Port Charterparty

Dock Charterparty:  In a dock charterparty the agreed destination is a dock and the vessel is an ‘arrived ship’ when she passes the dock gates. This type of charterparty is rare.

Port Charterparty: Port charterparties are the most commonly used form of charterparty and virtually all charterparties in the tanker market are port charters. Although we are dealing here with a port charter, where the berth is free and the vessel berths on arrival, the arrival voyage does not end until the vessel has berthed. It is at this point the vessel is an ‘arrived ship’. Where the vessel does not berth on arrival, for example, because of congestion on the berths, bad weather, tides, unavailability of tugs etc., under a port charterparty the agreed destination and the place that the NOR can be tendered is when the vessel has arrived at the ‘appropriate place’ within the port. Many disputes have arisen over where the appropriate place is for a port when the vessel has to wait for a berth. An important case on this subject is the Johanna Oldendorff (1973) 2 LLR 285 where it was decided that, if a vessel is not able to proceed directly to the berth, she will still have arrived at her agreed destination under a port charterparty if: a. she has reached the usual waiting area for vessels within the port, and b. she is at the immediate and effective disposal of the charterers. If a ship is within the port, but not at the usual waiting place, she may still be an ‘arrived ship’ if, at the place where she is, she is at the immediate and effective disposal of the charterers. If the ship is waiting at some other place in the port then it will be for the owner to prove that she is as fully at the disposal of the charterers as she would have been if in the vicinity of the berth for loading or discharge. There are still some arguments as to what ‘within the port’ means in practice, for example, the legal port limits, the customary anchorage, etc. In some ports, the port area is not clearly defined. Where there is no legal definition of the port boundary, the applicable test will be to ask whether she is in an area within which the port exercises authority. However, if the vessel has been refused permission and ordered to wait outside the port by the port authority she is not an ‘arrived ship’. In the Johanna Oldendotff case, the House of Lords thought that the area within which the port regulates movement and conduct would be a good guide. The court took trouble to suggest that the physical or pilotage limits of the port would not necessarily be the port limit. The court wanted to avoid strict legal definitions, and avoid argument by adopting the meaning of ‘port’ which the users of the port would give it. In practice, this definition led to arguments when port limits were unclear and usual anchorages were far from the berth. In the Maratha Envoy (1977) 2 LLR 301, the House of Lords confirmed that the vessel must anchor within the port. In this case, the vessel anchored at the Weser Lightship waiting to discharge at Brake – it was held that the vessel had not arrived at the port. This case was further complicated by the fact that the vessel twice left the anchorage and proceeded to Brake and, as anchoring at Brake was not permitted, she returned to the Weser anchorage each time – the act of moving to Brake did not make the vessel an ‘arrived ship’ because to be an ‘arrived ship’ the vessel must be waiting at the end of her voyage. Therefore, at common law, if the usual anchorage is outside the port limits, then the vessel will not have arrived. The owner should be aware of the ports where this will affect laytime starting, for example, Hull, where the usual anchorage is at Spurn Head, some 20 miles from the port. Without inserting an express provision in the charterparty confirming that the vessel is deemed to have arrived at the port when she anchors at Spurn Head, laytime would not commence, and the owner would bear the cost of the time lost waiting at Spurn Head. This principle was upheld in the case of The Agamemnon (TA Shipping Ltd v Comet Shipping Ltd [1998]) where a NOR given at South West Pass, at the mouth of the Mississippi, was invalid for the port of Baton Rouge, some 170 miles upriver, where the vessel had been fixed to load. In looking at the second part of the Johanna Oldendotfftest for arrival, that is, the vessel must be at the ‘immediate and effective disposal’ of the charterers, we shall see that this can often give rise to disputes because this phrase was not clarified in detail in this case. There is a presumption that a vessel waiting at the place where waiting ships usually lie will be deemed to be at the immediate and effective disposal of charterers and it is for charterers to prove to the contrary. If the vessel is waiting  for a berth somewhere other than the usual waiting place, then the owner must show that the vessel is at the immediate and effective disposal of the charterers. It should be noted that if the charterers are unable to use the vessel because of external factors such as congestion in the port (with no berth being available) or fog or bad weather (preventing the vessel sailing from the usual waiting area to an available berth), she will still be at the immediate and effective disposal of the charterer. Therefore, the charterers bear the risk of these external factors.