Interruptions and Exceptions to Laytime

The expression “interruptions to Laytime” refers to periods that do not count because they fall outside the type of time described in the Laytime Clause itself. By contrast, excepted periods are periods that would otherwise fall within Laytime, but are removed from the calculation by an Exceptions Clause. The practical distinction is important. Where an exception is relied upon, the party invoking it must prove a causal connection between the excepted event and the inability to perform cargo operations. Where the matter is an interruption, it is normally enough to show that the excluded condition exists at the place where loading or discharging would otherwise take place.

The same event may operate either as an interruption or as an exception, depending on the wording of the Charterparty. Bad weather provides the clearest example. If Laytime is expressed as Weather Working Days, adverse weather is an interruption because the words define the category of time that is capable of counting. They are not words of exception. By contrast, a separate clause providing that “any time lost through bad weather is not to count as Laytime” creates an exception. In that case, it must be shown that time was actually lost because of the weather. Time can only be lost if the ship is in Berth or in another position where loading or discharging could otherwise proceed. An interruption, however, may arise even if the ship is not yet in Berth, provided the relevant weather condition exists.

Where the Charterer has agreed to load or discharge within a fixed period, the Charterparty is one of Fixed Laytime. Once Laytime has started, the Charterer’s undertaking is strict. The Charterer remains liable for failure to complete cargo operations within the agreed period, whatever the obstacle may be, unless the delay falls within a Charterparty provision suspending Laytime, within an applicable exception, or results from the fault of the Shipowner or of persons for whom the Shipowner is responsible.

In a Customary Laytime Charter, the position is usually different. The risk of delay after the commencement of the relevant cargo stage will normally remain with the Shipowner. The Charterer’s obligation is not to complete within a fixed number of days or hours, but to perform the loading or discharging operation within a reasonable time, having regard to the conditions actually existing at the particular Port at the relevant time. For that reason, in a Customary Laytime Charter, the analysis normally concerns exceptions rather than interruptions to Laytime.

The Contra Proferentem Rule

In a Fixed Laytime Charter, interruption and exception provisions are normally inserted for the Charterer’s benefit. In a Customary Laytime Charter, where such clauses are less common, an exception clause may instead be intended to increase the Charterer’s responsibility and protect the Shipowner. The general principle is that an exceptions clause is construed against the party who seeks to rely on it. Lord Wilberforce expressed the approach in Photo Production Ltd v. Securicor Transport Ltd, after referring to an exclusion clause:

These words have to be approached with the aid of the cardinal rules of construction that they must be read contra proferentem and that in order to escape from the consequences of one’s wrongdoing, or that of one’s servant, clear words are necessary.

The first task, therefore, is to identify whose benefit the clause was intended to serve. If the wording is ambiguous, or if there is real doubt about whether the relevant circumstances fall within the clause, the ambiguity will normally be resolved in favour of the other party.

In some older Charterparty forms, the obligations of Shipowner and Charterer were arranged in separate sections rather than merely in separate clauses. That structure produced the view that exceptions appearing in the section dealing with the Shipowner’s obligations protected only the Shipowner and not the Charterer. That was the result in Sjoerds v. Luscombe, Touteng v. Hubbard, and Blight v. Page. In Charterparties drafted in that form, the placement of the exceptions made it difficult to treat them as mutual.

During the later nineteenth century, Charterparty drafting changed. The obligations of Shipowner and Charterer came to be set out in separate clauses within a single contractual structure rather than in separate sections. As a result, the judicial treatment of exceptions clauses also changed. Where a clause is framed in general language and is capable of applying to both parties, wholly or partly, the courts have been more willing to regard it as mutual.

Ford v. Cotesworth is an early example of that development. Martin B was inclined to treat a “restraint of princes” exception, appearing in a clause dealing with the Ship Master’s duties but followed by the words “throughout this Charterparty”, as extending more widely. In Barrie v. The Peruvian Corporation, Mathew J held that the general exceptions clause before him protected both the Charterers and the Shipowner.

The same approach was later accepted, although with some caution, by Bigham J in Newman and Dale Steamship Co Ltd v. The British and South American Steamship Co. There, a fire exception was held to protect the Charterers, even though the relevant general exceptions clause did not contain the words “mutually excepted”, which were sometimes used to avoid uncertainty.

In Ralli Brothers v. Compania Naviera Sota y Aznar, Bailhache J reviewed the earlier authorities and stated:

I take it that the law now stands that, unless a contrary intention is expressed or is to be gathered from the form of the charterparty, exceptions are mutual where they are contained, as is the modern practice, in one of the numerous separate clauses of a charterparty and do not form part of a clause dealing solely with the obligations of the shipowner or charterer as the case may be. Especially is that the case where, as here, there is only one set of exceptions and not, as in many modern charterparties two sets—one appropriate to the charterers’ and one to the owners’ obligations.

Horridge J in Franco-British Steamship Co Ltd v. Watson & Youell did not reject that proposition, but he referred to observations made by Scrutton LJ. Scrutton LJ had apparently remarked:

Ever since I was at the Bar it has been argued with considerable heat by counsel concerned whether or not certain exceptions of the charterparty apply for the protection of the charterer or only for the protection of the shipowners. In my view, it is quite impossible to lay down any general rule which will enable the question to be answered.

That uncertainty helps explain why some later Charterparty forms, including forms introduced in the 1980s, expressly identified which party could rely on particular exceptions. Clear allocation avoids arguments about whether a clause is mutual or one-sided.

Even after it has been established that an exceptions clause was intended to benefit a particular party, it remains necessary to decide whether the facts fall within the clause. To deal with this problem, Charterparties often use broad omnibus language such as “and any other causes beyond the Charterer’s control”, or general expressions such as “hindrances and obstructions”. The meaning and scope of such language depends on the context of the Charterparty, the commercial purpose of the clause, and the nature of the event relied upon.

General Principles

An exceptions clause will ordinarily be construed as applying only during the Laytime period. It will not protect the Charterer after the ship has gone on Demurrage unless the wording clearly extends to Demurrage. The clause may, however, affect the point at which Demurrage begins by suspending the running of Laytime before Laytime is exhausted.

Exceptions clauses are also normally confined to the loading and discharging operations themselves, and to the periods during which those operations are being performed or could have been performed. They will not usually extend to the earlier process of bringing cargo to the loading place, or to the later process of removing cargo after discharge, unless the wording plainly covers those stages.

The Charterer’s obligation to ensure that cargo is available at the loading place and ready for shipment at the proper time is strict. Difficulties in obtaining the cargo, arranging inland transport, securing rail wagons, dealing with suppliers, or bringing cargo to the Port will normally be for the Charterer’s account. The Charterer will be excused only where the exceptions clause clearly extends beyond the act of loading itself and covers the preparatory stage. In Grant v. Coverdale, Lord Selborne stated:

It would appear to me to be unreasonable to suppose that the shipowner has contracted that his ship may be detained for an unlimited time on account of impediments, whatever their nature may be, to those things with which he has nothing whatever to do, which precede the operation of loading and which belong to that which is exclusively the charterer’s business.

The authorities concerning the Charterer’s duty to have cargo ready at the Load Port were reconsidered in The Nikmary. The Court of Appeal held that the Charterer could not rely on a clause excluding delay beyond the Charterer’s control where the Charterer had lost the cargo nomination and therefore had no cargo available for loading.

The Charterer will satisfy the obligation to have the cargo ready for shipment in time if enough cargo is available at the loading point to allow loading to begin when the ship arrives and is ready, and if proper arrangements have been made for the balance to arrive in sufficient quantities and at appropriate intervals so that loading can continue without interruption.

In The Stainless Emperor, the Charterers warranted that the cargo to be loaded, interpreted as meaning the whole cargo, would be available on the ship’s arrival. The Charterparty also provided that any delay caused by breach of that warranty would count as “used Laytime”. There was also a holiday exception. The Charterers argued that the holiday exception should reduce the used Laytime counted against them because of their failure to have the full cargo ready. That argument failed before both the Arbitrators and the High Court.

Where local regulations require a certain proportion of the cargo to be on the quay and ready before the ship may enter the Port or Berth, the Charterer must ensure that the required quantity is ready when the ship is ready to enter. The Charterer cannot rely on the Charterer’s own failure or inactivity to prevent the ship from becoming an Arrived Ship and thereby prevent time from running. The parties may, however, agree expressly that the ship is to wait at the Port at the Shipowner’s risk until cargo is provided. A Charterer may also be excused from providing cargo where export is illegal or where the contract of carriage has been frustrated.

Fault of the Shipowner

Although the Charterer’s obligation to complete loading or discharge within the agreed Lay Days is strict, Laytime, and later time on Demurrage, will cease to run for delay caused by the fault of the Shipowner or by persons for whom the Shipowner is responsible. This principle is often associated with Budgett v. Binnington. It raises two practical questions: what amounts to fault, and for whose conduct is the Shipowner answerable?

The authorities have not always separated those questions clearly. The converse of the same rule is that where the Shipowner is prevented from performing the Shipowner’s part of the cargo operation by acts of persons outside the Shipowner’s control, the Shipowner will not be liable for the resulting delay.

Many of the reported cases concern events occurring after Laytime had expired and while the ship was already on Demurrage. The same general principles appear to apply both before and after Demurrage begins, and they operate independently of the express exceptions in the Charterparty. It is therefore unnecessary, in such cases, to ask whether a particular exclusion clause applies to the circumstances. That does not mean that parties could never draft a clause excluding the consequences of Shipowner fault. However, any such provision would almost certainly be construed strictly against the party seeking to rely on it.

Whether the delay occurs during Laytime or after the ship is on Demurrage, the defence of “fault” on the part of the owners operates as a direct defence. It is not merely a cross-claim by the Charterers for an equivalent sum, nor simply a case of avoiding circuity of action. The principle reflects the broader rule that a claimant cannot recover for delay or loss caused by the claimant’s own fault or default.

What Delays Are Covered by This Principle?

The way the principle has been formulated makes one point clear: the delay and the cause producing that delay must exist at the same time. If the Shipowner’s fault has already occurred, but the delay later arises from a different event or at a different stage, the principle may not operate as a direct answer to a Demurrage claim.

London Arbitration 4/92 illustrates the distinction. In that case, the ship experienced engine difficulties during the voyage. The Charterers argued that the extended voyage contributed to reinfestation of the cargo, which then caused additional delay at the Discharge Port while the cargo was refumigated. The Tribunal held that time continued to run during the delay at the Discharge Port. The alleged fault and the later delay did not coincide in the way required for the defence to operate directly against Laytime or Demurrage.

For the principle presently under discussion, the Shipowner’s default must normally relate to something occurring while Laytime or Demurrage is actually running. A different position may arise where the alleged default occurs earlier, for example during the approach voyage or laden voyage, and that earlier breach later produces delay at the next Loading Port or Discharge Port. In that situation, the Charterer may have a separate claim for breach of another term of the Charterparty, distinct from the Laytime and Demurrage provisions. The claim would usually be advanced as a cross-claim for damages, and the Charterer would have to prove in the ordinary way that the loss suffered was a foreseeable consequence of the breach.

London Arbitration 15/91 is best understood in that way, although the report suggests that the case may have been argued as if the alleged default operated directly as a defence to Demurrage. The Charterers sought to introduce an additional Loading Port for topping off, and the parties agreed an addendum to the Charterparty. Under that addendum, the owners provided an estimated date of arrival at the topping-off Port, although the estimate was stated to depend on the progress of loading at the second Loading Port.

On the facts, the Tribunal found that the estimate had been given honestly and reasonably. Had the Tribunal found otherwise, the better analysis is that Laytime or Demurrage at the topping-off Port would not automatically have been interrupted. Instead, the Charterers would have had a potential claim for breach of the ETA provision in the addendum, with damages possibly measured by some or all of the Demurrage otherwise payable to the owners.

Speed Claims in Voyage Charterparties

Speed warranties are not commonly found in Voyage Charterparties, but the BPvoy 3 Charterparty Form is an important exception. Clause 3, after identifying the place where the ship is to load, provides:

Thereupon the Vessel shall proceed with such cargo at a speed which Owners undertake shall be (“Base Speed”)

If the Vessel fails to maintain Base Speed… Owners shall be liable for all costs, losses, damages and expenses arising as a direct consequence thereof save to the extent that Owners that can prove to the satisfaction of Charterers that such failure was attributable to a reduction in speed necessitated by either adverse weather and sea state conditions or the safe navigation of the vessel.

A breach of this clause may give rise to the kind of separate claim discussed above. If the ship proceeds more slowly than contractually required and that delay causes later loss, the Charterer may seek to recover damages, provided the necessary causal and foreseeability requirements are satisfied.

There appear to be no reported decisions giving detailed guidance on the calculation of damages for breach of Clause 3 of the BPvoy 3 Charterparty Form. Under a Time Charterparty, the usual method is to determine the ship’s good-weather performance, compare that performance with the warranted speed, and calculate the time lost as a result of the shortfall. A similar analytical method may provide a starting point in a Voyage Charterparty context, although the consequences may be more complex because the loss may arise at a later Port rather than during the voyage itself.

One important question is the scope of the phrase “losses arising as a direct consequence” of failure to maintain the Base Speed. If the ship’s delay during the voyage causes her to miss a Berthing slot, and if a queue of other ships then develops, is the whole of the subsequent waiting period a direct consequence of the speed breach? Or is part of that delay too remote or caused by later events?

A similar issue was considered in London Arbitration 8/05, although not under a BPvoy 3 Charterparty Form. The Tribunal held that even if there had been a breach of the speed clause in that charter, the Charterers would not have established recoverable damages by way of counterclaim, nor would they have acquired any defence to the Demurrage claim. The decision shows that a speed breach will not automatically defeat Demurrage. The Charterer must still prove causation, remoteness, and recoverable loss.

Fault

The question of what amounts to fault by the Shipowner, so as to prevent Laytime or Demurrage from running, has been considered in several authorities. In The Fontevivo, Donaldson J stated:

“the mere fact that the shipowner by some act of his prevents the continuous loading or discharging of the vessel is not enough to interrupt the running of the laydays; it is necessary to show also that there was some fault on the part of the shipowner”

The statement is important because it makes clear that not every act of the Shipowner causing delay is enough. There must be some blameworthy conduct, breach of duty, failure to perform an obligation, or other legally relevant fault.

Houlder v. Weir provides an example. Discharge was delayed because the ship had to take on ballast. Channell J held that this did not amount to fault by the Shipowner. The operation was necessary for the safety of the ship and cargo. Channell J stated:

“In order that the charterers may succeed on that point, they must in my opinion, show that the delay was caused by an act of the shipowners or some one for whom they are responsible, which amounts to a breach of obligation on the part of the shipowners. Here there has not been a breach of obligation, but merely the performance of a necessary operation, no less for the protection of the cargo than for the protection of the ship.”

The critical phrase is “breach of obligation”. A delay caused by a necessary ship operation will not, without more, amount to fault. There must be something that the Shipowner was contractually or legally required to do, or to refrain from doing, and which was not done properly.

The same approach appears in Leeds Shipping Co Ltd v. Duncan Fox & Co Ltd, where Mackinnon J said:

“charterer is liable to pay the agreed demurrage unless the failure to have the ship discharged in the agreed time is due to the fault of the shipowner, in that the shipowner has not done his part in regard to something which it was within his power to do. The result is that supposing there is a strike or an insufficiency of labour, although that may prevent the shipowner from doing his part of the discharge, yet that is not due to any failure on his part in regard to something it was in his power to do, and it is, therefore not due to the default of the shipowner.”

This suggests that fault requires more than a causal connection between the ship and the delay. The delay must result from some failure by the Shipowner or the ship in respect of a matter within the Shipowner’s control. In Leeds Shipping Co Ltd v. Duncan Fox & Co Ltd, the problem was not a shortage of labour but inefficient labour, causing discharge to proceed much more slowly than the Charterparty rate. The problem was eventually resolved when the Ship Master offered increased payment. The court held that there was no fault by the ship and that the Charterers could not rely on a provision excusing the Shipper for loss or damage arising without neglect or default.

Once a ship has arrived at her destination and tendered Notice of Readiness (NOR), she should ordinarily remain at the Charterers’ disposal, at least to the extent that the Charterers wish to use her for loading or discharging. If the Charterers wish to perform cargo operations but cannot do so because the owners use the ship for an inconsistent purpose, or fail to do something essential to enable cargo operations to proceed, the resulting delay should not count as Laytime or Demurrage. That proposition is clear. The harder question is how far it extends where the Charterers do not actually require the ship at the relevant time.

In The Stolt Spur, Andrew Smith J held that, for Laytime or time on Demurrage to run, the Shipowner must do nothing voluntarily that prevents the ship from remaining continuously available for cargo operations, whether or not the Charterers had actually planned to use the ship during that period. The judge approved the following statement in Scrutton on Charter Parties:

However in order to be entitled to claim demurrage, the shipowner is under an obligation to have the vessel ready and available to load or discharge.

That proposition appeared in the twentieth edition of Scrutton, published in 1996, but was not present in the nineteenth edition published in 1984. The authority cited for the proposition was The Lefthero, where Evans J stated:

“The authorities show, therefore that the charterer undertakes an absolute obligation to pay demurrage, subject to exceptions and to ‘‘fault’’ but this depends in its turn, in my judgment upon the shipowners’ obligation to have the vessel ready and able to give discharge in accordance with contract. The wider principle underlying the authorities is like the larger theme which goes through the Enigma Variations, but which is never played.”

Evans J referred in particular to Parker J’s third reason for rejecting the Demurrage claim in The Union Amsterdam. That case concerned a ship that was aground during the relevant period. Parker J held that the owners could not argue that the ship was being detained while, through their negligence, she was aground. In that case, the Charterers required the use of the ship, and there was a direct causal link between the ship’s unavailability and the delay in cargo operations.

A similar approach can be seen in Ropner Shipping Co Ltd v. Cleeves Western Valleys Anthracite Collieries Ltd, to which Parker J referred. The Court of Appeal based its decision on the fact that the ship was not available for cargo operations at a time when cargo might otherwise have been loaded.

The Lefthero later went to the Court of Appeal. The court held that the ship had not been withdrawn from the Charterers’ service for the owners’ purposes or for any other inconsistent purpose. Therefore, the issue identified by Evans J did not arise on the facts.

The judges in Ropner Shipping Co Ltd v. Cleeves Western Valleys Anthracite Collieries Ltd considered that they were applying the law as it had stood since Budgett v. Binnington in 1891. More than 50 years later, in The Shackleford, Donaldson J held that Laytime or Demurrage is suspended only where the Charterers are deprived of the use of the ship in the sense that they wished to use her but were prevented from doing so because the owners wished to employ her for an inconsistent purpose.

In The Stolt Spur, the court appeared to accept that two possible principles might exist. The first was the Budgett v. Binnington line of authority, which may require the Shipowner’s fault to be the sole cause or at least the sole effective cause of the delay. The second was the “wider principle” identified by Evans J in The Lefthero, under which fault may arise if the ship is not continuously available for cargo operations, even if the Charterers did not actually wish to use her during the relevant period.

Whether these are truly two separate principles remains a matter for future judicial clarification. The better view is that, despite The Stolt Spur, the decisions in Ropner Shipping Co Ltd v. Cleeves Western Valleys Anthracite Collieries Ltd and The Shackleford support the narrower approach: time is suspended only where the Charterers have been deprived of the use of the ship at a time when they actually wished to use her.

Other Decisions Concerning Fault

London Arbitration 29/84 concerned an unusual factual situation under a Gencon Charterparty Form. After completion of the voyage, the owners submitted a Demurrage claim showing Laytime as beginning at 14:00 on 29 December. On that calculation, Laytime expired at 14:00 on 31 December, and the ship remained on Demurrage until 19:30 on 5 January. The New Year holiday and the following weekend therefore fell within the Demurrage period and counted against the Charterers.

It later emerged that the ship had been delayed in leaving the Loading Port because the chief engineer had been temporarily absent for personal reasons. If that delay had not occurred, the ship would have reached the Discharge Port on 23 December and completed discharge on 30 December. In that scenario, the Christmas holidays and adjacent weekend would have fallen during Laytime and would not have counted. The Charterers therefore sought reimbursement of what they described as Demurrage paid in excess.

The Arbitrators held that the owners were in breach of contract. At the time when the ship should have sailed from the Loading Port, she was unseaworthy because she was without her chief engineer. Clause 2 of the Gencon Charterparty Form did not protect the owners, because the words “loss or damage or delay” had previously been held to relate only to goods.

Even so, the Charterers’ claim failed. The Arbitrators applied the familiar rule that recoverable damages must have been “on the cards” or “not unlikely to occur” as a consequence of the breach, judged at the time when the contract was made. They reasoned that although it was possible that a weekend might fall during Laytime rather than Demurrage, that result was not likely where the ship was carrying only a small quantity of cargo, discharge was expected to take about 36 hours, and only 48 hours of Laytime had been allowed. The loss that actually occurred was therefore not reasonably foreseeable when the Charterparty was concluded.

The Arbitrators added that the conclusion might have been different if the discharge operation could reasonably have been expected to last more than 48 hours. In that situation, it would have been much more foreseeable that at least a weekend, and possibly the Christmas holidays, might fall within Laytime rather than Demurrage.

In The Mobil Courage, the Ship Master refused to sign a triplicate Bill of Lading (B/L), although presentation of that document would have enabled discharge to proceed under the Charterparty. That refusal deprived the owners of any right to Demurrage for the delay that followed. The delay was attributable to the Shipowner’s side because the Ship Master failed to perform an act necessary for discharge to continue.

The Anna Ch concerned a ship bound for Bandar Khomeini. The majority of the officers and crew refused to proceed beyond Bandar Abbas, where the ship was waiting for a convoy, because of the risk of involvement in the Iran/Iraq war. The Charterers eventually instructed the ship to discharge at Bandar Abbas, and a dispute arose about Demurrage for the period between the refusal to join the convoy and the ship’s later movement into Bandar Abbas for discharge. The Arbitrators held that the owners were entitled under the Charterparty to refuse to proceed to Bandar Khomeini. Since there was no fault by the owners and no applicable exceptions clause, the Demurrage award for that period was upheld.

London Arbitration 14/06 concerned alleged cargo damage. The Charterers refused to discharge part of the cargo unless the owners provided security for their claim, alleging that the cargo had become discoloured. The Tribunal held that the Charterers had not established any breach of the Charterparty by the owners and were not entitled to refuse discharge. The Demurrage resulted from the Charterers’ own failure to discharge the cargo, not from fault by the Shipowner.

The Forum Craftsman presented another unusual situation. The ship was removed from her Discharge Berth after part of the cargo was found to have been damaged by seawater entering through the hatches. By that time the ship was already on Demurrage. A further 79 days passed before she was allowed to re-Berth, most of the delay being caused by bureaucratic procedures. In arbitration, seven days were allowed against the ship, but Demurrage continued to run for the remainder of the period. That conclusion was upheld on appeal.

These cases show that fault is intensely fact-sensitive. Delay will not stop Laytime or Demurrage merely because something connected with the ship contributed to the factual background. The Charterers must show a legally relevant fault or breach by the Shipowner, a causal link with the loss of time, and, where the claim is advanced as damages rather than a direct defence, that the loss was not too remote. Where the delay is caused by the Charterers’ refusal to load or discharge, or by their own commercial decision, Laytime or Demurrage will continue to run.

In London Arbitration 4/93, the Shipowners succeeded in showing that delay caused by the failure of a windlass motor resulted from a latent defect. Because the defect prevented the ship from moving from the anchorage to the multi-buoy mooring where she was due to load, the Charterers argued that time should not count. The Tribunal held that there had been neither breach nor fault on the part of the owners. It also indicated that, even if fault had existed, liability would have been excluded by a general exceptions clause. The latter point is open to difficulty, since general exceptions clauses are ordinarily not treated as extending to Laytime or Demurrage. On the former point, however, if the delay can genuinely be traced to an unforeseeable latent defect, time may continue to run. The position is exceptional because the ship was unable to perform the immediate service required of her, namely to move from anchorage to the loading mooring, but the defect itself was not attributable to any blameworthy conduct by the Shipowners.

In London Arbitration 1/09, the Charterers also failed in an argument based on alleged ship fault, where they contended that the ship’s crane was incapable of lifting the warranted weights. The Tribunal was not persuaded that the evidence established the alleged defect or that the Shipowners were responsible for the delay in the way required to interrupt Laytime or Demurrage.

In London Arbitration 4/95, the time spent by surveyors acting on behalf of the owners in carrying out line displacement tests at the Discharge Berth was held not to be time lost by reason of owners’ default. The purpose of the tests was to determine whether oil remained in the lines. The Tribunal treated the survey activity as part of a legitimate operational inquiry rather than as a fault that suspended the running of time.

London Arbitration 14/96 raised a different issue. The Tribunal had to consider whether a discrepancy between the ship’s description as built and her description in Lloyd’s Register amounted to fault by the owners. It also had to decide whether the ship’s design breached an obligation to provide three “unobstructed” holds, where the alleged absence of such holds caused cargo operations to take longer. On the facts, the Tribunal held that the owners were not responsible for the way in which the ship was described in Lloyd’s Register. However, if the ship’s design itself meant that the holds were obstructed, the owners could be answerable for the consequences.

In London Arbitration 12/05, the Charterers tried unsuccessfully to show that delay at the Discharge Port caused by further fumigation was attributable to the owners. They argued that the Ship Master had begun ventilating the cargo too early and that the hatch covers were not sufficiently gas-tight to allow the fumigation performed at the Loading Port to remain effective. The Tribunal rejected those arguments and held that the Charterers had not established fault on the part of the Shipowners.

For Whose Fault Is the Shipowner Answerable?

The earliest important authority on this issue is Budgett v. Binnington itself. The case concerned a ship under a fixed Laytime Charter that was delayed during discharge by a strike of dock labourers. There was no strike exception in either the Charterparty or the Bill of Lading (B/L). The strike began while Laytime was running and continued for several days after Laytime had expired. Some of the dock labourers had been engaged by the Shipowners to perform the owners’ part of the discharge operation, while others had been engaged by the Consignees. The Consignees argued that, because they could not perform their own part of the joint discharge operation until the Shipowners had completed theirs, they should not be liable for the delay.

The Court of Appeal held that responsibility for the delay rested with the Consignees. Lord Esher stated:

“Now, has the shipowner failed in this duty through any default of his own, or of persons for whom he is responsible? The persons for whom he is responsible are the persons who represent him in his absence. If, for instance, the master refused to discharge the cargo, the owner would be responsible. How much further this rule of liability extends I am not prepared to say—whether, for instance, it extends to the case of the crew refusing to work.”

Lord Esher later added that the non-delivery, in practical terms the delay, had been caused by something the Shipowners could not have anticipated and by persons over whom the Shipowners had no control. Those persons were the labourers engaged by the stevedore, who were acting in breach of their contracts of employment.

The next major decision on the attribution of fault to the Shipowner was Harris v. Best, Ryley & Co, decided about two years later. The decision is not easy to reconcile with Budgett v. Binnington, especially because Lord Esher and Lopes LJ sat in both cases. The facts, however, were different.

In Harris v. Best, Ryley & Co, the ship was chartered to load cargo at both Leith and London. During the voyage between those Ports, severe weather damaged part of the cargo and caused other cargo to shift. When the ship arrived in London, the damaged cargo had to be landed for reconditioning, the shifted cargo had to be restowed, and part of the remaining cargo had to be moved so that the London cargo could be properly stowed. These matters, together with delay by the stevedore, delayed the ship for three days. Under the Charterparty, the stevedore had been nominated by the Charterers but employed by the owners.

The court held that the stevedore was the servant of the owners. The Charterers were therefore not liable for Demurrage caused either by the stevedore’s delay or by the need to move and restow cargo. They were also not liable for the additional expenses caused by those operations. Although Budgett v. Binnington had been cited in argument, Lord Esher did not refer to it in his judgment.

Lord Esher emphasized that loading was a joint operation involving both Shipper or Charterer and Shipowner. Each party had to perform that party’s own part, and each also had to do what was reasonable to enable the other to perform. The Shipper’s duty was to bring cargo alongside. Once cargo was alongside, it was the Shipowner’s duty to load and stow it. At the same time, the Shipper had to bring the cargo alongside early enough to allow loading to be completed within the Lay Days.

The joint nature of loading and discharging was also considered in William Alexander & Sons v. Aktieselskabet Dampskabet Hansa and others, a Scottish case decided by the House of Lords. In that case, Budgett v. Binnington was cited with apparent approval. Discharge of a timber cargo at Ayr was delayed by a shortage of labour. Under the custom of the Port, the Shipowners were responsible for placing the cargo on the quay, and the Charterers were responsible for removing it. The same stevedore was engaged for both parts of the operation. Because the stevedore could not obtain enough men, both sides of the operation were delayed. The House of Lords held that the Charterers bore responsibility for the resulting delay.

The authorities suggest the following distinction. Loading and discharging are joint operations. If an outside event, such as a strike in Budgett v. Binnington or a labour shortage in William Alexander & Sons v. Aktieselskabet Dampskabet Hansa and others, prevents both parties from carrying out their respective parts, the fault is attributable to neither party. Nevertheless, because of the strict nature of Fixed Laytime, Demurrage will still be payable if the permitted time is exceeded.

If, however, the outside event affects only one party, and that party is the Shipowner, Demurrage will not be payable where the delay has been caused by a person for whom the Shipowner alone is responsible. That explains Harris v. Best, Ryley & Co, where the delay was caused by the acts and omissions of the Ship Master and the stevedore, who on the wording of that particular Charterparty was treated as employed by the Shipowner.

The more modern problem of the Shipowner’s responsibility for the acts and omissions of stevedores was considered by Donaldson J and later by the Court of Appeal in Overseas Transportation Co v. Mineralimportexport, known as The Sinoe. The principal issue in that case concerned a Cesser Clause, but a significant subsidiary issue was who should bear responsibility for a long delay caused by the incompetence of the discharging stevedores.

The Charterparty provided that the stevedores were to be appointed and paid by the Charterers, and that the cargo was carried on F.I.O. terms. However, an Additional Clause stated that the stevedores were to be treated “as Owners’ servants and subject to the orders and direction of the Master”.

Donaldson J said:

If I had to decide this point, I should hold that the charterparty does not sufficiently clearly make the owners responsible for the fault of the stevedores to rebut the prima facie liability of the charterers to pay for the detention of the vessel. Fortunately, I do not have to decide it because even if I were to be in the charterers’ favour on that point, they have, in my judgment, no answer to the owners’ rejoinder, that in employing or causing or allowing these particular stevedores to be employed, the charterers were in breach of their duty to the owners. If this is right, the charterers are unable to rely upon the neglect of the stevedores as barring the owners’ claim to demurrage or alternatively are liable to the owners in a like amount as damages for breach of their obligation to employ competent stevedores.

The Court of Appeal agreed that the Charterparty wording was not clear enough to make the owners responsible for the default of the stevedores. A majority of the court, Lord Denning MR and Megaw LJ, also agreed with Donaldson J that, even if the stevedores were treated as the owners’ servants for some purposes, the true cause of the delay was the Charterers’ appointment of incompetent stevedores. The Charterers were therefore ultimately responsible.

Lord Denning expressed the point as follows:

Let me suppose, however, that clause 23 is sufficient to make the stevedores in some respects the servants of the owners. Even then the charterers are not, in my opinion, able to rely on it, and for this reason: it was the charterers who appointed the stevedores. It was their duty to appoint stevedores who were competent to do the discharging. The stevedores here turned out to be utterly incompetent. I do not think the bad conduct of the stevedores can be the fault of the owners, when the real cause of it was the fault of the charterers in appointing stevedores who were incompetent.

Megaw LJ reached the same conclusion:

Whether or not the appointment of incompetent stevedores would have been a breach of contract on the part of charterers, at any rate, the fact that that appointment was their responsibility under the contract does to my mind produce the result that vis-a`-vis the shipowners the charterers cannot say that the exceeding of the laytime was caused by the fault of the shipowners. For the true cause was the appointment of incompetent stevedores.

At first instance, Donaldson J had also referred to Lord Esher’s earlier observation in Budgett v. Binnington, which suggested that the class of persons for whom owners are responsible in this context might be very limited, perhaps extending little further than the Ship Master. Donaldson J noted, however, that Lord Esher had taken a broader view two years later in Harris v. Best, Ryley & Co, where Lord Esher held that Charterers were not liable to pay Demurrage in respect of stevedores employed by the Shipowners.

The practical conclusion is that the Shipowner is plainly answerable for the Ship Master and for those who represent the Shipowner in the Shipowner’s absence. The Shipowner may also be answerable for stevedores or others where the Charterparty, the employment arrangement, or the nature of the operation makes them the owners’ servants for the relevant purpose. However, clear wording is needed before Charterers can shift responsibility for stevedore default to the Shipowner where the Charterers themselves appointed or controlled the stevedores. If the Charterers appoint incompetent stevedores, the resulting delay will normally remain for the Charterers’ account, even if the Charterparty contains language suggesting that the stevedores are subject to the Ship Master’s orders during cargo operations.

Whether delay caused by Stevedores suspends Demurrage depends primarily on the wording of the particular Charterparty. If the stevedores are appointed by the Charterers, or by a party for whom the Charterers are responsible, the Charterers will not normally be able to shift responsibility for their acts or omissions to the Shipowners under the Charter unless two requirements are satisfied. First, the stevedores must be competent. Secondly, the Charterparty wording transferring responsibility to the Shipowners must be clear and unambiguous.

London Arbitration 18/05 illustrates the importance of identifying who bears responsibility for the cargo operation. The delay arose because the stevedores failed to follow the Ship Master’s stowage plan. Although the Charterers were to nominate and pay the stevedores, the Tribunal held that the owners remained responsible for the delay because although the Charterers were to nominate and pay the stevedores, responsibility for loading lay with the owners. The Tribunal also found that the stevedores’ failure on that occasion did not prove that they were generally incompetent.

By contrast, in London Arbitration 6/08, the Tribunal held that even where the Charterers appoint stevedores who are not themselves incompetent, the Charterers must also ensure that the stevedores are properly equipped to perform the cargo work. If loading or discharging requires equipment such as fork-lift trucks, and the Charterers fail to provide it or arrange for it to be available, any resulting delay cannot fairly be attributed to the Shipowners.

Bunkering

Ropner Shipping Co Ltd v. Cleeves Western Valleys Anthracite Collieries Ltd considered the effect of bunkering on Laytime and Demurrage. The Shipowner removed the ship from the Loading Berth in order to bunker, and it had not been established that this move did not interfere with cargo operations. The Charterparty contained a clause excluding bunkering time from Laytime. The case was argued on the basis that the Shipowner had chosen, for the Shipowner’s own convenience, to bunker before loading was complete but after the ship had already gone on Demurrage.

At first instance, it was argued that the Charterparty did not refer expressly to bunkering during Demurrage, and that the bunkering operation was therefore not wrongful within the principle of Budgett & Co v. Binnington & Co. Roche J was inclined to reject that argument, saying that the Shipowners could hardly contend that their own act was not wrongful in those circumstances. In the Court of Appeal, however, Bankes LJ declined to endorse that view and left the point open. The Court of Appeal decided the case on a narrower basis: a Shipowner cannot claim that the ship is being detained by the Charterer, and thereby claim Demurrage, during a period when the Shipowner has taken the ship away from cargo operations for bunkering for the Shipowner’s own convenience.

The better view is that Roche J’s instinct was correct. If a Shipowner removes a ship for bunkering during loading, and that removal interferes with cargo operations, the removal should amount to a wrongful act whether Laytime is still running or whether the ship was already on Demurrage. The reason is straightforward. During Laytime or Demurrage, the ship must remain available for the Charterers’ cargo operations unless the Charterparty provides otherwise or unless the interruption is justified by necessity.

In Ropner Shipping Co Ltd v. Cleeves Western Valleys Anthracite Collieries Ltd, the Shipowners also tried in the Court of Appeal to argue that no cargo had been available at the relevant time. The Court refused to consider that argument because it had not been advanced in the arbitration. The Court therefore gave no indication of what the result would have been if cargo had in fact been unavailable.

The Shackleford later considered a related issue. The question was whether Laytime was interrupted while the ship shifted from one Berth to another for bunkering. In the absence of any relevant exception clause or binding Port custom, Donaldson J held that time would continue to run during shifting. However, he drew an important distinction. Time would not continue to run where “the shift is for the Shipowner’s own purposes and to suit his own convenience e.g. in order to bunker or repair and the shift occurs at a time or in circumstances which deprive the Charterer of the use of the vessel”.

On the facts of The Shackleford, the shift to the bunkering Berth was admittedly for the Shipowner’s own purposes, but it did not deprive the Charterers of the use of the ship. Time therefore continued to run.

Andrew Smith J later commented on this reasoning in The Stolt Spur, stating:

I interpret this judgment as providing an example of a case where although shifting for bunkering purposes, the vessel could properly be regarded as at the charterers’ disposal in a business and mercantile sense, and the implication of the judgment of Donaldson J is that, had that not been the case, the time would not count for the purposes of laytime or demurrage.

