Voyage Charters. Laycan: State of Readiness. Last updated 22-May-2015

Defects of no real significance in the adventure cannot be used as a means of throwing up a charter at the last moment.
Per Devlin J. in Noemijulia S.S. Co. v Minister of Food [1951] 1 K.B. 223 at p. 228.

Nature and mode of operation

Ship’s arrival for laytime purposes involves:

(a) being in the appropriate place, generally known as the commercial area of the port, and

(b) being in the appropriate state of readiness, i.e. when she is in such a state of physical and legal readiness that there is nothing to prevent her being made ready at once if required

(c) furthermore it is for the owners to discharge the burden of proof that their vessel was ready at the time she tendered NOR.

In its turn state of readiness for the purpose of laycan embraces the following considerations:

(a) Since cancellation is for the charters’ benefit it is for the charterers to establish the right they claims.

(b) Defects of no real significance in the adventure cannot be used as a means of throwing up a charter at the last moment. Less stringent, than one for NOR tender, test of reasonable certainty applies to small defects, which can be made right during the loading and without interfering with the due course of loading.

Textbooks give an example of the San George was chartered to load grain in bags or bulk. Loading operation to be performed the owners at the Charterers’ risk and expense but without specification of loading method or availability of ship’s gear to the charterers. When vessel arrived before the cancelling time the charterers purported to cancel the charter on two grounds, one of which was that she had no loading gear rigged for the after holds. Both the High Court and in the Court of Appeal hold that Charterers’ cancellation was wrongful because readiness of the gear was not precondition of the vessel’s readiness since it was not inevitable that the gear would be used in loading at all. Thus readiness of the gear was distinguished from readiness of cargo space, as in another example of Sun Shipping Co Ltd v Watson and Youell Shipping Agency Ltd (1926) 42 TLR 240, where the steamer was chartered to bring a grain cargo from the Danube to Western Europe. She arrived at first load port and on same day notice of readiness to load was given, but during next three days work to erect shifting boards was still in progress. Question of ship’s readiness came out when the owners pursued their demurrage claim. It was held that as a general rule the whole of the shifting boards must be in position before the ship could be said to be ready, and there was nothing in this case to estop the charterers from contending that this general rule applied.

(c) Giving a valid NOR, unless expressly required, is not compulsory to satisfy requirement of vessel’s readiness for laycan purposes. See also Laycan & Laytime.

(d) Although significance or materiality of defect has to be considered, but the basic principle must be able to be simply applied to the given facts of a particular case for the sake of certainty . Certainty is essential in commercial matters and certainty is more important than that there may be hardship in a particular case because the application of the principle may cast the incidence of liability one way rather than the other. One only has to take this example. … what would be the position where there was only a short interval of time between the geographical arrival of the vessel and the cancelling date and notice of readiness was given in the expectation that a particular defect making the ship unfit to load might be remedied within a matter of hours, but this prediction was falsified in the event? What is the position of the parties to be if that defect has not in the event been remedied before the cancelling date? … The complications of such a situation are endless. The sure way of avoiding such complications is to have a rule which can be applied with absolute certainty . Materiality of defect is primary a question of fact but in form is a question of law.

(e) It is commonly agreed that the place from where NOR may be tendered coincide with the place which the vessel must reach to become arrived for laycan purposes.

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