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[2006] 2 CLC

Tidebrook Maritime Corp v Vitol SA of Geneva
(The Front Commander).

Court of Appeal (Civil Division).
Buxton, Rix and Scott Baker L JJ.
Judgment delivered 5 July 2006.

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61. Secondly, for the reasons set out above, the background provisions of the Asbatankvoy charter, and the background law, combine to indicate that, absent contrary agreement, a charterer who loads a vessel following a notice of readiness which is either valid or treated as valid should be expected to be doing so in time for which he is accountable, i.e. laytime. Laytime provisions may of course allow

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him notice time, or may except weekends and holidays or periods of delay due to force majeure etc: but one would not expect to find that the vessel would be used by a charterer in loading or discharging free of any laytime accountability. After all, the vessel is working for the charterer. Laytime is the time agreed and allowed for loading and discharging. In the absence of clear contrary expression, why should the charterer load or discharge in free time?

62. Thirdly, the commencement of laytime is intimately connected with the service of a notice of readiness. That is another way of expressing the charterers’ accountability for laytime, the time agreed and allowed for loading and discharging. There is usually a notice period allowed, but subject to that or other express exceptions, the notice of readiness is the trigger for the charterers’ accountability for laytime. In The Happy Day Potter LJ spoke (at para. 72) of:

‘the commercial context and the purpose of the contractual requirement to serve NOR which is to trigger the charterers’ obligation to unload whereby laytime starts to run immediately (in the absence of express provision), or in accordance with a specific regime ...’

63. Clause 6 of the Asbatankvoy form is consistent with that thought, in providing that a notice of readiness shall be served ‘and laytime ... shall commence’ six hours later. I accept Mr Young’s submission that the sole or dominant purpose of the notice of readiness was to act as a trigger for the commencement of laytime. The way I would put it is that, in the context of a charterparty, the sole or dominant purpose of a notice of readiness is to tender the vessel for loading or discharging and thus to act as the trigger for the commencement of laytime. Of course a notice of readiness expresses the vessel’s readiness, and thus her arrival, but that is because a vessel cannot tender such a notice without being arrived and ready. The purpose, however, is to tender the vessel to the charterer for his duties of loading or discharging with their laytime accountability. Similarly, I accept that the date of a notice of readiness may be used to price a cargo (but by far a more usual pricing mechanism is the bill of lading date): but that is its use under sale contracts, not under the charterparty. I therefore consider that Mr Brenton’s reasons for seeking to give to a notice of readiness a life force outside that as the trigger for the commencement of laytime are without material force.

64. Fourthly, once the owners were ordered to berth and to commence loading on 8 January, in advance of the earliest layday of 9 January, the protection of that earliest layday had gone. I refer to my construction of clauses 5 and 6 above. It seems to me that the same is true of clause 31.

65. Fifthly, and semantically, I do not read clause 31, as the judge did, as requiring two separate consents. I accept Mr Young’s submission that the words ‘and laytime shall not commence before 0600 ... on the earliest layday’ as expressing the legal consequence of the prohibition on serving a notice of readiness prior to the earliest layday. Once the earliest layday was waived, which was not done merely by allowing

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a notice of readiness to be served in advance of it but by ordering the vessel to berth and load in advance of it, the charterers consented to the early commencement of laytime: just as they would have done under clause 5 (see above) which also connects the earliest layday (and its waiver) with the commencement of time.

66. Sixthly, since the owners could not refuse to berth and load, Mr Brenton is in error to suggest that the owners’ possible and correct response to the charterers’ email orders was to say: ‘Only if in addition you agree in writing to commence time early – see clause 31’. To which the charterers could if their construction were the correct one, reply: ‘No thank you. Get on with berthing and loading or we will hold you liable under the first sentence of the very clause you have referred us to.’

67. Seventhly, I would regard the interpretation of clause 31 espoused by the charterers as unrealistic and uncommercial and a trap for the unwary master or owners’ agent. They would not think of responding to orders to serve a notice of readiness, to berth and to load by refusing to do so unless the charterers in addition agreed that time should count in advance of a time (here 0600 on 9 January) which had been expressly linked with a time, the earliest layday, before which NOR could not be served but which for those purposes had been expressly waived. Nor did these experienced owners, who were copied in on the charterers’ emails, think of responding as the charterers suggest they should have done. That is, of course, legally beside the point. But it is legally relevant to ask how the reasonable master or owners' agent or owner would have regarded the charterers' emails and clause 31. 

68. In this connection, I accept that if clause 31 has to be interpreted, as the charterers would submit, as containing the requirement of two entirely separate express consents, then the emails concerned do not quite amount to them. However, that is merely to emphasise the uncommercial nature of the charterers’ construction. No one would reasonably expect that laytime would not be running along with and pursuant to a notice of readiness given in immediate anticipation of berthing and loading, in circumstances where the express provision against early notice of readiness and early loading contained in the charterparty had been expressly waived in writing.

69. Eighthly, one has to ask how clause 33 fits into this scheme. Is it inconsistent with it, thus putting the above considerations into flux? In my judgment, no. Clause 33 properly asks the question which follows on immediately from the previous clause that contemplates loading before the earliest layday: How in such a case is time to count? If nothing more were said, time would, in my judgment count in accordance with clause 6 and following of the Asbatankvoy form. That might prejudice charterers where the notice of readiness was tendered in anticipation of early berthing and loading, but the latter operations were then delayed, albeit clauses 7/8 have their own provisions in this respect. Clause 33 appears, however, to cut through clause 6 and provides for two matters: first, that the relevant time to focus on is time from berthing until the commencement of laydays; and secondly, that that time is to be shared.

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70. Mr Brenton submits nevertheless that that time is free to the charterers, and that A therefore the effect of sharing it is to increase the laytime available to the charterers, and that in the absence of the sharing amendment to the Vitol standard clause the whole of the time from berthing to the earliest layday would have increased the amount of laytime. In my judgment that is uncommercial and counter-intuitive, for prima facie time used by the charterers for loading and  discharging should be time for which they are accountable, but in any event it is not what the clause is saying. The time is to be ‘credited’ (subject to sharing) ‘to Charterer against laytime and/or time on demurrage’. In my judgment that shows that laytime is otherwise running (or, if the vessel is already on demurrage, as it might be at a second loading port or at a discharge port) demurrage time is being incurred. I do not accept the charterers’ construction, which is that the time is to be added to laytime allowed, or deducted C from laytime used or demurrage time incurred merely as a post-event calculation at the conclusion of the voyage. It is preferable to ask how the time is being treated as it is running. Otherwise, the point at which the vessel exhausts laytime and goes onto demurrage will not be known until the end of the voyage. Moreover, if at the end of the voyage, the charterers have not exhausted their laytime, the ‘credit’ will be irrelevant – there is no provision for despatch.

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Conclusion

73. In sum, I would allow the appeal and hold that the owners’ construction of these clauses is correct. It follows that, by agreement, the principal sum of $70,489.71 has to be paid to the owners.