’’ (Emphasis by the author.)
The commercial judge surely hit the nail on the head regarding a commercially unbalanced result so that, in the context of commercial justice, it makes sense to have a simple and clear clause in a voyage charterparty which leaves it in no doubt that when a vessel is waiting for a berth, particularly in respect of congestion which results in no berth being available to the vessel, and later the cargo spaces are failed, time counts in favour of the owners but on the basis of the laytime exceptions being applicable. Such a clause could read:
‘‘If a loading/discharging berth is not immediately available at the time of the vessel’s arrival at or off the loading/and discharging port/terminal laytime shall commence . . . and shall run subject to the laytime exceptions irrespective of whether the vessel is subsequently found not to have been ready to load/discharge cargo. Laytime, or time on demurrage, will not run during any periods when the vessel has to be cleaned in order for the vessel to load/discharge her cargo.’’
A sentence could also be inserted in such a clause to the effect that any notice of readiness given by the master had to be given in good faith although this will be implied, in any event, because of what Mr Justice Colman had to say in the ‘‘Linardos’’:
‘‘In the arbitration it was submitted that the master must have acted in bad faith when he gave