13. Nereide S.P.A. Di Navigazione v Bulk Oil International Ltd (The “Laura Prima”) [1980] 1 Lloyd’s Rep 466; [1981] 2 Lloyd’s Rep 24; [1982] 1 Lloyd’s Rep 1

Reachable on arrival clause – modified Exxonvoy 1969 form – clause held operative to allow shipowners demurrage for delay caused by congestion.

The facts

The vessel was delayed at the loading port for about 9 days due to congestion.

The charterparty contained a clause allowing for notice of readiness to be given upon arrival at the customary anchorage, berth or no berth and excusing the charterers for delay in reaching a berth due to no fault of their own.

The charterparty also contained a “reachable on arrival” clause upon which the owners relied to claim demurrage.

Findings

The two arbitrators appointed were unable to agree and referred the matter to an umpire. The umpire found in favour of charterers but prepared a stated case for the Commercial Court.

Mocatta J found in favour of the shipowners and accepted the argument that the exemption for delay in favour of the charterers only became operative once they had fulfilled their primary obligation of providing a berth reachable on arrival.

The Court of Appeal (Laughton, O’Connor and Fox LJJ) agreed with the umpire but a unanimous House of Lords (Lord Diplock, Lord Fraser of Tullybelton, Lord Scarman, Lord Roskill and Lord Brandon of Oakbrook – judgment given by Lord Roskill) agreed with Mocatta J in giving precedence to the “reachable on arrival” clause.

Commentary

The respective clauses relied on by the parties to position the risk of delay due congestion were clearly contradictory. A more pleasing result could have been obtained by recognizing that the parties often intend natural impediments to be treated differently to man-made obstructions.

“Reachable on arrival” applies more readily to natural impediments eg tides. “Berth or no berth”, on the other hand, fits in with congestion. This approach reconciles the apparent contradiction in the clauses and would have allowed the charterers to succeed.

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