549. Gard Shipping AS v Clearlake Shipping PTE LTD (the MT “Zaliv Baikal”) [2017] EWHC 1091 (Comm)

Voyage charterparty – construction of lay time provisions.

The Facts

The vessel was chartered for one voyage from one safe port Ust-Luga to one or two safe port(s) “UK Cont North Spain – Hamburg Range”.

The charterparty was later revised to include a second voyage from Ust-Luga or St Petersburg to the same discharge range as the first voyage.

The charterparty contained the following clause:

AC11. Notwithstanding any term of this charter to the contrary, charterers shall have the liberty, at any stage of the voyage, of instructing the vessel to stop and wait for orders for max 3 days at a safe place within the range as agreed. In particular and without prejudice to the generality of the aforegoing, charterers shall be entitled to instruct the vessel not to tender NOR on arrival at or off any port or place or to delay arriving at any port or place until charterers give the order to do so. Time to count as used lay time or time on demurrage, if vessel is on demurrage. And all bunkers consumed to be for charterers account.

After first 5 days waiting for orders / discharge instructions at sea vessel to be considered as being used for storage, and, unless otherwise agreed, following increase of demurrage rate to apply.

Days 6 – 15 DEMM rate plus $5,000.

Days 16 – 26 DEMM rate plus $10,000.

Days 26 – 35 DEMM rate plus $15,000.

Prior to expiration of 35 days period charterers to inform owners if they require more time to use vessel as storage, and new rates to be mutually agreed.

Latest on 35th day of such waiting. Such a waiting time to be compensated at rates agreed above and payable together with freight against owners separate invoice.

Charterers option to order ship to wait at an offshore position provided they give final destination and expected cargo delivery window, in which case the above increase in rates not to apply.

In case where final destination or cargo delivery window changes, then increase of rates to apply as per this clause.

The final leg of the second voyage was from Kalundborg to Rotterdam.

The vessel completed her passage to Rotterdam at 22h30 on 26 January 2016. NOR was tendered at 22h50 on 26 January 2016.

Charterers did not give any discharge instructions until the afternoon of 31 March 2016 which meant that the vessel waited at Rotterdam for a total of 64.7083 days.

Owners claimed $976,731 for escalated demurrage and bunkers consumed.

Findings

Owners argued that, on these facts, where charterers allowed notice or readiness to be given but withheld discharge instructions for their own commercial purposes, they were hit by clause AC11 which provided for escalated demurrage.

Sir Jeremy Cooke held that they were not so hit but were liable for ordinary demurrage. This was the plain meaning of the provisions of AC11 read in the context of the entire charterparty and no term could be implied to contradict such meaning.

Commentary

The judge’s conclusion is not self-evidently right.

As the charterers were given the right to order the Master not to tender notice of readiness by clause AC11, a strong argument could be made out that the parties impliedly agreed that, in every case, charterers would make use of such right where they intended to use the vessel for storage. Allowing notice of readiness to be given and withholding discharge orders are practically contradictory positions.

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