That interpretation is not entirely easy to reconcile with the commercial facts. The bunkering in The Shackleford occurred at the only Discharge Port and was not carried out to facilitate the performance of the Charterparty then in question. It was done to enable the ship to proceed to her next employment. In that sense, it was plainly a Shipowner’s operation rather than a Charterers’ operation. Nevertheless, the key point remains whether the bunkering deprived the Charterers of the use of the ship at a time when they could otherwise have used her for cargo operations.

The Court of Appeal in Ropner Shipping Co Ltd v. Cleeves Western Valleys Anthracite Collieries Ltd also held that the whole period during which the ship was away from the Loading Berth had to be excluded, not merely the actual time spent pumping or receiving Bunkers (Fuel). The same approach should apply not only to Demurrage but also to any period of Laytime lost through the Shipowner’s fault.

Where no cargo is available, the result may be different. If the ship bunkers before Demurrage begins or after Demurrage has begun, but the bunkering does not interfere with any cargo operation because cargo is not available, there should ordinarily be no fault by the Shipowner and time should continue to run. The same reasoning should apply where the ship is waiting outside or at an anchorage because congestion prevents Berthing, and the Shipowner uses that waiting period to bunker. This is consistent with The Shackleford and was not rejected in The Stolt Spur. The authorities therefore support the proposition that bunkering does not interrupt time so long as it does not interfere with the Charterer’s operations.

London Arbitration 8/08 provides a practical example. The Charterers argued that time should not count while the ship bunkered at anchor while awaiting a Berth. The Tribunal rejected the argument because the Charterers lost no time as a result of the bunkering. The ship was waiting for a Berth in any event, and the bunkering did not delay loading or discharging.

Ballasting and Deballasting

At the end of the approach voyage, ships commonly discharge ballast before loading. Similarly, after the carrying voyage has ended and cargo is being discharged, ships commonly take on fresh ballast. Either operation may or may not delay cargo handling. The legal consequences are not necessarily identical in every case.

In modern shipping, ballast is almost always seawater, although some of the older authorities were decided when solid ballast was still used. Vaughan v. Campbell, Heatley & Co held that a ship could still be ready to load even though ballast remained in the holds, where that ballast was necessary to keep the ship upright and stable. The principle is that necessary ballast required for safety does not automatically prevent readiness or suspend the running of time.

Houlder v. Weir concerned ballasting during discharge. The Charterers argued that cargo discharge was slowed while ballast was being taken on board and that the relevant days should therefore not count as Lay Days. Channell J rejected that argument and stated:

In one sense the act of the shipowner may be said to have prevented the charterers from having the full benefit of the day, but the act which prevented the charterers from having a full day was not a breach of any obligation on the part of the shipowners. Here there has not been a breach of obligation, but merely the performance of a necessary operation, no less for the protection of the cargo than for the protection of the ship. It was an act similar to one beyond the control of the party, and not one like acts which are breaches of contract.

The reasoning is important. If ballasting or deballasting is necessary for the safety of the ship or cargo, and is carried out in the ordinary and proper course, it will not usually amount to Shipowner fault, even if it affects the speed of cargo operations.

London Arbitration 1/91 considered whether a Notice of Readiness (NOR) was invalid because one hold that the Charterers wished to use still contained ballast. The Charterparty also required every hold intended for use to be approved by the NCB/USDA. The Tribunal held that the Notice of Readiness (NOR) was not invalid where the ship was waiting to enter the commercial limits of the Port and the Charterparty allowed notice to be tendered outside those limits. After the hold was deballasted and passed inspection, it had to be ballasted again so that the ship could safely pass under a bridge on the way to the Loading Port.

In tanker Charterparties, the position is often governed by express wording. It is common for deballasting time to be excluded from Laytime where this results in loss of time, and some forms also exclude ballasting time. Clause 14(b)(vi) of Part II of the Exxonvoy 84 form provides that Laytime and Demurrage do not count if spent or lost:

“In ballasting or deballasting, cleaning of tanks, pumps, pipelines, bunkering or for any other purposes of vessel only, unless same is carried out concurrent with loading and/or discharging such that no loss of time is involved”.

The Asbatankvoy Charterparty Form contains a comparable provision in Clause 7 of Part II, but that clause applies only to deballasting and not to ballasting. The STB Voy Charter includes a similar provision in Clause 7(c). Clause 11 of that form goes further by providing that Laytime, or Demurrage if the ship is already on Demurrage, continues until discharge hoses are disconnected, or until ballasting begins at the Discharge Port or Ports, whichever occurs first.

In one London Arbitration, that wording was applied literally, even though the ship began taking on ballast before all the cargo had been discharged. The owners argued that, where a ship has two ballast systems, one for permanent ballast and another for the ballast required for the unladen voyage, the ship might merely be refreshing permanent ballast rather than ballasting to increase draught before sailing. The Arbitrators considered Clause 11 puzzling and suggested that it may originally have been intended to deal with a case where shore connection was used for ballasting after discharge had been completed. Nevertheless, the Arbitrators held that Demurrage stopped when ballasting began, even though this occurred about 36 hours before cargo discharge was completed.

Although the point was not argued in that arbitration, there seems no obvious reason why the owners could not have advanced a claim for Detention for the same period. The ship was still being detained for the Charterers’ purposes, namely completion of discharge, even though the express Demurrage machinery had stopped operating once ballasting began.

In the absence of any express provision dealing with deballasting or ballasting, the following principles provide a practical guide:

A. Where deballasting or ballasting can be performed at the same time as cargo operations, the ship will not be prevented from becoming an Arrived Ship for that reason, and Laytime or Demurrage will continue to run until cargo operations are complete.

B. Where deballasting or ballasting is carried out, or continues, after cargo operations have finished, Laytime or Demurrage will not be extended merely because the ship is still engaged in those ship operations.

C. Where deballasting or ballasting delays or interrupts cargo operations, but the operation is necessary at that time for the safety of the ship or cargo, the time lost will not be treated as caused by the Shipowner’s fault and will normally count.

D. Where deballasting or ballasting delays or interrupts cargo operations and is not necessary at that time, but is carried out for the Shipowner’s convenience, the time lost will be attributable to the Shipowner’s fault and will not count.

A different issue arose in London Arbitration 7/07. There was no dispute about the validity of the Notice of Readiness (NOR), but after the ship reached her marks, loading stopped. The reason was that some ballast water remaining in the tanks had frozen. Once the ice thawed, a further 500 mt of wheat was loaded. The Charterers argued that the delay should be placed on the owners. The Tribunal rejected that argument. The Charterers had not identified any Charterparty provision that shifted the time to the owners, and the unexpected freezing of some ballast water remaining in the tanks could not be treated as fault on the part of the owners, still less culpable fault.

Opening and Closing of Hatch Covers

Charterparties often contain express provisions dealing with the cost of opening and closing hatch covers, and also with whether time spent on that work is to count as Laytime. One typical clause was considered in London Arbitration 13/02. It provided:

All opening and closing of hatches including the handling and shifting of beams at loading discharging ports is to be done or paid for by the vessel and time used not to count as Laytime.

The difficulty was evidential. The Statement of Facts did not record how much time had actually been spent opening or closing the hatch covers. The owners argued that each operation took less than five minutes. The Charterers argued that each operation took one hour. The Tribunal held that, if the Charterers wished to deduct time from the Laytime calculation, the burden was on Charterers to prove how much time had in fact been spent. Since there was no reliable evidence of the actual time used, the Tribunal refused to insert a notional or speculative period into the calculation.

The decision is a useful reminder that even where the Charterparty clearly states that a particular activity is excluded from Laytime, the party claiming the deduction must still prove the amount of time actually lost or used. A theoretical allowance will not normally be accepted unless the Charterparty itself provides a fixed deduction.

Seal Inspections

London Arbitration 13/02 also considered a dispute about seal inspection. The Charterers pointed out that, where bagged foodstuff cargoes such as bagged sugar are carried, it is common for the holds to be sealed after loading and then inspected before discharge begins to confirm that the seals remain intact.

The ship was to discharge at Lagos. For practical reasons, the inspection and removal of the seals could only be carried out after the ship had Berthed. The Charterers sought to deduct the time said to have been occupied by that process.

The Tribunal rejected the claim. It held that the sealing operations at both Loading and Discharge Ports were joint surveys involving all interested parties. They were not operations carried out solely for the owners’ account. The Tribunal also found, on the facts, that the inspection and removal of the seals had not delayed the start of discharge. Since no actual delay had been proved, there was no basis for deducting time.

The practical point is that a seal inspection will not automatically interrupt Laytime or Demurrage. The party seeking the deduction must show both that the operation falls within the relevant Charterparty wording and that it actually delayed the cargo operation, unless the clause expressly excludes the period irrespective of delay.

Payment of Port Dues

London Arbitration 7/01 concerned a ship that was delayed in obtaining a Berth at the Discharge Port because the owners had not placed the Agents in funds. The Charterers argued that the ship was not at their immediate and effective disposal and that the Notice of Readiness (NOR) should therefore be treated as invalid.

The Tribunal did not accept that the Notice of Readiness (NOR) was invalid. Nevertheless, the Tribunal held that time did not run during the period of delay. The reason was that the delay was caused by the owners’ failure to fund the Agents, and that failure prevented the ship from proceeding in the ordinary way toward Berthing.

The case shows that a distinction may exist between the validity of Notice of Readiness (NOR) and the subsequent running of time. A notice may be valid when tendered, but Laytime or Demurrage may still be suspended if later delay is caused by a matter for which the owners are responsible.

Non-Production of Bills of Lading (B/L)

The basic rule is that cargo should be delivered only against presentation of an Original Bill of Lading (B/L). Bills of Lading are commonly issued in sets of three, and delivery against one original will normally render the others spent. Delivery without production of an Original Bill of Lading (B/L) may expose the owners to serious legal risk and may prejudice their P&I (Protection and Indemnity) Cover.

As a general rule, therefore, the Ship Master may decline to begin discharge until an Original Bill of Lading (B/L) is produced, or until the Receivers or Charterers provide a Letter of Indemnity (LOI) acceptable to the owners. The owners are under no obligation to accept such a Letter of Indemnity (LOI) unless the Charter expressly so provides.

There are, however, recognised exceptions to this rule. The main examples are:

A. Liner service;

B. Custom of the Port.

Where ships are employed in a regular liner service, it is customary for Bills of Lading (B/L) to be presented to the line Agents and for the ship to discharge in accordance with those Agents’ instructions. That may be so even where the ship has been voyage-chartered for a single voyage.

The second exception concerns Port custom. In some Ports, Port Authorities may not permit a ship that has Berthed to refuse discharge merely because Original Bills of Lading (B/L) have not yet been produced. Local practice and compulsory Port procedures may therefore affect the ordinary rule, although clear evidence of such custom or compulsion will normally be required.

Subject to those exceptions, where the Ship Master refuses to deliver without production of a Bill of Lading (B/L) and discharge is delayed as a result, Laytime will nonetheless continue to run, and Demurrage will continue thereafter. A refusal to deliver in those circumstances is not a default by the ship. Equally, the owners will not usually be entitled to claim Detention for the same period, because the Charterers are entitled to use their Laytime while the documentary issue is resolved.

Two London Arbitration awards illustrate the practical application of these principles. In London Arbitration 7/02, there was delay between the ship’s arrival at the Discharge Port and her Berthing. The Charterers sought to blame the owners. Under the Charterparty, the owners were required to discharge against presentation of a Letter of Indemnity (LOI), but the Charterers had not tendered one. The Tribunal held that it was for the Charterers to provide the Letter of Indemnity (LOI), not for the owners to ask for it. The Tribunal also found that the Charterers’ Agents had expressly instructed that the ship was not to Berth until the cargo documents arrived.

In London Arbitration 11/03, the owners refused to allow the ship to enter the Port because the Charterparty was a Berth Charterparty and Original Bills of Lading (B/L) were unavailable. The owners claimed compensation for the period during which the ship stayed outside the Port awaiting Berthing. The Tribunal rejected the claim. It held that there was no need for the ship to remain outside the Port merely because the Original Bills of Lading (B/L) were not yet available.

The broader conclusion is that non-production of Bills of Lading (B/L) may justify refusal to discharge, but it does not automatically justify keeping the ship outside the Port or claiming Detention. The precise result will depend on the Charterparty wording, local practice, Port Authority requirements, the availability of an acceptable Letter of Indemnity (LOI), and whether the delay is caused by Charterers, Receivers, or owners.

Crane and Cargo Gear Breakdowns

Voyage Charterparties for geared ships often include provisions dealing with the consequences of crane, winch, or cargo gear breakdown. The effect of such clauses depends on their wording. Some clauses provide for apportionment of time. Others exclude only the “time thereby lost”. The difference can be important.

Where apportionment is required, a common question is whether the reduction should be calculated by reference to the total number of cranes or winches fitted on the ship, or by reference to the number of hatches actually being worked at the relevant time. In London Arbitration 2/02, although the case concerned a Time Charter, the Tribunal held that the calculation should be made by reference to the number of appliances actually in use at the relevant time. There is no obvious reason why the same approach should not apply under a Voyage Charterparty, if the wording supports that method.

Where the clause does not provide for apportionment, the position may be different. In London Arbitration 6/08, the relevant clause did not refer to a percentage or mechanical apportionment. It referred instead to the “time thereby lost”. The Tribunal held that the actual time lost had to be proved. It was not enough to apply a simple mathematical formula unless the clause itself required that approach.

The practical distinction is therefore between a clause that automatically reduces Laytime in proportion to unavailable gear and a clause that excludes only actual delay caused by the breakdown. In the latter case, evidence of the real operational impact is essential.

Communications with Ship

One London Arbitration concerned delay caused by Port Agents being unable to communicate with a ship lying in the roads when a Berth unexpectedly became available. The Arbitrators held that a ship waiting offshore must keep communication channels open to a reasonable extent and operate them on a reasonable schedule.

The burden of proof rested on the Charterers. They had to show that the ship had failed to maintain reasonable communications and that the failure caused delay. Unless special arrangements had been made, it was also for the Charterers to identify the communication method that should have been used. The case does not impose an absolute duty to maintain constant contact at all times, but it does require a commercially reasonable system of communication while the ship is waiting for Berthing instructions.

MT Altus

After loading a crude oil cargo from a barge through a sealine had been completed, the Ship Master of the MT Altus was asked by the terminal to flush the sealine and ballast the loading barge so that the terminal could move the barge inshore for cleaning. The terminal said that it would pay for the operation. The Ship Master complied.

In later proceedings between the owners of the MT Altus and the Charterers, who were not the terminal operators, Webster J held that Laytime continued to run during those operations. The judge then considered whether Laytime should nevertheless be treated as suspended. He distinguished between the sealine flushing and the ballasting of the barge. Before doing so, he noted that neither operation was necessary for the operation or safety of the ship, nor for the safety of the cargo already on board.

Webster J held that, when the terminal required the sealine to be flushed, it was acting as Agent for, and in the interests of, the Charterers. That operation was therefore connected with the Charterers’ side of the cargo arrangements and did not suspend Laytime.

The ballasting of the barge was different. The Ship Master complied because he feared that, if he refused, his ship would be detained, and that even if detention was avoided, the ship or other ships in the same ownership might be blacked. In making that request, however, the terminal was not acting on behalf of the Charterers. The question was therefore whether the Ship Master’s compliance amounted to a fault or voluntary act by the owners sufficient to suspend Laytime.

After considering the Shipowners’ contractual duties and the authorities on Laytime interruption, Webster J stated:

I would assume, therefore, that Laytime can be suspended or interrupted by an act of a Shipowner, which has the effect of preventing the completion of loading or the commencement of the voyage, even without a breach of contract on his part, if that act constitutes a fault falling short of a breach of contract, or if it lacks lawful excuse.

Applying that test to the facts, Webster J held that the Ship Master was not at fault. Nor had he failed to proceed on the voyage without unreasonable delay, or failed to do everything reasonably possible to co-operate with the Charterers in securing the release of the ship. Webster J concluded:

Applying that test to the facts of the present case which I have found, in my judgment the master, in complying with SEREPT’s request, was not at fault, nor is he to be regarded as having failed to proceed on the voyage without unreasonable delay, or having failed to do everything reasonably possible to co-operate with the defendants in securing the release of the vessel for that purpose. In my judgment, therefore, Laytime was not interrupted or suspended.

The decision shows that a Ship Master’s compliance with a terminal request will not necessarily amount to Shipowner fault, even if the operation is not strictly necessary for the ship or cargo. The court will examine the commercial pressure, the reason for compliance, the party on whose behalf the request was made, whether the act delayed loading or the commencement of the voyage, and whether the Ship Master acted reasonably in the circumstances.

Exclusion of Fault

The effect of an exclusion clause where fault exists on the part of the Shipowner, or on the part of persons for whom the Shipowner is responsible, was considered by Parker J in The Union Amsterdam. The facts were relatively simple. The Union Amsterdam had arrived at the Discharge Port, and Laytime had already expired before a Berth became available. The ship was therefore on Demurrage when, after a Berth became open, she grounded while proceeding toward it. The owners argued that Demurrage continued to run during the grounding because any fault attributable to them, arising from negligent navigation of the ship, was excused by the United States Carriage of Goods by Sea Act (COGSA), which had been incorporated into the Charterparty.

Parker J rejected that argument and gave three reasons. First, the relevant clause merely provided that the ship would not be liable for delay to the cargo caused by matters excepted under US COGSA. Applying the general rule that exceptions clauses are construed narrowly, the clause could protect an owner against a cargo claim for delay, but it could not be used as a basis for maintaining a claim against the Charterers for Demurrage. Parker J then added two broader propositions, which are best treated as obiter.

The judgment continued:

In the second place a breach of duty remains a breach of duty, and therefore fault notwithstanding, that liability for the breach is excluded. In the third place, far from doing nothing to prevent the vessel being available, owners have, by negligent navigation or management, so prevented her and, as Lord Justice Bankes said, it does not lie in their mouths to say that the vessel was being detained by the charterers during the period when by their negligence she was grounded.

The reference to Bankes LJ was a reference to Ropner Shipping Co Ltd v. Cleeves Western Valleys Anthracite Collieries Ltd. A significant distinction must, however, be made between Ropner Shipping Co Ltd v. Cleeves Western Valleys Anthracite Collieries Ltd and The Union Amsterdam. In The Union Amsterdam, the owners relied on an exceptions clause to excuse negligence. In Ropner Shipping Co Ltd v. Cleeves Western Valleys Anthracite Collieries Ltd, the Court of Appeal did not go so far as to hold that there was “fault” on the part of the Shipowner. The case was decided on what would probably now be analysed as Estoppel.

If such an Estoppel can arise where a ship is deliberately withdrawn for the Shipowner’s own convenience, it remains open to question whether the same reasoning should apply to negligence by the Shipowner’s servants, especially where the Charterparty contains wording that expressly excuses such negligence. In The Union Amsterdam, the relevant wording did not have that effect, but the broader legal question remains distinct.

There is also another line of authority, arising in a different but closely related context, which deals with the point raised by Parker J’s second and third propositions. This concerns the position where the Shipowner’s fault is excluded by an exceptions clause. For such a clause to operate, it must clearly extend to the particular fault relied upon. The relevant authorities come from the law of General Average (GA), and they do not appear to have been cited to Parker J.

Under General Average (GA), the right to recover contribution is lost if the peril that made the sacrifice necessary was caused by the “fault” of the party seeking contribution. Thus, an owner may be prevented from recovering contribution if the loss was caused by negligence on board the ship, unless the owner is protected against liability for that negligence by the terms of the Charterparty or Bill of Lading (B/L). In The Carron Park, Sir James Hannen P stated:

The claim for contribution as general average cannot be maintained where it arises out of any negligence for which the shipowner is responsible; but negligence for which he is not responsible is as foreign to him as to the person who has suffered by it.

That principle was affirmed by the House of Lords in Dreyfus v. Tempus Shipping Co. Later, in Goulandris Brothers Ltd v. B Goldman & Son, Pearson J also treated the rule as depending upon the existence of an actionable wrong. Unless there is a wrong for which the party seeking contribution is legally responsible, the claim for contribution in General Average (GA) is not defeated.

On that basis, the decision in The Union Amsterdam was correct on Parker J’s first ground: the particular clause relied upon did not extend to the Demurrage claim in question. However, the broader propositions stated in the judgment are more difficult to support. If the “fault” relied upon by Charterers is expressly and effectively covered by an exclusion clause, the better view is that time will continue to run, whether as Laytime or as Demurrage.

That said, any clause by which a Shipowner seeks to excuse the non-availability of the ship would need to be drafted in very explicit terms. The first reason given in The Union Amsterdam shows that simply incorporating the Hague Rules, US COGSA, or similar legislation into the Charterparty is unlikely to be sufficient. Similarly, a general exceptions clause will not usually be enough.

This point was made clearly in Sametiet M/T Johs Stove v. Istanbul Petrol Refinerisi A/S, known as The Johs Stove. The Charterparty contained a clause similar to Clause 19 of the Exxonvoy 69/Asbatankvoy Charterparty Forms, which relieves the owner from liability for delay arising from acts, neglect, or similar conduct of the Ship Master and the owner’s servants in the navigation or management of the ship. Lloyd J stated:

I agree with the arbitrator that a general exceptions clause such as clause 19 will not normally be read as applying to provisions for Laytime and Demurrage, unless the language is very precise and clear.

“Any Other Cause Beyond the Control of Charterers”

The expression “any other cause beyond the control of Charterers”, or wording to similar effect, may appear in two different forms. It may stand alone as an independent provision, or it may be added at the end of a wider General Exceptions Clause. Where it is appended to other listed exceptions, questions may arise about its relationship with the listed events. That separate issue is considered later.

“ANY OTHER CAUSE BEYOND THE CONTROL OF CHARTERERS”

In this section, the phrase is considered as a self-standing provision. The question is therefore what kinds of delay can properly be described as beyond the Charterers’ control.

One of the best-known uses of the phrase appears at the end of Clause 6 of the Asbatankvoy Charterparty Form, particularly in its relationship with the “Reachable on Arrival” undertaking in Clause 9. That relationship was resolved by the House of Lords in The Laura Prima.

The House of Lords also considered similar wording in The Notos. That case involved a period of delay during which swell prevented any ship of the relevant size from discharging at the sea-line where discharge was intended to take place. The owners failed in their attempt to establish that the STB Charterparty Form contained a Reachable on Arrival undertaking. However, they succeeded before both the Tribunal and the courts in relation to a later period of delay. After the swell had subsided and the sea-line had become usable, it was occupied by another ship that had arrived earlier than the Notos. That second period counted against the Charterers because the Charterers controlled the sea-line.

Weather will normally be regarded as beyond the control of Charterers. Tidal restrictions would probably be treated in the same way. Congestion, however, may or may not be beyond Charterers’ control, depending on the facts. In The Notos, congestion was not beyond the control of the Charterers because the Charterers controlled the sea-line.

In The Nikmary, Moore-Bick J considered Clause 6 of the Asbatankvoy Charterparty Form in circumstances where the Reachable on Arrival provision in Clause 9 had been deleted. Moore-Bick J stated:

As in The Notos, the charter in the present case contains no undertaking on the part of the charterers to designate a berth reachable on arrival. I would accept, therefore that clause 6 is effective to protect the charterers where delay is caused by congestion over which they have no control. However the problem in the present case was not one of congestion in the usual sense of a queue of vessels waiting their turn to berth, but of the scheduling of supplies.

In The Nikmary, the ship failed her tank inspection when first presented. Two days later, the tanks were approved, but the ship then had to wait almost one month before loading began. The difficulty was that cargo would have been available when the ship first arrived, but by the time the tanks were approved, the refinery’s production had been allocated to the domestic market and to other ships already scheduled for loading. The ship was therefore placed at the end of the loading programme.

The Charterers were entitled to cancel the Charterparty but chose not to do so. Their obligation to have cargo available once the ship became ready therefore continued. The Court of Appeal upheld the first-instance decision and held that a Voyage Charterer is under an absolute and non-delegable obligation to provide cargo for loading. Charterparty Exceptions, including Clause 6, will ordinarily be construed as protecting the Charterer in relation to the duty to load, but not in relation to the separate duty to provide cargo, unless the wording clearly says otherwise. Time therefore continued to count against the Charterers throughout the prolonged delay.

In The Mozart, Mustill J held that the Charterers were not liable for delay caused by the breakdown of a stacker-reclaimer used for loading. The breakdown resulted from poor maintenance. The stacker-reclaimer was owned by independent contractors engaged by the Charterers’ Agents.

The exclusion formed part of a wider clause, but the judge appears to have treated it as though it stood alone. The wording excluded “any cause whatsoever beyond the control of the Charterer”. The word “whatsoever” appears to have been important. Mustill J stated:

If the clause is expressed widely, it must be applied widely.

Mustill J also held that the Charterers were not vicariously liable for the terminal’s failure to maintain the stacker-reclaimer because the Charterers, through their Agents, were dealing with the terminal at arm’s length.

The Mozart was followed by Bingham J in The Chanda.

Most Charterparties provide that the Charterer is to load and discharge the cargo. A difficult issue arises where that obligation is delegated. The duty may be delegated to Shippers or Receivers, there may be one or more Sub-Charterparties, or performance may be passed to sellers or buyers of the cargo. In many cases, those parties will be dealing with each other at arm’s length.

The question then becomes whether Charterers may say that a delay was beyond their control simply because they delegated the performance of loading or discharging to another party. In many cases, the answer will not matter because, even if Charterers had performed the operation themselves, the delay would still have been beyond their control, as in ordinary Port congestion. As a matter of principle, however, it would be unsatisfactory if a Charterer could avoid responsibility merely by sub-chartering or otherwise transferring the practical performance of the Charterer’s loading or discharging obligations.

General Exceptions Clauses

Most Charterparties contain specific exceptions and, in addition, a broad General Exceptions Clause. A familiar example is Clause 19 of Part II of the Asbatankvoy Charterparty Form, which provides:

The Vessel, her Master and Owner shall not, unless otherwise in this charter expressly provided, be responsible for any loss or damage, or delay or failure in performing hereunder, arising or resulting from:— any act, neglect, default or barratry of the Master, pilots, mariner or other servants of the Owner in the navigation or management of the vessel; fire, unless caused by the personal design or neglect of the Owner; collision, stranding or peril, danger or accident of the sea or other navigable waters; saving or attempting to save life or property; wastage in weight or bulk, or any other loss or damage arising from inherent defect, quality or vice of the cargo; any act or omission of the Charterer, Owner, Shipper or Consignee of the cargo, their agents or representatives; insufficiency of packing; insufficiency or inadequacy of marks; explosion, unseaworthiness of the Vessel unless caused by want of due diligence on the part of Owner to make the vessel seaworthy, or properly manned, equipped and supplied; or from any other cause of whatsoever kind arising without the actual fault or privity of the Owner. And neither the Vessel nor Master or Owner, nor the Charterer, shall, unless otherwise in this charter expressly provided, be responsible for any loss or damage or delay or failure in performing hereunder, arising or resulting from:— Act of God; Act of War; Perils of the Seas; Act of Public Enemies, Pirates or Assailing Thieves; arrest or restraint of princes, rulers or people; or seizure under legal process provided bond is promptly furnished to release the vessel or cargo; strike or lockout or stoppage or restraint of labour from whatever cause, either partial or general; or riot or civil commotion.

The question whether exceptions clauses operate mutually has already been considered. In the clause quoted above, the structure is clear. The exceptions in the second sentence are mutual and are intended to benefit both Shipowner and Charterer. The much longer list in the first sentence is drafted for the protection of the Shipowner alone.

Even where exceptions are mutual, it remains doubtful that a General Exceptions Clause applies to Laytime or Demurrage. Unless the Charterparty contains express wording, or unless a necessary implication arises from the language used, such a clause will not normally protect either party in relation to the Laytime and Demurrage machinery. Nor will it ordinarily apply to events occurring before the ship has begun the approach voyage to the Loading Port.

In The Johs Stove, Lloyd J considered a clause of the kind set out above and stated:

I agree with the arbitrator that a general exceptions clause such as clause 19 will not normally be read as applying to provisions for Laytime and Demurrage, unless the language is very precise and clear.

That approach was later followed in London Arbitration 7/04.

The Exxonvoy 84 Charterparty Form, which succeeded the Exxonvoy 69/Asbatankvoy Charterparty Form, made the position even clearer by expressly stating in a subclause that the General Exceptions Clause does not apply to Laytime or Demurrage.

The question whether Clause 28 of the Sugar Charterparty 1969 form applied to Laytime was considered in The Solon. The clause appeared under the heading “Strikes and Force Majeure” and provided:

Strikes or lockouts of men, or any accidents or stoppages on Railway and/or Canal and/or River by ice or frost, or any other force majeure clauses including Government interference, occurring beyond the control of the Shippers or Consignees which may prevent or delay the loading and discharging of the vessel always excepted.

The Charterers relied on a strike at the Loading Port.

Thomas J reviewed The Kalliopi A, The Forum Craftsman, The Lefthero, and the dictum in The Johs Stove. The dispute required the court to consider two related questions. The first was whether a higher degree of clarity is required where a party seeks to rely on an exceptions clause after the ship is already on Demurrage, compared with reliance on the same clause during Laytime. The second was the broader principle that an ambiguous clause will not provide protection.

The owners argued that neither principle nor authority supported the view that a greater degree of certainty was required in relation to Demurrage exceptions. They submitted that Charterers had a primary obligation to load within Laytime and a secondary obligation to pay Demurrage if they failed to do so. In Photo Production Ltd v. Securicor Transport Ltd, Lord Diplock had described an exclusion clause as:

“one which excludes or modifies an obligation whether primary, general secondary or anticipatory secondary, that would otherwise arise under the contract by implication of law.”

On that basis, the owners argued that the same level of clarity should be required whether the clause was said to affect the primary obligation to load within Laytime or the secondary obligation to pay Demurrage after Laytime had expired.

The Charterers argued for a distinction. Where the excepted event occurs after the ship is already on Demurrage, the Charterer is already in breach of the Laytime obligation, and the exception must therefore be expressed very clearly if it is to relieve the Charterer from the consequences of that breach. By contrast, where the event occurs during Laytime, the Charterer is not yet in breach. The clause operates not so much as an exception from liability but as part of the machinery defining or modifying the time allowed for performance. Expressions such as “time not to count”, as Hobhouse J observed in The Forum Craftsman, define the performance obligation itself. On that view, less stringent wording may be sufficient during Laytime than after Demurrage has begun.

The point is commercially important. If an exceptions clause applies during Laytime but not after Demurrage, the same event may suspend time before the Demurrage threshold is reached but have no effect once the ship is on Demurrage. Clear drafting is therefore essential. If the parties intend a strike, force majeure, weather event, governmental restraint, or other exception to stop time both during Laytime and while on Demurrage, the Charterparty should say so expressly.

In my view, the owners’ argument is essentially correct. The maxim “once on Demurrage always on Demurrage” can sometimes obscure rather than clarify the legal position. As Lloyd LJ indicated in The Lefthero, the phrase is best understood as expressing the broad rule that express Laytime exceptions do not automatically continue to apply once the ship is on Demurrage. Where the real question is whether a General Exceptions Clause excuses performance during Laytime or during Demurrage, the maxim is not the controlling principle. The proper approach is the ordinary rule of construction: an ambiguous clause gives no protection.

The issue is whether the clause is clear enough to relieve the Charterer from obligations imposed by the Charterparty. During Laytime, the Charterer’s primary obligation is to load the ship within the Lay Days. After the Lay Days have expired, that obligation to load remains, but the Charterer is also under the secondary obligation to pay Demurrage for breach of the obligation to load within the agreed time. In both situations, the same essential question arises: has the clause been drafted with sufficient clarity to excuse the Charterer from the relevant obligation?

On that basis, the court held that Clause 28 did not operate as an exception to the running of Laytime.

London Arbitration 20/10 provides a further example of the operation of General Exceptions Clauses. In that case, a ship was arrested during loading by the Indonesian Navy, arbitrarily and without justification, and was released only after the Charterers paid a substantial fine. The Tribunal held that the Charterers were protected by a General Exceptions Clause excluding delay caused by restraint of princes. The clause protected the Charterers in relation to the delay, but not in relation to the fine. The financial loss caused by the fine remained where it fell, namely on the Charterers.

“Any Other Cause Beyond the Control of Charterers”

This phrase, or wording of similar effect, is often included at the end of an Exceptions Clause after a list of specific excluded causes. In The Cape Equinox, the wording was “any other causes or accidents beyond the control of the Consignee”. The issue was whether the specific exclusions preceding those words also had to be causes beyond the Consignee’s control. The Arbitral Tribunal held that they did, and that conclusion was upheld by the High Court.

Where the delay is caused by something not expressly listed in the clause, the question becomes whether it can nevertheless fall within the concluding general words. Before considering the authorities, the main principles may be summarised as follows:

A. If the listed exceptions share a common character, or belong to the same genus, the presumption is that the general concluding words are limited to matters of the same kind. This is the ejusdem generis rule of construction.

B. If the listed exceptions do not share any common thread, the concluding words are more likely to be read broadly and may be given their ordinary literal meaning.

C. If the concluding words include “whatsoever”, or similarly expansive wording, that will usually indicate an intention to displace the ejusdem generis restriction. Even where the earlier exceptions have a common character, the final words may then be given a wide meaning.

Cases Relating to Principle A

In the early case of Lyndon v. Standbridge, Pollock CB explained the rule in these terms:

It is a general rule of construction that where a particular class is spoken of, and general words follow, the class first mentioned is to be taken as the most comprehensive, and the general words treated as referring to matters ejusdem generis with such class.

Crawford and Rowat v. Wilson, Sons & Co concerned a Charterparty clause providing:

The Act of God, the Queen’s enemies, restraint of Princes and Rulers, fire, riots, stoppage of trains, strikes of pitmen and others, lock-outs, disputes with workmen, and all unavoidable accidents or hindrances, in procuring, loading and/or discharging the cargo… always excepted.

The Port Crawford was ordered to Rio de Janeiro with a cargo of coal, but discharge was delayed by revolution. Mathew J described the conditions at Rio de Janeiro in vivid terms:

the town of Rio was from time to time bombarded by the rebels, and there was constant firing of shot, shell and small arms between the ships of the insurgents and the forts and batteries of the Government on shore.

Mathew J held that the rebellion amounted to an unavoidable accident or hindrance in discharging the cargo. The delay was therefore covered by the exception.

The Court of Appeal considered the same rule in Richardson v. M Samuel & Co. The Charterparty there excepted, among other matters:

“strikes, lock-outs, accidents to railway . . . or other causes beyond Charterers’ control”.

A railway accident caused a shortage of cargo at the Loading Port. Loading was then further delayed because the Charterers’ Agent, having dismissed the men engaged to load ships during the stoppage, was unable to obtain sufficient labour when work resumed.

Smith LJ considered the concluding words and stated:

In my opinion, these words are to be read as applying to matters ejusdem generis with those which have been mentioned before—that is to say, matters which relate to the impossibility of getting the cargo down to the ship and into the ship, and cannot be read so as to cover acts of the charterers’ agent, which he for his own purposes thinks fit to perform, Therefore, I am of opinion that the want of men does not come within this exception.

Rigby LJ agreed, although he added that a dismissal of men by an employer might, in another case, be sufficiently analogous to a lock-out. On the facts before the court, however, that was not so.

In Shamrock Steamship Co Ltd v. Storey & Co, Bigham J considered delay at Grimsby caused by an abnormal number of colliers, itself the result of a strike in the South Wales coalfield. The clause excluded delay caused by:

“Commotions by keelmen, pitmen, or any hands striking work . . . or other acts or causes beyond the freighters’ control”.

Bigham J held that the exception did not apply. He said:

. . . the fact that the Welsh coal strike may have caused an unusual number of ships to seek cargoes at Grimsby has, in my view, no more to do with the case than if the same result had followed from a strike in German or Australian or Japanese collieries. The glut in shipping cannot, I think, be brought within the fair meaning of either of the particular or the general words of the exception, the general words having to be read as confined to matters ejusdem generis with the particular matters mentioned in front of them.

The case later reached the Court of Appeal. The Court of Appeal upheld the result on a different ground, namely the incorporation of the Colliery Guarantee into the Charterparty. Lord Russell of Killowen CJ added a note of caution, observing that he would have required further argument before accepting Bigham J’s construction of the Exceptions Clause.

Many of the earlier authorities on the ejusdem generis rule were reviewed by Vaughan Williams LJ in Tillmans & Co v. The Steamship Knutsford Ltd. Counsel had argued, relying on a non-maritime authority, that general words should prima facie be given a broad meaning unless clearly cut down by the preceding words. The alternative view was that general words following specific exceptions should first be read narrowly unless the context showed that a broader meaning was intended.

The House of Lords agreed with the courts below that, in the first instance, such general words should be given a restricted meaning. On the facts, the words “or any other cause” had to be read ejusdem generis with “war” or “disturbance”. They therefore referred to some violent occurrence caused by human agency and did not extend to a case where the Ship Master considered entry into a Port unsafe because of ice or perils of the sea.

