London Arbitration 6/24

In a voyage chartered under an amended NYPE 93 form, a dispute arose due to the master’s delayed submission of the Notice of Readiness (NOR), leading sub-charterers to contest the commencement of demurrage. The owners contended that the delay was neither deliberate nor negligent, attributing any loss to negligence on the part of the charterers’ agents. Conversely, the charterers argued that the master’s failure constituted a breach of contract and negligence, and sought US$209,000 in demurrage damages.

Voyage Details

On January 22, the vessel arrived at the outer anchorage of the discharge port at 10:30. The master notified the charterers’ agent at 12:51 about anchoring and awaiting berthing instructions. Despite a request from the agent, the master did not tender the NOR until 15:04 on January 27. Sub-charterers refused demurrage based on the initial NOR, asserting that demurrage commenced only with the valid NOR issued on January 27. Consequently, charterers sought damages from owners for lost demurrage, citing breach of clause 8(c) of the charterparty.

Claims

The owners asserted that the master’s delay was unfortunate but not a breach or negligence under clause 8, emphasizing the vessel’s readiness for discharge throughout. They argued any loss resulted from negligence by charterers’ agents. In response, charterers maintained the master’s duty to promptly submit NOR upon arrival, insisting on breach and negligence, whether deliberate or not.

Legal Interpretation

In arbitration, the tribunal clarified that under a time charter, the master must provide a valid NOR upon arrival at the agreed port, signaling readiness to load or unload. Standard time charters typically lack explicit NOR procedures, making clear instructions from charterers crucial. Despite this, if instructions are unclear, the master should seek clarification, with reasonable interpretations benefiting from the doubt.

Clause 8 and Sub-Charter Terms

The tribunal noted discrepancies between claimed clause 8(c) and the submitted charterparty, which featured sub-clauses (a) and (b) without specific NOR guidelines. Absent such instructions, notifying vessel arrival suffices. Conversely, the sub-charter detailed NOR’s role in laytime commencement, highlighting agents’ awareness but inaction until January 27.

Agent Responsibilities

While acknowledging the master’s unintentional delay due to port demands and agent expectations, the tribunal affirmed the agents’ role in guiding NOR compliance. It underscored agents’ duty to remind the master of NOR requirements and promptly notify concerned parties.

Decision

Initially, all parties presumed the NOR was valid on January 22, evidenced by port lineup inclusion and subsequent laytime calculations. Subsequent technical concerns by sub-charterers about NOR validity emerged later. Despite adverse weather impacting the master’s focus on safety over procedural formality, the tribunal absolved the master of negligence attributable to charterers’ agents.

Award

The charterers’ claim was completely dismissed. The owners were awarded their costs under section 63(5) of the Arbitration Act 1996 and granted the cost of the award totaling £11,400 plus interest.