25. Surrey Shipping Co. Ltd v Compagnie Continentale (France) S.A. (The “Shackleford”) [1978] 1 Lloyd’s Rep 191; [1978] 2 Lloyd’s Rep 154

Provision that vessel be entered at Custom House prior to commence of laytime – charterers bound by their agent’s acceptance of a premature NOR.

The facts

Wheat was shipped under a Baltimore form Grain Charter from the US Gulf to Constantza.

The charterparty contained a special provision that the vessel was required to be entered at the Custom House prior to notification of the vessel’s readiness to discharge.

The provision was qualified by the words “whether in berth or not”.

The vessel was unable to berth due to congestion and was anchored in the roads.

On arrival in the roads, the master tendered Notice of Readiness to the receivers, acting as agents for the charterers. The Notice of Readiness was premature in that the vessel had not been entered at the Custom House.

Nevertheless, the receivers accepted Notice of Readiness, expressly conceding that laytime had begun to run.

There was a delay of approximately six weeks before a discharge berth became available. During this period, the vessel spent a few days taking on bunkers.

The charterers contended that, irrespective of the Notice of Readiness, laytime could only, upon a proper interpretation of the charterparty, commence once the vessel had been entered at the Custom House.

There was also a dispute about who should bear the cost of moving berths in order to take on bunkers.

Findings

The Commercial Court (Donaldson J) held in favour of the owners. His decision was confirmed by the Court of Appeal (Buckley and Bridge LJJ and Sir David Cairns).

The Commercial Court found that the charterers were estopped from denying the validity of the Notice of Readiness. The type of estoppel relied upon in the judgment of the Commercial Court was estoppel by conduct.

The finding of the estoppel was confirmed by the Court of Appeal.

In the Court of Appeal, the charterers raised a further argument, namely, the absence of authority on the part of the receivers. This was rejected by the Court of Appeal.

With regard to shifting berths during the running of laytime, both courts found that the bunkering exercise carried out by the owners did not contribute to the delay and therefore did not count against the owners.

Commentary

The main issue in this matter was that of estoppel and the matter was decided on its own facts.

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