Strike and Lock-Out Provisions in a Voyage Charterparty

Strike and Lock-Out Provisions in a Voyage Charterparty

The General Strike Clause in a voyage charterparty is designed to allocate the commercial consequences of labour disruption affecting performance of the charter. Its practical importance is usually felt most sharply in relation to laytime, demurrage, loading delay, discharge delay, cancellation rights, and the ability to redirect the ship when a discharge port is affected by a strike or lock-out.

In the Gencon form, the clause operates through a structured compromise. Neither charterers nor shipowners are to be responsible for the consequences of strikes or lock-outs preventing or delaying the performance of obligations under the charter. The clause then deals separately with disruption at the loading stage and disruption at the discharge stage. For that reason, the clause should not be read as three isolated sentences. It must be interpreted as a single commercial mechanism.

The central purpose is to prevent either side from carrying the full burden of a labour stoppage without a contractual route for dealing with it. At the same time, the clause does not simply suspend every consequence of a strike. It gives different rights depending on the stage of the voyage, the timing of the strike, whether laytime has already expired, and whether the charterer or receiver chooses to keep the ship waiting or move the cargo operation elsewhere.

The Clause as a Complete Commercial Code

English authorities have treated the Gencon General Strike Clause as a coherent code. The approach developed in cases such as The Onisilos and The Saturnia is that the general exclusion must be reconciled with the specific loading and discharge provisions. The broad wording in the first part does not automatically override the later parts; instead, the later parts provide the special rules for the circumstances they address.

This matters because a strike clause often affects competing commercial expectations. A charterer may argue that a strike should stop time or reduce exposure to demurrage. A shipowner may argue that the ship has been detained and should continue to earn at the agreed or market rate. The Gencon wording seeks to avoid that dispute by offering defined options, especially where a strike affects loading before the charter has been fully performed or discharge after the ship has arrived at the destination.

Although exemption clauses are generally construed carefully, the decided cases have given the General Strike Clause a wide practical operation. A party relying on it must still show that the situation falls within the clause, but the wording is not confined to a narrow class of port labour disputes. Its operation depends on the nature of the stoppage, the obligation affected, and the point in the voyage at which the interruption occurs.

What Counts as a Strike or Lock-Out

The clause is triggered by a strike or lock-out. The modern meaning of strike is broader than an old-fashioned wage dispute. A strike may include a concerted stoppage of work by workers seeking improved wages or conditions, protesting a grievance, or supporting other workers. It is not necessary that every worker stops for an entire day. A refusal to work at night, while day shifts continue, may still amount to a strike if the port operation normally requires night work.

However, not every delay, refusal, protest, or disruption is a strike. A stoppage caused by fear, a bomb scare, civil commotion, political mourning, social unrest, or a general security concern may fall outside the usual meaning unless the facts show a labour-related concerted refusal to work. The distinction is important because the charterer normally carries the burden of proving that the event relied upon is genuinely within the strike wording.

A difficult issue arises with go-slow, work-to-rule, and intermittent stoppages. In commercial terms, these actions may cause delays similar to a strike. Legally, however, a mere reduction in efficiency may not be enough unless the clause expressly extends to slowdowns or similar industrial action. The Voylay Rules 1993 reflect this distinction by treating a strike as excluding a mere go-slow unless it causes a complete cessation of work at a time when work would normally be carried out.

For drafting purposes, parties who want to cover go-slows, work-to-rule action, overtime bans, safety stoppages, port congestion caused by labour disruption, or wider civil disturbance should say so expressly. Reliance on the word strike alone can leave a serious evidential and legal argument.

Part One: The General Exclusion of Responsibility

The opening part of the Gencon clause states the broad rule that neither side is responsible for the consequences of strikes or lock-outs that prevent or delay the fulfilment of obligations under the charter. This wording is potentially wide enough to cover many obligations, not only cargo handling. It may apply to strikes involving stevedores, crane drivers, tug crews, pilots, ship crew, or other workers whose stoppage prevents contractual performance.

