London Arbitration 15/21

DEMURRAGE – BERTH OPERATOR RULES (UBT) – COMMENCE OF LAYTIME – DESPATCH 

The vessel reached the Southwest Pass at 14:00 on 13 April but encountered congestion and could not berth. NOR was tendered at 15:24 the same day; however, it was not until 17 April that a pilot was able to take the vessel to anchor at mile 51. The ship finished an initial draft survey and received a hold pass certification, then tendered its second NOR without prejudice to the first. The vessel finally berthed at 14:00 on 24 April and tendered its third NOR, again without prejudice.

The owner asserted that time began counting when the first NOR was tendered. The NOR was valid, and the fixture recap stated the following:

“- LOAD PORT: 1 SP UBT DAVANT- USA (ATTACHED UBT RULES SHALL INCORPORATE WITH THIS CP…

– SHOULD THE BERTH BE OCCUPIED OR SHOULD THE VESSEL BE PREVENTED FROM PROCEEDING TO THE BERTH AFTER HER ARRIVAL AT OR OFF THE PORT NOTICE OF READINESS MAY BE TENDERED BY TELEX, FAX WWWW

– AT BOTH ENDS PORT LAYTIME SHALL COMMENCE TO COUNT 12 HRS AFTER VALID NOR IS TENDERED UNLESS OPERATIONS SOONER COMMENCED. IN CASE SOONER COMMENCED, ACTUAL TIME USED TO COUNT.”

“WWWW” was an acronym for “wibon, wccon, wifpon, wipon,” i.e., “whether in berth or not, whether customs cleared or not, whether in free pratique or not, whether in port or not.”

The charterer claimed the UBT Rules superseded the fixture recap. These rules required the vessel to be at the loading berth or at the closest available anchorage, ready and suitable to receive cargo before a valid NOR could be tendered. UBT Rules apply to users of the berth and are imposed contractually by the berth owners. The relevant clauses of the UBT Rules include:

“2.2 NOTICE OF READINESS

In the case of an Ocean Vessel to be loaded, issuance of the Notice of Readiness shall mean that the Ocean Vessel (1) has obtained all requisite governmental approvals, inspections and clearances…; (2) is located at the Berth or Closest Available Anchorage (as defined in section 2.5 below); (3) is ready and suitable in all respects to receive the Cargo in all holds to be loaded; (4) has confirmed with the Terminal that the Cargo is to be loaded to Vessel is in storage at the Terminal or, if Cargo is to be direct transferred, is in barges in the Terminal’s fleet; and (5) has determined that the Cargo is in a condition satisfactory to the Vessel Party and all regulatory authorities for shipment. Notice of Readiness shall be considered invalid unless the aforementioned five conditions are met…  

2.5 CLOSEST AVAILABLE ANCHORAGE

Ocean Vessels filing a Berth Application to utilize the Terminal facilities normally will be required to anchor at Davant Anchorage (Mile 53.5-54.5 LDB), or the closest available anchorage to Davant, Louisiana.”

The charters also claimed the Southwest Pass was not the closest available anchorage and the terms of the charterparty and fixture recap clearly stated time commenced when the vessel berthed, as per clauses 1, 6, and 41:

Clause 1: The said Vessel shall, proceed to the loading port(s) or place(s) stated in Box 10

Clause 6: If the loading/disch berth is not available on the Vessel’s 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, whether in free pratique or not, whether custom cleared or not.

Clause 41: In any case the notice of readiness to load must be tendered once:

(a) has arrived at the port limits

(b) is physically ready in all respects to load or discharge the nominated cargo.

The tribunal held that, under English law, the primary agreement takes precedence over incorporated documents when there is inconsistency in terms; Hence, the charterparty overruled the UBT Rules regarding the commence of laytime. Further, the tribunal confirmed the vessel was valid in giving NOR at the Southwest Pass, for it was the closest available anchorage off the port when the vessel arrived.

The tribunal awarded the Owner the claimed amount of US$ 109,495.83, plus interest and costs.