In Mudie v. Strick & Co Ltd, Pickford J held at first instance that a shortage of labour caused by plague did not excuse the Charterers from delay in discharge. The shortage was not an “accident” and was not ejusdem generis with “strikes, lock-outs or civil commotions”. On appeal, the Court of Appeal ordered a new trial but did not express any view on Pickford J’s reasoning.

In Thorman v. The Dowgate Steamship Co Ltd, Hamilton J again examined the ejusdem generis rule and emphasised that it is only a canon of construction. He stated:

One must, of course, bear in mind that it is a canon of construction only. The object is to find out the intention of the parties. The instrument, the nature of the transaction, and the language, must all have due regard given to them, and the intention of the parties is to be ascertained by the consideration of their language in accordance with its ordinary and natural meaning.

The specific exceptions in that case covered delay caused by:

. . . strikes of pitmen or workmen, frosts or storms, and delays at spouts caused by stormy weather, and any accidents stopping the working, loading or shipping of the said cargo, also restrictions or suspensions of labour, lock-outs, delay on the part of the railway company . . .

The ship was delayed by congestion, which Hamilton J found to be a normal incident of the trade at that Port. Looking at the common thread in the clause, he said:

But it appears to me that the common category which covers all this is to be found in the circumstances that they clearly all refer to something extraordinary—something in the nature of a casualty, something accidental or abnormal…

He therefore held that ordinary congestion did not fall within the concluding words “any other cause beyond my control . . . ”.

McCardie J reviewed many of the authorities again in SS Magnhild (Owners of) v. McIntyre Brothers & Co. His judgment appears to differ from Vaughan Williams LJ’s approach in Tillmans v. Knutsford on whether there is a presumption that general words following specific exceptions should be read broadly or narrowly.

On the meaning of a genus, McCardie J said:

I confess that I find great difficulty in answering the question. How the language of natural history came to be applied to the construction of commercial documents or statutes, wills and deeds, I know not… So far as I can see, the only test seems to be whether the specified things which precede the general words can be placed under some common category. By this I understand that the specified things must possess some common and dominant feature.

He continued:

Speaking broadly, the judges in the past seem to have been somewhat acute to find, if reasonably possible, a common category in Charterparties, Bills of Lading (B/L) and policies of insurance… Must the particular facts in question be similar to one or other of the specified things ere they can be allowed to fall within the general words, or will it suffice if they fall within the genus? Even on this point there seems much doubt.

McCardie J also approved a passage from Scrutton on Charterparties, in which Scrutton LJ explained:

It must be remembered that the question is whether a particular thing is within the genus that comprises the specified thing. It is not a question (though the point is often so put in argument) whether the particular thing is like one or other of the specified things. The more diverse the specified things, the wider must be the genus that is to include them; and by reason of the diversity of the specified things, the genus that includes them may include something that is not like any one of the specified things.

In Hain Steamship Co Ltd v. Canadian Transport Co Ltd, Atkinson J applied Hamilton J’s reasoning in Thorman v. The Dowgate Steamship Co Ltd. The genus under consideration was one of abnormal occurrences. Atkinson J added, however:

But it must be remembered that if frost, fog and bad weather are within the genus, then “abnormal” must not be given any extreme interpretation.

More recently, the Supreme Court of New South Wales held in Caltex Oil (Australia) Pty Ltd v. Howard Smith Industries Pty Ltd, known as The Howard Smith, that a clause excluding “Acts of God, restraint of Government and other circumstances beyond control of parties” did not extend to delay caused by a strike of shore operators.

London Arbitration 2/94 adopted a somewhat different approach from some earlier authorities. The Tribunal held that the exceptions in the clause under consideration did not belong to one single category, type, or genus, but to several categories. The Tribunal therefore concluded that the words “any other cause beyond the control of Charterers” could operate under the ejusdem generis rule only within the categories already identified by the listed exceptions. Machinery breakdowns occurring somewhere other than “at the Mines, at Shippers or Receivers works or Wharf” did not fall within the concluding general words of exception.

Cases Relating to Principle B

SS Magnhild (Owners of) v. McIntyre Brothers & Co, mentioned above, was in fact a Time Charter case. The dispute arose after a ship grounded while entering a French Port. She remained aground for eight days, and repairs then took about a further two weeks. Throughout that entire period, the Charterers placed the ship off-hire, while the owners disputed their right to do so.

The relevant clause provided that the ship would be off-hire “in the event of loss of time from deficiency of men, or owners’ stores, breakdown of machinery or damage to hull or other accident preventing the working of the steamer . . . ”. The owners argued that “other accident preventing the working of the steamer” had to be read ejusdem generis with the specific matters listed before it. McCardie J rejected that argument, stating:

I cannot create a genus (whether scientific or otherwise) out of the specific words. I see no common or dominating feature of such words. Default of the owners cannot, of course, be such a feature, for the matter mentioned in the specific words could arise either with or without such default. Unseaworthiness… cannot be a common or dominating feature inasmuch as damage to hull might supervene, although the ship was perfectly seaworthy. Human agency cannot be a common or dominating feature, for damage to hull might arise through tempest… If, then, there be no such common or dominating feature, the ejusdem generis rule cannot apply.

McCardie J added that even if a genus could be identified, it would probably be wide enough to include the grounding and the resulting detention. The case therefore illustrates Principle B: where the specific words do not share a clear common character, the general words are not cut down by the ejusdem generis rule and may be given a broader meaning.

The House of Lords reached a comparable conclusion in Nicholas E Ambatielos v. Anton Jurgens’ Margarine Works. That case arose from a strike by dock labourers at Rotterdam, which delayed the ships Ambatielos and Panagis in discharging. Both ships were fixed under Charterparties containing no specific strike clause, but the contracts included the following provision:

Should the vessel be detained by causes over which the charterers have no control, viz., quarantine, ice, hurricanes, blockade, clearing of the steamer after the last cargo is taken over, etc., no demurrage is to be charged and lay days not to count.

The first issue was whether the listed examples were intended to be an exhaustive definition of the causes of detention. The majority of the House of Lords held that they were not. Their Lordships then considered whether the listed examples had any common thread that could limit the meaning of the final “etc.”. They concluded that no such common genus existed.

The Lord Chancellor expressed the reasoning as follows:

We have to see whether . . . the well known rule ejusdem generis applies. My Lords, I know no authority for applying that rule to a case of this kind—a case where to begin with the whole clause is governed by the initial general words, secondly, where the expression to be construed is the expression et cetera, and thirdly, where as in this case there is no genus to which anyone can point which comprises all the five cases.

The House of Lords therefore held that the clause was effective to prevent time from running during the strike. The decision shows that where the clause begins with broad general words and then gives non-exhaustive examples, the court may be reluctant to impose a narrow ejusdem generis limitation if the examples do not form a coherent class.

Cases Relating to Principle C

The leading authority on Principle C is the House of Lords decision in Larsen v. Sylvester & Co. The clause there provided:

The parties hereto mutually exempt each other from all liability arising from frosts, floods, strikes, lock-outs of workmen, disputes between masters and men, and any other unavoidable accidents or hindrances of what kind soever beyond their control, preventing or delaying the working, loading, or shipping of the said cargo occurring on or after the date of this charter until the actual completion of loading.

The Mauranger entered dock at Grimsby to load coal but was delayed by congestion. The higher courts agreed that the ejusdem generis rule did not apply and that the delay was covered by the exception. Lord Robertson explained the effect of the wording:

. . . the parties, I think, have realized, or, at least, may well be held to have realized, the applicability of that rule to such contracts, and they inserted these words “of what kind soever”, simply for the purpose of excluding that rule of construction. The effect of the insertion of these words is this, it excludes the limitation that would naturally arise from the context and gives to the word “hindrances” its full and absolute meaning.

The important feature of the clause was the expansive wording “of what kind soever”. That language indicated that the parties intended the general words to have their full breadth and not to be limited by the specific examples preceding them.

The same approach was followed by Bailhache J in France, Fenwick & Co Ltd v. Philip Spackman & Sons. The relevant clause provided:

Strikes of workmen, lock-outs, pay days, idle days or cavilling days, or riots or frost, rain or floods, or any accident or any cause whatsoever beyond the control of the charterer which may prevent or delay her loading or unloading excepted.

The ship was delayed at the Discharge Port because of a shortage of railway wagons. That shortage had been caused by an exceptional demand for wagons. Bailhache J described the background:

As we all remember the summer of 1911 was quite exceptional; the fruit crop was heavy and the hops were moved some 14 days before the usual time; there were about this time some manoeuvres, partly of the territorial forces and partly of the regular army; and in addition there was the dislocation of the railway traffic owing to the few days’ serious strike in August.

Bailhache J then stated:

It is sufficient for me to refer to Larsen v. Sylvester and Thorman v. Dowgate Steamship Co. In the former of these cases the general words were “of what kind soever”, and the House of Lords held that by the use of those words there was a sufficient expression of intention to exclude the ejusdem generis rule. In Thorman v. Dowgate Steamship Co, the general words were “any other cause”, and Hamilton J decided there was no sufficient indication to override the well-known ejusdem generis rule.

On that basis, Bailhache J held that the clause was wide enough to exclude the delay. The words “any cause whatsoever” were sufficient to displace the ejusdem generis rule.

A different but related issue arose before Mustill J in The Mozart. The ship had been chartered to carry petcoke from the TOPCO terminal near Port Arthur to Rotterdam. At the Loading Port, the ship was delayed for several days when a large mobile conveyor belt, known as a stacker-reclaimer, broke down. The equipment was used to move petcoke from railcars into storage and then from storage to the ship. The breakdown resulted from poor maintenance by the terminal. The terminal was not the Shipper, but an independent contractor engaged by the Charterers’ Agents to store and load the petcoke.

The Charterparty was on an Americanised Welsh Coal Charterparty Form. The Charterers relied on Clause 3, which provided:

. . . Any time lost through riots, strikes, lock-outs, or any dispute between masters and men, occasioning a stoppage of pitmen trimmers or other hands connected with the working or delivery of the petcoke for which the vessel is stemmed, or by reason of accidents to mines or machinery, obstructions, embargo or delay on the Railway or in the Dock; or by reason of fire, floods, frosts, fogs, storms or any cause whatsoever beyond the control of the Charterer affecting mining, transportation, delivery and/or loading of the petcoke not to be computed as part of the loading time (unless any cargo be actually loaded during such time)…

In the arbitration, the Charterers had argued that the stacker-reclaimer failure amounted to a machinery breakdown. The Arbitrators rejected that submission. Before Mustill J, the argument was reframed. The Charterers contended that the malfunction fell within the words “any cause whatsoever beyond the control of the Charterer affecting loading of the petcoke”.

Mustill J approached the issue in two stages. First, he considered whether the words should be construed literally. Secondly, he considered whether the event was in fact beyond the Charterers’ control. On the first question, he said:

If the clause is expressed widely, it must be applied widely.

Mustill J therefore gave the words their ordinary wide effect, thereby displacing the ejusdem generis rule. On the second question, he held that the Charterers were not vicariously responsible for TOPCO’s failure to maintain the stacker-reclaimer. Through their Agents, the Charterers had dealt with the terminal at arm’s length.

A further issue was whether the Charterers were prevented from relying on the exceptions clause because they had not given notice of the stoppage, as the final part of the clause required. Both the Arbitrators and Mustill J held that the Charterers could still rely on the clause. The owners had suffered no prejudice from the absence of formal notice because, through the Ship Master, they were fully aware of what had occurred.

In The Vine, the court considered a claim by owners for delay where the ship was held up for more than one month because repairs were being carried out to the nominated Berth. The Charterparty incorporated terms from a long-term sale contract between Brazilian Shippers, who controlled the loading Berth through a subsidiary, and the receivers of the cargo. One of those terms excluded “Partial or Total interruptions on railway or port” from the running of Laytime. The court held that the delay fell within that wording.

However, the court also held that a catch-all provision excluding time lost by “Any cause of whatsoever kind or nature beyond the control of the seller preventing cargo preparation, loading or berthing of the vessel” did not assist the Charterers. “Seller” could not be read as meaning Charterers. In any event, the Charterers would have had to prove both that the event was beyond their control and that no reasonable steps could have been taken to avoid or mitigate the event or its consequences. The court also held that the requirement that the event be beyond the control of the seller applied only to the catch-all provision, not to all the listed exclusions. In the end, however, the owners succeeded because they established that the Charterers were in breach of their safe Berth warranty.

In The Notos, the owners argued unsuccessfully that a clause containing the phrase “any other cause of whatsoever nature or kind over which the Charterer has no control” should be confined to causes connected with the ship or her owners, because some causes of that kind were specifically mentioned in the clause. The court rejected that narrow approach and treated the words as broad enough to operate according to their natural meaning, subject to the requirement that the cause must genuinely be outside the Charterers’ control.

In The Mastrogiorgis B, the United States Court of Appeals for the Second Circuit held that time lost through congestion, where the congestion itself had resulted from a strike, fell within the phrase “beyond the Charterer’s/Receiver’s control”. The clause was described as having been drafted in very wide terms, and the court gave effect to that breadth.

Overtime Ordered by Port Authorities to Count as Laytime

Several important points arose in President of India v. Edina Compania Naviera SA, known as The Stamatios G Embiricos, a decision of Mocatta J.

The case concerned a Charterparty for the carriage of grain from the US Gulf to Kandla and Bombay. The Charterparty contemplated that, before the Stamatios G Embiricos could obtain a Berth at Kandla, it would have to be lightened. For that reason, Clause 11 incorporated the Centrocon Lighterage Clause. The relevant part provided that time would commence 48 hours after the ship arrived at the lightening anchorage.

The Charterparty also contained the following clauses:

12. . . . If overtime work ordered by the Port Controller or Authorities at loading or discharging ports, the cost of such overtime shall be shared equally between Owners and Charterers, and half such time so used to count as laytime.
13. Vessel to work day and night including Saturdays after noon, Sundays and Holidays if requested to do so by Charterer or his Agents.
14. (a) Cargo to be discharged by consignees’ stevedores, free of risk and expense to vessel, at the average rate of 1000 tons of 2240 lbs. per weather working day of 24 consecutive hours Saturdays after noon, Sundays and Holidays excepted even if used, always provided the vessel can deliver at this rate.

The ship reached the Kandla lightening anchorage at 06:00 on 29 September 1958. Time therefore began to run at 06:00 on 1 October. Before time began, however, the Port Authority ordered overtime to be worked for certain periods. From 1 October onward, the ship worked continuously under the Port Authority’s instructions, first at the anchorage and later alongside, until the Kandla cargo was fully discharged.

The dispute concerned how the relevant clauses interacted, and how overtime periods should be treated in three situations:

A. Overtime before Laytime had commenced;

B. Overtime during Laytime;

C. Overtime during excepted periods.

The Charterers argued that the final words of Clause 12 applied only after Laytime had begun. They further argued that once Laytime had commenced, all overtime periods were to count only as half-time. The owners argued that the half-time provision applied only to periods that would not otherwise have counted as Laytime at all, either because Laytime had not yet started or because the period was excepted, such as Sundays or holidays.

Mocatta J accepted the owners’ construction. He held that the natural function of words stating that a period is “to count as Laytime” is to bring into the Laytime calculation a period that would otherwise not count. The addition of “half” affected only the amount of time to be counted, not the nature of the provision. Mocatta J explained:

When in a charter words are used to the effect that a certain period of time is to count as laytime the natural and ordinary meaning of those words is that such period is to be treated as permitted laytime when otherwise it would not be. The addition of the word “half” does not alter that natural and ordinary meaning in its character, but only so far as quantum is concerned. Support for this view is afforded by the argument of Mr Diamond, which is in my judgment well founded, that the positive phrases in charters that a period is “to count” or is “to count as laytime” are commonly used for the benefit of the shipowner, so as to result in a decrease in dispatch money or an increase in demurrage, in contrast to the negative phrases that a period is “not to count” or is “not to count as laytime”, which are used for the benefit of the charterer so as to result in an increase in dispatch money or a decrease in demurrage.

The result is that a clause providing that overtime ordered by Port Authorities is to count as Laytime will usually operate in favour of the Shipowner by bringing into account periods that would otherwise be excluded or would not yet have begun to count. It will not ordinarily reduce ordinary Laytime already running to half-time unless the wording clearly produces that effect.

CONGESTION

Congestion is one of the most common causes of delay in Laytime and Demurrage disputes, although Charterparties do not always refer to it expressly as an exception. Instead, congestion is usually brought within broader wording such as obstructions, hindrances, or other causes beyond the control of the relevant party.

In The Amstelmolen, the Court of Appeal held that an Exceptions Clause using language of that kind could apply even where the commencement of Laytime had been accelerated by a WIBON (Whether in Berth or Not) provision. The practical effect is that Laytime may begin because the ship has reached a point inside the Port where she is “at the immediate and effective disposition of the Charterer” in the case of a Port Charterparty, or because a special clause brings forward the start of Laytime, but the running of Laytime may then be immediately suspended by the applicable exception.

There is substantial authority on the meaning of “obstructions”, particularly where congestion prevents a ship from reaching a Berth. In Navrom v. Callitsis Ship Management SA, known as The Radauti, both the High Court and the Court of Appeal accepted that, on the facts, “hindrances” were sufficient to protect the Charterers against a comparable delay.

One of the issues in The Radauti was whether it mattered that congestion was foreseeable. The courts held that it did not. Lloyd LJ stated:

But if, as we are bound to hold, the word “obstructions” covers the inability of a vessel to get to her berth because of congestion, I can see no difference in principle whether there was one vessel in front of Radauti or a 100. The degree of congestion is clearly irrelevant. So also, in my view, is the likelihood of congestion. That was the view of Mr Justice Staughton in The Adolf Leonhardt [1986] 2 Lloyd’s Rep 395. It was his view in the present case. I share his view. The phrase “hindrances… delaying… the discharge of the cargo” should be given its ordinary meaning, even though on the facts some degree of hindrance was inevitable. The foreseeability of the congestion does not justify attaching an unusual or restricted meaning to the word “hindrances”.

The result is commercially important. If the Charterparty language is wide enough to cover congestion, the exception is not defeated merely because congestion was likely, expected, or even almost inevitable. The question remains one of construction: does the wording used by the parties cover the delay that actually occurred?

ADVERSE WEATHER

Adverse weather is frequently excluded from Laytime, either because the Laytime Clause itself defines countable time by reference to weather, such as Weather Working Days (WWD), or because a separate clause expressly excludes time lost by weather. The distinction matters. Where Weather Working Days are used, weather operates as part of the definition of Laytime. Where the clause refers to time lost through weather, the party relying on the clause must normally prove causation and actual loss of time.

The word “weather” is an ordinary word rather than a technical legal expression. Unless the Charterparty uses it in a special sense, its meaning is a question of fact for the Tribunal. The Tribunal must decide, on the evidence, whether the conditions proved fall within the ordinary commercial meaning of weather.

The Shorter Oxford English Dictionary defines weather, among other things, as:

The condition of the atmosphere (at given place and time) with respect to heat or cold, presence or absence of rain, etc.

The concept is therefore broad. Many natural phenomena that interfere with cargo operations may be directly or indirectly connected with atmospheric conditions. Nevertheless, there are limits. Not every event influenced by weather is itself weather.

London Arbitration 5/94 provides an unusual example. Cargo work was interrupted at times because bees, attracted by sugar residues from earlier discharged ships, swarmed around the working area, especially during the heat of the day. Stevedores understandably stopped work.

The Charterers argued that bees swarm only in certain weather conditions and that the interruptions should therefore fall within a weather exception. The Tribunal rejected the argument. It held that “bees” were not themselves weather. If the Charterers wished to rely on the weather exception, they had to prove a direct causal link between the weather and the swarming of the bees. That would require proof of consistency and inevitability to a high standard. On the evidence, the Charterers failed to meet that standard.

It must also be remembered that what amounts to bad weather for one ship will not necessarily amount to bad weather for another. Rain may prevent discharge of bulk sugar, grain, cement, or other moisture-sensitive cargoes, but it may have no effect on the discharge of crude oil from a tanker. The same weather may also have different Laytime consequences for two ships carrying similar cargoes if their Charterparties contain different weather clauses.

For example, if Ship A is under a Port Charterparty with Laytime expressed in Weather Working Days (WWD), and Ship B is under a similar Port Charterparty with Laytime expressed simply in Working Days but containing an additional clause excluding time lost by adverse weather, rainy periods while both ships wait at anchorage may be treated differently. For Ship A, the rain may prevent the period from falling within the definition of Laytime. For Ship B, time may continue to run unless it is shown that time was actually lost because of the rain. The causal requirement for an interruption to Laytime is therefore different from the causal requirement for an exception from Laytime.

Limits of Weather

The weather must be adverse before it can be excluded, and it must be adverse to the cargo operation in question. It is not enough that the weather is inconvenient or unpleasant. It must affect, or be capable of affecting, loading or discharging of the particular cargo under the particular Charterparty.

The most common adverse weather conditions are forms of atmospheric precipitation: rain, hail, snow, and sleet. Strong wind is another frequent cause. Where such conditions are actually occurring at the place where cargo operations are being performed, or where they would otherwise be performed, there is usually little difficulty in deciding whether the weather is adverse to the operation.

However, the facts may be more complex. In London Arbitration 23/04, the Tribunal considered a Charterparty providing that “. . . normal winter conditions at disport not to stop time from counting”, while Laytime was measured in Weather Working Days (WWD). The cargo was green bananas, and the Discharge Port was St Petersburg in late January and early February. The Statement of Facts recorded snow or rain during the periods the Charterers sought to exclude, and no work was performed during those periods.

The Tribunal rejected the owners’ argument that rain and snow were normal winter conditions at St Petersburg and therefore could not stop time. It also rejected the Charterers’ argument based simply on the ordinary meaning of Weather Working Days. Instead, the Tribunal accepted an interpretation advanced by the Charterers’ surveyor that reconciled the apparently conflicting clauses. When the temperature became very low, the practice was to discharge for short intervals, close the hatches, warm the holds to protect the banana pulp temperature, and then resume. The phrase stating that winter conditions would not stop time from counting meant that time continued to count during the periods when the holds were being heated.

The requirement that weather must be adverse to cargo operations, and not merely to some other movement or Port operation, is illustrated by London Arbitration 10/02, where fog interfered with shifting operations. The fog did not necessarily constitute weather adverse to the cargo operation itself.

In London Arbitration 10/04, Laytime was measured in Weather Working Days (WWD). The Charterers had arranged with several different Shippers to load different cargoes, some of which were more sensitive to weather than others. There was only one Laytime allowance. The issue was what should happen where the weather permitted some cargoes to be loaded but not others. The Tribunal held that a Weather Working Day was a working day, or part of one, during which cargo could be loaded or discharged without interference from the weather. As a general rule, Laytime continued to run if any of the intended cargoes could be loaded, even though the weather did not permit the loading of others. Once only the weather-sensitive cargo remained, and the weather prevented that cargo from being loaded, time ceased to count.

In practice, what is usually excluded is the actual period of adverse weather. A mere fear that cargo operations may later be interrupted is not enough, even where the Charterer or cargo interests have had to decide in advance whether to order gangs of Stevedores for a particular shift.

In The Maria G, Devlin J observed:

But no case has been cited to me in which a mere threat of bad weather which has suspended loading has been held to make a day not a Weather Working Days (WWD), and certainly no case where the threat of bad weather has affected not the operation of the actual work of loading, but the safety of the ship in the particular place in which she was.

The Maria G had been ordered by the Calcutta Harbour Master to move from her Loading Berth to buoys because bore tides were expected and might damage both the ship and the Berth. The bore tides did in fact occur while the ship was at the buoys. The Charterers argued that time should not count during the period away from the Berth. Devlin J assumed, without deciding, that bore tides might be treated as weather, but held that a mere threat of bad weather was insufficient to stop time from counting.

The question whether time may be excluded in anticipation of circumstances that would have been excepted if they had actually occurred has also arisen in relation to other exceptions, particularly “restraint of princes”. In Watts, Watts & Co Ltd v. Mitsui & Co Ltd, Lord Dunedin stated:

Restraint of princes, to fall within the words of the exception, must be an existing fact and not a mere apprehension. This was held long ago by Lord Ellenborough in Atkinson v. Ritchie. The more recent cases cited by the appellants, such as Geipel v. Smith and Nobel’s Explosives Co v. Jenkins, do not in any way touch that proposition. They only show that it may be possible to invoke the exception when a reasonable man in face of an existing restraint may consider that the restraint, though it does not affect him at the moment, will do so if he continues the adventure. It would be useless to try and fix by definition the precise imminence of peril which would make the restraint a present fact as contrasted with a future fear. The circumstances in each particular case must be considered.

There is no reason why similar reasoning should not apply to weather clauses. The key question is how imminent and certain the adverse weather must be before present weather conditions can themselves be treated as adverse. In the case of rain or snow, the answer will usually be that the weather is not adverse until it actually starts to rain or snow, because the hatch covers could quickly be closed and cargo operations suspended.

By contrast, where the expected weather is a typhoon, the position may be different. A typhoon may threaten both cargo operations and the safety of the ship or Berth. At the point where proper seamanship requires cargo operations to stop and the ship to leave the Berth, the threat of adverse weather may itself be treated as adverse weather, even if the wind strength has not yet reached the level that would independently prevent cargo work.

In The Maria G, it does not appear to have been argued that the bore tide would itself have prevented loading if the ship had stayed at the Berth. Devlin J stated:

. . . I should decide against it [Charterers’ argument] on the broad ground that, if the effect of weather is not to interfere with the operations of the loading and discharging, but is to render the presence of the vessel in a particular place unsafe, the time so lost is not what the parties contemplate when they are referring to Weather Working Days.

A similar approach appeared in a London Arbitration involving a ship loading bulk sulphur by conveyor belt while lying at anchor offshore. Bad weather required the ship to leave the loading position, and she returned when conditions improved. An Additional Clause excluded time lost because of bad weather from loading time. The Arbitrators held that, although loading was indirectly suspended because of the weather, the effective cause of the stoppage of loading was the ship’s need to leave the loading point because the position had become unsafe. There was no evidence that the bad weather actually prevented loading of sulphur through the conveyor belt. The weather exception clause therefore did not apply.

Particular Types of Weather

Frost

The temperature at which water vapour in the air condenses into droplets is known as the dew point. Where the dew point is above freezing, condensation forms as water. Where it is below freezing, moisture is deposited directly on cold surfaces as ice crystals, commonly called frost. Frost is plainly a form of weather.

The effect of frost was considered in the Scottish case of Henry & MacGregor Ltd v. Galbraith & Roy. The Rattray Head arrived at Wisbech with a cargo of potatoes during persistent severe frost and other adverse weather. Discharge was delayed for about 11 days. The Charterparty contained an Additional Clause providing that time lost during ordinary working hours because of bad weather was not to count, and a General Exceptions Clause specifically excluding time lost due to frost.

The Charterers argued that if discharge proceeded, the potatoes would be damaged during and after discharge because of the frost. They accepted that the frost did not physically prevent the act of discharge itself. Their argument was that they were entitled to postpone discharge until the risk of cargo damage had passed.

Lord Russell rejected that submission and stated:

Now, in my opinion, the exceptions in the Charterparty which absolve the charterers from liability for demurrage on the happening of certain events (bad weather and frost) connote circumstances which affect the discharging or loading so as to render these operations physically impossible… In the present case I consider that neither expressly nor by clear implication do the words of the exceptions invoked by the charterers apply to the circumstances disclosed on record.

Whatever the position may be under Scottish law, English authority clearly recognises that weather may affect cargo operations either by physically preventing cargo operations, such as strong winds, or by exposing the cargo to a risk of damage. Compania Naviera Azuero SA v. British Oil and Cake Mills Ltd is an example. There, Laytime was expressed in Weather Working Days, the cargo was grain, and the dispute concerned rain. The obvious effect of the rain would have been to damage the cargo if loading or discharge had continued.

So far as Henry & MacGregor Ltd v. Galbraith & Roy decided that the exception applied only to loading and discharging themselves, and not to matters before or after those operations, the decision is sound. In British Steel Corporation v. National Dock Labour Board, the Court of Appeal held that, where iron ore was discharged by grab unloaders into a hopper and then onto a conveyor belt leading to the stockyard, discharge from the ship was complete when the ore reached the conveyor. In Henry & MacGregor Ltd v. Galbraith & Roy, Lord Russell appears to have treated discharge as complete when the potatoes reached the quay.

If, however, the risk of frost damage arose while the cargo remained in the open hold or while it was actually being discharged, the better view is that the exception should have applied. To that extent, the decision is difficult to support.

There is no reason why an Exceptions Clause cannot be drafted more broadly to cover delay caused by frost before loading begins or after discharge has been completed. Pinch & Simpson v. Harrison Whitfield & Co, decided by Denning J, provides an example of such wording.

That case concerned a ship fixed to carry loam from the River Thames to Middlesbrough. The loam was taken from a nearby quarry and transported directly from extraction to the ship. Frost prevented quarrying and also caused loam left overnight in trucks to harden so that it could not be tipped out. The Charterparty excluded time lost through, among other matters, “frosts . . . preventing the loading or unloading or provision of cargo”. By the time the ship was ready to load, severe frost had set in and the provision of cargo was delayed.

Denning J upheld the Charterers’ reliance on the clause and explained:

Those words show that a distinction is drawn between the act of loading and the provision of cargo. The loading is the actual operation of loading from the wharf or quay on to the ship. The provision of cargo applies to an earlier time—that is to say, in this case the actual provision of the loam from the quarry and its carriage down to the jetty. It applies, in my judgment, to the getting of the cargo, in that it has to be got out of the quarry. It applies not only to the carrying of it down to the jetty but to the actual picking of it out of the quarry.

Denning J also observed that the words “provision of cargo” were probably inserted because “loading” is sometimes construed narrowly as referring only to the physical operation of moving cargo from the wharf or quay onto the ship. The case shows the importance of precise drafting. If the parties intend weather or frost to excuse delay in obtaining, preparing, or bringing cargo to the loading place, the clause must say so directly.

Ice

The ordinary effect of ice during Laytime is that it prevents cargo from being made available or cargo operations from being carried out in the usual way. In trades involving regions where ice may interfere with cargo operations, Charterparties commonly include a specific ice clause. Such clauses often deal not only with the effect of ice on Laytime, but also with situations where ice prevents the ship from reaching the Loading Port or Discharge Port, or where ice makes it unsafe for the ship to remain there until operations are completed.

One example appears in the Exxonvoy 84 Charterparty Form, which provides:

Clause 21 Ice

(a) DURING VOYAGE: In case a nominated port or place of loading or discharging should be inaccessible due to ice, Ship Master shall immediately notify Charterer by telegraph, telex or radio, requesting revised orders and shall remain safely outside the ice-bound area. Charterer shall give orders for another port or place which is free from ice and where there are facilities for the loading or discharging of the cargo in bulk. In this event, freight shall be paid at the rate stipulated in Part I(g) to such alternative port or place and any time by which the steaming time to such port or place exceeds that which would have been taken if Vessel had been ordered to proceed to such port or place in the first instance shall be compensated at the Deviation Rate per running day and pro-rata thereof. In addition, Charterer shall pay for extra bunkers consumed during such excess time at Owner’s documented actual replacement cost for such bunkers at the port where bunkers are next taken.

(b) AT PORT: If, on or after vessel’s arrival at the loading or discharging port or place, it is dangerous to remain at such port or place for fear of Vessel being frozen-in or damaged, Master shall notify Charterer who shall give orders for vessel either to proceed to another port or place where there is no danger of ice and where there are facilities for the loading or discharging of the cargo in bulk or to remain at such original port or place at Charterer’s risk. If vessel is ordered to proceed to another port or place, the sum in respect of freight and delay to be paid by Charterer shall be as stipulated in paragraph (a) of this clause. If Vessel remains at such original port or place, any time so lost on account of ice shall count as Laytime or, if vessel is on Demurrage, as time on Demurrage.

The discussion in this section is confined to the effect of ice on Laytime and related time-counting issues.

The operation of an ice clause was considered by the House of Lords in Michalinos & Co v. Louis Dreyfus & Co. The case concerned a Charterparty for the carriage of wheat from a Port on the River Danube to a Port in the United Kingdom or on the Continent. Seventeen Running Days were allowed for loading and discharge. The ship, the Matheos, arrived at Braila, the nominated Loading Port, on 7 December 1921 and tendered Notice of Readiness (NOR).

At Braila, grain was ordinarily loaded in three recognised ways: first, at a quay in the docks from silos; second, from lighters in midstream outside the docks; and third, from the riverbank by gangways and manual labour. The Charterers intended to load a small part of the cargo in the dock and the balance in midstream. On arrival, the Matheos Berthed in the dock at the grain quay, but outside another ship that was still loading. On 12 December, severe frost began and the dock froze completely. From that date until 9 March, the Matheos and all other ships in the dock remained trapped in ice.

Clause 11 of the Charterparty provided that “detention by . . . ice from Braila down to Sulina shall not count as Lay Days”. The Charterers relied on that clause. The Shipowners argued that the clause applied only to the passage between Braila and Sulina. Although the Shipowners succeeded before the Arbitrators, that argument was firmly rejected by the lower courts and by the House of Lords. Lord Cave LC held that the argument was untenable because the clause referred to Lay Days, and there could be no question of Lay Days running during the ship’s passage down the Danube.

The Shipowners also argued that loading had not been absolutely prevented by ice because the ship could still have been loaded in the dock by manual labour, either from the quay or from lighters within the dock. If that had been done, the time later spent loading could have been saved. The House of Lords accepted that such loading was physically possible, but rejected the argument because it was commercially impossible. The cost would have been unrealistic, and keeping the wheat on board the Matheos for what was obviously going to be a lengthy period would have increased the risk of cargo damage.

The House of Lords also rejected the argument, which had appealed to Rowlatt J, that the Charterers were required to prove that ice prevented all three recognised methods of loading at Braila before they could rely on the exception. Lord Sumner explained:

I agree with the view of the Court of Appeal. The Matheos, being an arrived ship, was entitled to have a usual loading intimated to her, but it was for the charterers to select for her, among the usual and proper places, one which thereupon becomes the place where her loading was to begin; and exceptions excusing delay in this loading attach and have relation to that place and mode of loading.

The result was that, once the Charterers selected a recognised method of loading, they could rely on the exceptions clause if they proved that the ice prevented or delayed loading by that chosen method.

The severe winter of 1921, during which the Danube froze earlier than usual, also gave rise to T Lewis v. Louis Dreyfus & Co, a Court of Appeal decision involving similar facts and the same ice clause. Braila was again the Loading Port. In that case, however, the ship, the Newlands, became trapped in ice while proceeding upriver to Braila and arrived there only on 5 March.

The dispute concerned three days after her arrival at Braila. During that period, cargo could not be loaded because part of it was in lighters lying in the docks and still frozen in, while another part was farther upstream in lighters that could not be brought down because of the ice. During this time, the Newlands lay moored midstream awaiting cargo. The Charterers had chosen loading from lighters as the method of loading.

The Court of Appeal found that the obstruction to loading by the chosen method was temporary, and that this would have been apparent at the time. The court then considered the general obligations of the Charterers where a temporary obstacle affects the selected loading method. Lord Hanworth MR stated:

In the present case the charterer had half his cargo in lighters ready to go alongside the ship. He might have had the whole cargo in lighters ready to go alongside the ship. The fact that for a day or two ice prevents loading being carried on alongside the ship ought not to compel him suddenly to alter the whole of his plans, to get the whole of the cargo out of the lighters, or to purchase other cargo out of warehouse, leaving the cargo in lighters on his hands as derelict. He is entitled to continue in the option he has exercised for a reasonable time; and I am not going to specify what a reasonable time is, because I cannot foresee all cases or events which will require him to change over to another form of loading at another place.

The Court of Appeal therefore held that the Charterer was protected by the ice clause. A Charterer who has selected a usual and proper method of loading is not immediately required to abandon that method and adopt a different one merely because a temporary obstacle arises.

The question whether ice can prevent a day from being a Weather Working Day (WWD) arose in Dampskibsselskabet Botnia A/S v. Bell & Co. The ship was chartered to carry pit props from Finland to Cardiff. The Charterparty specified a loading rate per Weather Working Day (WWD). At the loading place, the customary method was for the cargo to be towed out to the ship in timber rafts. Ice impeded that process, and the ship eventually sailed with only part cargo because it was clear that no further cargo could be supplied before the Port closed for winter.

The owners claimed Deadfreight. The issue was whether the Shippers had complied with the Charterparty loading requirements before the ship was obliged to leave. That depended on whether ice could prevent time from counting as Weather Working Days (WWD). The owners argued that ice was not weather, but merely the consequence of weather. Bateson J rejected that argument and stated:

I think the formation of ice by cold which prevents the loading is weather.

He later added:

I think it, i.e. weather, means loading weather and if you have ice which prevents you loading you are stopped from loading by the weather being unfit for loading. In other words, you have not got a Weather Working Day (WWD).