Part One therefore modifies the ordinary position under which a party remains responsible for performance unless the contract is frustrated or an express exception applies. If a qualifying strike prevents or delays performance, the clause may protect the party who would otherwise be in breach. Its effect is not limited to the physical act of loading or discharging.

At the same time, Part One is not the final answer in every case. Where Part Two or Part Three applies, those more specific provisions shape the parties’ rights. In other words, the general immunity is subject to the special loading and discharge regimes created by the clause. This is why the clause must be read as an integrated commercial bargain.

Part One and the Running of Laytime

General exceptions clauses do not automatically interrupt laytime or demurrage. Voyage charter law usually requires clear wording before time is stopped or demurrage liability is reduced. The Gencon General Strike Clause is different because its later wording expressly refers to reckoning laydays as if there were no strike and to payment of half demurrage in discharge-port cases. That wording shows that the strike clause can affect laytime and demurrage, subject to the detailed structure of the clause.

Part One may also extend to the consequences of a strike, including abnormal congestion caused by a strike after the strike itself has ended. Whether this result follows in any particular case depends on the words used and the facts proving that the later congestion was truly a consequence of the strike, rather than ordinary port congestion. Some strike clauses are worded more narrowly and stop operating when the strike itself ends.

The practical point is that parties should distinguish between delay caused by the strike itself and delay caused by its aftermath. If post-strike congestion is to be included or excluded, the charterparty should say so clearly.

The Rule Once on Demurrage Always on Demurrage

A major limitation on the General Strike Clause is the rule commonly expressed as once on demurrage, always on demurrage. If laytime has already expired before the strike begins to delay the ship, the charterer normally cannot rely on the strike clause to reduce or avoid demurrage. This principle was central to The Saturnia.

The reasoning is commercial as well as textual. If a strike after expiry of laytime allowed the charterer to escape or reduce demurrage, the owner would be worse off than if the strike had occurred earlier during laytime. The specific option mechanisms in the clause make little sense once laytime has already expired. Therefore, unless the charter contains clear wording to the contrary, a ship already on full demurrage remains on full demurrage despite later strike delay.

This principle applies at both loading and discharging stages. The half-demurrage regime in the discharge section is not available where the ship was already on demurrage before the strike affected discharge. In that situation, full demurrage continues.

Part Two: Strikes Affecting Loading

The second part of the Gencon clause deals with strikes or lock-outs affecting loading. It applies where the strike affects the loading of the cargo, or part of it, when the ship is ready to proceed from her last port, during the approach voyage to the loading port, after arrival at the loading port, or while loading is underway.

The wording is wide enough to cover a strike that has not yet physically delayed loading but would do so if it continued. For example, a strike known to be affecting the loading port before the ship arrives may still fall within Part Two if it is likely to prevent or delay the loading operation. The phrase is intended to exclude only strikes that have no meaningful connection with the loading of the contractual cargo.

Part Two is concerned with an actual strike or lock-out. A mere backlog after a strike has ended may be dealt with under Part One if causation is proved, but it is more difficult to use the loading-port option mechanism where no strike is still in progress. The owner’s rights under Part Two are strongest when a qualifying strike is active during the relevant period.

The Owner’s Request to the Charterer

When Part Two applies, the captain or owner may ask the charterer to declare in writing that laydays will be reckoned as if there were no strike or lock-out. The purpose is clear. The owner gives the charterer a choice: either maintain the strike protection and risk cancellation, or preserve the charter by agreeing that laytime will count without strike deduction.

The charterer must give an affirmative written declaration within 24 hours. Silence is not enough. If the charterer fails to respond positively in time, the owner obtains the option to cancel the charter. The clause does not oblige the owner to make the request immediately, and it may be commercially reasonable for an owner to wait briefly to see whether the disruption ends quickly. There is also no obvious right for the charterer to compel the owner to ask the question.

