Ship Readiness to Load

Before laytime will begin to run, not only must the vessel become an ‘arrived ship’ at the designated port of loading, but two further requirements must be satisfied. First, the shipowner must have given the prescribed notice of readiness to load and, second, the vessel must in fact be ready to load. In the absence of special agreement in the charterparty, English law does not require the master to give notice of readiness to unload to the consignee at the port of discharge.
(I) Notice of readiness to load:  The purpose of such notice is to inform the charterer that loading may commence and to provide a starting point for the calculation of laytime. At common law the notice can be in any form, providing that it is communicated, but if a particular form is prescribed in the charter, such as notice in writing, then that form must be adopted. From the standpoint of business convenience, advance notice of expected readiness would be particularly helpful tothe charterer and many standard forms require the giving of such notice at a specified time before arrival. For example, clause 2 of the Polcoalvoy charter requires at least 10 running
days’ written notice of the approximate date of readiness to load. On the other hand, many charter forms prefer certainty and the requirement at common law is for a simple notice of actual readiness to load. Such notice is, however, only effective in respect of an ‘arrived ship’ which is actually ready to load at the time notice is given. In this respect English law takes a strict view and a notice of anticipated readiness is ineffective even though the vessel was in fact ready to load at the time the notice was given. Problems arise, however, in such a case where, despite the invalid notice, the vessel proceeds to berth and to load or discharge cargo without a further notice of readiness being given. According to the strict legal view, laytime will not commence in the absence of a valid notice of readiness with the result that, not  only will the owners have no claim for demurrage but they may also be obliged to pay the charterers despatch money for the whole of the agreed laytime. This result, while legally impeccable, does not make commercial sense. Nevertheless, the courts have been reluctant to hold that a premature notice of readiness becomes automatically effective when the vessel is ready to discharge and proceeds to discharge with the co-operation of the charterers. In their view mere awareness by the charterers of the vessel’s readiness to discharge is not sufficient. Something extra is required in the form either of an implied or express agreement to dispense
with the need for notice, or a waiver or estoppel binding on the charterers in respect of the necessity for a further valid notice. The Court of Appeal considered that these requirements were met in the case of The Happy Day, where the vessel, having missed the tide, was unable to enter port but nevertheless gave a premature notice of readiness to discharge. The vessel berthed the following day and commenced discharge. The issues before the court were twofold: was a further notice of readiness required to commence laytime and, if not, when did laytime commence? On the facts of the case the charterers were aware of the arrival of the vessel and of its readiness to discharge while, through their agents, they had accepted instructions to discharge the vessel without  any reservation of their position as to the validity of the notice of readiness which they had earlier received. In these circumstances, Potter LJ was of the opinion that ‘the doctrine of waiver may be invoked and applied in such a case and the commencement of loading by the charterer or receiver without rejection of or reservation regarding the notice of readiness can properly be treated as the “something else” which Lord Justice Mustill
indicated was required to be added to mere knowledge of readiness on the part of the charterers, in
order for a finding of waiver or estoppel to be justified.’ On the facts of the case, the notice of readiness previously tendered was treated as having been accepted at the time discharge commenced. A more liberal approach to the problem is suggested by the comment of Rix LJ in The Front Commander. ‘If a charterer uses a vessel, known to be ready at the time of  use, which has been tendered to him by a valid notice of readiness, or by an invalid notice whose invalidity is known, he must expect time to run against him . . . subject to any express
contrary agreement.’ The case in question involved a charterparty which included a specific laycan provision. The vessel arrived at the loading port, gave notice of readiness and commenced loading the day before the earliest date for loading specified in the laycan provision. Despite the fact that the charterers, during the loading voyage, had sent repeated emails to the
owners requesting the vessel to give notice of readiness and commence loading as soon as possible after arriving at the loading port, they nevertheless contended that laytime did not commence before the earliest layday specified in the laycan clause. In rejecting this argument,
Rix LJ, in the Court of Appeal, laid stress on the fact that ‘the charterers not only consented to an early tender of notice of readiness, berthing and commencement of loading, but gave orders to that effect.’ Such problems are avoided in some European jurisdictions, such as in Scandinavia and Germany, where an anticipatory notice of readiness is effective provided that the vessel
is ready by the time the notice expires. Many charters have an additional requirement that notice of readiness be given during specified office hours, e.g. between 0600 and 1800 hours. The question then arises as to whether notice given outside these hours is a complete nullity, thus necessitating the rendering of a second notice within the required period. A recent decision has held that, provided the vessel is ready to load at the time the contractually invalid notice is given, there is no good reason why such notice should not take effect as from the time fixed by the contract for it to be tendered. If it is subsequently discovered that the vessel is not ready to load, then the notice will be wholly ineffective and laytime will not commence to run. On the other hand, should the charterer in such circumstances waive the default by proceeding to load without protest, then he will not be allowed to invoke the lack of readiness at a later stage in the absence of of fraud. As noted earlier, English law does not require notice of readiness to be given at the port of discharge, where it is the responsibility of the consignee to keep a lookout for the arrival of the vessel. This rule probably stems from the situation in liner contracts where the obligation to notify a range of consignees might impose an unjustifiable burden on the shipowner particularly in cases where the bill of lading has been assigned during the voyage. It is, however, more difficult to justify the rule in the case of charterparties and accept the view taken by Donaldson J that ‘once his cargo has been loaded . . . [the charterer] may be expected to take an interest in the movements of the vessel which he would not take prior to loading’. The problem of identifying the ultimate consignee can be avoided by a provision in the charter requiring the master to give notice to specified agents at the port of discharge.