18. North River Freighters Ltd v President of India (The “Radnor”) [1955] 2 Lloyd’s Rep 73; [1955] 2 Lloyd’s Rep 668

Giving of Notice of Readiness delayed by port authorities making vessel incommunicado – charterers entitled to rely on “time lost” clause.

The facts

A voyage charterparty on the Gencon form required the vessel to proceed to “one safe berth Dairen” to load a cargo of soya beans or grain and to proceed from there to a port in India.

One clause stipulated that laytime would commence after written Notice of Readiness had been given and another, that “time lost in waiting for berth to count as loading time”.

The vessel arrived off Dairen and, no pilot being available, anchored in the quarantine anchorage. Customs officials boarded the vessel and placed a total restriction on communication with shore.

Approximately seven days later, the charterer’s agents boarded the vessel when they were given Notice of Readiness by the master.

At arrival, the vessel was physically ready to load and the charterers were aware of its arrival.

In dispute was which party was to bear the risk of delay prior to berthing.

Findings

The umpire (C W Bateson) found that the clause “time lost in waiting for berth to count as loading time” was operative and held that the ship was entitled to demurrage for the time spent in the port prior to berthing.

McNair J found that on a proper interpretation of this particular charterparty, time could only run once Notice of Readiness had been given as prescribed. Time lost in waiting for a berth to become available could only be considered once a valid Notice of Readiness had been given.

McNair J agreed with counsel for the owners (Roskill QC) that it was incorrect to attempt to force the terms of this agreement into either a port charter or berth charter category. Where the ship lay was immaterial as the delay was caused by the failure to give Notice or Readiness.

The Court of Appeal (Singleton, Jenkins and Parker LJJ) restored the umpire’s decision.

The Court of Appeal (main judgments by Singleton and Jenkins) favoured the view that this was a berth charter.

Commentary

The Court of Appeal avoided the pitfall of placing the contract in a category in order to impose predetermined rules but this did not guarantee the correctness of the decision.

Counsel for the charterers (Megaw QC) argued, seemingly correctly, that this was a port charter and that reference to “one safe berth” actually meant that the charterers were confined to the nomination of a single as opposed to multiple berths.

The finding of the Court of Appeal that this was a berth charter is inconsistent with the clause which was held to be decisive of the case ie. “time lost in waiting for berth to count as loading time.” The consequences of a berth charter are that the risk of delay in reaching a berth lies on the ship which contradicts the specific clause in question. Singleton LJ remarked that there was no magic in a charterparty. The solution was to be found by the application of ordinary contractual principles.

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