Voyage Charters. Laytime.‘Reachable on arrival’. Last updated 28-Jun-2015

The meaning of the charterparty is, I think, that the charterers undertake to order the ship to go to such dock and to such quay berth there as they may wish, all of which is for their benefit, but with this stipulation in favour of the shipowners, that it shall be to a quay berth which is ready. That being so the charterers would be bound to name a quay berth which was ready, and there was a default on their part in the present case as the quay berth was not ready for the vessel.
Per Sir William Brett, M.R in Harris and Dixon v Marcus Jacobs & Co., (1885) 15 Q.B.D. 247 at p.250.

Charterer’s duty to procure berth ‘reachable on arrival’

Concept of berth "reachability" on vessel’s arrival and extent of charterer’s duty to procure such place attracted much legal attention in the second half of the last century.

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 …

Obligation to have the berth physically reachable when owner’s vessel arrives at the nominated port was a peculiar one within framework of a port charter party, because it shifted usual owner’s risks for congestion, physical obstructions and bad weather to the charterer. Such redistribution was, assumingly, the owners’ attempt to deal with consequences of contemporary decision of the House of Lords in The Aello, where it was held that to be "arrived" the vessel shall reach "commercial area" or "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".

In all The Angelos Lusis, The President Brand and The Delian Spirit cases the warranty was expressed in identical words:

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 …

In The Angelos Lusis and The President Brand vessel was held to be not arrived in technical sense, so owners were able to claim damages for detention calculated on demurrage rate. In The Delian Spirit the owners’ claim for damages for charterer’s breach to nominate reachable berth, flowed from invalidation of Notice of Readiness served’s LJ test in The Aello creates creates situation when laytime and demurrage regime will not start at all and instead of liquidated damages by way of demurrage, damages for detention will be available to the owners.

From the first sign it may appear that, if damages for detention are calculated at the demurrage rate for the period of delay, then there is little difference between demurrage and damages for detention. The crucial character of this distinction becomes evident from decisions in The Angelos Lusis, The President Brand and The Delian Spirit cases.

The Laura Prima [1982] 1 Lloyd’s Rep 1 was concerned with cl.6 and 9 of Exxonvoy 1969 (read more about history of ASBATANKVOY). By the time of decision in The Laura Prima "arrived ship" test was formulated by Lord Reid and adopted by the House of Lords in The Johanna Oldendorff [1973] 3 All ER 148, which considerably clarified ¬†technical arrival of the vessel under a port charter.

Effect of Reachable and Always accessible

Later in The Fjordaas and in The Sea Queen the court held that it is immaterial whether delay in getting into the berth ‘reachable on arrival’ was caused by low water, fog, weather restrictions or by any other physical or non-physical reason such as e.g. unavailability of tugs , prohibition of night navigation by port authorities or strike of the oil terminal employees , the combined effect of cl. 6 and cl. 9 of ASBATANKVOY was held to be such that, unless expressly excluded, it rest the liability for any mentioned delay upon the charterers.

Some recent arbitration cases show that ‘reachable on arrival’ provision may well be used when vessel visit such ports as Lagos or Qingdao where waiting place is well outside of port limits, to deprive the charterers from the benefit of unused laytime.

On the other hand, as author of Commencement of Laytime points out, "reachable on arrival" provision is not necessarily to be considered so very favourable to the shipowners if exceptions are sufficiently clearly drafted as to suspend running of laytime or demurrage in instances when berth is not reachable on arrival. The author goes further and says that last century decisions (The Angelos Lusis, The President Brand , The Delian Spirit, The Laura Prima, The Fjordaas and The Sea Queen) have turned out to be a Pyrrhic victory for the shipowners since the charterers moving away from using ASBATANKVOY and other standard forms of tanker charters have much less favourable to the owners provisions related to commencement of laytime.

To be continued …

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