Bateson J also observed that ice may exist during otherwise clear and beautiful weather, but still constitute bad weather for Laytime purposes if it prevents loading. The relevant question is not whether the visible weather appears bad, but whether the atmospheric condition and its consequences make the weather unsuitable for the cargo operation.

Surf

At some Ports, ships are loaded from, or discharged into, lighters that are themselves loaded from or discharged onto a nearby beach. This method was historically far more common before modern Port facilities and containerisation, but it still exists in some regions, particularly in parts of South America and India.

If the beach is affected by surf, the lighters may be unable to load or discharge. That may in turn lead to congestion or a shortage of lighters around the mother ship, thereby interfering with loading or discharging at the ship. Ordinarily, however, the lighters can be cleared away, and a shortage of lighters is not usually caused by any fault of the Shipowner. The Shipowner’s responsibility normally begins or ends with receiving cargo from, or delivering cargo to, the lighters.

In the absence of express wording, surf will not usually affect the calculation of Laytime, even where Laytime is expressed in Weather Working Days (WWD). The distinction between surf and ice is that ice may prevent lighters or cargo from reaching the ship directly, whereas surf often affects the separate operation of loading or unloading the lighters on the beach. It is therefore one stage further removed from the ship’s own cargo operation.

An express surf provision was considered in Bennetts & Co v. J & A Brown. In that case, delay caused by surf was expressly excluded from Laytime. The Charterers also sought to prove a custom at Valparaiso under which surf days were not Weather Working Days (WWD), with the Port Captain having authority to declare which days were surf days. Walton J rejected that argument. Since the alleged custom would have given “Weather Working Days (WWD)” a meaning different from its natural and ordinary meaning, it could not be accepted. However, because some delay had in fact been directly caused by surf, the specific surf exception applied to those days.

In British and Mexican Shipping Co Ltd v. Lockett Brothers & Co Ltd, the Receivers argued that, by the custom of the Port of Iquique, surf days declared by the Captain of the Port were not working days. At first instance, Hamilton J rejected that argument. On appeal, the Court of Appeal held, on a preliminary point of law, that the alleged custom might provide a defence to the Shipowners’ Demurrage claim. The judges were careful to stress that they were deciding only a preliminary legal point. Kennedy LJ in particular emphasised that his reasoning proceeded on the assumption that both parties knew of the custom.

The earlier Scottish decision in Holman v. Peruvian Nitrate Co took a different view, holding that, notwithstanding such a custom, the relevant days remained working days. That decision is, with respect, the more persuasive one. A custom should not readily be allowed to alter the ordinary meaning of Weather Working Days unless it is clearly proved, known to the parties, reasonable, certain, and not inconsistent with the Charterparty wording.

Swell

At exposed Ports and anchorages, swell is often a major cause of interruption to loading and discharging. In one London Arbitration, the Umpire considered whether high swell amounted to weather. He stated:

There appeared to be no direct authority, nor was any cited to me, as to whether “high swell” is “weather”. “Weather” certainly includes “storms”. “Swell” is a phenomenon of the high seas and has been defined as “a slow, steady, continuous undulation of the sea unbroken by waves after a storm”. It is the product of bad weather.

The Umpire held that high swell was analogous to storms, although less severe. During a storm, Charterers would not be expected to continue discharge because both cargo and ship could be at risk. The same reasoning applied to high swell where it created a substantial risk of damage to the vessel. The Umpire rejected the argument that surf cases governed the point, because those authorities concerned the loading or discharging of lighters on a beach, not operations alongside or at anchorage. He concluded that “high swell” was covered by “weather” and that the Charterers were entitled to exclude such periods from Laytime.

In Dampskibsselskabet Botnia A/S v. Bell & Co, although the case itself concerned ice, counsel for the Receivers argued by analogy that if ice were not weather, waves or swell generated by wind and preventing lighters or rafts from coming alongside ships would likewise not be weather. Bateson J accepted the force of that analogy. Since he held that ice was weather, he would presumably also have accepted that wind-generated waves and swell could constitute weather.

For swell to affect Laytime, swell must interrupt cargo operations. In dry cargo operations, swell may impose excessive strain on cargo gear and create a risk that cargo may be dropped or damaged. In liquid cargo operations, swell may create a risk that hoses will rupture, with possible cargo loss or pollution. In London Arbitration 11/10, the Tribunal held that where a ship had to leave Berth because of swell, cargo operations would have been interrupted had she remained there. Since Laytime was measured in Weather Working Days (WWD), time did not count.

It should be noted that, under German law, swell does not appear to be treated as bad weather in itself. Under English law and London arbitration practice, however, swell may fall within weather where it is caused by weather and directly affects cargo operations.

Where swell reaches shallow water and breaks into waves, it is often described as rough seas. In that situation, the same principles apply. The question remains whether the condition is weather-related and whether it prevents or interrupts the particular cargo operation.

Bore Tides

A bore tide is a tidal wave of unusual height produced either by the meeting of two tides or by the force of a tide rushing up a narrowing estuary. Bore tides are often strongest around the equinoxes.

In Compania Crystal de Vapores v. Herman & Mohatta (India) Ltd, known as The Maria G, Devlin J assumed, without deciding, that a bore tide might amount to weather for the purpose of Weather Working Days (WWD). He then held, on other grounds, that time was not interrupted.

By leaving the point undecided, Devlin J plainly did not regard the classification of a bore tide as weather as an easy question. The better view, based on meteorological and oceanographical principles, is that a bore tide, and indeed any ordinary tidal phenomenon, is not weather. Weather is defined by reference to the condition of the atmosphere. Tides originate from a different source.

Wind is the movement of air in the atmosphere caused by differences in atmospheric pressure. Those pressure differences arise from variations in the temperature of air columns over different areas. The atmosphere continually tends to equalise pressure by moving air from high-pressure regions to low-pressure regions. Because of the rotation of the earth, winds do not move directly from high pressure to low pressure, but circulate around pressure systems.

Moving air exerts drag on the surface of the sea. That produces ripples and then waves. While waves remain within the area where the wind is blowing, their size depends on the speed of the wind, the duration of the wind, the distance over which it blows, and the depth of the water. When the wind drops, or when the wave train moves beyond the area in which it was generated, it may continue for thousands of miles before finally dying away. As it travels, wavelengths usually increase and wave heights diminish. Outside the area of generation, these wave trains are known as swell. When swell reaches shallow water, it may become surf. Sea waves, swell, and surf are therefore all caused, directly or indirectly, by the condition of the atmosphere.

Tides, by contrast, including bore tides, arise from the gravitational effects of the sun and moon. For that reason, they will not ordinarily amount to weather unless their effect is materially influenced by a condition that is itself weather. For example, strong winds acting against a spring tide may create short, steep seas that impede cargo operations. In such a case, the relevant weather element is the wind and the sea state produced by it, not the tide as such.

Causation and Weather

As explained earlier, interruptions to Laytime are periods that do not count because they fall outside the description of Laytime itself. Exceptions to Laytime are different. They are periods that would otherwise fall within Laytime but are removed from the calculation by an additional clause. The distinction is not merely linguistic. It affects the causation test that must be satisfied before time can be deducted.

Interruptions

The most common clauses under which weather interrupts Laytime are those that define the permitted time by reference to:

Weather Working Days (WWD)

Working Days (WD), Running Days (RD), or Hours, Weather Permitting (WP).

In Dow Chemical (Nederland) BV v. BP Tanker Co Ltd, known as The Vorras, Sir John Donaldson MR stated at the end of his judgment:

There have been attempts to classify laytime provisions as either “descriptive” or exceptive, the latter importing a causative connection with the delay. I am not sure how much this adds to clarity. Prima facie, any clause defining laytime is descriptive and any clause providing that time shall not count against laytime so defined is exceptive. If it matters, I would classify the expression “72 running hours Weather Permitting” as descriptive.

Where the Laytime Clause is descriptive in this sense, it is not necessary to prove that the weather caused actual delay to the particular ship. However, there must still be a connection between the weather and the possibility of performing the cargo operation. The real question is whether cargo of the relevant type could have been safely loaded or discharged, without undue risk, in the weather conditions existing at the place where cargo operations were intended to take place.

For this purpose, it does not matter whether the ship is actually in the loading or discharging position. If she is there, the evidence will usually be easier. If she is not there, and no similar cargo is being handled at the relevant location, the question must be answered hypothetically. In The Vorras, which concerned a tanker, Sir John Donaldson said:

In my judgment the weather prohibited any vessel of this general type from loading and it is nothing to the point that owing to the presence of another vessel in the berth, the prohibition was not the operative cause which prevented the vessel from loading.

In tanker operations, the exact cargo may not make much difference for this purpose, which explains the reference to “a vessel of this general type”. The danger may arise from the risk of hose rupture, cargo escape, pollution, or contamination, regardless of the precise liquid cargo carried. In dry cargo operations, however, the better view is that the question should be asked by reference to the particular cargo. Weather that affects one type of cargo will not necessarily interfere with another. Rain may prevent loading of grain, sugar, cement, or other moisture-sensitive cargoes, while strong wind may be the more relevant factor in container or cargo gear operations.

It is important to keep the focus on cargo operations. The relevant question is not whether the ship can safely remain at the Berth, but whether the weather prevents or would prevent loading or discharge. Devlin J made that point clearly in The Maria G:

. . . if the effect of weather is not to interfere with the operations of the loading and discharging, but is to render the presence of the vessel in a particular place unsafe, the time so lost is not what the parties contemplate when they are referring to Weather Working Days (WWD).

It is also irrelevant whether any actual work was intended during the relevant period. The status of the day depends on whether the weather would have permitted cargo work, not on whether the Charterer, Shipper, Receiver, Stevedores, or Port interests intended to work. Pearson J expressed the point in relation to Weather Working Days (WWD) as follows:

The status of a day as being a Weather Working Days (WWD), wholly or in part or not at all, is determined solely by its own weather, and not by extraneous factors, such as the actions, intentions and plans of any person.

Exceptions

Where adverse weather is excluded not by the definition of Laytime itself, but by a separate exceptions clause, a different approach applies. In that situation, the party relying on the clause must establish not only that the weather was adverse, but also that the weather was the proximate cause of the loss of loading or discharging time.

Burnett Steamship Co Ltd v. Joint Danube & Black Sea Shipping Agencies illustrates the point. The relevant clause provided that “Should any time be lost whilst steamer is in a loading berth owing to work being impossible through rain . . . the amount of actual time so lost . . . to be added to the loading time . . . ”. Rainy periods during loading totalled about two days. The Shipowners argued that no time had actually been lost because no cargo was available for loading during those periods. The majority of the Court of Appeal accepted that argument. Greer LJ stated:

There are two things that the charterer has got to prove in order to entitle him to that extension of time, and if he fails to prove either of those two things he fails to establish his right to an extension of time. He has to prove that work became impossible through rain and that in consequence of that he lost time in loading; unless he proves both those circumstances he does not bring himself within the clause.

In Stephens v. Harris, the Charterparty allowed “400 tons per Weather Working Day (WWD), Weather Permitting (WP)” for each loading. The ship was to load ore that had to be brought from five miles away. Bad weather delayed the transport of the cargo to the ship, but it did not affect the physical loading operation itself. The court held that Laytime was not interrupted because the weather did not affect the loading of the ship. Lord Devlin later commented on the decision in the Reardon Smith case:

“if the weather was to be treated as if it were an excepted peril excusing work only when it was actually operating, words could, of course, be found to do it. In Stephens v. Harris & Co, the Court of Appeal held that the phrase “weather permitting” in the laytime clause had that effect.”

The Camelia and the Magnolia also concerned “Weather Permitting (WP)”. Although the Court of Appeal has since held that, where this phrase forms part of the Laytime Clause, it is descriptive rather than exceptive, the reasoning in The Camelia and the Magnolia may still be relevant where the clause under consideration is truly exceptive.

The dispute concerned periods of rain while the ships were waiting for a Berth. The Charterparty provided for discharge at a rate “per weather permitting working day” and also contained a “berth occupied” clause under which time was to count from arrival in the roads if no cargo Berth was available. Brandon J treated the weather wording as an exclusion from Laytime.

Brandon J considered two questions. First, what effect would the weather have had after the ship had Berthed? Secondly, what effect should the weather have on notional Laytime before the ship had Berthed? Having concluded that, after Berthing, time would count unless weather actually prevented the work, he then considered the effect of the “berth occupied” clause on the notional period. Relying on The Darrah, he held that where bad weather is excluded by an additional Exceptions Clause, and where a “berth occupied” or “time lost in waiting for berth” clause causes waiting time to count as Laytime, then any time that would have been lost had the ship been in Berth should not count as Laytime.

Brandon J summarised the rival arguments as follows:

“it was contended for the shipowners that since the words were words of exception they could only result in time being excluded from laytime if discharge was actually prevented by the weather. So far as notional laytime is concerned, it was impossible for discharge to be actually prevented by the weather because, the ship not being in berth, she was ex hypothesis not engaged in discharging. For the charterers, on the other hand, it was contended that the object of clause 6 (the berth occupied clause) was to put both the parties in the same position when a berth was not available on arrival as they would have been if a berth had been available. Accordingly, if weather would have prevented discharge if the ship had been in berth although it did not do so because she was not, allowance should be made for the time which would notionally have been lost.”

Brandon J held that the Shipowners’ argument was inconsistent with the reasoning of the House of Lords in The Darrah. He therefore applied The Darrah even though the weather exception operated only where it was causative.

Brandon J did not expressly decide what the result would have been if there had been no “berth occupied” clause. The likely answer is that Laytime would have continued to run, because there would have been no causal connection between the weather and the failure to discharge cargo.

In The Darrah, the issue was whether a waiting provision stood independently of a Laytime provision expressed in Weather Working Days (WWD), so that all waiting time counted without exception. The House of Lords held that it did not. Their Lordships used broad language and relied on general principles, but they did not directly decide the precise issue later examined by Brandon J in The Camelia and the Magnolia.

It may therefore be argued that when the House of Lords held that a “berth occupied” clause made no difference in a Port Charterparty once the ship had become an Arrived Ship, that ruling was not necessarily intended to cover a case where adverse weather is excluded by a separate Exceptions Clause. In such a case, the position is different because, without a “berth occupied” clause, adverse weather would be excluded only when the ship is actually in Berth. Only then can loading or discharge be interrupted by weather.

In The Vorras, Sir John Donaldson MR referred to The Darrah and stated:

It is authority for the proposition that a time lost clause is immaterial in a Port Charterparty, at least after the ship has arrived, since in such circumstances time lost waiting for berth is laytime.

It remains uncertain whether that statement was intended as a general proposition or only as a proposition applying to descriptive Laytime clauses.

Until the courts reconsider the question, Brandon J’s decision in The Camelia and the Magnolia remains the main authority. In principle, there is strong commercial logic in treating a “berth occupied” or “time lost in waiting” clause as placing the parties in the same position they would have occupied had the ship been in Berth. On that basis, an Exceptions Clause excluding bad weather should operate by reference to what would have happened if the ship had actually reached the Berth. This avoids giving the Shipowner a windfall merely because no Berth was available.

Even on that approach, however, Brandon J emphasised that periods of rain or other adverse weather are excluded only if they are causative. If no cargo was available, or if loading or discharge was not taking place for a reason unrelated to the weather, Laytime would nevertheless continue to run.

In Gebr Broere BV v. Saras Chimica SpA, Parker J considered several possible weather scenarios.

The first scenario was where a ship had reached Berth, begun loading, and then stopped loading because of weather. If the Charterparty contained a weather Exceptions Clause, time would stop counting whether the clause was exceptive or descriptive. If the weather then worsened so that the ship had to leave the Berth for safety reasons, the question would become one of causation. Parker J took the view that where weather first prevented loading and then also forced the ship to leave the Berth, it did not cease to prevent loading merely because the ship had left.

However, the Charterer must show that the loading operation was prevented by bad weather. It is not enough to show only that the Berth temporarily became unsafe.

Parker J then considered the case where a ship refrains from entering Berth for safety reasons. He concluded that Laytime would be interrupted if the weather was such that, had the ship been in Berth, it would both have prevented loading and required the ship to leave. However, Laytime would not be interrupted if, for safety reasons, the ship could not reach Berth but, had she been in Berth, loading would not have been interrupted by weather, assuming the ship was already an Arrived Ship.

Laytime would likewise not be interrupted if the intended Berth was occupied, regardless of the effect of the weather on the ship then lying there, in the absence of a “time lost waiting for berth” clause, and the same would apply if insufficient water prevented the ship from reaching the Berth.

In one New York Arbitration, the Tribunal took a broader view. It held that an Exceptions Clause referring to “prevention or stoppage of work” was wide enough to cover not only weather that would have affected discharge from the ship had she been alongside, but also weather that prevented the barge, into which cargo had been discharged at anchorage, from discharging at the nominated Berth.

Conoco Weather Clause

The Conoco Weather Clause is a well-known provision frequently used together with the Asbatankvoy Charterparty Form. It is commonly worded as follows:

Delays in berthing for loading or discharging and any delays after berthing which are due to weather conditions shall count as one half Laytime or, if on Demurrage, at one half Demurrage Rate.

The clause supplements and extends the half-rate Demurrage storm provision found in Clause 8 of the printed Asbatankvoy Charterparty Form. Its commercial effect is to allocate part of the weather-delay risk between Shipowner and Charterer. It may apply where the weather does not amount to a storm within the meaning of Clause 8, and also where the delay occurs before the ship has gone on Demurrage.

The scope of the clause was considered in a New York Arbitration, Medtank Ltd v. Adam Maritime Corporation, known as The Alaska. The decision is a useful illustration of how the clause operates in practical tanker Charterparty disputes.

The owners argued that the clause should be read narrowly. In their submission, it applied only to delay in entering a Berth already nominated by the Charterer in performance of the Charterer’s obligation under Clause 9 of the Asbatankvoy Charterparty Form to procure a Berth reachable on arrival. The owners also argued that the clause could not operate where the Charterer had not yet performed the separate and overriding duty to provide cargo for the ship.

The arbitration panel considered two separate periods of delay.

The first period occurred before the ship’s turn to Berth had arrived and before any Berth had been nominated or procured by the Charterer. When Notice of Readiness (NOR) was tendered, the intended Berth was occupied and the Alaska was third in line. The Charterparty was on the Asbatankvoy Charterparty Form, the same form considered by the House of Lords in The Laura Prima. In that case, the Charterers could not rely on delay in “getting into” Berth to escape their obligation under Clause 9 to nominate and procure a Berth “reachable on her arrival”.

The Conoco Weather Clause was not sufficiently clear to change that position. Although the clause referred to “berthing” rather than “getting into” Berth, that linguistic difference was not enough to relieve the Charterer from the Clause 9 obligation to provide a Berth reachable on arrival.

The second period of delay was different. A Berth had become available, but the opportunity to use it was lost for reasons unrelated to adverse weather. To rely on the Conoco Weather Clause, the Charterer had to prove that the “delays in berthing” were “due to weather conditions”. The burden of proof rested on the Charterer.

The panel also made clear that an adverse weather clause does not protect a Charterer from Demurrage where the real problem is that no cargo is available for loading.

In other circumstances, where both cargo and Berth are available and the ship’s Berthing is plainly delayed by weather, the Conoco Weather Clause would reduce Demurrage to one half. In such a case, the Charterer would not need to prove that the weather was severe enough to amount to a “storm” under Clause 8.

The key point is therefore this: for pre-Berthing delay, the Berth referred to in the opening words of the Conoco Weather Clause must be a Berth that the Charterer has procured and that is reachable on arrival. If no Berth is available at all, the clause does not alter the Charterer’s responsibility for that delay.

This interpretation is consistent with the House of Lords’ reasoning in The Laura Prima on the meaning of “Berth” in Clause 9 of Part II of the Asbatankvoy Charterparty Form.

As with weather, holidays may operate either as an interruption to Laytime or as an exception from Laytime. They operate as an interruption where Laytime is expressed in terms such as “Working Days (WD)”, “Weather Working Days (WWD)”, or similar wording. They operate as an exception where the Laytime Clause first defines the time allowed and then adds words such as “Sundays and Holidays Excepted (SHEX)”.

Unlike weather, however, a holiday exception does not ordinarily require proof of causation. If the day is a holiday within the meaning of the Charterparty, time normally does not count. A causal requirement would need to be introduced by words such as “Time lost due to holidays not to count as Laytime”. In that case, if cargo work was actually performed, whether at ordinary rates or overtime rates, it would be difficult to say that time had been lost.

A more complex question may arise where work could have been performed on the holiday if the Charterer had been willing to pay overtime. The answer may depend on the practice of the particular Port. If payment of overtime on such days is normal and commercially expected, a refusal to pay may not be treated in the same way as a genuine inability to work. Holiday exceptions are usually inserted for the benefit of Charterers, so that time does not count on days when they cannot, or choose not to, work. That position may change only where the clause expressly requires a causal loss of time.

What is a Holiday in Ship Chartering?

At first instance in British and Mexican Shipping Co Ltd v. Lickett Brothers & Co Ltd, Hamilton J distinguished between working days and non-working days. He described non-working days as days devoted to rest or recreation and continued:

I think it is immaterial whether the days for play or rest are so for secular or religious reasons, and whether they are so by the ancient authority of the Church or by the present authority of the state.

Although “non-working days” is not identical to “holidays”, because it may also include Sundays or equivalent weekly rest days, the description is broadly useful when considering what makes a day a holiday for Laytime purposes.

The Charterparty Laytime Definitions 1980, Voylayrules 1993, and Baltic Code 2007 contain similar definitions of “holiday”. The Baltic Code 2007 defines the term as follows:

HOLIDAY—a day other than the normal weekly days of rest or part thereof, when by local law or practice the relevant work during what would otherwise be ordinary working hours is not normally carried out.

Whether a particular day is a holiday is a question of fact. It must be decided “according to the regulations or the practice or the custom or the law applicable in the Port”. The character of the day is determined by reference to conditions ashore at the Port, not by reference to conditions on board the ship. Conditions on board are governed by the ship’s articles and by the law of the flag.

Regulations and Law

For this purpose, regulations and law include ordinances or declarations made by a competent authority. Whether this extends to regional or local authorities was considered in Hain Steamship Co Ltd v. Sociedad Anonima Comercial de Exportacion e Importacion (Louis Dreyfus & Cia Lda). The dispute arose in Argentina. One of the days in question was an official holiday throughout the Province of Buenos Aires. The other was a holiday in the town and Port of San Nicolas, declared by the municipal authority. By federal decree, Customs and other federal offices at the Port remained open on those days.

MacKinnon J rejected the argument that a holiday had to be universally recognised or declared throughout the whole country. He stated:

With limited exceptions, such as national holidays like July 4 in the United States and, I suppose, to some extent, bank holidays in England, holidays are necessarily things which vary as to particular days in particular parts of the country, holidays really are a local institution and only very exceptionally a national institution.

In The Mosfield, the Charterers successfully argued that a statute of the Louisiana State Legislature made every Saturday a holiday at the Port of Lake Charles. Donaldson J rejected the argument that the statute was intended merely to regulate the closing hours of banks, government offices, and legal institutions. He said:

Furthermore I do not consider that it matters what is the purpose of the legislation, if the chosen method is to declare certain days to be holidays. Act 210 of 1958 of the Louisiana Legislature declares all Saturdays to be holidays in an area which includes the Port of Lake Charles and this concludes the matter.

In both cases, the days had been declared holidays by authorities exercising power over the Port area and the surrounding district. The holidays also applied generally to the local community. In The Mosfield, work in the Port continued despite the holiday status of Saturdays, but only at overtime rates.

London Arbitration 7/07 considered whether Monday, 27 December 2004, was a holiday in Lagos, Christmas Day that year having fallen on a Saturday. The Charterers relied on an invoice from the Nigerian Ports Authority charging extra for public holiday services and on a notice from the Nigerian Ports Authority stating that the Federal Government had declared 26 and 27 December public holidays. The owners relied on a message from BIMCO (Baltic and International Maritime Council) stating that 27 December had not officially been declared a public holiday, together with messages from Lagos Agents and Lagos lawyers stating that the day was not a holiday anywhere in Nigeria. The Tribunal preferred the evidence from the Nigerian Ports Authority and held that the day was a holiday.

In some parts of the world, a local Port Trust or Dock Labour Board may publish its own holiday list. Such a list may or may not correspond with the list issued by local civic authorities. Unless the Port Authorities have legal power to declare holidays, such lists can take effect only, if at all, as evidence of custom and practice.

In countries with a federal or state-based system, individual states may be empowered to declare their own holidays. India provides an important example. The Negotiable Instruments Act 1881 authorises each state to issue General Orders specifying public and government holidays. Although the Act is primarily concerned with banking, Section 25 is general in effect and is not limited to banks.

Care must be taken, however, to distinguish between public holidays and government holidays. Public holidays are general in character and therefore apply to Charterparties as holidays by law. Government holidays may merely mean that government offices are closed. London Arbitration 23/87, concerning the Port of Veraval in Gujarat, illustrates the point. The disputed days were held to be holidays, even though cargo work continued and the Port office was closed.

A/S Westfal-Larsen & Co v. Russo-Norwegian Transport Co Ltd concerned a possible conflict between law and practice. The Soviet Government had introduced what it called “the uninterrupted week”, replacing the previous pattern of work, including holidays, with a continuous shift system. The relevant decrees were issued in mid-1929, and the dispute concerned Christmas Day and Boxing Day of that year, together with New Year’s Day 1930. Work was apparently carried out on all three days. Nevertheless, Wright J found on the evidence that the decrees had not yet been implemented in practice at Leningrad, and that workers who worked on those days were paid substantial overtime. He also found that traditional religious festivals and feast days were still recognised. The case therefore suggests that, where law and practice are in conflict, practice prevails.

A different question arose in Hain Steamship Co Ltd v. Sociedad Anonima Comercial de Exportacion e Importacion (Louis Dreyfus & Co Ltd). The issue was whether a local law making it unlawful to work after a particular hour on specified days could turn those days into holidays. The answer was no. MacKinnon J pointed out that neither the ship nor the Charterers had undertaken to work in breach of local law. The local prohibition was therefore irrelevant to the construction of “holiday” in the Laytime Clause.

Custom and Practice

In this context, custom means a settled and established practice of the Port. A custom may itself identify holidays, either by listing particular dates or by laying down a formula. It may also authorise a particular body to declare holidays. In all such cases, the observations of Kennedy J in Sea Steamship Co Ltd v. Price, Walker & Co Ltd remain important. Kennedy J stated:

In my opinion, in order to establish a mercantile custom it is necessary, not only to show that a large number of influential people at the place have agreed that it would be a good thing… but also that the agreement was acted upon, because, unless it is acted on, no one will challenge it… A custom cannot be established merely by three or four important classes of persons in a community of a port agreeing that it is desirable. It must be enforced.

For a holiday to arise by custom or practice, it must be observed by a sufficiently large section of the community so as to have become generally accepted as a holiday. In Z Steamship Co Ltd v. Amtorg, New York, Goddard J stated:

If it could be shown that certain trades—I do not think one would be enough—a certain number of trades had closed their doors in Boston on Saturdays so that a large number of working people regarded Saturday as a holiday, although you might persuade somebody to work on that day, more might be said, but I do not think you could make a holiday, merely because of some arrangement between employers and employees in a particular trade.

In Denniston & Co v. Zimmerman, the Charterparty provided that holidays, fete days, and colliers’ monthly holidays were not to count as Lay Days. On that wording, the Court of Appeal held that the four days of the Welsh National Eisteddfod were both holidays and fete days (public holidays) for the relevant district.

In London Arbitration 18/87 and 22/87, 8 November, Thomas W Gleason’s birthday; 31 December, New Year’s Eve; and 7 January, Clarence Henry’s birthday, were held not to be holidays in the southern United States. They were merely “Longshoremen’s Holidays”, meaning days agreed between the union and employers on which overtime was payable.

By contrast, London Arbitration 4/05 reached a different conclusion in relation to George Washington’s Birthday, also known as President’s Day. Although the BIMCO (Baltic and International Maritime Council) Holiday Calendar stated that the day was not observed in Louisiana, the Tribunal held that, for a ship loading at a Mississippi terminal, the day should be treated as a holiday because higher labour charges were payable. That conclusion is difficult to reconcile with Goddard J’s statement that a holiday requires something more than an arrangement between particular employees and their employer.

Most religious holidays will qualify as such by custom, provided they are observed widely enough in the relevant Port community and affect the ordinary performance of the work in question.

Specific Classes of Holidays

Sometimes a Charterparty does not exclude holidays generally, but only a defined category of holidays. Where that is so, only the category expressly identified in the Charterparty will be left out of the Laytime calculation. The wording used by the parties is therefore decisive.

General or Local Holidays

The expression “general or local holidays” was considered in Love and Stewart Ltd v. Rowtor Steamship Co Ltd, a Scottish case that reached the House of Lords. The main issue was whether the Laytime provision, which required discharge per day “but according to the custom of the respective ports”, created Fixed Laytime or Customary Laytime. That distinction mattered because the Charterers sought to introduce evidence that, at the Port concerned, work was not normally carried out during wet weather or during Saturday afternoons.

The House of Lords had no difficulty in holding that the clause created Fixed Laytime. Lord Sumner, giving the leading opinion, then held that a Saturday half-holiday did not fall within “general or local holidays”. He did not, however, define the expression positively, nor did he explain whether it differs from the word “holidays” used without qualification.

If there is any distinction, it is likely to arise in relation to holidays based on custom. One can imagine a case where, in a particular country, a day is generally observed as a holiday by custom, while in the specific Port or locality concerned it is treated as an ordinary working day. If the clause referred only to holidays, that day might not be excluded. If the clause referred to “general or local holidays”, the result could be different because the wording may be broad enough to capture either a general holiday or a local holiday.

Legal Holidays

The expression “legal holidays” is most commonly encountered in Charterparties involving voyages to countries where numerous customary holidays exist, some affecting different parts of society or commerce in different ways. The purpose of the expression is to exclude only those holidays created by law or formally recognised by law, and not holidays resting only on custom or local practice.

Legal holidays may include holidays declared by regional or local authorities, as well as those established at the national level, provided the relevant authority has legal power to declare them.

Official and Local Holidays

In Z Steamship Co Ltd v. Amtorg, New York, Goddard J appears to have treated an official holiday as one declared by “Government officials or under Government powers”. If “Government” is understood narrowly as referring only to central Government, that interpretation would exclude holidays declared by regional or local authorities. Where the words “official and local” are used together, that may indeed be the intended distinction.

Even so, it is more coherent to give “official” a broader meaning, extending at least to decisions made by regional authorities acting under legal powers. What matters is not only the level of government involved, but whether the day has been directly proclaimed or declared as a holiday by a competent authority.

The decision of Goddard J makes clear that an official holiday requires a direct proclamation, order, or declaration. It is not enough that the alleged holiday arises indirectly from an official measure. The facts of the case illustrate the point. The dispute concerned the unloading of coal at Boston, United States.

Under a Code of Fair Competition, which had legal force through the National Recovery Act 1933, coal dock workers could not be compelled to work more than 40 hours a week. If work was available and they were willing, they could work additional hours at overtime rates. The local trade therefore agreed that the ordinary 40 hours would be worked from Monday to Friday, and that Saturday work would be paid at overtime rates whether or not the 40-hour week had already been completed. It was argued that, because the arrangement was made to comply with an official requirement, Saturday had become an official holiday.

Goddard J described the question as “a very, very difficult one” and said that he had considerable difficulty reaching a conclusion. Nevertheless, he held that the arrangement had been adopted for the convenience of the local trade and did not make Saturday an official holiday. He also held that, because only one trade was affected, Saturday could not be treated as a local holiday.

Charterparty Holidays

Some jurisdictions operate a dual holiday system. Examples include India, Bangladesh, Sri Lanka, and the Province of Quebec in Canada. If every holiday falling within such a system were excluded from Laytime, the result would often be commercially unrealistic because cargo work commonly continues on many such days, albeit at overtime rates.

For that reason, a practice developed under which a local body, often the local Chamber of Commerce, identifies which holidays should count for Charterparty purposes. Such declarations are usually treated as part of the custom of the Port and may become firmly established. In Bombay, now Mumbai, the Bombay Chamber of Commerce has issued such declarations since 1881.

Where the Charterparty expressly refers to “charterparty holidays”, only holidays falling within that recognised category are excluded for Laytime purposes. If the Charterparty refers simply to “holidays” and contains no further qualification, it is unlikely that a court or Tribunal would imply such a restriction.

Legal and Local Holidays

London Arbitration 33/04 concerned a Charterparty under which Laytime was to be calculated in Weather Working Days of 24 consecutive hours. The clause also provided that time would not count from the evening before a “legal and local holiday” until 08:00 on the following day. The Loading Port was Kandla, on the west coast of India. The disputed day was Mahatma Gandhi’s birthday, which the state government had designated as a general holiday. No cargo operations were performed on that day.

The owners argued that the phrase “legal and local holidays” did not include days described in the Statement of Facts as “charterparty holidays”. That argument failed. As a matter of logic, the decision is correct. Legal and Local Holidays would normally include national, state, and local holidays. Charterparty holidays might be a narrower category, perhaps limited to national and state holidays selected for Charterparty purposes. There is no reason why the broader phrase should exclude a day merely because it is also a charterparty holiday. If that interpretation were adopted, the phrase would effectively exclude only local holidays, which would be an artificial reading.

Super Holidays

The Lowlands Orchid concerned what the report described as “super holidays”. The report does not define that expression in detail, but the dispute concerned whether Christmas Day and Boxing Day were excluded from Laytime. The term appears to be used in the carriage of major bulk cargoes, where certain major holidays may receive special treatment even under clauses that otherwise include Sundays and holidays.

The fixture recap provided for discharge on SHINC (Sundays and Holidays Included) terms, but otherwise incorporated an earlier Charterparty. That earlier Charterparty also provided for SHINC (Sundays and Holidays Included) terms, but not in relation to super holidays. The dispute therefore turned mainly on the broking and incorporation of terms rather than on the general law of Laytime. Both the majority of the Arbitral Tribunal and the High Court held that the terms of the earlier Charterparty governed the position.

Non-working Holidays

The expression “non-working holidays” refers to holidays on which loading or discharging can proceed only if substantial additional payment is made. This is to be contrasted with “working holidays”, where work continues at ordinary or near-ordinary rates, even though the day is unquestionably a holiday by law or custom.

That was the effect of Roche J’s decision in Panagos Lyras (Owners) v. Joint Danube & Black Sea Shipping Agencies of Braila. The Charterparty provided for loading per Running Day “Sundays and Non-working Holidays Excepted”. The dispute concerned Despatch Money and focused on Good Friday, Saturday in Holy Week, and Easter Tuesday, all of which were public holidays at Galatz, the Loading Port. Work nevertheless continued as normal on each of those days.

Roche J held that the relevant test was whether substantial extra payment had been made. The matter was remitted to the Arbitrator. In doing so, Roche J indicated that it might be necessary to examine payments made not only to labourers working in the holds, but also to men employed at the silos or elevators, and to consider whether extra payment had been made to the Dock Authorities. He added:

The mere fact of some extra payment need not make all the difference, but on the other hand, if the payments were of any large amount it might make all the difference.

The decision shows that “non-working holidays” is not concerned simply with the legal label attached to the day. It is concerned with the practical and commercial character of the day at the Port: whether cargo work proceeds in the ordinary way or only at a materially different cost.

BIMCO Calendar

The Baltic and International Maritime Council publishes an annual holiday calendar showing different classes of holidays observed at a range of Ports for the following year. The calendar is prepared from reports supplied by the relevant countries and is intended as guidance for BIMCO (Baltic and International Maritime Council) members.

In ordinary use, the BIMCO Calendar is persuasive rather than conclusive. It may assist parties, Agents, Shipowners, Charterers, and Arbitrators in identifying local holidays, but it does not override the Charterparty, local law, or proved custom. There is, however, nothing to prevent the parties from making the calendar contractually decisive by inserting a Charterparty Clause stating that holidays are to be excluded “as specified in the BIMCO Calendar”.

Holidays and Working Days (WD)

The central question is whether holidays and Working Days (WD) are mutually exclusive. Can a day be a holiday at the Loading Port or Discharge Port and still qualify as a Working Day (WD) for Laytime purposes? The issue matters where Laytime is measured in Working Days (WD) or Weather Working Days (WWD), and holidays have not been expressly excepted. There is no final answer, but the authorities suggest that in some circumstances the courts may accept that a day can be a holiday for the local community and still be a Working Day for Laytime purposes.

In Cochran v. Retberg, Lord Eldon described Working Days in a way that excludes Sundays and Holidays.

In Nielsen v. Wait, Lord Esher adopted a similar approach:

If by the custom of the port certain days in the year are holidays, so that no work is done in that port on those days, then working days do not include those holidays. Therefore “working days” means days on which, at the port, according to the custom of the port, work is done in loading and unloading ships.

