Voyage Charters. Laytime. Arrived Ship. Last updated 22-Feb-2015

It is true, too, that the free anchorage lies some twenty-nine to thirty-seven kilometres down the estuary from what was to be the eventual loading spot. Is that mere defect of propinquity an essential point? … In my opinion, propinquity is only of importance as showing that a vessel has been brought as near as conditions allow to what will be the eventual loading spot, and normally, of course, waiting vessels should and will want to get as near in as they can …
Per Lord Radcliffe in Sociedad Financiera de Bienes Raices SA v Agrimpex Hungarian Trading Co for Agricultural Products (The Aello) [1960] 2 All ER 578 at p.588.

Destination point

As it was considered in part on Berth and Port Charter, NOR and Distribution of Risks pages, for laytime to start the owner shall accomplish approaching stage or leg of voyage charter. In other words vessel shall finish her passage to loading port and tender herself ready, she then must be in fact ready and available to the charterers at the nominated in the charterparty place, i.e. either port or berth. When all three conditions met the vessel becomes an ‘arrived ship’.

Importance for the owner to have the vessel within the designation of an ‘arrived ship’ consists in the fact that only ‘arrived’ ship can tender valid notice of readiness and trigger commencement of laytime.

The nineteenth century decisions considered the ship as arrived not from the arrival in port, but from her arrival at the ordinary place of discharge, according to the usage of the port. In many UK ports, such as Hull, for example, it was arrival at the docks and put in the charge of the dock company’s officers being in a dischargeable state. In Parker v Winlow (1857) 7 E & B 942 it was held to be Brunswick wharf in Plymouth, as it was directed by consignee on arrival at roads. Similarly in Bastifell v Lloyd (1862) 1 H & C 388, arrival at Cole Wharf in Rochester, was held to be arrival for the purpose of laytime and not arrival at the buoys at Rochester road, about 500 yards from and opposite to Cole’s Wharf.

Until then the owner under common law was to bear all the risks for delays incurred in ‘an ordinary course of navigation’.

As Plymouth is a tidal harbour, the words must bear the meaning of parties contracting with reference to a tidal harbour, who know that, in the ordinary course of navigation, the state of the tide may delay the possibility of getting safely to the destination. The risk of that ordinary delay the shipowner undertakes to bear.
Per Coleridge J, in Parker v Winlow (1857) 7 E & B 942 at p.948, Bastifell v Lloyd (1862) 1 H & C 388 per Channell B, at p.395.

Thus, contemporary text books considered commencement of laytime or demurrage, not from the arrival in port, but from the arrival at the ordinary place of loading or discharge, according to the usage of the port. So the days begin to run when the ship is in the dock where the discharge is to take place.

Later, in the beginning of the last century, Kennedy LJ noted in Leonis Steamship Company, Ltd v Rank, Ltd [1908] 1 K.B. 499 at p.518, that "the answer to the inquiry whether the ship can or cannot properly be described as an "arrived" ship obviously depends upon the point which the parties have chosen to designate in the charterparty as the destination."

If contract in question is a berth charter, then the owner fulfils his duty as to ‘arrived ship’ only when his vessel gets alongside the berth. Any notice sent before this moment is premature and invalid and will remaining invalid unless another one tendered from the berth (read more Premature and Invalid NOR).

By contrast, position under a port charter was a matter of many controversies until the end of the last century. Whereas decision of the Court of Appeal in The Leonis was considered to firmly lay down general principles which must be followed, the difficulty has been to find out what those principles are. The essence of legal polemics was concentrated on efforts to define port limits as combination of geographical, legal and administrative limits. The task was very difficult in view of unprecedented expansion of limits of many ports prompted by rapid growth in size and number of ships after the end of WW II . The problem was vividly highlighted by discussions and decision of the House of Lords in The Aello [1960] 2 All ER 578.

The facts of The Aello were unusual. The shortage of maze, and not of berths or loading facilities, in the port of Buenos Aires was so acute that by the month of August 1954, ships waiting for maize cargoes began to pile up in the inner harbour, lying in second and third tier off the quays, in basins and in the waters of the harbour, while only one elevator of several was operating, because its capacity being more than sufficient to deal with all the maize that was available for loading. As a result, the congestion of shipping in the vicinity of the loading elevator had got so bad that the port authority and the Grain Board on 1 September the authority adopted a resolution that no vessel was to be allowed to berth in third tier at the elevator but all maize vessels were to anchor and wait at the free anchorage in the roads, some 22 miles away, until a berth was available either in first or second tier at the elevator. The Aello arrived on 12th of October had to wait there. Another consequence of this congestion was that vessels at waiting anchorage were not granted neither berthing nor police permits.

Application of general principles stated in The Leonis by their Lordships in the House of Lords led to result that majority adopted Parker LJ test (below) that under a port charterparty a vessel was not an arrived ship until she was within the commercial area of the port, which is a physical area where ships could be loaded when a berth was available.

Applying that test to the facts of the present case, it is claimed that all the conditions were fulfilled. Reading the test literally that may be true, but there is a real danger of interpreting words of a judgment as if they were in a statute and without regard to the facts of the case. In the Leonis SS Co., Ltd v. Joseph Rank, Ltd. the ship in question was not twenty-two miles away from the dock area - she was anchored but a few ship’s-lengths off the pier alongside which loading took place. I agree, of course, that distance is not a conclusive factor, but what KENNEDY, LJ., was I think, contrasting throughout his judgment was an area where loading takes place as opposed to the actual loading spot. The commercial area was intended to be that part of the port where a ship can be loaded when a berth is available, albeit she cannot be loaded until a berth is available.
Per Parker LJ in The Aello, [1958] 2 All ER at 699, [1958] 2 QB at p.401.

Lord Radcliffe in his dissenting speech underlined that whilst maritime and commercial men might understand by the port different things for different purposes, vessel’s ultimate duty under the charterparty is to reach with all due despatch the loading berth to which the charters might order her, i.e. to be so located nearby the berth as to be at the disposal of the charterer. He said at p.587:

She was under the control of the port authority at Buenos Aires in the anchorage. She was lying in what was by the prevailing regime of the port the proper waiting place for vessels under orders to load maize. She could go no further into the port without the giro which would allocate her a berth. She was at the disposition of the charterers, ready to take up the berth selected by them, as soon as they provided the cargo which would make the berth available.

Emphasis on the meaning of a port in its commercial sense as it would be understood by persons engaged in shipping business, led to unsatisfactory decision in The Aello where the notion of arrival at the port was given a restrictive meaning of arrival to part of the port where a ship can be loaded.

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