15. Shipping Developments Corporation S.A. v V/O Sojuzneftexport (The “Delian Spirit”) [1971] 1 Lloyd’s Rep 64; [1971] 1 Lloyd’s Rep 506

“Reachable on arrival” clause – laytime commencing “berth or no berth” – damages for detention not competent in case of congestion

The facts

The vessel was chartered to go to one or two safe ports in the Black Sea to load a cargo of crude oil and to proceed from there to one or two safe ports in Japan.

The vessel was ordered to load at Tuapse. The port comprised of a breakwater sheltering a jetty with berths for only four tankers. When the berths were occupied, the tankers were not allowed to wait inside the breakwater but had to remain at an anchorage within the roads.

The anchorage was within the administrative, pilotage and fiscal limits of the port.

On arrival at the anchorage, a Notice of Readiness was tendered and accepted. Due to congestion, the vessel lay at anchorage for 4½ days.

The owners contended that the vessel was not an arrived ship until it reached a berth and claimed damages for detention for the delay of 4½ days.

The charterparty allowed for 5 days’ laytime and no dispatch.

The umpire (Mustill QC) upheld the shipowner’s contentions but stated a special case for the Commercial Court.

Findings

The Commercial Court (Donaldson J) found that the “reachable on arrival” clause and the laytime clause operated independently of each other and that even if laytime did commence only upon reaching a berth and that demurrage was therefore minimal, that the shipowners were entitled to damages for detention while the ship lay at anchor due to breach of the “reachable on arrival” clause.

The Court of Appeal (Lord Denning MR, Fenton Atkinson LJ and Sir Gordon Willmer) held that the vessel was an arrived ship when it anchored in the roads.

The Court of Appeal disagreed that damages for detention could be claimed in addition to demurrage as the intention of the parties was that the time of grace purchased by the charterers in freight (laytime) could be utilized by them for any purpose including congestion.

On a secondary issue, both the Commercial Court and Court of Appeal found that even though free pratique was only issued after the vessel had berthed, laytime commenced on reaching the roads.

Commentary

Lord Denning MR did not expressly rule that the Angelos Lusis which had been followed by Donaldson J, was wrongly decided. Sir Gordon Willmer expressly left open the question what the outcome would have been if the vessel had not been found to be an arrived ship with reference to the test for a port charterparty.

The facts of this case and the Angelos Lusis demonstrate the conceptual confusion which is introduced by importing the construct of an arrived ship.

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