In Nelson & Sons Ltd v. Nelson Line (Liverpool) Ltd (No 3), Channell J went even further. He suggested that where a Charterparty uses the words “working days”, any separate reference to Sundays and holidays is unnecessary because such days are not within Working Days (WD) in the first place.

In Reardon Smith Line Ltd v. Ministry of Agriculture, Lord Devlin referred to those authorities with approval and later stated:

the character of a day as a working day cannot be determined by inquiring whether on that day or on a part of it work was done at standard rates.

The main focus is therefore what happens at the Port as a whole. It would go too far to say that a day must be a Working Day (WD) merely because some work was carried out, whether at ordinary rates or at overtime rates. MacKinnon J made the point in Hain Steamship Co Ltd v. Sociedad Anonima Comercial de Exportacion e Importacion (Louis Dreyfus & Cia Ltda), known as The Tregantle:

no doubt, it is possible to get people to work on the most universally recognized holidays in London, such as bank holidays, if you pay them sufficiently to make it worth their while.

If no work is carried out in the Port because of a holiday, then plainly that holiday prevents the day from being a Working Day (WD). The harder question arises where the locality observes a holiday but loading and discharging continue, whether at ordinary rates or overtime rates.

That was broadly the situation in The Mosfield, where Donaldson J stated:

There was a time when a finding that a day was a working day seems to have excluded the possibility that it was a holiday . . . but in modern conditions this is no longer the case… I doubt whether holidays would feature so regularly as an exception to laytime counted in working days if holidays and working days were in fact mutually exclusive.

In The Mosfield itself, holidays were expressly excepted, so the finding that the Saturdays in question were both Working Days and holidays under local legislation was not strictly necessary for the decision.

In Panagos Lyras (Owners), work at the Port continued almost normally and at ordinary rates. If the Laytime Clause had referred to loading per Working Day or Weather Working Day instead of per Running Day (RD) with holidays excepted, it is possible that the disputed days would have been treated as both holidays by ancient custom and Working Days (WD).

If that reasoning is taken to its logical conclusion, Sundays and holidays would not interrupt Laytime measured in Working Days or Weather Working Days whenever the Port was operating, unless expressly excepted. Since the question whether a day is a Working Day is essentially factual, the courts may avoid that extreme conclusion by asking whether the Port community as a whole was substantially working. A day may therefore remain a holiday, and not a Working Day, if most of the Port is on holiday, even though some cargo work continues.

In practice, the issue often remains academic because most Charterparties expressly exclude holidays even where Laytime is measured in Working Days or Weather Working Days. Clear drafting remains the safest solution. If the parties intend holidays to be excluded, they should say so expressly; if they intend cargo work on holidays to count, the Charterparty should make that equally clear.

Part-Day Holidays

Local law, local regulation, or Port practice may sometimes declare a holiday for only part of a day, such as a half-day holiday. Whether that period is capable of being treated as a holiday for Laytime purposes depends primarily on the wording of the Laytime Clause.

Where Laytime is expressed simply in Working Days (WD) or Weather Working Days (WWD), the day is normally characterised as a whole. If work is performed during part of that day, the day will usually remain a Working Day. This approach was reflected in one London Arbitration award, where the Tribunal stated:

“The day had to be considered as a whole. Subject to any express agreement to the contrary the English law was settled. The House of Lords in Reardon Smith v. Ministry of Agriculture … had found that on some days the hours of work may vary but this could not transform a working day into a non-working day unless it was also effective to transform it into a holiday. The fact that no work was performed after 14 00 hours because of a local half-day could not derogate from the description of a day, as a whole, as a working day. It could not be described as a holiday because work was performed up to 14 00 hours and so the whole day must score up as laytime.”

Where holidays are expressly excepted, however, there is no strong reason in principle why the exception should be confined only to full-day holidays. If local law or a recognised Port practice creates a holiday for part of a day, that part-day holiday may properly be excluded if the wording of the Charterparty is broad enough. The Charterparty Laytime Definitions 1980, the Voylayrules 1993, and the Baltic Code 2007 all define holidays in a way that expressly includes part of a day.

The contrary argument is based partly on Lord Devlin’s statement in Reardon Smith Line Ltd v. Ministry of Agriculture:

“Sundays and holidays are days of 24 hours, which, when excepted, are taken out of the lay days. They are taken out as a whole because, as Lord Sumner said in Love and Stewart Ltd v. Rowtor Steamship Co Ltd, the exception of holidays is based on days and not on parts of days.”

That statement should be treated with caution. There are two important reasons why it should not be taken as a general rule that only whole-day holidays can ever be excluded.

The first reason concerns the context of Love and Stewart Ltd v. Rowtor Steamship Co Ltd. In that case, Laytime was calculated by reference to a daily cargo-handling rate, and there was an express holiday exception. The dispute concerned Saturday afternoons, which were said to be half-day holidays by local custom. The House of Lords rejected that argument. Lord Sumner’s reasoning, as later described by Lord Devlin, excluded all part-day holidays. However, the case was decided at a time when parts of days were generally treated as whole days. Both the Laytime allowed and the time used were rounded up to complete days. Demurrage was different only because the Charterparty expressly allowed pro rata calculation for parts of a day. Modern Laytime practice is very different, with calculations routinely made by hours and minutes.

The second reason is that Lord Devlin’s observation was made while discussing the meaning of “working days”. It should therefore be confined, if anything, to the characterisation of part holidays falling within Working Days, rather than being treated as a comprehensive rule about all holiday exceptions.

In a New York Arbitration, the Charterers argued that Ramadan should be treated as a series of part-day holidays, so that six hours per day should be deducted from Laytime. The owners relied on the BIMCO Holiday Calendar, which stated:

Ramadan. Ramadan is the ninth month of the Islamic year and is rigidly observed as a thirty days’ feast, during the hours of daylight by all Muslims. As a consequence labour conditions may be difficult and in any event the labourers’ capacity will drop. Thus the month of Ramadan is not in itself a holiday but the first day of the following month (Shawwal) is usually a holiday often called “Id-ul-Fitr”, Ramadan end of feasting.

The Tribunal held that Laytime continued to run as full days throughout Ramadan. Reduced labour efficiency, altered working patterns, or difficulty in obtaining labour during Ramadan did not make each day a part-day holiday in the absence of clear Charterparty wording or recognised legal or customary holiday status.

Saturdays

Unless the Charterparty, local law, or established local custom provides otherwise, Saturday is generally regarded as an ordinary Working Day and counts as such for Laytime purposes. This remains so even where local labour practice limits Saturday working hours or requires overtime payment.

The leading authority is Reardon Smith Line Ltd v. Ministry of Agriculture. Although commonly cited in that form, the case was in reality a consolidated appeal involving several Shipowners and the Ministry of Agriculture, Fisheries and Food, which had chartered ships to carry wheat from Vancouver. A strike by elevator workers at five of the seven Vancouver elevators lasted almost three months and caused substantial delay. The cases are often referred to collectively as the Vancouver strike cases.

One issue before the House of Lords was whether Saturday at Vancouver should be treated wholly or partly as a Working Day. Lord Devlin delivered the leading speech on this point. After reviewing the historical development of “Working Day” and “Weather Working Day”, he concluded that the word “working” described the nature of the day rather than the number of hours worked. It was irrelevant whether work was carried out at ordinary rates.

The House of Lords therefore held unanimously that Saturday was a Working Day. That was so even though Saturday was not part of the elevator workers’ normal working week, and only Saturday morning formed part of the longshoremen’s ordinary week. The longshoremen were essential to the loading of wheat. Their Lordships also held that, even if no one in the Port worked at ordinary rates on Saturday afternoon, Saturday afternoon could not be separated out and treated as a non-working part of the day.

In London Arbitration 15/97, Charterers argued unsuccessfully that every Saturday morning was a holiday at Romanian Ports. The Tribunal rejected that argument and stated:

“there were two considerations which militated against the proposition that Saturday mornings should not count against laytime. The first was that in almost the whole of the Western world nowadays, Saturdays were non-working days (at least for the bulk of the population); yet they were not commonly regarded as being “holidays” in any country. The second was that the relevant charter exceptions frequently (as in the present case) pointed up a distinction between Saturdays on the one hand and holidays on the other.”

To qualify as a holiday, a day had to be determined as such by law or as a matter of custom. The mere fact that fewer people work on Saturdays, or that Saturday work attracts overtime, is not enough.

In The Mosfield, however, the position was different. A provision enacted by the Louisiana State Legislature was held to make every Saturday a holiday at the Port of Lake Charles. The result depended on local law, not merely on local working practice.

Overtime

The effect of overtime payments on the status of Saturdays was considered in Corrado Societa Anonima di Navigazione v. Exporthleb. The case concerned loading at Russian Ports, where Sundays and holidays were excepted. The Ports operated continuously through three eight-hour shifts. On Saturdays, overtime was paid for the last two hours of each shift. It was argued that those overtime periods fell within the holiday or non-working exception.

The judge rejected that argument. The real question was whether work was customarily carried out at the relevant time. Since work was normally performed, the fact that part of it attracted overtime pay did not alter the character of the period for Laytime purposes. Overtime, by itself, is therefore not decisive.

Custom

In Love and Stewart Ltd v. Rowtor Steamship Co Ltd, the Laytime Clause provided for cargo handling at a daily rate “during the ordinary working hours of the respective ports, but according to the custom of the respective ports”. The Charterparty also excepted Sundays and holidays.

The Charterers argued that those words allowed them to rely on a local custom under which Saturday was treated as a half-day. Lord Sumner rejected that argument, stating:

“The intention to have fixed lay days is clear and must prevail. Furthermore, the days which are to be excepted in computing the lay days are the subject of an express provision which is complete in itself.”

Lord Sumner then held that a Saturday half-day holiday did not fall within the holiday exception. As already noted, the reasoning that the exception applied only to whole days may not reflect modern Laytime practice, where parts of days are commonly calculated precisely.

It is also important that the days in Love and Stewart Ltd v. Rowtor Steamship Co Ltd were Running Days (RD). The case does not finally answer the question whether, where Laytime is measured in Working Days or Weather Working Days (WWD), custom may establish that Saturday is a holiday or a non-working day. In light of Reardon Smith Line Ltd v. Ministry of Agriculture, any such classification would have to apply to the day as a whole, not merely to Saturday afternoon.

At Vancouver, when Reardon Smith Line Ltd v. Ministry of Agriculture arose, some work was regularly performed on Saturdays. Longshoremen worked Saturday mornings without overtime as part of their ordinary working week, and both longshoremen and elevator workers were willing to work the full day if necessary to get a ship away. On those facts, it could not realistically be argued that Saturdays were holidays.

Lord Devlin nevertheless recognised that some days may be neither holidays nor Working Days. He said:

“But there may, of course, be days in some ports, such as the Mohammedan Friday, which are not working days and yet cannot well be described as Sundays or Holidays.”

If it is proved as a fact that work is not ordinarily carried out at a particular Port on Saturdays, there is no reason why Saturdays could not be treated as non-working days for the purpose of a Working Day or Weather Working Day (WWD) clause. The question would be one of fact and Port practice.

In Z Steamship Co Ltd v. Amtorg, New York, Goddard J did not rule out the possibility that Saturday could be a holiday by custom, provided it was observed as such by a sufficiently large part of the community. On the facts, however, that was not established. To leave Saturdays out on that basis, the Charterparty would also need to contain wording excluding holidays.

Local Law

Local legislation may validly make Saturday a holiday, while at the same time the Port may continue to work on Saturdays. A day can therefore be both a Working Day and a holiday, depending on the wording of the Charterparty.

In The Mosfield, Donaldson J held on the evidence that Saturday at Lake Charles, Louisiana, was a Working Day, though not a regular Working Day. He stated:

“The adjective “regular” might signify that it was not a day upon which work was regularly done or that it was not a day on which work was done at normal rates of pay. This ambiguity is resolved by the further statement that Saturday morning is a normal overtime working day.”

Although Saturday was a Working Day, Donaldson J also held that an Act of the Louisiana Legislature declared all Saturdays to be holidays in an area that included the Port of Lake Charles. Saturday was therefore also a holiday.

The Laytime Clause provided for “weather working days of 24 consecutive hours”, with Saturday afternoons, Sundays, and holidays excepted. Since Saturday was a holiday under local law, the whole of Saturday was excluded from Laytime.

The effect of a law making it unlawful to work after 13:00 on Saturday was considered by MacKinnon J in Hain Steamship Co Ltd v. Sociedad Anonima Comercial de Exportacion e Importacion (Louis Dreyfus & Co Ltd), known as The Trevarrack. MacKinnon J summarised the Charterers’ argument as follows:

“In the Argentine not only is Saturday afternoon after 1 p.m. a non-working time, or a holiday, but it is a compulsory holiday in the sense that by the Argentine law it is illegal to work after 1 p.m. on the Saturday. Therefore, the charterers argue that as it was illegal to work after that time, that period when it was so illegal to work must be cut out of the period of 24 hours which is to constitute a “running day”.”

MacKinnon J rejected the argument. First, neither the ship nor the Charterers had undertaken to work on Saturday afternoon in breach of Argentine law. Secondly, he considered that Love and Stewart Ltd v. Rowtor Steamship Co Ltd had decided that Saturday afternoon did not fall within the term “holiday”, and that the fact the holiday was imposed by local law did not alter the result.

With respect, that reasoning is open to doubt. Love and Stewart Ltd v. Rowtor Steamship Co Ltd is often cited as authority that Saturday afternoon is not a holiday, but Lord Sumner’s actual reasoning was that a holiday exception was based on days, not parts of days. He stated:

“Saturday afternoons are the more plausible case of the two, but the exception in the charter is clearly based on days, not on parts of days. I do not think the term extends to the latter part of a weekday, on which it is usual not to work, although we all call it and enjoy it under the name of a Saturday half-holiday. Really it is a half-day, which while it lasts, is wholly holiday, and I do not think that “general or local holidays” cover it.”

At the time, Laytime calculations commonly dealt in whole days. Today, parts of days are routinely counted, often down to minutes. There is therefore no convincing reason why the word “holiday”, when used as an exception, should necessarily be limited to a whole day. The considerations that led the courts to treat “working” in “Working Day” as describing the character of the day as a whole do not necessarily apply to a holiday exception. The Charterparty Laytime Definitions 1980, by defining holiday to include part of a day, reflect that more modern approach.

If that view is correct, The Trevarrack is difficult to support, and a half-day holiday imposed by local legislation making work unlawful should be treated as a holiday for the relevant part of the day.

The position would be different if the Laytime allowance were expressed in Working Days or Weather Working Days (WWD) without a holiday exception. In that case, even though Saturday afternoon was non-working, Saturday would still normally be characterised as a full Working Day because the day must be classified as a whole.

Saturdays Today

Even accepting that part-day holidays may now be recognised in suitable cases, courts and Tribunals will usually be slow to hold that Saturday is a half-day holiday merely because work does not take place on Saturday afternoons. The absence of work at the Port may make Saturday afternoon a non-working period, but a holiday requires more. It would normally be necessary to show that the period is a holiday for the wider locality, not merely for the Port, either by force of law, as in The Mosfield, or by custom, as contemplated in Z Steamship Co Ltd v. Amtorg, New York.

Baltimore Form C Saturday Clause

The Baltimore Form C Saturday Clause provides:

1. Notwithstanding any custom of the port to the contrary Saturday shall not count as laytime at loading and discharging port or ports where stevedoring labour and/or grain handling facilities are unavailable on Saturday or available only at overtime and/or premium rates.

2. In ports where only part of Saturday is affected by such conditions, as described under “1” above, laytime shall count until the expiration of the last straight time period.

3. Where six or more hours of work are performed at normal rates, Saturday shall count as a full layday.

The effect of this clause was examined in Primula Compania Naviera SA v. Finagrain Cie Commerciale Agricole et Financiere SA, known as The Point Clear. The ship anchored at the Hook of Holland while waiting for her turn to proceed to the suction elevators at Rotterdam for discharge of a grain cargo. The dispute concerned the Saturday after arrival and whether Laytime, which had already started, continued to run.

At Rotterdam, day and night shifts were worked from Monday to Saturday inclusive. On Saturdays, only between one-third and one-half of the weekday labour force was available, so not all bulk grain discharge Berths could be worked. The elevator operators charged customers a flat rate for weekday day and night shifts and also for Saturday day shifts. A higher charge applied for Saturday night shifts. The workers themselves received enhanced pay for work outside Monday to Friday day work, although their employment contracts required them to work one day shift every third Saturday.

The first question was whether, where the ship was not in Berth, the necessary labour and facilities could be said to be unavailable. Donaldson J held that they were available. The clause had to be applied objectively by reference to Rotterdam as a Port, not subjectively by reference to the particular ship. The fact that the ship was not yet in Berth was irrelevant.

The next question was whether the reduced labour force and the fact that only some Berths were working meant that labour and facilities were unavailable in Rotterdam generally. Donaldson J answered no. He emphasised the negative wording of the clause, namely that labour and facilities must be unavailable on Saturdays. He stated:

De minimis apart, this must mean wholly unavailable. Otherwise, the clause would have spoken of “partially unavailable” or “not wholly available” or “subject to a reduction in availability”. On this particular Saturday, like other Saturdays, there was a substantial reduction in the availability of labour and grain discharging facilities, but neither was “unavailable”.

The final question was whether labour and facilities were available only at premium rates. The relevant period was the Saturday day shift, not the Saturday night shift. Donaldson J held that the reference to overtime or premium rates meant the charges payable by customers to those providing labour and facilities. Since Rotterdam did not charge customers premium rates for the Saturday day shift, labour and facilities were not available only at overtime or premium rates.

Weekend Clause

Charterparties that exclude Sundays and Holidays often also exclude the periods immediately before and after them. A common form of wording is:

“Time shall not count between noon on Saturday and 8 am on Monday, nor between 5 pm (noon if Saturday) on the last working day preceding a holiday and 8 am on the first working day thereafter.”

Questions may arise where the relevant Port is in a Muslim country and Friday is the principal weekly non-working day. There appears to be no direct authority, but the better view is that the clause must be applied according to its actual wording. It is not permissible simply to substitute Friday for Saturday. The result may be that, where Laytime is expressed in Working Days or Weather Working Days, time does not count on Friday because it is not a working day, and is then also suspended from noon on Saturday until Monday morning. That may appear commercially uneven, but it is for the parties to draft suitable wording if they intend a different result.

In London Arbitration 6/91, the Charterers unsuccessfully argued that the weekend clause excluded not only weekends but also the period from 17:00 each working day until 08:00 the following morning. The Tribunal rejected that extended interpretation.

In London Arbitration 7/97, the clause provided:

“Vessel to be discharged at the rate of… Saturdays Afternoon, Sundays and Holidays excepted, Even If Used (EIU).
Time from 1700 hrs Saturday or day preceding a Holiday to 0800 hrs Monday or day following a Holiday not to count as laytime, even if used.

The issue was whether the period between 12:00 and 17:00 on Saturday counted. The Tribunal considered that the phrase “Saturdays Afternoon” was unusual. It was more familiar with “Saturdays after noon”. If those words had been used, there might have been an argument that the two parts of the clause conflicted. Reading the clause as a whole, however, the Tribunal held that the parties intended time to count until 17:00 on Saturdays and on days preceding holidays, but not thereafter, even if used. Any ambiguity had to be resolved against the Charterers.

In London Arbitration 1/00, the Tribunal considered wording stating that “time from Sunday 00 00 hour or day preceding holiday until 08 00 hours Monday or next working day not to count.” In relation to holidays, the Tribunal held that time was not to count from the end of the day preceding a holiday, meaning from midnight. The Tribunal also noted that this was an Exceptions Clause relied upon by Charterers and therefore had to be construed strictly against them.

Working in Excepted Periods

The question of work during excepted periods arises in two main situations. First, the Charterparty may expressly provide for such work. Secondly, the Charterparty may be silent.

Where the Charterparty deals expressly with the issue, the most common wording is “Unless Used (UU)” or “Unless Used (UU), in which event only actual time used to count”. The second form creates little difficulty. It expressly states that only actual time used is to count. It does not matter whether Laytime is expressed in Running Hours, Working Days, or Weather Working Days (WWD). In each case, the actual time used counts against Laytime.

Where the clause contains only the words “Unless Used (UU)”, Charterers and Shipowners have sometimes disputed whether any use of an excepted day makes the whole day count. That argument may derive from older practice, under which part of a day was sometimes counted as a full day. It may also be argued that, once time is used, the day becomes a day of the kind identified in the Charterparty as a Lay Day.

In modern Laytime calculation, however, the better view is that even the shorter phrase “Unless Used (UU)” should normally mean that only the actual time used counts. Laytime is now commonly calculated in fractions of days, hours, and minutes. There is therefore no commercial reason to treat a short period of work during an excepted day as converting the whole day into Laytime.

This view is supported by the Charterparty Laytime Definitions 1980, which state:

“UNLESS USED (UU)” means that if work is carried out during the excepted days the actual hours of work only count as laytime.

Similarly, the Voylayrules 1993 provide:

“UNLESS USED” (UU) shall mean that if Laytime has commenced but loading or discharging is carried out during periods excepted from it, such time shall count.

Even stronger support for the view that only the time actually worked should be counted is found in Sofial SA v. Ove Skou Rederi, known as The Helle Skou, another decision of Donaldson J. In that case, the Charterparty excluded time from 17:00 on Friday until 08:00 on the following Monday, “Unless Used (UU)”. Some cargo work was performed on the relevant Saturday, but about half of the period intended for work was lost because of rain. The Shipowners argued that the whole weekend should count, while the Charterers contended that only the period during which work could actually be performed should count against Laytime. Neither side argued that the whole of Saturday alone should count.

On the basis of the arguments presented, Donaldson J accepted the Charterers’ position and held that only the time actually used should count. Donaldson J stated:

“The fallacy of the owners’ argument lies in regarding time between 17 00 hours on a Friday and 08 00 hours on the following Monday as an indivisible period of time which is either used or not used. The basic rule, which is set out in the first sentence [of the laytime clause] is that laytime is calculated by aggregating individual moments of weather working time. The laytime clock ticks only so long as each succeeding moment can properly be described as weather working time. Between 17 00 hours on Fridays and 08 00 hours on Mondays, more than weather working time is required to make the clock tick. In addition, the weather working time has to be used, and it is only so long as it is used that the laytime clock will continue to tick.”

When referring to weather working time, Donaldson J was presumably referring to any period during which cargo work was actually performed, whether or not the day itself was otherwise a Working Day. On that basis, if work had continued on Sunday, the time so used would also have counted.

Where not provided for

After some early uncertainty, the position is now settled. The mere fact that cargo work is carried out during an excepted period does not, by itself, alter the express terms of the Charterparty so as to make that period count as Laytime where there is no “Unless Used (UU)” or similar clause.

The first English decision to consider this issue appears to have been Brankelow Steamship Co Ltd v. Lamport & Holt, decided by Lord Russell of Killowen CJ. In that case, Sundays were excepted, but cargo was nevertheless loaded throughout Sunday at the Charterers’ request. The judge concluded:

“when a full day is occupied in loading by the charterers on the one hand, who were not bound to load, and in the receipt of cargo by the ship which was not bound to receive, the fair inference is that both parties agreed to treat that as a working day.”

The next relevant decision was Houlder v. Weir. Channell J held that whether time counted depended on the terms, if any, on which permission to work during the excepted period had been granted. In that case, the Arbitrator found that the agreement was that Sundays on which work was carried out would not count as Laytime, but that the Charterers would bear the extra expense. Channell J upheld that finding and observed that he was inclined to think time would not have counted even if there had been no express agreement and the ship had merely allowed the work to proceed.

In Houlder v. Weir, one issue was whether the Ship Master had authority to make the agreement concerning the basis on which Sunday work would be performed. Later, in Nelson & Sons Ltd v. Nelson Line (Liverpool) Ltd (No 3), Channell J referred back to his earlier decision and said that, although he still considered it right on its facts, he was now prepared to accept that a Ship Master could agree on the Laytime basis for work carried out during excepted periods. On the facts before him, he found no express agreement, but nevertheless inferred that the parties intended to treat the excepted period as a working day. That first-instance decision was followed by Bray J in Whittall & Co v. Rahtkens Shipping Co Ltd.

The Court of Appeal affirmed Channell J’s decision in Nelson & Sons Ltd v. Nelson Line (Liverpool) Ltd (No 3), but the House of Lords later reversed it. Lord Loreburn LC stated:

“In my view it is a question, not of law, but of fact, whether or not there was an agreement varying the terms of the charterparty and providing that the holidays in question should count as lay days. I am unable to see any evidence of such an agreement.”

In Pteroti Compania Naviera SA v. National Coal Board, Diplock J considered a comparable situation where work began before the time fixed by the Laytime commencement clause. After reviewing the evidence, Diplock J stated:

“. . . I draw attention to the decision in the House of Lords in James Nelson & Sons Ltd v. Nelson Line (Liverpool) Ltd . . . and to a dissenting judgment of Lord Justice Fletcher Moulton (as he then was) in the Court of Appeal in the same case… , which points out the principles on which the court should be prepared to infer agreements of that kind between the parties, and contains a warning against an easy inference of such agreements. I can see no ground whatsoever on which I could infer an agreement here that, because the charterers started to unload, and the shipowners’ servants assisted in doing so, at 2.30 in the morning, there was an agreement between the parties that laytime should start then instead of at the time provided for (in my view) on the plain construction of clause 8.”

The result is clear. Without an express agreement varying the Charterparty, the courts will be reluctant to infer that work during an excepted period causes that time to count as Laytime. Something more than the mere fact that work was done is required. A Ship Master may have authority to make such an agreement, particularly if it is later ratified by the Shipowner. The more difficult question will often be whether the Charterers’ servants, Agents, Shippers, Receivers, or Stevedores had authority to make a corresponding agreement on behalf of the Charterers. That issue will normally be governed by ordinary principles of agency.

It may also be noted that the Voylayrules 1993 provide:

“EXCEPTED” or “EXCLUDED” shall mean that the days specified do not count as Laytime even if loading or discharging is carried out on them.

The Charterparty Laytime Definitions 1980 and the Baltic Code 2007 contain comparable definitions.

Strikes

The exclusion of “strikes” from Laytime is among the most common exceptions found in Fixed Laytime Charterparties. This explains the large body of case law on the subject. The most frequently encountered strike provisions are the Centrocon Strike Clause, derived from the River Plate Charterparty 1914, and the Gencon Strike Clause, found in the Uniform General Charter. The Gencon wording remained substantially the same in the 1922 and 1976 versions, but was altered in the 1994 revision. Both clauses require separate consideration.

Before turning to those standard clauses, however, it is necessary to identify the broader principles that apply to strike exceptions. Whether those principles apply in a particular case will always depend on the wording of the clause.

Meaning of “Strike” in Ship Chartering

The word “strike” is now generally given a broad commercial meaning. It may include most forms of work disruption by employees, regardless of the precise motive or grievance behind the stoppage.

In London Arbitration 9/03, however, the Tribunal adopted a narrow approach. The dispute concerned several days during which it was alleged that Stevedores had gone on strike after one of their colleagues was killed in a bomb explosion away from the Port. The Tribunal used a definition taken from the Oxford Dictionary, describing a strike as a “cessation of work by workers in an industry as a protest against working conditions or low pay”.

The Tribunal considered that the evidence showed the labour force had refused to work, apparently out of sympathy for a colleague killed in the explosion. It held that such conduct did not fall within the definition of a strike. That dictionary definition is arguably too narrow. Under English industrial relations law, a strike may be understood more broadly as the cessation of work by a body of employed persons acting in combination. On that approach, the reason for the stoppage is less important than the fact of concerted withdrawal of labour. A refusal by one individual will probably not be enough, but the number required to constitute a concerted body may be small and may perhaps be as low as two.

In the nineteenth century, “strike” was often given a narrower meaning and was commonly associated with wage disputes. In King v. Parker, Kelly CB held that a strike meant a refusal by the whole body of workers to continue working because the employer refused a wage increase or because the workers refused a wage reduction. Lord Coleridge CJ expressed a similar view in Stephens v. Harris & Co:

“When one hears of persons striking, it does not mean a refusal to work because the weather happens to be hot, but a standing out for higher wages.

In that case, the courts held that “strikes” and “striking work” did not cover a stoppage by miners who refused to work because of fear of contracting cholera.

In Re Richardson and M Samuel & Co, Smith LJ suggested that “strikes and lockouts” were limited to trade disputes. That narrow approach was later rejected in Williams Brothers (Hull) Ltd v. Naamlooze Vennootschap W H Berghuys Kolenhandel. The case arose in 1915, when the crew of a Dutch ship refused to sail from Hull because Germany had threatened to sink neutral shipping, Holland being neutral at the time. The Shipowners relied on a strike exception clause. Sankey J accepted that they could do so and stated:

“A strike does not depend merely upon the question of wages. At the same time, I do not think it would be possible to say the abstention of a workman from mere fear to do a particular thing or perform a particular contract would necessarily constitute a strike. I think the true definition of the word “strike”, which I do not say is exhaustive, is a general concerted refusal by workmen to work in consequence of an alleged grievance.”

In Tabb & Burletson v. Briton Ferry Works Ltd, Greer J held that “Strike” could include a partial strike, where workers refused to work night shifts in support of a demand for a better minimum wage, even though day-shift work continued. In Naamlooze Vennootschap A C Lensen’s Stoomvaart Maatschappij v. Muller & Co (London) Ltd, Roche J was prepared to treat a refusal by crane drivers and Stevedores to work overtime as at least analogous to a strike and therefore within wording excluding time lost by any other similar cause.

The question whether a refusal to work for only part of the day could amount to a strike was later considered by the Court of Appeal in Tramp Shipping Corporation v. Greenwich Marine Inc, known as The New Horizon. Dock workers at St Nazaire refused to work night shifts as part of action aimed at improving their conditions, although day shifts continued normally. The workers were not in breach of their employment contracts, but it was customary for a 24-hour shift system to operate. Ackner J held at first instance that the action was a strike, and the Court of Appeal affirmed that decision. Lord Denning MR defined strike as follows:

“I think a strike is a concerted stoppage of work by men with a view to improving their wages or conditions, or giving vent to a grievance or making a protest about something or other, or supporting or sympathizing with other workmen in such endeavour. It is distinct from a stoppage which is brought about by an external event such as a bomb scare or by apprehension of danger.”

Applying that definition, Lord Denning MR added:

“They were not in breach of contract. But it is none the less a strike. Many a strike takes place after a lawful notice; but it is still a strike. It was discontinuous. At work during the day-time, off work at night. But a strike need not be continuous. It can be discontinuous and the periods may be added up.”

The Voylayrules 1993 contain the following definition of strike:

“STRIKE” shall mean a concerted industrial action by workmen causing a complete stoppage of their work which directly interferes with the working of the vessel. Refusal to work overtime, go-slow or working to rule and comparable actions not causing a complete stoppage shall not be considered a strike. A strike shall be understood to exclude its consequences when it has ended, such as congestion in the port or effects upon the means of transportation bringing or taking the cargo to or from the port.

Whether an overtime ban amounts to a strike can be difficult. The Voylayrules 1993 definition is probably correct in saying that a refusal to work overtime is not a strike if it does not produce a complete stoppage. However, if the overtime ban results in a complete stoppage for particular hours of the day, The New Horizon suggests that it may amount to a strike. The essential issue is whether the industrial action produces, at any time, a complete cessation of work.

In Yewglen (Owners) v. Helical Bar & Engineering Co, an earlier case in which the exceptions clause covered “strikes, lock-outs, and employment disputes”, the judge in the Mayor’s and City of London Court held that a “go-slow” came within the clause. It is clear that a go-slow may amount to time lost through an employment dispute. Whether it can properly be described as time lost by reason of a strike is more doubtful. The better view is that a strike requires a cessation of work, although that cessation need not be continuous or extend throughout the entire day. A go-slow may still be covered where the clause also excludes other causes outside the Charterers’ control.

As Lord Denning MR indicated in The New Horizon, the dispute giving rise to a strike need not be one between the workers and their own direct employer. The workers may act in support of a wider cause, or in sympathy with other workers. Such action is often called a sympathetic strike.

An early example is Seeberg v. Russian Wood Agency, decided by MacKinnon J. The case concerned a strike by Stevedores at Leningrad. The action was directed only against Latvian ships; other ships at the Port continued to be worked normally. MacKinnon J described the circumstances as follows:

“. . . that is the curious incident of this strike, work was going on in this port and ships of many nationalities were being loaded with all due diligence, but the stevedores did not in fact load any cargo on Latvian ships, and it was said that it was a strike in sympathy with some labour grievance of some alleged unions or other workers on or connected with Latvian ships in Latvian and other ports. That was the nature of the strike.”

The Shipowners argued that, because both the Stevedores and the Shippers were effectively controlled by the Russian Government, the Shippers could have taken steps to end the strike. On the evidence, MacKinnon J rejected that argument and held that the action was a properly declared strike within the meaning of the strike clause.

A later example of sympathetic action is J Vermaas’ Scheepvaartbedrijf NV v. Association Technique de L’Importation Charbonniere, known as The Laga. The Laytime Clause excluded “existing strikes”. Shortly after the Laga arrived at Nantes with a coal cargo, Port labour refused to handle coal ships in order to support French miners who were on strike. Other ships continued to be worked normally. After reviewing the nineteenth-century authorities, McNair J stated:

“Strikes in every sense of the word occur today which are not concerned directly with wages. They are concerned, for instance, with working conditions; and so I think one has got to bear in mind that the meaning of the term “strike” must change with the progress (if that is the right word) of industrial history and it may have a different meaning today from the meaning given to it a century ago.”

Having found that there was no grievance between the strikers and their own employers, McNair J added:

“. . . the word “strike” is a perfectly good, appropriate word to use to cover a sympathetic strike and a general strike and there is no need for it today to have any ingredient of grievance between those who are refusing to work and their employers.”

McNair J also considered the word “existing” in the exceptions clause. He held that it was inserted to confine the excluded period to the actual duration of the strike itself, and not to extend the protection to consequential delay after the strike had ended.

Strike Clause

To rely on a strike clause, the party invoking it must normally prove that the strike caused the loss of time in question. That requirement will usually be found in the wording of the clause itself. For example, the Centrocon Strike Clause begins with the words “If the cargo cannot be loaded by reason of . . . a strike”. Similarly, Clause 19 of the Asbatankvoy Charterparty Form refers to delay “arising or resulting from . . . strike”. In both formulations, the clause requires a causal connection between the industrial action and the delay for which protection is claimed.

These examples also show that strike exclusions usually fall into two broad categories. The first consists of clauses specifically directed to loading and discharging operations. The second consists of wider provisions, usually contained in general exceptions clauses. The latter type is treated with caution in relation to Laytime and Demurrage. In Sametiet M/T Johs Stove v. Istanbul Petrol Rafinerisi A/S, known as The Johs Stove, Lloyd J stated in relation to an Asbatankvoy or Exxonvoy 69 general exceptions clause:

“a general exceptions clause, such as clause 19, will not normally be read as applying to provisions for laytime and demurrage, unless the language is very precise and clear.”

The need to prove causation was also emphasised in Reardon Smith Line Ltd v. Ministry of Agriculture, the Vancouver strike cases. In the Court of Appeal, Sellers LJ said:

“I would agree with Mr Justice McNair that the decision established and applies the principle that the mere existence of strike is not sufficient; it must have some causative effect upon the operations of the particular ship concerned.”

London Arbitration 9/03 raised a difficult causation issue. The ship was waiting for a Berth during the alleged strike, and therefore could only have been affected indirectly, if at all, by the industrial action. The owners argued that the Charterers could not rely on the strike exception because the immediate cause of the delay was congestion, not the alleged strike. They also argued that other ships already alongside were continuing to work normally.

The Charterers ultimately failed because the Tribunal held that the facts did not amount to a strike. However, the brief report suggests that, had the Tribunal found that the relevant events constituted a strike, it might have been prepared to accept the Charterers’ causation argument, even though the ship was directly prevented from discharging by congestion rather than by the strike itself.

The scope of any strike clause depends on its precise wording and on the facts. The causation required in a particular case will also depend on the language used. Nevertheless, the main issues can usefully be considered under four headings:

A. Provision of Cargo

B. Congestion and Consequential Delays

C. Duty to Lessen Effect

D. Length of Delay

A. Provision of Cargo

The Charterer’s obligation to have cargo at the loading place, ready for shipment at the proper time, is normally an absolute obligation. A strike exceptions clause will protect a Charterer only where the cargo is already ready at the Loading Port, unless the clause is drafted widely enough to cover the earlier stage of obtaining, transporting, or assembling cargo. If the delay results from difficulty in bringing cargo to the Port, the usual strike clause will not assist unless its language clearly extends to that situation.

Lord Dunedin explained the principle in Arden Steamship Co v. Mathwin & Son:

“the excuse must be very clearly expressed in the charter, because, unless this is very clearly expressed, the duty is, as I have phrased it, an absolute duty . . . It is amply settled by authority that loading is one thing and providing a cargo is another; and an accident which may prevent a cargo coming forward is not to be construed as an accident which delays the loading, although of course, unless the cargo is forward the loading cannot go on.”

