COMMENCEMENT OF LAYTIME PDF

If the notice is invalid, then in the absence of a waiver by charterers on which see below laytime will not commence at all, even if the charterers knew or ought to have known that the vessel was in all respects ready. These have assisted in the development and clarification of this area of the law. Arbitrators may however, take a more commercial view and decide on the facts that the charterers were aware or ought to have been aware that the vessel was ready to load and knew that loading was taking place, and that therefore laytime should commence on loading. The burden of proof, however, is on the owners to show that laytime should start to run even though a notice of readiness was not given. Where a notice is required then in the absence of an express provision to the contrary, this is required only at the first load port and not at the subsequent load ports or at the discharge port s. At common law, the notice may be given orally or in writing.

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If the notice is invalid, then in the absence of a waiver by charterers on which see below laytime will not commence at all, even if the charterers knew or ought to have known that the vessel was in all respects ready.

These have assisted in the development and clarification of this area of the law. Arbitrators may however, take a more commercial view and decide on the facts that the charterers were aware or ought to have been aware that the vessel was ready to load and knew that loading was taking place, and that therefore laytime should commence on loading. The burden of proof, however, is on the owners to show that laytime should start to run even though a notice of readiness was not given.

Where a notice is required then in the absence of an express provision to the contrary, this is required only at the first load port and not at the subsequent load ports or at the discharge port s.

At common law, the notice may be given orally or in writing. The question of whether the vessel is an "arrived" one for the purposes of commencement of laytime has been the subject of much discussion and case law which is outside the scope of this article. However, it can be said briefly that the specified destination will depend on the terms of the contract; if the charterparty is a berth charterparty then the specified destination is the nominated berth or, if a berth has not been nominated, it will be the first available berth to which the vessel is ordered and the notice of readiness may be tendered at that place subject to the other conditions being satisfied.

If, however, the charterparty is a port charterparty then the notice of readiness must be tendered when the vessel is in berth within the specified port or, if a berth is not available, when the vessel is within the port limits and at the waiting area where vessels usually wait for a berth. Various clauses in the charterparty may advance the time that the vessel may tender the notice even though she may not be at the specified destination.

The most familiar is the WIBON "whether in berth or not" provision which means that under a berth charterparty, if the berth is not immediately accessible, the notice of readiness may be given when the vessel is in the port in which the berth is situated. Similarly a WIPON "whether in port or not" provision will enable the notice in certain circumstances to be tendered even if the vessel has not yet entered the port area. This means that the vessel must be both physically ready in that the holds are ready to receive the cargo and legally ready in that all documentation necessary to enable her to commence loading is in order.

If, however, the vessel is ready subject only to a mere formality then the notice may still be able to be tendered. Validity of the notice of readiness A notice of readiness therefore contains several statements of fact. In order to be a valid notice, those statements must be true. If the statements are incorrect the notice is invalid and a nullity so far as the contract is concerned and ineffective to start laytime. Further, as was made clear in the leading authority of the "MEXICO I" [] described below , if the statements were untrue when they were made, the notice does not subsequently become valid when the circumstances change.

If therefore, there is any doubt as to the validity of the notice, it is always advisable for the master to tender a further notice. Under the charterparty, the owners had a right to complete the vessel with other cargo.

On completion of loading, the vessel was also carrying a cargo of beans for the same charterer under another agreement. Both the maize and the beans were overstowed by parts of the completion cargo.

On arrival at the discharge port, the vessel tendered notice of readiness on 25th January. The owners claimed that laytime commenced when the cargo became fully accessible on 6th February. Charterers on the other hand claimed that time commenced only when discharge actually commenced on 19th February.

Accordingly, the charterers were entitled to insist on a further notice of readiness in order for laytime to commence unless they had in the meantime waived their right to a further notice or agreed that it would not be necessary. On the particular facts in this case, the Judge found that although the notice was invalid, the charterers had nevertheless accepted it via their agents on the commencement of discharge.

As a matter of principle, however, the judge confirmed that an acceptance of an invalid notice in circumstances where the charterers were unaware of the inaccuracy in the notice could not bind the charterers and they were not prevented from subsequently disputing the effect of the notice.

What will constitute a waiver of the defect or acceptance of an invalid notice is considered in more detail below. Unless there is provision to the contrary in the charterparty, the statements in the notice must relate to the time that they are made and when the notice is given.

There is a distinction however between an invalid notice and one that is uncontractual in that it has been tendered to the wrong party or at the wrong time of day. A notice that falls within the second category may still be regarded as valid. The law in this area has recently been clarified in the following recent cases.

