Suspending Laytime

Fault of the Shipowner

Since laytime is time for which the charterer has already paid freight, it is now accepted that if a delay occurs during the loading or discharging operation (or at any other time when the laytime is running), which is the fault of the owner, then the time lost as a result of that delay does not count as used laytime or time on demurrage.

Case Example: The Union Amsterdam grounded off the discharge port as a result of the negligent navigation of the master and, consequently, the discharge process was delayed. It was held that the owner was not able to claim demurrage for the period of the delay resulting from the grounding because the delay had occurred because of the owner’s fault: The Union Amsterdam [1982] 2 Lloyd’s Rep 432. Even if the owner can rely on a general clause in the charterparty to exclude his liability for the act which caused the delay (eg negligent navigation in the above example), this is irrelevant to his liability to the charterer in relation to his lay time and demurrage position.

For example, in the Union Amsterdam case, the owner was not liable under the charterparty for negligent navigation. Lay time was still suspended because the grounding was caused as a result of the owner’s error and it did not matter that the owner could exclude its liability for it.

Shipwner Using The Ship For His Own Purposes

The second situation in which laytime is suspended is where the owner uses or takes the vessel away for its own purposes. For many years, the legal rules surrounding this general exception were unclear. However, following an English Court decision in 2002, it is now accepted that if, after laytime has started, a vessel is not available for the charterer’s loading or discharging operations because it is being used by the owner for his own purposes, neither laytime nor demurrage will run.

In addition, the owner’s conduct does not need to be ‘wrong’ or in breach of contract and the charterer does not even need to show that its operations were in fact delayed. It is enough that the owner did not make its vessel available to the charterer during laytime because that time has been paid for by the charterer in the freight it pays to the owner.

Case Example: The Stolt Spur, which was a parcel tanker, arrived at the discharge port to discharge cargoes for different charterers. When she arrived to discharge the first charterer’s cargo, she was advised that the berth would not be available for a considerable time. The vessel moved to another berth and loaded a cargo for a different charterer. The court said that, since the owner had taken the vessel away for its own purposes unconnected with the particular charterparty, neither laytime or demurrage could run: The Stolt Spur [2002] 1 Lloyd’s Rep 786. This rule seems fair if one simply considers that the vessel is not available to the charterer.

On the other hand, the owner did not commit any breach of the charterparty and, indeed, would have been perfectly entitled to wait for the first charterer’s berth to become available while lay time was continuing to run. In summary, therefore, if the owner takes the vessel away for its own purposes, and those purposes are unconnected with the performance of the charterparty in question, then laytime or time on demurrage will not run for the period the vessel is away.