The distinction between loading cargo and providing cargo is therefore fundamental. A clause that excuses delay in loading will not normally excuse failure to have cargo available.

In H A Brightman & Co v. Bunge y Born, a “work to rule” on one of the five railways serving Rosario delayed the movement of cargo to the Loading Port. The Charterparty excluded not only strikes but also obstructions on the railways. In arbitration, the situation was held to amount to such an obstruction. Both the Court of Appeal and the House of Lords expressed doubt about that conclusion. They nevertheless held that only railway obstructions occurring on the Port railway system itself could be relevant for the purposes of the clause.

The practical result is that a strike or similar labour disruption occurring inland, or on a transport route before cargo reaches the Port, will not usually excuse the Charterer unless the Charterparty expressly covers the provision of cargo, inland transportation, railway stoppages, or other pre-loading arrangements in clear terms.

B. Congestion and Consequential Delays

A recurring dispute arises where a ship is delayed because Berths remain congested after a strike has ended. Whether such knock-on delay is covered by a strike clause depends on the wording of the clause and on the facts. No single rule applies to all Charterparties. The cases provide guidance, but the language of the particular contract remains decisive.

Where Consequential Delay Was Allowed

In Leonis Steamship Co Ltd v. Joseph Rank Ltd (No 2), the relevant clause provided:

“If the cargo cannot be loaded by reason of . . . any dispute between masters and men, occasioning a strike of railway employees or other labour connected with the working, loading or delivery of the cargo proved to be intended for the steamer . . . , the time lost not to be counted as part of the lay days . . . ”

A strike among railway workers had ended before the ship arrived, but the strike had caused congestion on the railway system, which in turn delayed delivery of the cargo intended for the ship. Bigham J held that the delay in bringing the cargo forward was covered by the exception clause.

In the Scottish case of Moor Line Ltd v. Distillers Co Ltd, Lord Salvesen took a similar view. He stated:

“It is according to the good sense, and, I think, also according to the strict language of the contract, that in the case of delay arising as a consequence of a strike which has terminated, but the effects of which on the rate of discharge still continue, that to the extent that that delay is attributable, not to want of reasonable diligence on the part of the receiver, but to the after-effects of a strike or lock-out, he shall not be answerable for any delay”

In The Johs Stove, the Arbitrators found that the ship had been delayed by congestion, but that the congestion was caused by the after-effects of a strike. The general exceptions clause excluded delay or failure in performing the Charterparty “arising or resulting from . . . strikes”. Lloyd J held that the clause did not excuse the Charterers’ failure to nominate a Berth “reachable on arrival”. However, Lloyd J appears to have accepted, at least in principle, that a consequence need not be the immediate consequence of a strike in order still to be described as arising or resulting from it.

Where Consequential Delay Was Not Allowed

In Shamrock Steamship Co Ltd v. Storey & Co, the ship was due to load coal at Grimsby. A coal strike in South Wales caused an unusual number of ships to seek cargo at Grimsby, creating congestion and delaying the ship in obtaining a Berth. The Charterers relied on a clause excluding “commotions by keelmen, pitmen, or any hands striking work . . . or other acts or causes beyond the freighter’s control which may prevent or delay the loading of the ship”.

Bigham J rejected the argument and stated:

“It was admitted that there was no strike or interference with work at the collieries from which the defendants’ coal was being procured, and the fact that the Welsh coal strike may have caused an unusual number of ships to seek cargoes at Grimsby has, in my view, no more to do with the case than if the same result had followed from a strike in German or Australian or Japanese collieries. The glut in shipping cannot, I think, be brought within the fair meaning of the particular or the general words of the exception.”

When the case reached the Court of Appeal, Lord Russell of Killowen CJ decided the matter on another ground. He added that he would have required fuller argument before accepting Bigham J’s conclusion on the strike point.

The Scottish decision in Westoll v. Lindsay also concerned the lingering effects of a strike. Dock labour at Leith had gone on strike, and the Charterparty provided that if cargo could not be loaded or discharged because of certain causes, including a strike of essential workmen, “the days shall not count” during the continuance of the cause. The ship, the Gladys Royle, arrived seven days after the strike ended, but did not Berth until about 11 days after she was ready to discharge.

Lord Strathclyde, the Lord President, held that the exception did not apply:

The strike of the dock labourers did not, therefore, prevent the discharge of the Gladys Royle, but it did prevent the discharge and, it may be, the loading, of other ships which arrived before her at the port, and were berthed before her but later than they otherwise would have been on account of the strike which delayed them. In short, there was a sufficiency of men essential to the discharge at the port, but an insufficiency of berths.

The same approach appears to apply under both the Centrocon and Gencon Strike Exception Clauses. If the strike has ended before time would otherwise begin to run, delay caused only by the after-effects of the strike will generally fall outside the strike provisions. Under the Centrocon clause, such delay may possibly be considered an “obstruction”, depending on the wording and facts.

In Union of India v. Compania Naviera Aeolus SA, known as The Spalmatori, Lord Reid stated that the first part of the Centrocon Strike Clause clearly did not apply to time lost unless the strike or other relevant event was still continuing. He also suggested, without deciding, that the third part of the clause might cover delays occurring after the strike had ended if the strike had been operative during the running of Laytime. Lords Hodson and Guest, forming the rest of the majority, agreed that Part III was subject to Part I.

In Salamis Shipping (Panama) SA v. Edm Van Meerbeck SA, known as The Onisilos, Donaldson J considered the Gencon Strike Clause. He held, obiter, that it did not extend to the after-effects of a strike, despite the reference in the opening words to the consequences of any strike. Donaldson J explained:

“The use of the word “consequences” does not necessarily connote “after-effects” and in my judgment means no more in this context than “loss or damage” resulting from a strike or lock-out which prevents or delays the doing of something required to be done under the contract. So read, the clause makes complete sense, and if it is construed as being confined to prevention or delay caused directly by the strike rather than by its after effects, is coterminous in time with pars. 2 and 3 which deal with the special cases of loading and discharging.”

Donaldson J also noted that this interpretation followed the same approach as The Spalmatori.

The overall position is therefore fact-sensitive. Wide wording such as “arising or resulting from strike” may, in some contexts, cover consequential delay. More specific strike clauses, especially those tied to the actual continuation of the strike or to the inability to load or discharge during the strike, are less likely to protect Charterers once the strike has ended and the remaining delay is caused by congestion or disruption left behind by the strike.

C. Duty to Lessen the Effect

Alternative Action

Before a party protected by a strike clause can rely on that clause, it will usually have to show that the delay could not reasonably have been avoided. A strike does not automatically entitle the protected party to do nothing. The party must still take reasonable steps, within the commercial and contractual limits of the situation, to reduce the impact of the strike where that is possible.

The principle was stated clearly by Lord Esher MR in Bulman & Dickson v. Fenwick & Co:

“It is true that when the vessel arrived at the Regent’s Canal there was a difficulty in taking delivery because of a strike of workmen; but a strike would in itself not be sufficient to exonerate the charterers from doing the best they could to accept delivery, and would not entitle them to fold their arms and do nothing.”

The Cape Equinox is an important modern illustration of this principle, not least because it concerned Clause 9 of the Amwelsh Charterparty, a standard clause in a widely used form. Clause 9 provides that discharge is to be performed by the Consignee, who is also responsible for Demurrage. It then states:

“In case of strikes, lockouts, civil commotions, or any other causes or accidents beyond the control of the consignee, which prevent or delay the discharging, such time is not to count unless the vessel is already on demurrage.”

In that case, a strike by the employees of the Receivers and Consignees began four days after discharge had started and continued for about one month. The owners claimed Demurrage. The Charterers argued that the words “beyond the control of the consignee” qualified only the residual phrase “any other causes or accidents”, and did not qualify the specifically listed events of “strikes, lockouts, civil commotions”.

The Tribunal found that the Charterers could not have avoided the strike, but that the strike was not outside the control of the Consignee. The Tribunal therefore accepted the owners’ argument that all the listed exceptions had to be “beyond the control of the consignee” before the Consignee could avoid liability. The High Court agreed. On the natural construction of Clause 9, the words “beyond the control of the consignee” applied not only to “any other causes or accidents”, but also to the specified events of strikes, lockouts, and civil commotions.

The decision also shows that the obligation to consider alternative action must be assessed against the Charterparty as a whole. Other clauses may restrict what the parties can do, or may require a particular course of action. Although this requirement resembles the duty of a claimant to mitigate loss, the better analysis is that it forms part of causation. The party relying on the strike clause must show that the delay was truly caused by the strike, and not by that party’s failure to take reasonable steps to avoid or reduce its effect.

The courts have long recognised that strikes are temporary, uncertain, and difficult to predict. In Reardon Smith Line Ltd v. Ministry of Agriculture, McNair J observed:

“It is an obvious truism that no one can predict in advance how long a strike will last, and even when the contestants appear to be far apart, a strike may end suddenly without any advance warning.”

Scrutton LJ made a similar point in Metropolitan Water Board v. Dick, Kerr & Co:

“strikes have always been treated by the courts as subject to such unexpected termination that they cannot without more be treated as abrogating contracts.”

This uncertainty affects the reasonableness of any proposed alternative. A course that might seem commercially sensible if the strike were certain to last for months may be unreasonable where the strike could end the next day. The assessment is therefore practical and fact-sensitive.

Alternative Port

A Charterparty may give the Charterer a range of Loading Ports or Discharge Ports from which to choose. In Reardon Smith Line Ltd v. Ministry of Agriculture, McNair J and the Court of Appeal reviewed the authorities dealing with the nomination of a strike-affected Port. They concluded that it would be unreasonable to nominate a Port where a strike was already taking place only if, at the time of nomination, it could be shown that the particular ship was bound to suffer excessive delay. Because strikes are inherently unpredictable, that will usually be extremely difficult to prove.

Once the Port has been validly nominated, the Charterer has no right or power to alter it unless the Charterparty permits such a change or the parties make a fresh agreement. Donovan LJ explained the point in the Court of Appeal in Reardon Smith:

“Next the charterers are not, in my view, in breach of contract in not nominating a different port from Vancouver when it became clear that the strike would or might be a long one, or when it had lasted several weeks with no end actually in sight. If, as the authorities appear by implication to decide, the nomination of one of the optional ports of loading has the result that the port must be regarded as written into the charterparty from the beginning as the sole port of loading, the effect is as if the remaining ports were struck out… on that view, no port exists after such election as an alternative port except by fresh agreement. Apart from this, I do not think the charterparty ought to be read as containing an implied term that some alternative port shall be named if unreasonable delay occurs at the port first nominated.”

The courts also recognised the possible unfairness to the Shipowner if the Charterer were allowed to change the nominated Port after the ship had already arrived or was already committed to the first Port. The Shipowner might then incur the cost of clearing from the strike-bound Port, sailing to another Port, and entering that Port. Such consequences will not lightly be implied into the Charterparty.

Alternative Cargo

A separate question is whether the Charterer is obliged to load another cargo if the originally intended cargo cannot be loaded because of a strike. The answer depends on the wording of the Charterparty and on the cargo obligation undertaken by the Charterer.

The leading authority is Brightman & Co v. Bunge y Born Ltda Sociedad, a Court of Appeal decision. Viscount Radcliffe later summarised the principles in Reardon Smith as follows:

(1) If a shipper has undertaken to ship a full and complete cargo made up of alternative commodities, as in the terms “wheat and/or maize and/or rye”, his obligation is to have ready at the port of shipment a complete cargo within the range of those alternatives. Consequently, the fact that he is prevented from loading one of the possible types of cargo by a cause within the exceptions clause, even though that is the type that he has himself selected and provided for, is not an answer to a claim for demurrage. To protect him each of the alternatives or all the alternatives would have to be covered by an excepted clause.

(2) Consistently with this view the shipper’s selection of one of the named commodities does not convert the primary obligation to ship a full cargo in one form or the other into a simple obligation to ship a full cargo of the commodity selected. In other words, his selection is not like the exercise of an option to name a port. He may change his mind and later his choice: he “retains control of his powers until the final ton is put on the ship”, said Lord Justice Atkin. This may not be a full statement of the nature and consequences of the right of selection, but I have no doubt that it describes the general situation.

(3) If a shipper finds himself stopped by an excepted cause (e.g. in that case, the government prohibition) from loading or continuing to load the type of cargo that he has provided for and genuinely intended to ship, he may still rely on delay as covered by the exceptions clause to the extent of a reasonable time “to consider the position and change his cargo” or “to deal with the altered conditions” or, simply “to change over”.

Viscount Radcliffe then questioned the third principle because of the commercial difficulties it may create. He considered that any allowance of reasonable time to adjust could arise only from the general position of a shipper under such a Charterparty, not from the construction of the exceptions clause itself. He noted that there was much to be said for the first-instance view in Bunge y Born, namely that if the shipper’s primary obligation is to load a full cargo from a range of permitted commodities, and if no exception covers all those commodities, the shipper is in default once Lay Days expire without any additional “reasonable time” to change cargo.

Viscount Radcliffe stated:

The risk is hardly more onerous than many others that commercial men have to assume. I must add, too, that the whole idea of “reasonable time” seems to me to remain in a good deal of uncertainty and that there is a wide and unexplored range of argument as to how long the thwarted shipper is to be allowed for the purpose of considering his position, what deployment of effort he is supposed to achieve in the pursuit of his alternative cargo, when he has decided on it, and how far he is allowed to set the time and expense of getting such a cargo to the port and, it may be, its unsuitability to his own current needs against the expected delay to the cargo originally intended.

Lord Devlin expressed similar doubts, and the rest of the House of Lords appear to have shared them, although not always in express terms. In Reardon Smith, however, the House of Lords held that the parties had not agreed simply to ship and carry a full cargo of one of several commodities. Instead, they had agreed that one commodity was to be shipped, with an option to ship alternatives. The primary obligation was to provide wheat, and wheat was covered by the exceptions clause. The Charterers were under no obligation to forfeit that protection by exercising their option to provide another kind of cargo that was not affected by the delay.

Lord Devlin explained the commercial nature of such an option:

“In exercising the option, which he has acquired solely for his own advantage, the holder is not bound to consider the convenience or the interest of the other party.”

The option must nevertheless be exercised within a reasonable time and communicated to the other party. If it is not exercised in time, the option may be lost. In a cargo-shipment context, the election must be made early enough for the ship to prepare and for the cargo to be made available.

The distinction is therefore important. If the Charterer has undertaken to load one of several alternative cargoes, the Charterer may have to provide another cargo if the originally selected one cannot be loaded. If, however, the Charterer has undertaken to load a particular cargo and merely has an option, for the Charterer’s own benefit, to substitute another cargo, the Charterer will not usually be required to exercise that option in order to protect the Shipowner from delay.

Alternative Methods of Loading/Discharging and/or Change of Berth within the Port

A strike, or another excepted cause, may prevent cargo operations at the particular Berth or by the particular method originally selected by the Charterer. In some cases, loading or discharge might still be possible by another method or by shifting to another Berth. Whether the Charterer may, or must, adopt that alternative depends on the wording of the Charterparty and the commercial practicality of the change.

In King Line Ltd v. Moxey, Savon & Co Ltd, Goddard LJ stated:

“the ship is not bound, once she has arrived and made fast to a berth to which she has been ordered, to shift again from that berth for the purpose of taking on board part of the cargo which is the subject-matter of the charter.

Shifting the Berth

Many Charterparties contain wording such as “ship to proceed to 1/2 safe Berth, 1/2 safe Ports Red Sea and there load a full cargo . . . ”. Other forms contain a more detailed shifting provision. Clause 16C of the Exxonvoy 84 Charterparty Form, for example, provides:

“Charterer shall have the right to shift vessel within any port of loading and/or discharging from one loading or discharging place back to the same or to another such place once or more often.”

Clauses of that kind give the Charterer a contractual right to order the ship to shift Berth. Whether that right becomes a duty in a strike or other excepted-cause situation depends on the facts.

Lewis v. Louis Dreyfus & Co, one of the Danube ice cases, provides an important example. The ship Newlands was ordered to Braila to load grain. At Braila, grain could be loaded in three ways: in midstream using floating elevators, from carts by labour alongside the riverbank, or from dock silos inside the dock. The Charterers chose loading from lighters. Ice prevented the lighters carrying the cargo from leaving the dock or coming downstream. Delay caused by ice was excepted under the Charterparty. Because the delay lasted only a few days, the Charterers did not shift the ship to load by another method. Scrutton LJ held that they were entitled to maintain their chosen method for a reasonable time:

“when you have in a port a way of loading in the river from lighters, a way of loading from carts by men alongside the river bank, and a way of loading from dock silos in the dock, the charterer is not bound to have a cargo ready at each place of loading for each alternative on the chance of some difficulty turning up. He may exercise his option and be ready for one method of loading and if something occurs to prevent him loading in the way which he had intended it must take something more than a mere day or two’s prevention to require him to completely turn over his plans and start loading at another place in another way . . . They are entitled to continue in the option they have exercised for a reasonable time, and I am not going to specify, because I cannot foresee, all the cases which might happen to require them to change over to another form of loading at another place.”

The same reasoning is particularly relevant to strikes. Because the duration of a strike is unpredictable, courts and Tribunals are unlikely to require the Charterer to abandon an existing loading plan immediately and order the ship to shift. It may be commercially unreasonable to require the Charterer to remove cargo from lighters, arrange an entirely different loading method, or purchase substitute cargo, especially if the strike may end without warning.

Different considerations may apply on discharge, provided the Charterparty contains a shifting clause. If discharge at another Berth is practically available and commercially reasonable, a Tribunal may be more willing to say that the ship should have been ordered to shift. The question remains one of commercial possibility, not theoretical possibility.

The same principles apply to alternative methods of loading or discharging at the same Berth. In Michalinos & Co v. Louis Dreyfus & Co, another Danube ice case, the ship Matheos became frozen into the dock. It was argued that loading could still have been performed manually from the quay or from lighters in the dock. The House of Lords rejected that argument. Although the suggested method was physically possible, it was commercially impracticable.

Scrutton LJ explained the concept of commercial practicability in Lewis v. Louis Dreyfus & Co:

There is a finding by the umpire that it was physically possible to load in the way suggested and that the only obstacle was cost; but cost generally is the obstacle and a thing is commercially impossible if it costs more than commercial men would contemplate as a reasonable way of carrying out the matter.

In Reardon Smith Line Ltd v. Ministry of Agriculture, Sellers LJ stated in the Court of Appeal:

“The argument based on an obligation to seek an alternative method of loading if one became unavailable, equally fails, for the unavailability would have to be of a permanent and not a temporary nature of an option which would exclude the obligation to load in one of the ways available at the port.”

That statement reflects the headnote in Lewis v. Louis Dreyfus & Co, although the issue there involved both a change of Berth and a change in the method of loading. Lord Hanworth MR also held in that case that, if a change of Berth or method of loading became necessary, the Charterers should be allowed a reasonable time to adjust their arrangements, just as Brightman & Co v. Bunge y Born suggested that reasonable time might be allowed for changing to an alternative cargo.

However, in Reardon Smith, at least two members of the House of Lords expressed doubts about the practicality and certainty of allowing reasonable time to change cargo. The same doubts may apply equally to changing Berth or changing the method of loading or discharge.

Alternative Labour

Where loading, discharge, or the prosecution of the voyage is delayed by a strike, the party relying on a strike exceptions clause may have to answer the argument that alternative labour could reasonably have been obtained. The question is whether the party seeking protection did what was reasonable to avoid or reduce the delay.

In Williams Brothers (Hull) Ltd v. Naamlooze Vennootschap W H Berghuys Kolenhandel, the crew of a Dutch ship refused to carry coal from Hull to Rouen because of a German threat to sink neutral shipping. Sankey J held that every effort had been made to persuade the crew to remain or to obtain substitutes. The Shipowners were therefore entitled to rely on the strike exception.

D A Stathatos Steamship Co Ltd v. Cordoba Central Railway Co Ltd points the other way. The Charterers, who were also Consignees, argued that discharge at Rosario had been delayed by a strike of Stevedores. Under the Charterparty, the Consignees were responsible for discharge. Non-union labour was available, but the Consignees refused to use it because they feared future union boycotts. The Ship Master then arranged for the cargo to be discharged by non-union labour. The Charterers nevertheless argued that they were excused from paying Demurrage because of the strike.

Wright J rejected that argument and stated:

“The question which has been debated is a question of fact, and it is whether the strike here did, as the whole or any part of the period of discharge, prevent or delay the discharging, and whether, in fact, if the charterers had done what was reasonable in order to obviate and assist in obviating the effects of the strike, the delay would have continued for the period which in fact it occupied.”

If the Charterers had used non-union labour, discharge would have been completed more quickly. Their fear of possible future union boycotts was not a sufficient reason for refusing to use alternative labour. The case shows that a party cannot rely on a strike clause if reasonable measures were available to lessen the delay and the party chose not to take them for its own commercial reasons.

D. Extent of the Delay

Even where a strike exception applies, it remains necessary to determine how much time was actually lost. The question is not answered merely by proving that a strike existed. The party relying on the clause must show the period, or the part of the period, during which the strike prevented or delayed cargo operations in a way covered by the Charterparty.

This issue is illustrated by two decisions arising from the same labour dispute at Villa Constitución in Argentina in 1912. The stoppage involved railway engine drivers, stokers, and crane drivers. It began on 6 January and continued until 15 February. However, from 27 January, operations partially resumed and some cargo was discharged before the strike formally ended. The ordinary discharge method was to place the cargo directly into railway wagons for inland carriage, since no storage space was available at the discharge place.

In both cases, the Laytime provision stated:

“Time to commence when steamer is ready to unload and written notice given, whether in berth or not. In case of strikes, lock-outs, civil commotions, or any other causes or accidents beyond the control of the consignees which prevents or delays the discharging, such time is not to count, unless the steamer is already on demurrage.”

The first case was London and Northern Steamship Co Ltd v. Central Argentine Railway Ltd, decided by Scrutton J. It concerned the ship Holgate, which arrived three days before the strike began, started discharge on 9 February, and completed discharge on 2 March. The railway argued that, on each day when discharge was impeded by the strike, no time at all should count. Scrutton J rejected that argument and stated:

“In case of strikes which delay the discharging, time is consumed, and, in my view, what these businessmen meant when they said “such time” was the time they had spoken of inferentially in the words immediately preceding, the time which was lost by the complete prevention, or partial prevention or the delay of the discharging.”

Scrutton J therefore held that, between the partial resumption of work and the end of the strike, only part of the period had actually been lost. Laytime continued to count to the extent that effective discharge work was carried out, although he also found that some delay after the partial resumption remained attributable to the strike.

The second case was Central Argentine Railway Ltd v. Marwood, which ultimately reached the House of Lords. The ship involved was the Goathland. She arrived during the strike on 12 January, obtained a Berth after the strike on 1 March, and completed discharge on 23 March. The railway advanced the same argument. It succeeded at first instance, but failed in the Court of Appeal and in the House of Lords. Before the House of Lords, the only issue argued was what credit should be given for the period of partial working, since the Shipowners did not challenge the period of complete stoppage.

The House of Lords held that the work completed during the period of limited operations was equivalent to six days’ normal work. That amount of time therefore had to be charged against Laytime. At the same time, several members of the House made clear that they had not been asked to decide the earlier period. Lord Sumner observed:

“I think the words “which prevents or delays the discharging” means strikes which in themselves prevent or delay the discharging of the chartered ship herself, and do not extend to the case of strikes which only prevent the chartered ship from getting into a berth because they prevent some other ship from getting out of that berth.”

That passage suggests that Lord Sumner, and possibly other members of the House, might have held that time continued to run during the earlier waiting period if the point had been fully argued. If that is correct, it would follow that time should also have run in full during the period of partial working. A similar argument had been advanced in relation to the Holgate, but Scrutton J appears to have treated it as an argument that there was no strike at all, rather than as an argument that there was no causal connection between the strike and the ship’s waiting for a Berth.

The two cases therefore support an important practical rule. Once the strike exception is engaged, only the time actually lost by reason of the strike is excluded. Time may still be lost after the strike has formally ended if the continuing consequence directly affects the particular ship, as happened with the Holgate. But a different result may follow where the delay is merely consequential, such as where the strike delayed other ships and those ships then delayed the chartered ship’s access to a Berth.

Centrocon Strike Clause

The Centrocon Strike Clause first appeared in the River Plate Charterparty 1914 (Homewards), a form prepared for voyages from the River Plate to the United Kingdom. Despite that origin, the clause has long been used in many other Charterparty arrangements and is not confined to the River Plate trade.

Although it is usually called a strike clause, its reach is broader than strikes alone. It also covers a number of other exceptions. The full wording of Clause 30 of the Centrocon Charterparty Form is as follows:

If the Cargo cannot be loaded by reason of Riots, Civil Commotions or of a Strike or Lock-out of any class of workmen essential to the loading of the Cargo, or by reason of obstructions or stoppages beyond the control of the Charterers on the Railways, or in the Docks, or other loading places, or if the Cargo cannot be discharged by reason of Riots, Civil Commotions, or of a Strike or Lock-out of any class of workmen essential to the discharge, the time for loading or discharging, as the case may be, shall not count during the continuance of such causes, provided that a Strike or Lock-out of the Shippers’ and/or Receivers’ men shall not prevent Demurrage accruing if by the use of reasonable diligence they could have obtained other suitable labour at rates current before the Strike or Lock-out. In case of any delay, by reason of the before-mentioned causes, no claim for damages or Demurrage shall be made by the Charterers, Receivers of the Cargo or Owners of the Steamer. For the purpose, however, of settling Despatch rebate accounts, any time lost by the Steamer through any of the above causes shall be counted as time used in loading or discharging.

In Navico AG v. Vrontados Naftiki Etairia PE, Donaldson J observed that the Centrocon Charterparty, and especially this clause, had kept lawyers occupied for many years. Although further disputes will always be possible, the main limits of the clause are now relatively settled.

As McNair J explained in Union of India v. Compania Naviera Aeolus SA, known as The Spalmatori, the clause can most conveniently be divided into four parts. The parts are interconnected and must be read as a whole, but the division helps explain the operation of the clause.

First Part

The first part covers most of the opening sentence, excluding the proviso, and ends with the words “such causes”. Its core effect may be summarised as follows:

“If the Cargo cannot be loaded by reason of [specified causes]… or discharged by reason of [other specified causes]… the time for loading or discharging, as the case may be, shall not count during the continuance of such causes.”

At first instance in The Spalmatori, McNair J held that “time for loading or discharging” meant the period allowed, not the period actually spent. That interpretation was accepted by both the Court of Appeal and the House of Lords. Time excluded under this part of the clause therefore does not count against the Laytime allowed elsewhere in the Charterparty. The result is that this part can operate only where the strike or other excepted event occurs during Laytime. It does not apply where the event arises after the ship has already gone on Demurrage.

In the House of Lords in The Spalmatori, Lord Reid described the scope of this part of the clause as follows:

“I think that the meaning of the first part is clear. It deals with periods during which no work can be done in loading or discharging by reason of one or more of the causes mentioned. It does not deal with any period during which the operation of any of these causes merely slows down the work and it does not deal with consequential delay after these causes have ceased to exist. Clearly, it applies if one of these causes exists at the beginning of the laytime or comes into operation during the laytime. Then, in the first event, the laytime does not begin to run until these causes have ceased or, in the latter event, the laytime is suspended.”

The first part is therefore concerned with complete prevention of loading or discharge during the continuance of the specified cause. It does not deal with mere reduction in the rate of work, nor with later consequences after the cause itself has ended.

The Particular Events Identified

The events relating to loading are wider than those relating to discharge. In relation to loading, the clause includes “obstructions or stoppages beyond the control of the Charterers on the Railways, or in the Docks, or other loading places”. The discharge wording is narrower and refers principally to riots, civil commotions, strikes, and lock-outs of workmen essential to discharge.

Impediments Outside the Charterers’ Control in the Docks or at Other Loading Places

The phrase has generated substantial litigation, particularly since Leonis Steamship Co Ltd v. Joseph Rank Ltd (No 2), where “obstruction” was held wide enough to include Port congestion where no Berth was obtainable. In Ionian Navigation Co Inc v. Atlantic Shipping Co SA, known as The Loucas N, Lord Denning described that as an unsatisfactory decision that merchants and lawyers had tried to avoid. Nevertheless, it remains an important authority.

The impediment must still be beyond the Charterers’ control. Two cases show how that limitation works.

The first is Sir R Ropner & Co Ltd v. Bunge North American Grain Corporation. The ship Ashby was to load grain at Mobile. The only elevator Berth was already occupied. The Charterers proposed that loading should be carried out at another Berth using the ship’s tackle, provided the owners accepted the additional expense. The owners refused. They nevertheless argued that because loading could have taken place at another Berth, there was no impediment beyond the Charterers’ control. The Umpire held, and the court confirmed, that the Charterers were under no duty to load by ship’s tackle, and that such a method would have been unreasonable in the circumstances. The delay was therefore caused by an impediment beyond the Charterers’ control, not by any fault of the Charterers or their Agents.

The second case is Venizelos ANE of Athens v. Societe Commerciale, known as The Prometheus. Mocatta J held that, where Charterers failed to nominate a Berth until about 18 hours after the ship had arrived, they could not rely on the obstruction affecting the Berth they preferred during that interval unless they could also prove that loading at alternative Berths was commercially impracticable. The decisive point was that the Charterers had failed to nominate a Berth before the ship’s arrival.

Impediments Outside the Charterers’ Control on the Railways

In H A Brightman & Co v. Bunge y Born, one issue was whether a “go slow” or “work to rule” on one of the railways used to bring cargo to the Port amounted to an obstruction. In the Court of Appeal, Bankes LJ and Scrutton LJ expressed reservations about whether that type of industrial action could properly be called an obstruction. Atkin LJ took a broader view and said:

“The word “obstruction” may include both the physical condition which interferes with the normal flow of traffic, and abnormal industrial conditions which cause the normal flow of traffic to be impeded.”

However, all members of the Court of Appeal, and later the House of Lords, held that the relevant railways were only those inside the Port. Lord Dunedin explained:

“The word “railways” is in concatenation with the word “docks” and points, I think, to the use of a railway as one of the instruments of loading…”

In Owners of the SS Bassa v. Royal Commission on Wheat Supplies, Roche J considered delays on the railway caused by an accumulation of rolling stock after a strike. He held not only that the railway had to be within the Port, but also that the clause was limited to the period of the actual obstruction. It did not extend to later consequential delay.

Stoppages

Like “obstructions”, the word stoppages appears to relate to events occurring “on the Railways, or in the Docks, or other loading places”. Although the clause does not say this expressly, “stoppage” is best understood as referring to a stoppage of labour by workmen, rather than merely any interruption in loading from whatever cause.

The same expression appears in the Chamber of Shipping Welsh Coal Charter, where the wording refers to “Any time lost through riots, strikes, lock-out, or any dispute between masters and men occasioning a stoppage of pitmen, trimmers or other hands . . .”. In Akties Adalands v. Whittaker, Pickford J said:

“I think “stoppage” looking at the wording of the clause, means an entire stoppage of work, not a delay and only just getting a small amount…”

The difficulty with treating a stoppage as something less than a complete cessation was examined in Miguel de Larrinaga Steamship Co Ltd v. D L Flack & Son, another case under the Welsh Coal Charter. In the Court of Appeal, Sir Ernest Pollock MR asked:

What is a partial stoppage? How much is a partial stoppage? Are you to treat it as a stoppage when you are still able to get 50% of the coal loaded? Are you to say when you are getting a slower delivery than is normal that that is a stoppage? At what point can you stop? Having regard to these difficulties I think that the right course is to treat the word stoppage as bearing its meaning on its face and intended to mean complete stoppage.

By analogy with strikes, a stoppage must be total, but it need not necessarily be continuous. Separate interrupted periods of total stoppage may still be disregarded if they fall within the clause.

It is not entirely clear whether the word “stoppage” adds much to the other exceptions in the Centrocon Clause. In The Spalmatori, Lord Reid stated that the relevant causes apply only to periods when no work is done, and not to periods where work merely slows down. In H A Brightman & Co v. Bunge y Born, Atkin LJ was prepared to treat “obstruction” as including hindrances caused by abnormal industrial conditions, which could make “stoppage” redundant. The expression may have been inserted at a time when strikes were understood more narrowly as wage disputes, so as to catch broader forms of industrial interruption.

Riots and Civil Disturbance

Unlike some of the loading-specific causes, riots and civil commotions apply both to loading and to discharge.

Under English law, a riot requires several elements. There must be at least three persons carrying out, or beginning to carry out, a common purpose. They must intend to support one another, by force if necessary, against anyone opposing them. The force or violence used must be such as to alarm at least one person of reasonable firmness and courage.

Civil commotion is probably broader. The number of persons involved may be as few as two, as in an affray, and a common purpose may not be required. Secondary picketing and demonstrations would normally fall within the expression. Whether terrorist acts fall within “civil commotion” may depend on the facts and the wording of the clause.

Strike or Lock-Out of Any Class of Workmen Essential to the Loading/Discharging

The meaning of “strike” has already been considered and does not need to be repeated in detail here.

“Lock-out” generally means the closing of a place of employment, the suspension of work, or the refusal by an employer to continue employing workers as a result of a dispute, with a view to compelling those workers, or assisting another employer in compelling workers, to accept terms or conditions of employment. That definition is not exhaustive. A lock-out may be imposed for reasons other than compelling workers to accept employment terms.

Dampskibsselskabet Svendborg v. Love & Stewart Ltd illustrates the meaning of “workmen essential to the loading or discharging”. In that case, time was not to count during delay caused by strikes of workmen essential to discharge. A strike by workmen in the Charterers’ yard led the railway company to restrict the number of wagons supplied, in order to avoid an accumulation of wagons in the yard. The indirect consequence was delay in discharge. The Charterers could not rely on the exception because the strike did not involve workmen engaged in the actual loading or discharge operations. It concerned workers involved in the later distribution of the cargo.

Second Part

The second part of the Centrocon Strike Clause is the proviso at the end of the opening sentence. It provides that a Strike or Lock-out of the Shippers’ and/or Receivers’ men will not prevent Demurrage from accruing if, by using reasonable diligence, they could have obtained other suitable labour at the rates current before the Strike or Lock-out.

This proviso limits the protection otherwise given by the first part of the clause. Even where the opening part of the clause is satisfied, meaning that a strike occurs during Laytime and prevents cargo work from being carried out, Laytime is still not suspended if substitute labour could reasonably have been obtained to continue loading or discharging.

In Union of India v. Compania Naviera Aeolus SA, known as The Spalmatori, Lord Reid explained this part of the clause as follows:

“The reference to preventing demurrage accruing is not happy, but I think that the meaning is clear enough. The existence of the strike is not to prevent demurrage from beginning to accrue at the end of the stipulated laytime if other labour was available. Without the proviso demurrage would not have begun to accrue then: the first part of the clause would have prevented that and demurrage would only have begun to accrue at the end of the stipulated laytime, plus the time during which the strike prevented work.”

There appears to be no direct authority giving a complete definition of “Shippers’ and/or Receivers’ men”, nor explaining why that wording differs from the expression used in the first part of the clause, namely “workmen essential to the loading/discharge”. In The Spalmatori, Lord Reid referred to “other labour being available”. That suggests that he saw no meaningful distinction between the workers covered by the opening part and those covered by the proviso. On that approach, both parts would include labour engaged in loading or discharging the ship, whether the workers were direct employees or independent contractors.

In most Ports, Stevedores and other cargo-handling labour are independent contractors rather than employees directly employed by Shippers or Receivers. However, in Seeberg v. Russian Wood Agency Ltd, MacKinnon J took a narrower view. He held that state-organised Stevedores at Leningrad were not Shippers’ men, even though the Shippers themselves were also a state agency. Although MacKinnon J treated the phrase as limited to workers directly employed by the Shippers, he nevertheless held that the Charterers, who were also the Shippers, still had to prove that no alternative labour was available. MacKinnon J stated:

“I do not think it is sufficient for the charterers merely to say: “There is a strike and therefore we need not load.” They must further prove that the cargo could not be loaded by reason of the strike, and if it is established that by taking some steps or adopting some reasonable course the cargo could, by or on behalf of Exportles, have been loaded notwithstanding the existence of the strike, then in those circumstances they would not have established under this clause that the cargo could not be loaded by reason of the strike…”

The question whether the Charterers are under a duty to lessen the impact of a strike, or whether the issue is simply one of causation, has already been considered. MacKinnon J’s reasoning treats the matter as part of causation: if reasonable steps could have enabled loading to continue, then the cargo could not truly be said to have been unable to load by reason of the strike. Lord Reid, by contrast, appears to have treated the necessary causation more simply: a strike existed and prevented work from being done, but the proviso then reintroduced the question whether alternative labour could have avoided the loss of time.

