Laytime – master’s knowledge of stoppage eliminating need for notice to be given to qualify for deduction of time
Petroleum coke was shipped from Port Arthur to Rotterdam.
Clause 25 of the charter provided that time lost during stoppages due to various causes during loading was not to count as laytime provided “due notice [was] given at the time to the Master or Owner”. The specific incidents qualifying for stoppage time were set out including riots, strikes, and accidents to mines or machinery. A catch-all or sweeper clause referring to “any cause whatsoever beyond the control of the charterer” was included.
The shipper’s agent entered into a separate contract to receive the petroleum coke and to load it into the vessel.
The contractor’s loading equipment broke down due to poor maintenance which caused a stoppage.
Although the Master knew of the stoppage and its cause, no formal notice was given to him in terms of the charterparty.
The owners argued, firstly, that the stoppage was not covered by the terms of the charterparty and, secondly, that no notice was given of the stoppage.
The majority of a panel of three arbitrators (Michael Mabbs, Clifford Clark and John Besman) found that the catch-all phrase did not assist the charterers and that the stoppage did not fall within the terms of the charterparty. This finding rendered a finding on the second issue, namely, whether notice was required, irrelevant. Nevertheless, the panel unanimously found that formal notice would not have been required.
The Commercial Court (Mustill J) found on the first issue that the wide, general clause had to be given a wide meaning and that the stoppage was covered.
He declined to apply the eiusdem generis rule adopted by the arbitrators to read down the relevant clause. A further argument adopted by the arbitrators was that if the general clause had to be construed widely it would make the specific instances mentioned redundant. Mustill J remarked that arguments from redundancy had little weight when construing a commercial document.
He found that “due notice” would in the circumstances be no notice since there could be nothing “due” in a communication which told the Master nothing which he did not already know. He pointed out that, as a matter of law, the charterers could not be prejudiced by their failure to perform a useless formality.
In support of the second contention, Mustill J quoted the words of Lord Denning MR in an insurance case, Barrett Bros, “the law never compels a person to do that which is useless and unnecessary”.
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