The charterparty provided that the vessel was at the South West Pass and "ready to proceed to loading port weather permitting".

A notice of readiness was tendered at the South West Pass. It was not until two days later however that the vessel arrived at Baton Rouge general anchorage but, due to the designated berth being unavailable, loading did not commence until later the following day. The charterers failed to persuade the arbitrators to agree with this view, but on appeal, the Judge found in their favour. In accepting their arguments, the Judge relied on the Court of Appeal decision in the "MEXICO I" [] which made clear that when a notice is to be given in order to start laytime running, this must be a valid notice and not an "inchoate" or "delayed action device" seeking to commence laytime automatically on the happening of a certain event.

In such cases, a fresh notice must be given. Applying that case to the facts before him, the Judge found that the notice of readiness in this case represented that the vessel was at the place at which it was permissible for the notice to be tendered the Baton Rouge anchorage. This was clearly not the case and the notice was therefore invalid and could not trigger the commencement of laytime. Of the various notices given at the load and discharge ports, one was given at hours and the other two at hours.

The charterers argued that since the notices were tendered outside the specified period they were non-contractual being in breach of the relevant clause and therefore invalid and of no effect in accordance with the principles in the "MEXICO I".

It was common ground that a when the notice of readiness was given the vessel had then arrived at the appropriate place within the port in question b the vessel was in fact ready to load or discharge as required by the charterparty and the statement of readiness was therefore correct c the vessel continued to be ready and d no further notices were given. In their judgment, the Court of Appeal confirmed the principle decided in the "MEXICO I" namely, that in order to be a valid notice, it must contain accurate statements of existing fact.

The Court drew a distinction between the requirement to "tender" a notice of readiness and to "give" or to "receive" one. However, the Court also considered what the position would be if the charterparty required the notices of readiness to be "given" or "received" by charterers within certain periods and they are in fact given or received outside these periods. The Court held that in such cases provided the notice was otherwise correct the notice would be non-contractual and therefore wrong but not invalid at the time it was given.

The practical effect of a non-contractual notice which is tendered outside the required time is, that while it may not be effective to start the laytime clock running, the defect may be "cured" by, for example, the passage of time and laytime will start at that point. As the Court pointed out, whether the defect can be so "cured" is a question of fact rather than the law and will vary from case to case.

The charterers may choose to accept an otherwise invalid notice. However, this acceptance must be in clear terms and in these circumstances owners will leave themselves open to the argument that this acceptance was induced by an incorrect representation in the notice as happened in the "MEXICO I". In those cases, the charterers would not be precluded from disputing the effect of the invalid notice. Whether there has been such an acceptance will depend on the facts of each case. However, as expressed in the "MEXICO I", at the very least it must be shown that there was some kind of bilateral representation and conduct by the parties to provide evidence that the original contractual arrangement as to the commencement of laytime had been replaced by something new.

However, there are still some grey areas. In order therefore, to be absolutely certain that time will start to count at the earliest opportunity, if there is any doubt as to the validity of the original notice the master should issue a further notice of readiness.

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Insight & Knowledge

A brief history of laytime Legal A brief history of laytime 10 July The subject of Commencement of Laytime is extensive. Therefore, this article is intended to be a brief overview of the main conditions that are generally required for laytime or, if applicable, demurrage to commence, together with references to the significant supporting case law underpinning the guiding principles. In general terms, there are three conditions which need to be satisfied under most charterparties before laytime can commence. We will consider each requirement in turn. Arrival at Destination The vessel must have arrived at the place within the port where NOR may be validly served as specified in the charterparty. This agreed destination will vary depending on whether the charterparty is a "berth charter" or a "port charter". Until then, the vessel is still at the loading or carrying voyage stage, and no obligation lies upon the charterer to load or receive the cargo The Kyzikos [] A.

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COMMENCEMENT OF LAYTIME PDF

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Commencement of laytime

Commencement of laytime: common pitfalls and errors Written by Hatty Sumption and Bethan Bradley Determining when laytime commences is essential for both owners and charterers. Both need to be aware when laytime starts so that any demurrage claim can be accurately evaluated. It is therefore important that both owners and charterers are able to effectively analyse the terms of the charterparty which deal with the conditions which need to be satisfied before the laytime clock starts running. In this article, we will review the main conditions that are generally required to be satisfied and indicate some of the common pitfalls and errors which can arise. As the first article in this series discusses, there can be a number of terms which will deal with laytime and demurrage issues throughout the entirety of the charterparty. The importance of carefully reviewing the charterparty when a laytime and demurrage issue arises cannot be overstated.

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