In The Spalmatori, Lord Reid also quoted Scrutton on Charterparties for the proposition that, where a ship is already on Demurrage, an exceptions clause must be clearly worded before it can interrupt Demurrage. Lord Reid then stated:

“There is no wholly satisfactory interpretation or explanation of the third part of the clause and one must choose between two almost equally unsatisfactory conclusions. In a case like this where a clause in common use has simply been copied one cannot try to find what the parties intended. They almost certainly never thought about things happening as they did. So I must fall back on the rule which I have already quoted from the work of Lord Justice Scrutton. I do not think it is an arbitrary rule for this reason. If a strike occurs before the end of the laytime neither party can be blamed in any way. But if it occurs after demurrage has begun to accrue the owner might well say: “True, your breach of contract in detaining my ship after the end of the laytime did not cause the strike, but if you had fulfilled your contract the strike would have caused no loss because my ship would have been on the high seas before it began: so it is more reasonable that you should bear the loss than that I should.” So it seems to me right that if the respondents are to escape from paying demurrage during this strike they must be able to point to an exceptions clause which clearly covers this case. And in my judgment they cannot do that.”

Looking at the wording of the Centrocon Clause, where substitute labour is available, the strike may be the immediate cause of the stoppage, while the failure to use available replacement labour may be the indirect cause of the continuing loss of time. If that indirect cause were enough to break the chain of causation in every case, the proviso would have little independent function. For that reason, Lord Reid’s approach is the more persuasive one.

Although the relevant observations in both decided cases were obiter, the practical result is important. A narrow interpretation of “Shippers’ and/or Receivers’ men”, combined with MacKinnon J’s causation approach, leads broadly to the same result as a wider interpretation extending to independent contractors, combined with Lord Reid’s analysis. On either view, the Shipper or Receiver must prove that no substitute labour was obtainable before relying on the strike clause. That result accords with commercial common sense.

A future court could theoretically adopt a narrow interpretation of “Shippers’ and/or Receivers’ men” and require only proof that the strike prevented work, without considering whether alternative labour could have been obtained. Such an approach would be commercially unrealistic. The better view is that the proviso means that, even where a strike prevents cargo operations, Laytime should nevertheless continue to run if other labour can reasonably be obtained to carry out the work.

Third Part

The third part of the Centrocon Strike Clause is the second sentence, which provides:

In case of any delay, by reason of the before-mentioned causes, no claim for damages or demurrage shall be made by the Charterers, Receivers of the Cargo or Owners of the Steamer.

The interpretation of this part was the central issue before the House of Lords in Union of India v. Compania Naviera Aeolus SA, known as The Spalmatori. In that case, the strike commenced after Laytime had already expired and the ship was already on Demurrage. By the time the case reached the House of Lords, it was accepted that the first two parts of the clause were limited to events occurring during Laytime. The question was whether the third part should be treated as a separate and wider provision.

At first instance, McNair J held that Part III, if it had any effect at all, was either an inaccurate summary of the more detailed provisions that came before it or introductory wording leading into Part IV, which dealt with Despatch Money. The Court of Appeal disagreed. It held that Part III operated independently, with the result that the Receivers were not liable for Demurrage during the strike, even though the strike began after the ship was already on Demurrage.

The House of Lords, by a majority of three to two, reversed the Court of Appeal and restored McNair J’s decision. The majority held that Part III was also confined to events arising during Laytime. It did not protect Charterers, Receivers, or other cargo interests from Demurrage where the strike began only after the ship was already on Demurrage.

Although the point was not essential to the actual decision, the majority speeches suggest that Part III may cover delay in loading or discharging that continues after the strike itself has ended, provided the delay flows directly from a strike that existed when Laytime would otherwise have begun or that began while Laytime was running. It does not cover the after-effects of a strike where the strike had already ended before Laytime began, or before Laytime would otherwise have begun. In such a case, the usual after-effect is Port congestion, which may instead fall within the “obstruction” wording of the Centrocon Strike Clause, depending on the facts.

Lord Hodson acknowledged that this interpretation could produce uneven results:

“It is represented on behalf of the respondents that this is an odd result since if the right to rely upon exception depends upon the date of the strike this has capricious results for a strike occurring before the beginning of the laytime would be of no avail to the respondents, whereas a strike occurring shortly after the laytime had begun to run would avail them. This may be true, but I cannot see that this affords any justification of construing the words under consideration in such a way as to cover the respondents from the effects of delay arising from a strike whenever occurring.”

Lord Reid also indicated that Part III may have a broader practical reach than Part I. Whereas Part I is confined to periods of complete stoppage of work, Part III may extend to situations where, during the continuance of a strike, work is not brought entirely to a standstill but is slowed down. On that view, Part III enlarges the operation of Part I rather than merely repeating it.

The difficulty lies in giving Part III a coherent function while still reading it together with the rest of the clause. Lord Reid captured that difficulty when he said:

“It is fairly obvious that the third part is not an original part of the clause, but is a later addition: I cannot imagine even the least legally minded draftsman drafting the clause as a whole in its present form.”

The practical result is that Part III cannot be read as a general protection against Demurrage whenever delay is connected in some way with a strike. It must be tied back to the structure of the clause as a whole. If the strike or other relevant cause arises during Laytime, Part III may prevent claims for damages or Demurrage in respect of delay caused by that event, including some direct continuing effects. If the ship is already on Demurrage before the strike begins, much clearer wording is required before the Charterer or Receiver can avoid Demurrage.

Fourth Part

The fourth part of the Centrocon Strike Clause is the final sentence of the provision. It states:

For the purpose, however, of settling Despatch rebate accounts, any time lost by the Steamer through any of the above causes shall be counted as time used in loading or discharging.

The purpose of this wording is to protect the Shipowner from an otherwise unfair result. The earlier parts of the clause suspend the running of Laytime where the relevant exception applies. Without the final sentence, the Shipowner might bear the commercial loss caused by the strike, lock-out, riot, obstruction, or other listed event, and yet still become liable to pay Despatch if cargo work later resumed and was completed more quickly than the Laytime allowance would otherwise have required.

The final sentence therefore operates only for the purpose of Despatch accounting. It does not reverse the earlier suspension of Laytime for Demurrage purposes. Instead, it ensures that, when calculating whether Despatch is payable, time lost through the listed causes is treated as time used in loading or discharging. In practical terms, the Charterer or Receiver cannot benefit twice: first by having Laytime suspended during the excepted event, and then by claiming Despatch as if that lost period had not occurred.

Gencon Strike Clause

The Gencon Strike Clause has formed part of the widely used Gencon Charterparty Form since 1922. In its modern form, and particularly after the 1994 revision, it deals separately with strikes and lock-outs affecting loading and discharging, while also preserving a broader mutual exception for consequences not otherwise governed by the specific machinery of the clause.

The clause is commonly expressed in substance as follows:

Neither Charterers nor Owners shall be responsible for the consequences of any strikes or lock-outs preventing or delaying the fulfilment of any obligations under this contract.

(a) If there is a strike or lock-out affecting or preventing the actual loading of the cargo, or any part of it, when the Vessel is ready to proceed from her last Port or at any time during the voyage to the Loading Port or Ports or after her arrival there, the Master or the Owners may ask the Charterers to declare that they agree to reckon the Lay Days as if there were no strike or lock-out. Unless the Charterers give that declaration in writing, by telegram if necessary, within 24 hours, the Owners shall have the option of cancelling this Charterparty. If part cargo has already been loaded, the Owners must proceed with that cargo, freight being payable on the loaded quantity only, with liberty to complete with other cargo on the way for their own account.

(b) If there is a strike or lock-out affecting or preventing the actual discharging of the cargo on or after the Vessel’s arrival at or off the Discharge Port, and the strike or lock-out has not been settled within 48 hours, the Charterers have the option either of keeping the Vessel waiting until the strike or lock-out ends against payment of half Demurrage after expiry of the time allowed for discharge, with full Demurrage payable after the strike or lock-out terminates until completion of discharge, or of ordering the Vessel to a safe Port where she can safely discharge without risk of being detained by strike or lock-out. Such orders must be given within 48 hours after the Master or the Owners have given notice to the Charterers of the strike or lock-out affecting discharge. On delivery of the cargo at the substituted Port, all terms of the Charterparty and the Bill of Lading (B/L) apply, and the Vessel receives the same freight as if discharge had taken place at the original Port, except that if the distance to the substituted Port exceeds 100 nautical miles, the freight on the cargo delivered there is increased proportionately.

(c) Except for the obligations described above, neither the Charterers nor the Owners shall be responsible for the consequences of any strikes or lock-outs preventing or affecting the actual loading or discharging of the cargo.

The 1994 edition made several stylistic changes of little practical significance. For example, it inserted “the” before expressions such as Vessel and Charterers, replaced “Captain” with “the Master”, substituted “Charter Party” for “contract”, and used “discharging” in place of “discharge”. These drafting changes do not materially alter the commercial operation of the clause.

The more important changes were structural and substantive. First, the 1994 wording divided the clause into three separate subparagraphs, marked (a), (b), and (c). Secondly, what had previously appeared as the opening general wording was moved into subparagraph (c).

In its earlier form, the opening wording operated as a broad mutual exception protecting both owners and Charterers against the consequences of failure to perform contractual obligations where strikes or lock-outs intervened. In the 1994 wording, that general protection is expressly made subject to the detailed mechanisms in subparagraphs (a) and (b). Even so, subparagraph (c) still indicates that, where a strike arises during loading or discharging, then, subject to the specific machinery in the earlier subparagraphs, Laytime may cease to run.

Another important amendment is the insertion of the word “preventing” alongside “affecting” in the opening sentence of each subparagraph. The practical effect may be limited, because a strike that prevents cargo work will necessarily affect it. More significantly, the revised wording confines the clause to the actual loading or discharging of the cargo. This tends to exclude strikes or lock-outs whose effect on cargo operations is only indirect, such as stoppages at the premises of suppliers or receivers, or delays in inland transport to or from the ship.

Under subparagraph (b), the election is now expressly given to the Charterers, whereas the earlier wording referred to Receivers. The 1994 version also makes clear that payment of Demurrage at half rate ends once the strike or lock-out has ceased, after which Demurrage is payable at the full rate. The half-rate Demurrage mechanism applies only to discharge and has no application to loading.

Although the Gencon Strike Clause has been in use for many decades, there has been surprisingly little judicial analysis of its detailed meaning. In Salamis Shipping (Panama) SA v. Edm Van Meerbeck & Co SA, known as The Onisilos, Donaldson J observed:

“Carriers of goods by sea have traditionally shown an interest in developing and refining the law, which earns (amongst other things) the unbounded admiration of those lawyers who practise in this field. It was therefore with a sense of shock that I learned that there still remained an area which is totally unexplored—the general strike clause, which probably has appeared in the Gencon Charterparty Form since 1922.”

When the same litigation reached the Court of Appeal, Lord Denning MR stressed that the clause had to be read as a complete provision, in the same way that the Centrocon Strike Clause had been construed as a whole.

The two main authorities on the Gencon Strike Clause are The Onisilos and Superfos Chartering A/S v. NBR (London) Ltd, known as The Saturnia. Strictly speaking, the comments on the interpretation of the clause in The Saturnia were obiter, because both at first instance and in the Court of Appeal it was held that the clause did not apply because the ship was already on Demurrage when the strike began.

In The Onisilos, the ship had been chartered to carry a mixed cargo from Antwerp to Charleston, Mobile, and Houston. When she arrived at Charleston, discharge could not proceed because of a strike. Laytime had not yet expired on arrival, but it expired about six days later. The Charterers failed to direct the ship to another Discharge Port.

In The Saturnia, the facts were different. The ship had been chartered to carry sugar and general cargo from Antwerp to Lagos. The strike-related difficulty arose only after the ship had reached Lagos and after Laytime had already expired.

Although the clause must be interpreted as one composite provision, it is useful to examine the main parts separately, particularly as they appeared in the 1922 and 1976 versions.

First Paragraph

Read in isolation, the first paragraph is drafted in very wide terms. In The Onisilos, Sir Gordon Willmer observed that, under the opening words of the general strike clause, the Charterers would be relieved from liability to pay Demurrage throughout the duration of the strike, and even beyond it if the continuing consequences of the strike still prevented discharge.

At first instance, Donaldson J suggested that this part of the clause could extend to cases where a strike by tugmen, pilots, or seamen prevents the relevant ship from reaching either the Loading Port or the Discharge Port. Although the Court of Appeal reversed Donaldson J on the question whether “consequences” included continuing after-effects of a strike, none of the appellate judges appears to have disagreed with his observations concerning tug, pilot, or similar service strikes.

In The Saturnia, Bingham J described the breadth of the first part in these terms:

It is evident that Part 1… is drawn in very wide terms. It is for the potential benefit of both owners and charterers. It is not limited to strikes or lock-outs which prevent or delay the loading or discharging of the vessel. It would cover strikes of the crew, or of pilots or tugmen, as well as of stevedores or crane drivers. Any strike which prevents or delays the fulfilment of any obligation under the contract falls within the apparent scope of the clause. So construed, the clause modifies the ordinary contractual position according to which neither party is relieved of his obligation to perform by supervening impossibility of performance, whether as a result of strikes or lock-outs or any other cause unless or until the contract is frustrated.

On that analysis, the first paragraph probably also extends to delay in cargo reaching the Port. It may also excuse delays not expressly dealt with in the second and third paragraphs. For example, if a strike at the Loading Port ends before the ship leaves her previous Port, but the continuing effects of that strike still cause delay, the resulting delay may be excused under the first paragraph. Similarly, if a strike at the Discharge Port occurs during the laden voyage, ends before the ship arrives, but its after-effects continue to delay discharge, the time lost may also fall within this part of the clause.

However, The Saturnia makes clear that this protection does not extend to a strike that begins only after Laytime has expired. Bingham J held that, where the strike began only after Laytime had expired, the first paragraph did not release the Charterers from the obligation to continue paying Demurrage. The Court of Appeal upheld that conclusion. Sir John Donaldson MR, giving the only fully reasoned judgment, held that the clause, when read as a whole, did not apply where the strike began after Laytime had already run out.

In Armada Lines Continent Mediterranean Service Ltd v. Naviera Murueta SA, the ship reached the Discharge Port under a Gencon Charter during a strike, and discharge was delayed. The strike ended within 48 hours, meaning that only the opening part of the Gencon Strike Clause could potentially apply. The owners argued in arbitration that the Charterers could not rely on the clause because the strike lasted less than 48 hours and Laytime had not expired. The Arbitrator rejected that argument and held that the period of delay should not count against Laytime.

The dispute later reached the High Court on an application to amend the award for excess of jurisdiction. The judge expressed no concluded view on the Arbitrator’s construction of the first paragraph, other than noting that its proper operation had not been directly decided in earlier authority. Nevertheless, on general principles, the Arbitrator’s conclusion appears correct. If a strike occurs before Laytime has expired and prevents or delays the relevant cargo operation, time should not count unless the specific machinery of the clause produces a different result.

The meanings of “strike” and “lock-out” have already been considered in general terms. Even though the first paragraph is broad, there must still be industrial action of the specified kind. A refusal to work for part of each day may fall within the clause if it amounts to a strike. By contrast, a “go-slow” or “work to rule” will not necessarily do so unless the wording is broad enough to include comparable industrial action.

Second Paragraph

The second paragraph deals specifically with strikes or lock-outs affecting the loading of cargo. The word “affecting” can bear either a broad or narrow meaning, but in this context it is likely to have been intended to operate fairly widely. If the draftsman had intended the paragraph to apply only to strikes involving workers directly engaged in cargo operations, the word “preventing” would have been a more natural choice. Moreover, since delays outside this paragraph may still be excused by the first paragraph, commercial sense supports a reasonably broad reading of the phrase “affecting loading of the cargo”.

To fall within the second paragraph, the strike must either begin, or already exist, when or after the ship is ready to proceed from her last Port. That last Port may be her previous Discharge Port or an earlier Loading Port on the same voyage. However, the protection applies only if Laytime had not expired when the strike commenced.

In The Saturnia, Bingham J explained the commercial logic:

. . . Parts 1 and 2 seem to me to represent a coherent commercial bargain. If a strike or lock-out affects the loading of the vessel at the loading port after expiry of the agreed laytime, the charterer has no relief from his obligation to pay demurrage at the full rate. It is his fault that the vessel has not been loaded. There is no reason why the owner should suffer loss of his contractual demurrage when, but for the charterers’ breach, the loading of the vessel would not have been affected by the strike or lock-out.

The language of the clause, together with observations in The Saturnia, suggests that the owners must take the positive step of requesting a declaration from the Charterers. If no declaration is requested, the matter is governed by the first paragraph, and Laytime either does not begin or, if the strike occurs after the ship has arrived, is suspended.

If the owners request a declaration and the Charterers agree that Laytime is to continue to run, Laytime will count from the ship’s arrival or from the start of the strike, as the case may be. Full Demurrage will then accrue once Laytime has expired.

If the Charterers refuse to give the declaration or fail to respond, three possible consequences may follow. First, if no cargo has yet been loaded at the strike-bound Port or at any previous Loading Port, the owners may wait until the strike ends, with Laytime not running under the first paragraph. Secondly, the owners may exercise the option to cancel the Charterparty.

If the owners cancel, the position is somewhat analogous to the withdrawal of a ship under a Time Charterparty for non-payment of hire. The cancellation brings the contract to an end, but it does not automatically create a separate damages claim merely because the option has been exercised. To be effective, the owners would presumably need to exercise the option promptly, probably within 24 hours of the Charterers’ refusal or failure to reply. If the owners do nothing within that period, a court may find that they have elected to waive the option and remain bound until the strike ends, with time not counting under the first paragraph.

Owners would normally be expected to request the declaration once the strike begins to affect loading, or possibly before the ship’s arrival if the strike is already known. However, there seems to be no reason in principle why they cannot wait for some time to see whether the strike ends before making the request. During that waiting period, Laytime would not run. Provided the Charterparty has not been frustrated, there appears to be no fixed limit on how long the owners may wait before making the request. The strict time limits arise only after the declaration has been requested.

The third possible consequence arises where some cargo has already been loaded. In that event, if the declaration is refused or not given, the owners must direct the ship to sail with the quantity already on board, however small that quantity may be. If the strike affects only one type of cargo, there is no obvious reason why the owners could not use the liberty in the final sentence of the paragraph to complete with other cargo at the original Loading Port. In practice, however, the Charterers would probably prefer to keep Laytime running and load substitute cargo themselves, provided that substitute cargo falls within the contractual cargo description.

If no substitute cargo is available at the original Loading Port, the ship must presumably sail as soon as she would have sailed had she loaded a full cargo. The owners cannot prolong the stay unnecessarily once the clause requires the ship to proceed with part cargo.

In order to avoid the commercial risk of sailing with only a small quantity of cargo and earning minimal freight, owners sometimes negotiate for lump sum freight. London Arbitrators have considered the effect of lump sum freight where the Gencon Strike Clause provides that freight is payable on the loaded quantity only. They held that the phrase meant the lump sum freight. That was because the lump sum was the freight payable regardless of the quantity actually loaded.

In the same arbitration, another issue arose. Notice of an intended strike had been given, and the Charterers ordered the ship to sail before the strike actually began. The owners argued that the second paragraph applied only where there was an actual strike or lock-out. The Arbitrators agreed. A merely threatened strike was not enough. However, on the evidence, the parties had made an ad hoc agreement that the clause would apply prospectively.

The final point concerns the liberty to complete with other cargo at other Ports. Such Ports must be on the way, which presumably means reasonably close to the direct route. If the Shipowners first choose to sail in the opposite direction to load additional cargo, that would not be “on the way” and may, depending on the Charterparty and Bills of Lading, amount to a deviation in relation to the cargo already on board.

Third Paragraph

The third paragraph concerns strikes or lock-outs at the Discharge Port. The meaning of “affecting” should be approached in the same way as in the second paragraph. The strike itself, not merely its lingering aftermath, must either exist when the ship arrives at the Discharge Port or arise after arrival before the third paragraph can operate. If the strike has already ended before the ship reaches the Port, the case is governed by the first paragraph.

In The Onisilos, Lord Denning discussed the position where a strike occurs upon the ship’s arrival, but his reasoning would also apply where the strike had ended before the ship arrived. He said:

“After the strike comes to an end, the ship is still unable to discharge her cargo because of congestion in the port. The ships are waiting in a queue to get in. This waiting is one of the “consequences” of the strike. According to Part 1 of the strike clause, the charterers would not be liable for demurrage during that period (of waiting for a berth)…”

If there is a strike or lock-out on or after the ship’s arrival, the Charterers have two choices. They may keep the ship at the original Discharge Port, in which case Laytime continues to run and half Demurrage becomes payable after Laytime expires. Alternatively, they may direct the ship to another Discharge Port where discharge can take place without the risk of detention by the strike or lock-out.

The paragraph sets out the machinery for exercising these choices. First, the ship must notify the Charterers of the strike. The Charterers then have 48 hours from receipt of that notice to decide which option they wish to adopt.

In The Onisilos, no notice was given by the ship to the Charterers, although the Receivers were plainly aware of the strike. No formal election was made by the Charterers. Nevertheless, the Arbitrators found, as a mixed finding of fact and law that was not challenged before the courts, that by failing to direct discharge at another Port, the Charterers had elected to keep the ship at the original Discharge Port until the strike ended. No point appears to have been taken as to any distinction between the Charterers and the Receivers.

If the Charterers could have shown that they were unaware of the strike because the ship gave no notice, the position would probably have fallen under the first paragraph, with Laytime simply suspended. If, however, the ship gives notice and the Charterers fail to respond, they must be treated as having elected to keep the ship at the original Port.

A further question is whether, if the Charterers elect to wait until the strike ends, Laytime or half Demurrage runs as if there had been no strike, or only from the moment of the election. In The Onisilos, because no formal notices were given, time appears to have run from the ship’s arrival.

The more logical view is that if the Charterers elect to keep the ship at the Discharge Port, time should run as though there had been no strike. If, however, the Charterers order the ship to another Port, time should cease to run after the sailing order has been given. It should also not have run before then while the ship was affected by the strike, because that period would fall under the first paragraph.

One of the central issues in The Onisilos was how long half Demurrage continued. Was it payable only until the strike ended, until discharge was completed at that Port, or until discharge was completed at the final Discharge Port? Donaldson J held at first instance that half Demurrage lasted only until the end of the strike. The Court of Appeal disagreed. It held unanimously that, after Laytime expired, half Demurrage ran for all periods spent in Port until discharge was completed at the final Discharge Port. That included periods after the strike had ended where the ship remained delayed by the continuing consequences of the strike, such as Port congestion.

If the Charterers instead elect to send the ship to another Discharge Port, Laytime at the substitute Port should run in the ordinary way. If the ship was already on Demurrage before the order, or if she later goes on Demurrage at the alternative Port, then Demurrage at the full rate is payable. Bingham J explained the commercial bargain in The Saturnia:

At such port, it would seem, any demurrage would have to be paid at the full rate. Again, it seems clear, as was accepted in The Onisilos, that the clause represents a commercial bargain attempting fairly to apportion the loss between the parties. The owner would suffer through losing the use of his ship for only half the contractual compensation, but he would at least recover that. The charterer would suffer either by paying demurrage at a half rate when his inability to discharge was due to no fault of his or by taking the risk of paying full demurrage at an alternative port, but at least his potential liability at the original port would be mitigated.

In The Saturnia, the ship was delayed by a series of strikes during discharge after Laytime had already expired. The owners argued that the third paragraph, like the first, had no application. Bingham J accepted that argument and stated:

“But there are four considerations which compulsively lead me to accept the owners’ construction and thus differ from the umpire. First, the reference to paying half demurrage after expiration of the time provided for discharging does suggest that the draftsman had in mind a strike or lock-out taking effect before laytime had expired. Secondly, the charterers’ construction entitling them to pay at the half rate from the expiry of the agreed laytime or the onset of the strike, whichever was later, does seem to me to involve writing into the text words which are not there but which very well could have been, had the draftsman’s intention been to that effect. Thirdly, if, as I have concluded, the Part 2 options only obtain where the strike takes effect before the expiry of laytime at the loading port, it is more natural, and certainly more symmetrical, if the option at the discharge port similarly obtains only if the strike takes effect before the expiry of laytime. Fourthly, account may be taken of the fact, already referred to and put into the scales in the owners’ favour in The Spalmatori, that once laytime has expired and the obligation to pay demurrage has accrued, the charterer is in breach and but for that breach the vessel would not be affected by the strike.”

In the Court of Appeal, Sir John Donaldson MR approached the point more generally:

“So I am left with the position that this is a clause which in all its essentials is in the nature of an exceptions clause. The general rule applies and unless there is something in the wording of the clause which shows that the parties intended to apply it to a situation in which the laydays had already expired, it will be ineffective. I have looked in vain through the clause for any such words.”

The final sentence of the third paragraph deals with additional freight where the Charterers order the ship to a substitute Discharge Port. If the substituted Port is 100 nautical miles or less from the original Discharge Port, no additional freight is payable. If it is farther away, freight is increased in proportion to the additional distance.

On the wording of the clause, that extra freight is payable only on the cargo discharged at the substituted Port. The ship may then have to back-track or sail additional miles to reach any remaining Discharge Ports, but the clause appears to provide no additional compensation to the Shipowners for that extra movement. If Demurrage is payable at the original Port under the clause, it may also be payable only at half Demurrage during the relevant period. Where lump sum freight is payable, however, that sum would presumably be increased proportionately, even if it covers cargo intended for discharge at more than one Port.

Depending on the wording of the Bills of Lading (B/L), a claim for deviation could arise if Charterers, at the request of Receivers of part of the cargo, order the ship to a substituted Port. That issue depends on the Bill of Lading terms and the authority under which the substituted Port is selected.

Shifting the Ship and Laytime

A ship may be required to change her position in two principal situations:

A. from anchorage to Berth;

B. from one Berth to another.

Each situation raises different legal and commercial considerations. For that reason, the two forms of shifting should be examined separately.

Shifting the Ship From Anchorage to Berth

The cost of moving from anchorage to Berth has traditionally been treated as part of the overall cost of the carrying Voyage, whether the movement occurs at the Loading Port or the Discharge Port, and regardless of the type of Charterparty involved. Whether the time spent in that movement counts as Laytime, however, depends entirely on the Charterparty Terms.

Under a Berth Charterparty, unless the Charterparty contains wording that alters the ordinary rule, Laytime does not begin until the ship reaches the Berth. Under a Port Charterparty, the position is different. If the anchorage lies within the Port limits, Laytime begins when the ship reaches the anchorage, or after any agreed waiting period following arrival there, unless time is excluded by an Exceptions Clause or by a proven local custom under which inward passage time is not counted. If the anchorage lies outside the Port limits, time will count only where the Charterparty contains a “Reachable on Arrival” undertaking or another express clause providing that time is to run from arrival at the anchorage.

In one London Arbitration involving a Port Charterparty, the sole Arbitrator described the traditional allocation of risk in the following terms:

“The traditional view was that, in the absence of provisions to the contrary, the charterers bore the risk of port congestion after the vessel reached her agreed destination and laytime had commenced and the shipowners bore the risk of navigational matters/bad weather preventing a vessel reaching a position where laytime could commence.”

In another London Arbitration, the Arbitrator noted a commercially curious result. If the Charterers had not breached their “Reachable on Arrival” obligation and the ship had proceeded directly to Berth, the time spent travelling from anchorage to Berth would not have counted. In the actual circumstances, however, the time counted. The Arbitrator considered that this was not commercially unreasonable, because the net transit time from anchorage to Berth was materially longer where the ship first had to slow down, anchor, later weigh anchor, and then regain speed. It was therefore not inappropriate that Charterers should bear the additional time caused by their failure to provide a reachable Berth.

Where the ship moves from an anchorage within Port limits, the same broad conclusion would apply whether the Charterparty is a Port Charterparty or a Berth Charterparty without the “Reachable on Arrival” term, provided that in the Berth Charterparty there is another clause bringing forward the commencement of Laytime to arrival within the Port.

Clauses Under Which Time Does Not Run

Many tanker Charterparties, and some dry cargo Charterparties, contain provisions designed to place some or all of the time between arrival at an anchorage within Port limits and arrival at Berth on the Shipowner’s account. The extent of the exclusion depends on the exact wording of the relevant Charterparty. In broad terms, the excluded period usually covers one or both of the following:

A. time used in proceeding on an inward passage, as in forms such as Asbatankvoy, Exxonvoy 84, Texacovoy 71, Intertankvoy 76, BPvoy 2, and Shellvoy 3, particularly where Charterers instruct the ship to wait at anchorage;

B. delay in entering Berth where the cause lies beyond the Charterer’s control, as in STB Voy.

The Asbatankvoy Charterparty Form contains both types of protection. Clause 6 excludes certain delays in getting into Berth, while Clause 7 excludes time spent moving from anchorage to Berth. Clause 6, however, must be read subject to the Charterers’ obligation under Clause 9 to provide a Berth reachable on arrival. Only if that obligation has been fulfilled can Charterers seek to rely on the exclusion for delay in getting into Berth.

The expression “inward passage” does not necessarily carry the same meaning in every Charterparty Form. Its scope depends on the wording with which it is used. Under Texacovoy 71, the excluded period is the time spent or lost on an inward passage while moving from anchorage or another waiting place. That wording suggests that the excluded period begins only when the ship actually starts to move, namely when the anchor has been weighed. Under BPvoy 2, the corresponding wording is wider, excluding time on an inward passage, including awaiting tide, pilot or tugs, and moving from anchorage. That broader wording may cause time to stop counting earlier than the moment when the ship begins moving.

How much earlier remains uncertain. It might begin when the ship receives instructions to proceed. If time awaiting tide is excluded, further questions arise. Does “tide” mean only the next tide, or can it include the longer interval from neap tides to spring tides? If weather delays movement while the ship awaits tide, is that delay also excluded? These questions depend on construction and may require further judicial or arbitral clarification.

Some Charterparty Forms, including STB Voy, go further by excluding not merely passage time but also delays beyond the Charterer’s control. Clause 6 of the STB form provides:

“However where delay is caused to vessel getting into berth after giving Notice of Readiness (NOR) for any reason whatsoever over which charterer has no control such delay shall not count as laytime or demurrage.”

In SAMIR v. Notos Maritime Corporation of Monrovia, known as The Notos, one issue concerned a period during which swell prevented any ship of the relevant size from discharging at the sea-line where the Notos was expected to discharge. The owners argued that Clause 1(b) amounted to a “Reachable on Arrival” provision. That argument failed before the Arbitrators, the Commercial Court, the Court of Appeal, and the House of Lords. The delay was held to be beyond the Charterers’ control and was therefore excepted.

A further issue in The Notos concerned a later period after the swell had subsided and the sea-line had become usable. By then, another ship that had arrived before the Notos was occupying the sea-line. In relation to that second period, both the Arbitrators and the court held that time continued to run because the Charterers controlled the sea-line.

In The Afrapearl, Charterers failed in an attempt to exclude time spent shifting from anchorage to a sea Berth. The ship had previously been removed from the sea Berth on two occasions because the pipeline connecting the Berth to the terminal had developed a leak. The later shifting time was not excluded on the facts and wording before the Tribunal.

Custom of the Port

In Nielsen v. Wait, which is also important in the context of lightening, the Court of Appeal considered a custom under which grain ships bound for Gloucester could lighten at Sharpness. One feature of that custom was that, although Sharpness was treated as being within the Port of Gloucester, the period required for shifting from Sharpness to Gloucester did not count as Laytime.

It is doubtful that courts today would readily accept that time spent moving from anchorage to Berth should be excluded from Laytime unless there is an express clause to that effect. In principle, however, a sufficiently certain, reasonable, and well-established Port custom could still produce that result if properly proved.

Shifting From Anchorages Outside Port

Where a ship is required to anchor outside the Port, Laytime will not normally begin. The time spent waiting at that outside anchorage, together with the time used in moving either to an anchorage within the Port or directly to Berth, forms part of the Voyage and is therefore for the Shipowner’s account. However, if the parties anticipate such a possibility, they may expressly agree a different allocation of time. That was the position in Compania Naviera Termar SA v. Tradax Export SA, known as The Ante Topic, which ultimately reached the House of Lords.

The Ante Topic was chartered to carry corn from the United States to London or Hull. She was ordered to discharge at Hull. Clause 17 of the Charterparty provided:

“In the event of the vessel being ordered to Hull and being unable to berth immediately upon arrival on account of congestion, time to count from next working period after vessel’s arrival at Spurn Head anchorage but time used in shifting from such anchorage to discharging berth in Hull not to count as laytime.”

When the ship arrived off the River Humber, no Berth was available. She therefore anchored at Spurn Head, about 22 miles from Hull. When a Berth later became available, she was still unable to proceed upriver because there was insufficient water. A further four days passed before she could move.

The Charterers argued that this additional time should be excluded as part of the time used in shifting. The owners argued that only the actual period of physical movement should be excluded. The Charterers succeeded before the Umpire and again before Mocatta J. Mocatta J held that, once congestion had ended and permission to proceed had been given, the owners were under a duty to continue to the Discharging Berth with due despatch. In his view, the time involved in doing so included periods when the ship remained motionless. Mocatta J stated:

“I further do not consider that the wording of the clause is sufficient to alter the common law position so that the risks of delay, due to navigational and other hazards occurring after the cessation of inability to obtain a berth due to congestion, are made to fall upon the charterers save only for time taken in moving through the water or in preparation therefore.”

The majority of the Court of Appeal, and later the House of Lords, reached the opposite conclusion. They accepted the owners’ argument. In the Court of Appeal, Diplock LJ said that the ordinary meaning of the clause was that time used in shifting began only when the ship weighed anchor. He added:

“Why should not the words be given their ordinary meaning? I do not think that one solves this problem by arguing whether the Ante Topic was an “arrived” ship or not when she reached Spurn Head, or whether she had completed her contract voyage, or whether the risks of delay on voyage are normally accepted by owners, and of delay in discharge by charterers, or on any principle that once laytime begins to run it does not cease to do so unless some express term in the contract applies or further delay is caused by default of the owner. To give the words their ordinary meaning seems to me in this case to make business sense.”

The House of Lords agreed. Viscount Simonds delivered a short speech, observing that “to shift” conveys the idea of activity. He considered it difficult to imagine a less appropriate word to describe a ship lying at anchor while waiting for sufficient water to move.

Reachable on Arrival

The effect of a “Reachable on Arrival” clause on the commencement of time has already been considered, together with the principal authorities. In a Port Charterparty containing such wording, Laytime begins upon arrival at the anchorage, or at the agreed time thereafter, where no Berth is available. If the Charterparty also contains a clause excluding time spent shifting from anchorage to Berth, that shifting period will be excluded in the ordinary way.

If the anchorage lies outside the Port limits, or if the Charterparty is a Berth Charterparty, a “Reachable on Arrival” clause may give the Shipowner a claim for Detention from the ship’s arrival at or off the Port until she reaches Berth, where she proceeds directly from the anchorage to Berth. If the ship moves from an outside anchorage to a usual anchorage within Port limits, the Detention claim will ordinarily run until arrival at the latter anchorage. After that, the usual rules governing commencement of Laytime and any clause excluding time spent shifting from anchorage to Berth will apply.

The relationship between a “Reachable on Arrival” undertaking and a clause excluding delay beyond the Charterer’s control in getting into Berth was considered in Nereide SpA di Navigazione v. Bulk Oil International Ltd, known as The Laura Prima.

The relevant provisions were Clauses 6 and 9 of the Exxonvoy 1969 Charterparty Form:

6. Notice of Readiness: Upon arrival at customary anchorage at each port of loading or discharge, the Master . . . shall give the Charterer . . . notice… that the vessel is ready to load or discharge cargo, berth or no berth, and laytime… shall commence upon the expiration of six (6) hours after receipt of such notice… However where delay is caused to Vessel getting into berth after giving notice of readiness over which Charterer has no control, such delay shall not count as used laytime.

9. Safe Berthing—Shifting: The vessel shall load and discharge at any safe place or wharf, or alongside vessels or lighters reachable on her arrival, which shall be designated and procured by the Charterer.

The facts in The Laura Prima were essentially undisputed. The ship arrived at the customary anchorage at Marsa El Hariga, within Port limits, and tendered Notice of Readiness (NOR) to load. She could not proceed to Berth for several days because of congestion. The owners alleged breach of the “Reachable on Arrival” undertaking. The Charterers argued that they were protected by the final sentence of Clause 6. In arbitration, the two party-appointed Arbitrators disagreed, and the Umpire found in favour of the Charterers, holding that the congestion was beyond the Charterers’ control.

Mocatta J reversed that conclusion in the High Court. He held that Clauses 6 and 9 had to be read together and that this was a Port Charterparty containing no express provision placing the risk of congestion on the owners. He further held that the final sentence of Clause 6 could prevent Laytime from running only if the Charterers had designated and procured a safe place, wharf, or Berth reachable on the ship’s arrival.

The Court of Appeal restored the Umpire’s decision, but the House of Lords allowed the owners’ appeal and upheld Mocatta J. Lord Roskill delivered the only speech. He emphasised that the issue concerned the allocation of liability between Shipowners and Charterers under a Voyage Charterparty for delays at loading and discharge Ports caused by congestion.