Once the owner’s right to cancel has arisen, a late declaration by the charterer probably cannot automatically remove that right. It may, however, be treated commercially as a new proposal by the charterer to proceed on the basis that strike time will count. If the owner wishes to cancel after the charterer fails to agree within 24 hours, the right should be exercised within a reasonable time. Excessive delay may be treated as an election not to cancel.

Where the Charterer Refuses or Fails to Agree

If the charterer does not agree to reckon laydays as though there were no strike, the charterer keeps the protection of the general strike exception. The owner then decides whether to cancel. If the owner chooses not to cancel, the strike exception continues to protect the charterer to the extent allowed by the clause.

If no cargo has been loaded, cancellation ends the charter in accordance with the clause. If part cargo has already been loaded, the owner does not simply cancel and walk away. The clause requires the owner to proceed with the loaded cargo, with freight payable only on the quantity actually loaded, and with liberty to complete the ship with other cargo on the way for the owner’s own account.

This part-cargo mechanism protects cargo interests while allowing the owner to reduce the commercial loss caused by a strike-interrupted loading operation. It does not necessarily permit a neat apportionment of lumpsum freight unless the charter wording supports that result.

Where the Charterer Agrees

If the charterer gives the required declaration, laydays are counted as if no strike existed. The strike is ignored for laytime purposes, not merely from the date of the declaration but in relation to the loading period affected by the clause. The commercial price paid by the charterer for keeping the charter alive is the loss of strike protection in the laytime calculation.

Where laytime expires after such an agreement, demurrage should be payable at the full rate. The charterer cannot both prevent cancellation and then rely on the general exclusion to avoid the ordinary consequences of detention. The owner remains deprived of the use of the ship, and the charterer has chosen to proceed on the basis that the strike will be disregarded in counting time.

Part Three: Strikes Affecting Discharge

The third part of the General Strike Clause addresses strikes or lock-outs affecting discharge on or after the ship’s arrival at or off the discharge port. If the strike has not been settled within 48 hours, the receivers are given a choice. They may keep the ship waiting until the strike ends and pay half demurrage after discharge laytime has expired, or they may order the ship to a safe alternative port where discharge can take place without risk of detention by strike or lock-out.

Although the wording refers to receivers, the notice under the clause is given to charterers, and commercial practice often treats the charterer’s role as central. In any dispute, the relevant question is who had authority to give discharge instructions and whether the clause’s procedural requirements were met.

Part Three is not engaged by every discharge delay linked to labour trouble. A strike must be in progress on or after arrival at or off the discharge port, and it must remain unsettled for more than 48 hours. If the strike ended before arrival but caused congestion afterwards, the specific half-demurrage machinery may not apply, although the general exception may still be argued if the congestion is proved to be a consequence of the strike.

The 48-Hour Requirement at the Discharge Port

The 48-hour period is a key threshold. If a strike is already in progress when the ship arrives, the better view is that the period runs from arrival rather than from the earlier start of the strike. Successive short strikes should not ordinarily be added together to create a single 48-hour period unless the wording or facts justify that result.

Where the strike lasts less than 48 hours, Part Three does not create the half-demurrage option. However, if laytime has not expired, the charterer may still seek protection under Part One for time lost due to the strike. This approach prevents the 48-hour wording from turning a short qualifying strike into an event that is completely ignored for all purposes.

The evidential burden is important. A charterer who relies on the clause must show not only the existence of labour action but also that it affected discharge and satisfied the relevant timing requirements. Port statements, terminal notices, contemporaneous messages, statement of facts entries, and agent reports are often decisive.

The Option to Keep the Ship Waiting

The first discharge-port option is to keep the ship waiting until the strike or lock-out ends. In return, after the expiry of the agreed discharge time, the charterer pays demurrage at half the usual rate. The reduced rate is a contractual compromise: the charterer is not completely free of cost, while the owner does not receive full demurrage for a delay caused by qualifying labour disruption.

