24. Sociedad Carga Oceanica S.A. v Idolinoele Vertriebsgesellschaft M.B.H. (The “Angelos Lusis”) [1964] 2 Lloyd’s Rep 28

“Reachable on arrival clause” placing risk of congestion on charterers

The facts

The vessel was chartered to load gasoil in Constantza for destination one or two ports in the Antwerp-Hamburg range.

The charterparty contained in the following clauses:

6. The Vessel shall load and discharge at a place or at a dock or alongside lighters reachable on her arrival which shall be indicated by Charterers.

7. The lay-days shall commence from the time the Vessel is ready to receive or discharge her cargo, the Captain giving 6 hours’ notice to the Charterers’ Agents, berth or no berth.

It was practice in the port of Constantza that all vessels not in berth were required to wait in the roads, outside the commercial and fiscal limits of the port.

The vessel was unable to berth due to congestion and was required to wait in the roads for 4 ½ days.

Upon the supposition that laytime was to be calculated from the time that the vessel berthed, the charterers used up their laytime and were prepared to pay demurrage for the further period taken to load.

The owners claimed damages for detention for the 4 ½ days lost in waiting in the roads based on the wording of the “reachable on arrival clause” (clause 6). (The owners did not ague that the vessel was an arrived ship).

The charterers argued that “on arrival” in clause 6 meant became an “arrived ship” in the technical sense and the vessel was not an arrived ship because it lay in the roads; consequently there was no obligation to provide a berth.

Findings

The arbitrators appointed by the parties were unable to agree and the dispute was referred an to umpire. The umpire (Mr Albert Edward Morris) awarded damages to the owners subject to the opinion of the court regarding the effect of the “reachable on arrival” clause (clause 6). Megaw J agreed with the umpire’s decision.

Commentary

The judicial construct of an “arrived ship” caused both the umpire and the court to embark on an artificial line of reasoning warping the intention of the parties as expressed in the contract.

Because of the “berth or no berth” clause, laytime should have commenced when the vessel became accessible to the charterers ie. when it reached the roads.

In Pyman Brothers v Dreyfus Brothers & Co. The charterers nominated a particular berth (other berths being available) which was not reachable by the vessel. This is the type of situation for which the reachable on arrival clause was designed. It was therefore not surplusage.

The charterparty also contained a “so near as she may safely get clause” which was held in Dahl v Nelson, Donkin & Co. to protect the owners from the risk of congestion on similar facts.

The court reached the right decision for the wrong reason.

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