Lord Roskill stated that “Reachable on Arrival” is a familiar commercial phrase and means exactly what it says. If a Berth cannot be reached on arrival, the warranty is broken unless a relevant protecting exception applies. The Berth must have two qualities: it must be safe, and it must be reachable on arrival.

The result was that the owners succeeded in their claim for Demurrage. Demurrage began once the Notice of Readiness (NOR) period and the permitted Laytime had expired, and it continued until loading was completed.

The Outer Reach of The Laura Prima Judgment

Since the House of Lords gave judgment in The Laura Prima in November 1981, the exact scope of the decision has remained a source of debate. Part of the difficulty is that earlier authorities on “Reachable on Arrival” did not involve an exceptions clause like the final sentence of Clause 6. Another difficulty is whether The Laura Prima is limited to congestion, or whether it extends to other causes of delay.

The first question can be tested by considering facts similar to The President Brand. In that case, the ship first anchored outside the Port limits of Lourenço Marques, then moved to an anchorage inside the Port limits, tendered Notice of Readiness (NOR), and was later delayed further by congestion before reaching Berth. There was no equivalent of the final sentence of Clause 6 and no clause accelerating Laytime before arrival in Port. Roskill J held that the owners were entitled to recover Detention from the ship’s arrival at the first anchorage until Notice of Readiness (NOR) was given at the second anchorage. Once the relevant notice period expired, Laytime began, and discharge was completed within the allowed Laytime.

If that Charterparty had contained a Clause 6-type provision excluding delay in getting into Berth where the cause was beyond the Charterers’ control, it would not have affected the Detention claim. The harder question is whether it would apply to the second period of delay, after Notice of Readiness (NOR) had been given inside Port limits. In light of The Laura Prima, the better answer is no. A failure to provide a Berth “Reachable on Arrival” is not cured merely because Laytime has started. For the purposes of a Reachable on Arrival undertaking, there is only one arrival.

A further question arises where an additional clause, rather than Clause 6 itself, is relied upon to exclude time. London Arbitration 7/91 considered that issue under the Tanker Motor Vessel Voyage Form. An additional clause provided:

Any time used in waiting for daylight, normal tide conditions, bad weather or port services such as pilotage and towage shall not count as laytime at ports of loading and discharging.

There was also a general exceptions clause that expressly referred to Laytime. The ship was delayed, and the Charterers relied on those clauses as prevailing over a printed Reachable on Arrival provision. The Tribunal held that the Charterers could do so.

The brief report does not make clear whether the delay occurred before or after Berthing. If the delay occurred after Berthing, the effect of the breach of the “Reachable on Arrival” provision had already run its course, and the Tribunal’s decision was plainly correct. If the delay occurred before Berthing, but after the ship had reached a place where Notice of Readiness (NOR) could validly be tendered, the point is more difficult. One way of supporting the result is to apply the familiar principle that an additional clause prevails over a printed clause.

A comparable issue arises under Clause 8 of Part II of the Asbatankvoy Charterparty Form, which provides for half Demurrage in some circumstances and no Demurrage in others. Does this mean that Laytime continues to run until exhausted, and that, if the relevant conditions are then satisfied, only half Demurrage or no Demurrage becomes payable?

London Arbitration 2/90 considered such a situation. The ship arrived at the Discharge Port while still on Laytime, but during a tug strike that continued after Laytime expired. Tug strikes are one of the events for which Clause 8 provides that no Demurrage is payable. The Arbitrator held that the Charterers were excused from liability.

If that decision is correct, the availability of protection may depend on whether the Charterparty is a Berth Charterparty or a Port Charterparty. Under a Berth Charterparty, the Shipowner’s remedy may be a claim for Detention. Under a Port Charterparty, the Demurrage exception may operate.

Pending clearer judicial authority, the more logical view is that just as the Laytime exception in Clause 6 for delay in getting into Berth does not operate unless the Charterers have provided a Berth “Reachable on Arrival”, the Demurrage exceptions in Clause 8 should likewise not operate unless that requirement has been satisfied. Otherwise, the commercial force of the Reachable on Arrival undertaking would be substantially reduced.

The more controversial question is whether the principle in The Laura Prima, decided in the context of congestion, also applies to other types of delay, especially those traditionally treated as Shipowner’s risks, such as weather and shortage of water. Legal and commercial opinion has been divided on this issue.

The starting point is the structure of a Voyage Charter. In The Johanna Oldendorff, Lord Diplock divided the adventure into four stages: the loading or approach Voyage, the loading operation, the carrying Voyage, and the discharging operation. The first and third stages are performed by the Shipowner alone. The second and fourth are joint operations, although the primary responsibility for them lies with the Charterer. That is why provision of Berths, and therefore congestion, is usually a Charterer’s risk.

Lord Diplock explained the point in The Johanna Oldendorff:

The standard forms of charterparty do not usually include an exception clause for delay caused by the inability of the ship to load or to discharge her cargo because of congestion at the place, whether berth or dock or port, specified in the charterparty as the place of loading or discharge. So any loss due to delay from this cause falls upon the party who is thereby prevented from doing timeously what, by the terms of the charterparty, he had undertaken the primary obligation to secure was done.

The four-stage analysis is important because each stage must be completed before the next can begin. Until the ship reaches the named place of loading during the approach Voyage, or the named place of discharge during the carrying Voyage, the contractual duty to bring the ship there rests solely on the Shipowner. Delay in completing that stage normally falls on the Shipowner.

This commercial understanding appears in London Arbitration decisions. In one award, the ship anchored in Brest Roads, within Port limits, but could not proceed to Berth for about seven days because of lack of water caused by neap tides. The Arbitrators held that she was not at the effective disposition of the Charterers and therefore was not an Arrived Ship. They also observed that, in the absence of express words to the contrary, owners usually bear the risk of delays caused by low tides at a named Port.

Shifting the Ship and Laytime

The later arbitration concerned the Exxonvoy Charterparty Form and therefore contained a “Reachable on Arrival” provision. The brief report does not make entirely clear whether the ship was waiting inside or outside the Port limits. However, because the sole Arbitrator approached the case on the basis that Clause 6 applied and that Laytime would otherwise have run, it appears likely that the ship was waiting at the customary waiting place.

After reaching that usual waiting place, the ship could not proceed farther because of adverse weather, particularly strong winds. Referring to The Angelos Lusis, The President Brand, and The Laura Prima, especially Mocatta J’s judgment, the Arbitrator stated in substance that those authorities were logical in cases of Port congestion, but did not finally resolve the position where it would be useless to designate and procure a Berth because it was impossible for the ship to proceed into a Berth because of bad weather.

On that reasoning, where the designation or procurement of a Berth is irrelevant at the time of the ship’s arrival off the Port, Clause 9 should be put aside and the analysis should be confined to Clause 6, in relation to both the running of Laytime and delay in Berthing. The result would be that delay in Berthing because of bad weather would not count as Laytime.

The Arbitrator regarded it as commercially artificial to speak of designating or procuring a Berth when the Port was closed and the ship could not enter because of weather. In tanker practice, the ship is commonly instructed to stand off the Port until the weather improves, and only then is she given Berthing instructions. On that view, the sensible requirement is that the Charterers should have a Berth available when the weather improves, so that no further delay occurs between improvement of the weather and Berthing.

Earlier in the award, the Arbitrator acknowledged that he was bound by Roskill J’s decision in The President Brand, where the first delay was caused by insufficient water over the bar outside Lourenço Marques. Nevertheless, the Arbitrator considered that the reasoning should not necessarily be extended to weather conditions. Since the Arbitrator also referred to the traditional responsibility of Shipowners for navigational difficulties or bad weather preventing a ship from reaching the point at which Laytime can begin, it may be inferred that, had he been free to do so, he would have disagreed with Roskill J on insufficiency of water as well.

The commercial view is therefore that The Laura Prima should be confined to delay caused by Port congestion. On this approach, the Charterer’s duty is limited to providing a Berth that is free and available in the sense that it is not occupied when the ship arrives off the Port. If the ship still cannot proceed to Berth because of lack of water, bad weather, or another navigational hazard traditionally falling on the Shipowner, the lost time should remain for the Shipowner’s account. That may be because the ship has not become an Arrived Ship, or, if she has, because Clause 6 prevents the time from counting. Put differently, this approach treats “Reachable on Arrival” as meaning only “reachable without delay due to Port congestion”.

The competing legal approach is simpler and stricter. On this view, “Reachable on Arrival” means exactly what the words say. Every risk of delay preventing the ship from reaching the Berth is placed on the Charterer unless the Charterer has protected himself through a clearly drafted exception. It does not matter whether the cause of delay would traditionally have been treated as a Shipowner’s risk or a Charterer’s risk. In The President Brand, the risk was lack of water, a classic Shipowner’s risk. In The Laura Prima, the risk was congestion, usually treated as a Charterer’s risk, even though there was a specific finding that the Charterer could not have prevented it.

The Arbitrator in the award discussed above distinguished weather from lack of water. In another arbitration, however, the Tribunal reached the opposite conclusion. In Aden Refinery Co Ltd v. Ugland Management Co Ltd, Sir John Donaldson MR, though with apparent reluctance, upheld the High Court’s refusal to grant leave to appeal in a case involving delay caused by weather.

The issue eventually came before the High Court in a series of 1987 cases. The first was The Kyzikos, a non-tanker case in which an “Always Accessible (AA)” provision was treated as equivalent to a Berth being reachable on arrival. In that case, a Berth was available but not accessible because the ship could not proceed to it due to fog. Webster J accepted that he was bound by The President Brand, but drew a distinction between physical and non-physical causes of delay. He held that the provision applied only to physical causes. Fog and other weather conditions were treated as non-physical causes, and the owners were therefore not protected.

The next two cases were The Fjordaas and The Sea Queen. In The Fjordaas, delay resulted from a prohibition on night navigation, compulsory pilotage, and bad weather. In The Sea Queen, the delay arose from the non-availability of tugs followed by bad weather. In both cases, the Charterers succeeded in arbitration but lost on appeal. The Charterers argued that a distinction should be drawn between physical obstructions preventing the ship from reaching the Berth and other causes of delay. Congestion and lack of water were accepted as physical obstructions, even though lack of water would traditionally be regarded as an owners’ risk. The High Court rejected the proposed distinction in both cases.

Although The Kyzikos later reached the House of Lords, this specific issue was not considered above High Court level. The present position is therefore not entirely settled. There are two High Court decisions applying The Laura Prima regardless of the cause of the delay, and one High Court decision limiting it to delay caused by physical obstructions.

Until higher authority resolves the issue, the majority view is best reflected in Saville J’s dictum in The Sea Queen:

“it seems to me that the charterers have warranted in clear and simple words that there will be a berth that the vessel will be able to reach on her arrival—so that, if there is not, for whatever reason, then the charterers have failed to perform this part of their bargain.”

What is clear is that, if the “Reachable on Arrival” undertaking has been satisfied, and an intervening event then causes delay beyond the Charterers’ control, such as an embargo or insufficiency of water, the final sentence of Clause 6 will apply. That assumes, of course, that the ship is already an Arrived Ship. If she is not an Arrived Ship, the Charterer will still be protected because the Voyage has not yet ended and the risk of delay remains with the Shipowner.

The most likely causes of this kind of delay are traditionally described as Shipowner’s risks, including weather, insufficiency of water, collision, and similar navigational matters. However, political and other risks usually borne by the Charterer may also arise. Where the risk is normally one for the Charterer, the delay must still be beyond Charterer’s control. That may produce difficult questions in Ports dominated by a major Charterer, especially where that Charterer is also a state organisation.

Shifting the Ship From One Loading or Discharging Berth to Another

Unless the Charterparty expressly permits the Charterer to load or discharge at more than one Berth, a ship that has arrived and made fast at the Berth to which she has been ordered is not required to move again from that Berth in order to load or discharge another part of the cargo covered by the Charterparty.

In practice, many Charterparties do allow cargo operations at more than one Berth. This may be done in the voyage description itself, or by an Additional Clause. For example, the Baltimore Berth Grain Form C may provide:

“… the… Vessel… shall proceed to 1/2 safe berths [nominated port] and there load [the specified cargo]… and being so loaded shall therewith proceed to 1/2 safe berths [nominated port] and deliver the same…”

A similar result may be achieved through an Additional Clause. Clause 9 of the Exxonvoy 1969, or Asbatankvoy, form provides in its second sentence:

“The Charterer shall have the right of shifting the vessel at ports of loading and/or discharge from one safe berth to another on payment of all towage and pilotage shifting to next berth, charge for running lines on arrival at and leaving that berth, additional agency charges and expense, customs overtime and fees and any other extra port charges or part expenses incurred by reason of using more than one berth.”

Whichever form of wording is used, Laytime will continue to run during the movement unless the Charterparty expressly provides otherwise, or unless the movement is made for the Shipowner’s own purposes and removes the ship from the Charterers’ immediate and effective disposal.

In Surrey Shipping Co Ltd v. Compagnie Continentale (France) SA, known as The Shackleford, Buckley LJ distinguished discharge at two Berths in the same Port from discharge at two separate Ports, the latter involving a further carrying Voyage. He stated:

A charter to discharge at one or more berths in a single port is a very different thing. The movement from one berth to another within the port is for the convenience of the charterers. It would be eminently reasonable to construe the charterparty in such a case so as to reckon shifting time from one berth to another, or, if laytime has started to run, from anchorage to berth of discharge, as counting against laytime or demurrage and not as part of the carrying voyage.”

One of the shifts in The Shackleford was made for bunkering. However, because the bunkering took place while the ship was already waiting for a Berth, the court held that the time was not lost solely for the Shipowner’s own purposes. Time therefore continued to count during the movement to the bunkering Berth, during the bunkering operation, and during the return movement.

WI Radcliffe Steamship Co Ltd v. Exporthleb provides an example of a case where time did not count during shifting. The relevant clause provided:

“Charterers have the option of loading and discharging at two safe berths in one port without extra charge and time for shifting not to count.”

Although delay before a ship can move is probably less common when moving from one Berth to another than when moving from anchorage to Berth, wording of this kind would probably exclude only the actual time occupied by the move itself, not waiting time before the move begins. If, however, something occurs during the movement and lengthens it, that extra delay would probably form part of the shifting period.

Compulsory Shifting

A ship is sometimes forced to move at the request or order of a party other than the Shipowner or Charterer. This may happen because of weather conditions, or because of directions issued by Port Authorities or other local officials.

Where Laytime is expressed in Weather Working Days (WWD), or in days or Working Days weather permitting, whether time is interrupted depends on whether the weather allowed loading or discharge at the Berth at the time of the movement and during the ship’s absence. As Parker J observed in Gebr Broere v. Saras Chimica SpA, if weather first prevents loading or discharge and then also forces the ship to leave Berth, it does not cease to prevent cargo operations simply because the ship has moved away. Even so, time stops only when cargo operations are prevented, not merely because the weather makes it unsafe for the ship to remain at the Berth.

The leading authority on compulsory shifting is Cantiere Navale Triestina v. Handelsvertretung der Russe Soviet Republik Naphtha Export. In that case, the Dora, an Italian ship, arrived at the Soviet Port of Batum to load oil. Shortly after arrival, because of a dispute between the Soviet and Italian Governments, the ship was ordered to leave Russian waters. She complied and proceeded to Constantinople while representations were made to the Soviet Government in Moscow. About 17 days later, she returned to Batum. The Shipowners argued that time continued to run throughout the period of absence, and the Court of Appeal agreed.

Atkin LJ stated:

“Indeed, if one comes to think it out, there can be no reason why the absence of the ship from the harbour, once she has left and the lay days have begun to run, without any fault on the part of the owner, should prevent demurrage from running, it appears to me to make no difference whether the vessel is in harbour 50 yards away from a berth and cannot get to the berth, or whether she is out of the harbour, say 50 miles away, and is unable to get to the berth.”

It was also argued that performance of the Charterparty had become illegal, and that this should prevent time from running. On the facts, the court held that the orders given to the Dora were executive acts of the kind that would have fallen within a “restraint of princes” clause, had such a clause appeared in the Charterparty. The court therefore left the question of illegality open.

Illegality was later considered in The Maria G. In that case, the Harbour Master at Calcutta, fearing the effect of an expected bore tide, ordered the ship to move from an alongside Berth to buoys. Laytime was measured in Weather Working Days (WWD). Devlin J held that, even assuming a bore tide was weather, time was nevertheless not interrupted. On illegality, Devlin J accepted that the law at Calcutta authorised the Harbour Master to make such an order and that failure to obey would have been unlawful. He nevertheless accepted the owners’ argument that even if the law made loading unlawful while the ship was away from Berth, Laytime continued to run. It was not enough simply to point to a law that made loading unlawful during part of Laytime, however substantial that part might be.

The practical possibility of loading during the reduced period appears to have been treated as irrelevant. It therefore seems that, if illegality is to stop Laytime, the prohibition must be permanent or at least indefinite.

Where a ship is required to shift, Laytime will continue to run only if the move and the absence from Berth are temporary. In Petrinovic & Co Ltd v. Mission Française des Transports Maritimes, Demurrage ceased when the ship was taken away from Bordeaux because of the military situation in France. Donaldson J later referred to that decision in Gem Shipping Co of Monrovia v. Babanaft (Lebanon) SARL, known as The Fontevivo, and stated:

“the departure of the vessel was intended to be permanent. Such a departure must bring the contract of carriage to an end, whether it be a justified or an unjustified repudiation or whether it merely recognizes that in the events which were unfolding the contract had been frustrated. Once the contract of carriage is at an end, laytime must also cease to run.”

Who Must Bear the Expense of Shifting the Ship?

The question of shifting expenses frequently arises, particularly where the move is involuntary. Before turning to such cases, it is useful to distinguish the ordinary types of movement.

The cost of moving from anchorage to Berth is always for the Shipowner’s account, whether the Charterparty is a Berth Charterparty or a Port Charterparty. London Arbitration 11/99 provides an example. The owners tried unsuccessfully to recover part of the tug costs from the Charterers, arguing that the number of tugs used was excessive. The Tribunal rejected the claim and stated:

“in a voyage charter it was customary that owners met the cost of pilotage and tugs. The tribunal had not been informed of the size of the tugs or why five had been needed, although it did note that the vessel was the largest vessel to use the port. Whether the tugs were used for arrival or departure or both was unclear. The owners’ claim had been put on the basis that if port charges were more than average in the permitted range for a particular port, then any excess had to fall to the charterers. Apart from the fact that no evidence had been produced as to what the norm might be, the tribunal would in any event reject that argument. The charterers were entitled to select any port in the permitted range and the consequential costs fell to the owners.”

Later shifts made under the Charterparty and carried out on the Charterer’s instructions depend on the terms of the Charterparty. If the Charterparty merely permits cargo operations at more than one Berth and says nothing further, the cost is normally treated as covered by freight. In tanker Charterparties, however, later shifts are often expressly for the Charterer’s account, as in Clause 9 of the Exxonvoy 1969 form.

In relation to involuntary movements, Devlin J in The Maria G was careful to make the following reservation:

“But, of course, it does not necessarily follow, as a matter of law, that, because the time lost in loading has to be included in the assessment of the laytime, the charterers have to pay the expenses incurred in the shifting of the vessel to the King George Dock Buoys.”

A frequent argument is that, if the ship is compelled to leave Berth for the safety of ship and cargo, whether because of weather or other constraints, such as those in Petrinovic, the Berth must have been unsafe.

The classic definition of a Safe Port (SP) or Safe Berth (SB) is the formulation given by Sellers LJ in The Eastern City. The question is whether the Port or Berth is one that the ship can reach, use, and return from without being exposed to danger that cannot be avoided by good navigation and seamanship.

In The Reborn, the Court of Appeal considered the relationship between safe Port and safe Berth warranties. Where there is an express warranty that the Port is safe, but no express warranty that the Berth is safe, and the Charterers nominate the Berth, the nominated Berth may have to be safe as part of the safe Port warranty. A safe Port must be prospectively safe for the ship to use, and that includes use of a Berth for cargo operations. That requirement is implicit in the express safe Port undertaking, as explained in The Eastern City.

The Court of Appeal also considered the position where there might be an implied safe Berth warranty but no safe Port warranty. The principles governing safe Ports apply to safe Berths, but with two important qualifications. First, because the Charterers have not promised that the Port itself is safe, the ship’s passage to and from the Berth does not include the passage to and from the Port. Secondly, the undertaking is confined to the prospective safety of the nominated Berth or Berths against risks not affecting the Port as a whole or all Berths within it. The relevant danger must therefore be specific to the nominated Berth, not general to the Port or all Berths. On the facts, however, the court held that there was no implied safe Berth warranty.

Parker J made a further useful observation in The Polyglory:

If the only dangers to which a properly manned and equipped vessel of the size and type in question will be exposed are dangers which can be avoided by the exercise of ordinary reasonable care and skill that port is not as a matter of law unsafe…

If the ship leaves the Berth and thereby avoids the danger, there may be no breach of the safe Berth warranty, assuming such a warranty exists and is continuing, sufficient to support a claim for shifting costs.

As the authorities show, breach of an unsafe Berth warranty or unsafe Port warranty may give rise not only to a claim for physical damage to the ship, but also to a claim for pure economic loss, including delay. The Vine is an example. The Charterparty contained both safe Port and safe Berth warranties. Two of the three dolphins at the nominated loading Berth had been damaged by other ships. After the first incident, the Berth remained in use with additional tugs and a special approach procedure. The second incident occurred three or four days before the Berth was nominated for the Vine. After that second incident, ships could no longer use the Berth pending repairs, which began the day before the Vine arrived and lasted about five weeks. The ship was delayed for more than one month before Berthing. The owners recovered damages for that delay, assessed at the Demurrage rate, because the Berth was unsafe.

An unusual “Safe Berth (SB)” issue arose in The Universal Monarch. The ship was ordered to Leixões in Portugal under a Charterparty containing a safe Port warranty. Because of an earlier accident, the Port Authorities allowed a ship of that size to Berth only with six tugs, more than the number normally available at the Port. Extra tugs had to come from about 200 miles away at substantial expense. The owners claimed that cost as damages for breach of the safe Port warranty. They failed in arbitration but succeeded on appeal before Gatehouse J.

However, the judgment in The Universal Monarch should be treated with caution. It was delivered extempore, the leading safe Port authorities were not cited, and the merits were considered on an application for leave to appeal. Gatehouse J concluded:

“In my judgement, once the arbitrators had found that on the vessel’s arrival the port was not safe in the absence of the Lisbon tugs, a proper approach must have led them to conclude that the charterers were in breach of the safe port warranty and that the cost of obtaining the tugs from a distance represented by 16 hours steaming time in order to remedy their breach and render the port safe was for the charterers to bear.”

The leading authority on shifting expenses is probably Cosmar Compania Naviera SA v. Total Transport Corporation, known as The Isabelle, decided by Robert Goff J. The case later went to the Court of Appeal, which upheld the first-instance decision in a short judgment adopting Robert Goff J’s reasoning.

The Charterers, Total, ordered the Isabelle to proceed to Bejaia to load oil supplied by the Algerian National Oil Co, Sonatrach. Bejaia is subject to a phenomenon known as the “Ressac”. When the Mistral and Tramontane winds blow from the French coast, a heavy swell may develop at Bejaia. Ships remaining in Port may suffer damage, and there may be a risk of ruptured hoses. The Harbour Master may therefore close the Port when necessary. If a ship is completing loading when the Ressac begins, the Harbour Master may instruct that tugs be used to keep her steady. In other cases, the ship may be ordered to leave Berth and wait at anchorage until the Ressac has passed.

The Isabelle was first delayed in Berthing because of the Ressac and the resulting congestion. After she eventually Berthed and began loading, she surged heavily. Two tugs were ordered to hold her in position, but the surging continued. She was then ordered to leave the Berth and proceed to anchorage. About eight days later, she returned to Berth and completed loading.

The first issue concerned the period before the ship initially Berthed. Robert Goff J held that time did not run because the Charterparty was a Berth Charterparty. The only clause accelerating time applied where Charterers ordered the ship not to proceed to Berth, and that did not happen. Directions from the Port Authority requiring the ship to wait while other ships loaded were given by the Port Authority in its administrative capacity, not as Agent for the Charterers.

The second issue concerned payment for the tugs ordered to keep the ship at the Berth. The owners argued that the tugs were required as part of loading. Robert Goff J rejected that argument. It was for the owners to bring the ship to the Berth for loading and to keep her there for that purpose. The owners could not recover the cost of tugs used simply to maintain the ship at the loading Berth.

The final issue concerned shifting expenses. The order to move had been given by the Port Authority acting as administrator of the Port, not as Agent of the Charterers. Although the Charterparty contained the usual tanker shifting clause allowing Charterers to order loading or discharge at more than one Berth, that clause required a positive instruction by the Charterers. No such instruction had been given. The owners’ claim for reimbursement of shifting costs therefore failed.

London Arbitration 10/06 provides a contrasting example. The ship was scheduled to discharge into a floating discharge tanker moored off and parallel to the Berth. She was assisted by an experienced pilot and three tugs. The Charterers argued that she approached at excessive speed, but the Tribunal rejected that argument. Some ropes securing the storage tanker parted and a floating hose was crushed. Even so, the Tribunal held that the ship was not at fault, and that the Charterers were responsible for the resulting delay and extra shifting costs.

The general rule is therefore that, in most cases, the expense of involuntary shifting falls on the Shipowners, at least where they have paid those costs in the first instance, even if Laytime continues to run. London Arbitration 11/10, involving compulsory shifting caused by swell, is a further example. The Tribunal held that the cost lay where it fell, namely with the Shipowners.

What is “Warping” in Ship Chartering?

Warping describes the movement of a ship by using her own winches to haul herself along the quay, sometimes with assistance from her engines. For Laytime and expense purposes, it is important to distinguish between warping within the same Berth and warping from one Berth to another.

Warping within the same Berth commonly occurs where shore cranes, grabs, loaders, or other cargo-handling equipment cannot properly reach the required part of the ship, making a short movement ahead or astern necessary. In that situation, there is no true change of Berth. It is therefore irrelevant whether the Charterparty allows the Charterers to use one Berth or more than one Berth.

As to cost, it is common for the crew to perform the warping operation where they can lawfully and safely do so. Some Charterparties include an Additional Clause providing that the crew will assist with warping where Port regulations permit, and that warping within the same Berth is not to be regarded as a Berth shift. If Port rules do not allow the crew to perform the operation, or if there is no such clause and the crew refuse to carry it out unless paid, the expense is logically treated as part of the loading or discharging cost. In the ordinary case, time would continue to run during the warping operation.

Warping from one Berth to another raises a different issue, even if the movement takes place along the same quay frontage. The first question is who requires the move. If the movement is ordered by the Port Authority, it will normally be treated as an involuntary shift, and the expense will usually lie where it falls. In practice, that may leave the cost with the owners. If, however, the Port Authority or service provider bills the Charterers, Shippers, or Receivers directly, the cost may remain with them.

If the warping is a voluntary move made for the convenience of the Shippers, Receivers, or Charterers, the position is the same as for any other Berth shift. The relevant questions are: does the Charterparty allow cargo operations at more than one Berth? Does the Charterparty specify who is to bear the expense of shifting between Berths? If the Charterparty does not permit more than one Berth, the movement requires agreement with the owners, effectively varying the contractual arrangement. Owners would normally agree only on terms that time continues to run and that the expense is for the Charterers’ account. If the Charterparty permits more than one Berth but says nothing about time or expense, time will probably continue to run, while the cost will generally fall on the owners unless the wording or local practice points the other way.

Ship Lightening

Where the Charterparty allows the Charterer to nominate a Discharge Port from a range of Ports, the Charterer will be in breach of Charterparty if the Port, or the nominated Berth, cannot be entered by the ship without first lightening. The same principle applies where the nominated place cannot safely accommodate the ship’s laden draught.

The Alhambra is the classic illustration. The ship was ordered to Lowestoft, but because of her draught she could not remain afloat there at low water. The Charterparty required her to proceed to a Safe Port (SP) “or as near thereto as she can safely get, and always lie and discharge afloat”. The cargo Receiver offered to lighten the ship in the roads at the Receiver’s own expense, but the Ship Master refused and proceeded instead to Harwich, the nearest Safe Port (SP), where the cargo was discharged. The court held that the Ship Master was entitled to take that course.

If, as in The Alhambra, the Charterparty contains an “as near as she may safely get” provision, Laytime will begin in the ordinary way when the ship reaches the nearest place where she can safely discharge. If there is no such provision, the position is analogous to a case in which the Charterer has failed to nominate a proper Discharge Port. In such a case, there will normally be a prima facie claim for Detention for the period of discharge, although the Charterer may be entitled to set off the Laytime that would otherwise have been available against the delay caused by the breach.

Nielsen v. Wait had held that, by custom, time spent shifting from Sharpness to Gloucester did not count as Laytime. That decision was distinguished by Day J in Reynolds & Co v. Tomlinson. In that case, the Ship Master refused a request to discharge only enough cargo at Sharpness to allow the ship to proceed up the canal to Gloucester, the nominated Port. Instead, the Ship Master discharged the whole cargo at Sharpness. The court held that he was entitled to do so because Gloucester was not a Safe Port (SP) in the circumstances. Day J also observed that the issue whether Gloucester was a Safe Port (SP) had not been considered in Nielsen v. Wait.

The Ship Master may nevertheless agree, if he chooses, to discharge part of the cargo by way of a lightening operation. If he does so, the Charterer or Consignee will be liable for the expense incurred. Where the ship has already become an Arrived Ship before lightening begins, then, unless the Charterparty provides otherwise, Laytime will continue to run during lightening. That will be so whether lightening takes place because the Ship Master agrees to it, because the Charterparty permits it, or because the operation is necessary before the ship can proceed to the main Discharge Berth. Time will also normally continue to run during the subsequent movement to the main Berth.

If lightening takes place before the ship has become an Arrived Ship, the prima facie rule is that Laytime does not run. In Nielsen v. Wait, Lord Esher approached the matter on the basis that Sharpness was part of the Port of Gloucester, but added:

“If it is not within the Port of Gloucester, it is obvious to my mind that the shipowner would not be entitled to count the time spent in unloading as lay days; and if it is without the Port of Gloucester, it seems to be impossible to say that the defendants are liable.”

A different result was reached by the Scottish court in Dickinson v. Martini & Co. There, a ship had been chartered to discharge at a “safe port in the United Kingdom, or so near thereunto as she may safely get always afloat at any time of the tide”. Glasgow was nominated as the Discharge Port, but because of the ship’s draught, part of the cargo had to be discharged at Greenock. In respect of that cargo, the Court of Session held that the voyage had been completed at Greenock and that the time spent in lightening was to be included in used Laytime.

Where there is no “as near as she may safely get” clause but the Ship Master agrees to lighten, time will still count as a form of Detention. That is because the lightening has been carried out at the Charterer’s request, or because the Charterer is in breach by nominating a Port or Berth where lightening is necessary. The lightening operation will usually be treated as ending when the last lighter leaves the ship. It must be emphasised that a true need to lighten is different from a temporary delay caused by tide. Lightening is required where the ship could not safely Berth with the contractual cargo on board because of insufficient water, not merely where she must wait for a suitable tide.

There is one important exception. Where the Discharge Port is expressly named in the Charterparty, the Charterer has the right to nominate a Berth within that Port, but cannot choose a Berth with insufficient water for the ship’s fully laden draught if other suitable Berths are available. If no Berth in the named Port can be reached without lightening, then, in principle, lightening expenses will be for the Shipowner’s account and time will not run during lightening, whether the lightening occurs before or after the ship has become an Arrived Ship. The reason is that, by accepting the named Port as the contractual place of discharge, the Shipowner impliedly represents that the ship can enter that Port with the contractual quantity of cargo on board without unreasonable delay in the conditions reasonably expected at that time of year. In that situation, the difficulty arises from the Shipowner’s side of the bargain.

Many Charterparties make express provision for lightening, particularly tanker Charterparties. A detailed example appears in Clause 15 of the Exxonvoy 1984 form:

SHIP LIGHTENING/DISCHARGE AT SEA

(a) Except when required by reason of fault attributable to vessel, any lightening or discharge at sea or at a place outside a port shall be at the expense of Charterer and,… time used for such lightening or discharge shall count as laytime or as time on demurrage, as provided below:

(i) If vessel is lightened at sea or at a place outside a port, laytime or, if vessel is on demurrage, time on demurrage shall commence when vessel arrives at the lightening site designated by Charterer and shall end when disconnecting of the cargo hoses from the last cargo receiving vessel has been completed.

(ii) If vessel is fully discharged at sea or at a place outside a port, laytime or, if vessel is on demurrage, time on demurrage shall commence upon the expiration of six (6) hours after Vessel arrives at the lightening site designated by Charterer or when vessel is all fast alongside the first cargo carrying vessel, whichever occurs first, and end when disconnection of the cargo hoses from the last cargo receiving vessel has been completed.

(b) If vessel is lightened at sea, the lightening site shall not constitute a port or place additional to those specified in Part I(D). Charterer, however, shall reimburse Owner for any time by which the steaming time to the final discharging port or place exceeds that which would have been taken if Vessel had not lightened at the Deviation rate per day or pro rata for a part thereof. In addition, Charterer shall pay for extra bunkers consumed.

Under Clause 16, the Charterer undertakes to discharge enough cargo into ships or lighters within Port limits to enable the ship safely to reach and lie at the nominated Berth, always afloat.

In London Arbitration 9/98, the Tribunal held that the anchorage position where intermediate lightening took place was not a Berth within the meaning of Clause 9 of the Asbatankvoy Charterparty Form. In that case, it was important that there was an express provision stating that any lighterage area should not be treated as an additional Port or Berth.

Who Bears the Time Used in Ship Lightening?

Clerco Compania Naviera SA v. The Food Corporation of India, known as The Savvas, raised two important questions. The first was what constituted time used in lightening. The second was whether Laytime should be calculated by reference to the quantity of cargo carried before lightening or after lightening.

The Savvas arrived at Bombay and tendered Notice of Readiness (NOR) on arrival. According to the owners, the notice took effect on 21 October under the Charterparty terms. The Charterers argued that time did not begin until after lightening because an Additional Clause provided that lightening was at the owners’ risk and expense and that time used in lightening was not to count as Laytime. Lightening did not begin until 6 November and continued until 13 November. During that period, 5,520 tons were discharged from a total cargo of 31,604 tons.

The High Court held that time used in lightening meant only the actual period of the lightening operation. The owners’ argument therefore succeeded. Parker J stated:

As a matter of language, time sitting at Bombay from Oct. 20 to Nov. 6 doing nothing is not time used in lightening, any more than Sundays, holidays and Saturday afternoons are times used in discharging unless discharging operations are taking place.

On the second issue, Parker J held that the Charterers were entitled to calculate Laytime on the basis of a full cargo. Commercial sense required that result where Laytime began against the Charterers from the moment the fully laden ship arrived at the Port.

The Court of Appeal upheld the decision on both issues. Ackner LJ, giving the principal judgment, said on the first issue:

“To my mind “lightening” and “time spent waiting for lighters to arrive” are two quite different matters. Clause 22 is an unusual clause, in as much as it imposes upon the owners what is normally the charterers’ liability. If it had been intended to extend the meaning of the word “lightening” to cover that which is not normally included in its ordinary meaning, then clear words were required and could, without any great difficulty, have been supplied: specific provision could have been made for time lost in waiting for lightening not to count against laytime.”

On the second issue, Ackner LJ added:

“I agree with the learned judge’s observations with regard to the commercial sense of the matter. It is obviously of importance to charterers to know the total period of laytime that they have purchased in the freight which they have agreed to pay.”

The result is commercially significant. A clause excluding time used in lightening will not ordinarily exclude time spent waiting for lighters, unless the wording expressly says so. If the parties intend waiting time before lightening to be excluded, the Charterparty must use clear words.

London Arbitration 17/04 provides another example. The parties originally agreed that the ship would discharge at Qingdao, where lightening was unnecessary, and that Laytime would be measured in Weather Working Days (WWD). During performance, the parties agreed an addendum changing the Discharge Port to Yantai, where lightening was required. The addendum provided that “the operation should be carried out in safe condition under the master’s supervision and approval” and further stated:

“If the master considers that at any time it is unsafe to commence or continue discharge, he may remove his own vessel from alongside and the time to count.”

The ship had to wait about five days before lightening could begin because of strong winds and rough seas. After she reached the floating terminal where lightening was to be carried out, lightening had to be interrupted for almost a day, again because of strong winds and rough weather. The Charterers argued that time did not count during those periods. The Tribunal rejected that argument in part. It held that the periods fell within the addendum. Although the Tribunal did not accept the owners’ broader argument that all bad-weather time at the lightening installation should count, it held that weather delays falling within the wording of the addendum were to count against Laytime.

The practical conclusion is that lightening clauses must be read with precision. The ordinary meaning of “lightening” covers the physical operation itself, not the waiting period before the operation begins. If Charterers wish to exclude waiting time, weather delay, lighter availability delay, or other preparatory delay from Laytime, the Charterparty must make that allocation expressly.

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