In The Onisilos, the half-demurrage regime was held to continue through the discharge operation rather than ending automatically when the strike itself ended. The clause was treated as a clear commercial solution once the charterer had, expressly or by conduct, chosen to keep the ship waiting. The full rate did not revive simply because the labour stoppage had ceased.

A formal declaration is not always necessary for this option. If the charterer knows of the strike and does not order the ship to an alternative safe port within the relevant time, the charterer may be treated as having chosen to keep the ship waiting. If the charterer has no knowledge of the strike, however, it is difficult to treat silence as a deliberate election.

The Option to Order a Substitute Discharge Port

The second option is to order the ship to a safe port where discharge can be completed without the risk of detention by strike or lock-out. This option gives the charterer or receiver a way to avoid prolonged waiting at the original port. It also gives the owner a way to bring the adventure to completion, provided the substitute port is safe and commercially workable.

The clause says that such orders are to be given within 48 hours after the captain or owner gives notice of the strike affecting discharge. The better practical reading is that the owner’s notice sets a time limit for the substitute-port option. The charterer may be able to nominate earlier, even before formal notice, if the facts are clear. Conversely, if the owner wants certainty, prompt written notice should be served as soon as the strike begins to affect discharge; the owner need not necessarily wait until the strike has continued for 48 hours before giving that notice.

Once the ship is sent to a substitute port, the charterparty and bill of lading terms continue to apply to delivery there. If the substitute port is within 100 nautical miles of the original destination, the same freight applies. If the distance exceeds 100 nautical miles, freight on the cargo delivered at the substitute port is increased proportionately. The formula can still create disputes, particularly if part cargo is to be discharged elsewhere or if the deviation causes a substantial commercial detour.

At the substitute port, any demurrage should ordinarily be payable at the full rate unless the charter clearly provides otherwise. The substitute port must be one where the ship can discharge without the relevant strike risk, so the charterer should not expect to retain the same strike protection after choosing that alternative.

Consequential Congestion After a Strike

Strike clauses often generate disputes after the workers have returned. A ship may remain delayed because the port is congested, berthing windows are lost, shore tanks are unavailable, or cargo handling has fallen behind schedule. The question then becomes whether the delay is still a consequence of the strike or merely ordinary port congestion.

Under wording similar to the Gencon phrase referring to the consequences of strikes, English law has been prepared to treat strike-created congestion as protected where the factual link is established. However, not every clause has the same effect, and not every congestion claim is caused by a strike. The charterer must prove causation with contemporaneous evidence.

From a practical standpoint, the statement of facts should distinguish actual strike hours, periods when work resumed, port congestion created by the strike, ordinary waiting time, weather interruptions, berth occupancy, and any independent terminal delays. Without that separation, the laytime calculation becomes vulnerable to challenge.

Strikes, Deadfreight, and Failure to Provide Cargo

The General Strike Clause may also affect claims for deadfreight or failure to provide cargo. If a qualifying strike prevents the movement or loading of cargo, the charterer may argue that the general exclusion relieves liability for the failure to provide the contractual quantity. The strength of that argument depends on the clause wording, the source of the delay, and whether the charterer has an absolute obligation to provide cargo from another source.

Under the Gencon loading mechanism, the owner must follow the contractual procedure if seeking to cancel in response to a loading strike. Where part cargo is loaded, the owner’s remedy is not necessarily a deadfreight claim. The owner may be required to proceed with the loaded quantity and try to complete with other cargo if permitted by the clause.

For that reason, an owner facing a loading-port strike should not simply sail with part cargo and later claim deadfreight unless the charter permits that course or the procedural steps have been correctly taken. The owner should ask for the declaration, allow the contractual response period, and preserve all notices in writing.

