Laytime Exceptions

Parties of a shipping contracts are free to agree other express exceptions to the running of laytime (demurrage) as they see fit. Few dry cargo charterparties do this in their printed clauses, although tanker charterparties often include several express exceptions. Some of the more common exceptions are as follows.

  • In the Gencon 1976 Charterparty: General Strike Clause (Clause 15) provides that laytime will run at half rate whilst waiting for the strike to end. This is a good example of the parties agreeing to share the consequences of risks beyond their control.
  • In the Asbatankvoy Charterparty: Clauses 6 and 7 contain several express exceptions to laytime including: a. problems with the vessel and her equipment; b. night-time working restrictions; c. deballasting; d. pumping out of slops; and e. shifting from anchorage to berth.

If any of these defined events occur, laytime will stop running until the particular event is over, at which point laytime will start to run again. Ascertaining when an event starts and stops will generally be done by reference to the ship’s Statement of Facts (SOF) which records the time of each stage of the loading or discharging operation. It is important to remember that laytime exception clauses must be expressly agreed between the parties (charterers and shipowners). As they are exceptions clauses, they will be construed narrowly against the party who is seeking to rely on them. In addition, the law will rarely imply an exception to laytime and so best practice dictates that, if the charterer does not want a particular delay or period of time to count as laytime, charterer must get it agreed with the shipowner in advance and ensure that it is included in the charterparty.

Generally, express exceptions to laytime do not apply once the ship is on demurrage unless they are very clearly expressed to do so in the charterparty. Rule is often quoted as ‘once on demurrage, always on demurrage’. Reasoning behind the rule is that, once the charterer is in breach of contract by exceeding the agreed laytime, charterer should bear the risk of the whole of the additional delay caused to the ship. However, the parties may expressly agree that exceptions to laytime will continue to apply once the vessel is on demurrage by inserting express wording to this effect in the relevant clauses. General  rule is that laytime runs continuously unless it is stopped from running by an express exception agreed by shipowner and charterer in a clause of the relevant charterparty. To make sure that laytime is stopped when the parties have agreed, these clauses must be clear and there are many types of express exceptions to laytime used in practice today  For example, “sundays and other holidays not counting”  and “weather permitting”. An express exception to laytime will not take effect as an exception to time running when the ship is on demurrage unless the parties (charterers and shipowners) have made this clear in the charterparty.