Port limits and Notices of Readiness
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For Business
Marine
Shipping and logistics
(The Arundel Castle [2017] EWHC 116 (Comms) 31)
The English Court has recently looked at the issue of what can be considered a port limit, when addressing whether a vessel could give a notice of readiness “NOR”. The background to the dispute was that the vessel “Arundel Castle” had arrived at Krishnapatanam, but it had been unable to berth because of congestion.
The vessel was ordered by the authorities to anchor at a place identified by the port authority. When the owners arrived at that place they gave NOR. A demurrage claim followed and the owners and charterers adopted different views about the validity of the NOR given at the anchorage.
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The charterparty recap contained the following clause:
[“Notice of readiness] to be tendered… on vessels arrival at load/disch ports within port limits. The [notice of readiness] not to be tendered before commencement of laydays.”
The recap incorporated the Gencon charterparty form and clause 6 of that charterparty provided “if the loading/discharging berth is not available on the Vessels arrival at or off the port of loading/discharging, the Vessel shall be entitled to give Notice of Readiness within ordinary office hours on arrival there..”
The dispute was initially submitted to London Arbitration. The arbitrators had to decide whether the NOR was given in the port limits. They decided that that NOR was given beyond the port limits and was therefore invalid. However, it is worth bearing in mind that the only evidence they were given about the port limits was an admiralty chart and that chart revealed the vessel had anchored outside the port limits. No other evidence appears to have been given about the usual waiting places for ships in a port.
An appeal was then lodged against those findings and the case was heard by the Commercial Court in London. The owners argued before the Judge that the port limits included any area, within the areas in which vessels were customarily asked to wait by the port authorities. The owners also relied on the definition of “port” in the Laytime Definitions for Charterparties 2013. On the basis of that evidence they argued that the port limits included any area where vessels customarily loaded or discharged cargo, including berths, wharfs, anchorages, buoys, offshore facilities as well as places outside the legal fiscal or administrative areas.
The Court was not impressed by the owners’ arguments.
The Judge who heard the matter thought that although the Gencon clause referred to a vessels arrival at or off the port of loading/discharge, the fixture recap had expressly provided that NOR could only be given on the vessels arrival within the port limits. The Court recognised that the case law in this area supported the view that “a usual waiting place would not always be within the port in question” but the definitions given in various cases were not exhaustive. The Court was aware that very little evidence had been provided to the arbitrators by the owners about the area where the vessel had been ordered. In the absence of complete evidence the arbitrators were entitled to draw their own conclusions on the evidence before them. Even though the port authority had accepted that the vessel was an arrived ship it was not the result achieved by the charterparty wording.
As far as the Laytime Definitions for Charterparties 2013 was concerned – the Court took the view that those definitions were not incorporated into the charterparty.
6th March 2017
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