Interaction with Frustration

A strike may, in extreme cases, frustrate a voyage charterparty. However, frustration is not lightly applied. The delay must be so serious that performance has become radically different from the adventure contemplated by the parties. The existence of a strike clause does not automatically exclude frustration, but it may show that the parties allocated the risk of ordinary strike delay within the contract.

Where the clause provides a workable answer, the court or tribunal will usually apply the clause rather than the doctrine of frustration. Frustration becomes more likely only where the strike delay exceeds what the clause can sensibly accommodate, or where the commercial purpose of the voyage has been fundamentally defeated.

This is particularly relevant for prolonged strikes affecting an entire loading range, seasonal cargo programs, or consecutive voyages. A short or foreseeable labour interruption will normally be managed under the charter; a prolonged and commercially destructive interruption may raise a separate frustration issue.

U.S. Law Approach to the General Strike Clause

Under U.S. maritime law, the same broad agency and contract principles apply, but arbitration awards show a strong emphasis on the exact wording of the clause and the factual nature of the labour event. A strike is not treated as a force beyond all legal consequence unless the charterparty expressly makes strike delay an exception to laytime or demurrage.

U.S. panels have read the first part of the General Strike Clause broadly in appropriate cases. In The Silver Glory, a railway strike that prevented cargo movement from a mill to the loading port was held to relieve the charterer from responsibility for providing cargo and from a deadfreight claim. This illustrates that the strike need not be physically at the berth if it prevents fulfilment of a charter obligation.

At the same time, U.S. decisions place the burden on the charterer to prove that the relevant event was a qualifying strike and that it caused the claimed delay. Ambiguity about whether a stoppage is sufficiently labour-related or sufficiently long is generally resolved against the party seeking to interrupt laytime or reduce demurrage.

U.S. Law and the Meaning of Strike

U.S. arbitration decisions distinguish labour strikes from political or social work stoppages. In The Gina Juliano, short stoppages to commemorate a murdered union leader and to protest the killing of army officers were not treated as strikes within the General Strike Clause because they lacked the necessary commercial or labour motivation. A separate 24-hour port strike did qualify in character, but its duration was insufficient to activate the 48-hour discharge mechanism.

Other awards have treated civil unrest, irregular meetings, intermittent stoppages, and slowdowns cautiously. In The Anodad Naree, work slowdowns at Chittagong intended to improve wages were not accepted as falling within the relevant strike wording. These decisions reinforce the need for precise drafting if the parties want slowdowns, work-to-rule action, or labour-related inefficiency to have the same effect as a complete strike.

U.S. Law and Congestion After a Strike

U.S. awards are not uniform on whether congestion after a strike remains excepted. Some decisions have treated consequential delays as protected where they flowed from the strike. Others have refused to extend the exception beyond the actual strike period. The outcome depends heavily on the wording of the clause, the quality of evidence, and whether the congestion can be separated from ordinary port delay.

The safer commercial approach is to draft expressly. If the parties intend the exception to cover the aftermath of a strike, the charter should refer to congestion, backlog, berth unavailability, and other consequences arising from the strike. If they intend only the actual period of work stoppage to count, the clause should say so.

U.S. Law and the Loading-Port Cancellation Option

U.S. arbitration also emphasizes compliance with the loading-port procedure. In The Namik Kemal, an owner who sailed after loading part cargo without first asking the charterer for the declaration required by the clause and waiting the contractual 24 hours was not entitled to deadfreight. The award demonstrates that a contractual option must be exercised through the contractually required steps.

The lesson is straightforward. Where the clause gives a remedy, the party relying on it should follow the remedy exactly. Notices should be timely, addressed to the correct party, clear in their wording, and preserved together with delivery evidence.

U.S. Law and Half Demurrage at Discharge

At the discharge port, U.S. awards have recognized that a charterer does not necessarily need a formal declaration to choose the half-demurrage option. In The Sideri, the charterer was treated as having elected to keep the ship in port by not ordering her away within 48 hours after notice of the strike. Conduct, silence, and failure to nominate a substitute port may therefore amount to an election where the charterer has knowledge of the relevant facts.

However, this should not be treated as a reason for casual communication. Owners should give clear notice of the strike and reserve their rights. Charterers should respond expressly if they intend to order the ship elsewhere or if they dispute that the clause has been triggered. Silence may produce unintended consequences.

Practical Notice and Evidence Requirements

The General Strike Clause is notice-sensitive. At the loading stage, the owner’s request starts the 24-hour period for the charterer’s declaration. At the discharge stage, the owner’s notice can start the 48-hour period for a substitute-port order. Poorly drafted, late, or misdirected notices can turn a strong legal position into a disputed claim.

Owners should record when the strike began, which workers stopped, what work was affected, how loading or discharge was prevented, when the charterer was notified, and when any option was exercised. Charterers should record why the event qualifies as a strike, how it affected cargo operations, whether laytime had expired, and whether any order to a substitute port was commercially reasonable.

Agents’ statements, terminal certificates, labour union notices, port authority communications, pilots’ reports, and the statement of facts are all relevant. The evidence should be gathered while the event is unfolding, not reconstructed after a demurrage dispute has arisen.

Drafting Points for Shipowners

Shipowners should review whether the clause preserves full demurrage once laytime has expired, whether post-strike congestion is covered, and whether the owner has a clear right to cancel at the loading stage. The charter should specify how notices are to be served, whether email is sufficient, who may give and receive notices, and whether local agents have authority to bind the parties.

Owners should also consider whether half demurrage at discharge is commercially acceptable for the trade. In high-rate markets, a long strike at the discharge port can create a significant loss of earning capacity. Where the risk is unacceptable, the clause should be amended or the freight and demurrage economics should reflect that exposure.

Drafting Points for Charterers

Charterers should ensure that the clause protects not only physical loading and discharge strikes but also cargo supply interruptions, inland transport strikes, terminal labour disputes, and strike-related congestion if those risks are important to the trade. They should also confirm whether short strikes of less than 48 hours are protected under the general wording and whether slowdowns are included.

Where cargo movement depends on mines, railways, barges, inland depots, government permits, or terminal contractors, a narrow strike clause may not be sufficient. Charterers should decide whether the charter should cover only port labour or also the broader chain that enables cargo to reach the ship.

Operational Lessons During a Strike

During a strike, commercial decisions should be aligned with the clause. At the load port, owners should decide whether to ask for the 24-hour declaration and whether cancellation is commercially preferable to waiting. Charterers should decide quickly whether they want laytime to run as if no strike existed in order to keep the fixture alive.

At the discharge port, the charterer must choose between waiting on half demurrage after expiry of laytime and ordering the ship to a safe alternative port. Delay in making that decision may increase the dispute. Owners should serve notice promptly if they want to force the issue.

Both sides should also keep a separate analysis of whether the ship was already on demurrage when the strike began to affect cargo operations. That single fact may decide whether the charterer receives the benefit of reduced exposure or remains liable for full demurrage.

Conclusion

The General Strike Clause in a voyage charterparty is more than a simple excuse for delay. It is a detailed risk-allocation mechanism dealing with labour disruption, laytime, demurrage, loading cancellation, part cargo, substitute discharge ports, and freight adjustment. Its operation depends on careful construction, accurate timing, and reliable evidence.

For shipowners, the key protections are the right to ask the charterer to count laydays despite a loading strike, the option to cancel if the charterer refuses, and the preservation of full demurrage once the ship is already on demurrage. For charterers and receivers, the principal protections are the general strike exception, the ability to keep the ship waiting at half demurrage in qualifying discharge cases, and the right to order a safe substitute discharge port.

The clause works best when the parties understand its procedure before the dispute arises. Clear notice, precise drafting, detailed statements of fact, and prompt commercial decisions are essential. A strike clause that looks straightforward at fixture stage can become one of the most important clauses in the charter when cargo operations are interrupted.