Laytime.‘Reachable on arrival’ - The President Brand. Last updated 29-Sep-2014

This case involves the construction of a phrase consisting of four words in Clause 6 of a charter-party, the four words being "reachable on her arrival". In that phrase of four words two only are crucial, one the first word "reachable" and the other the last word "arrival.
Per Roskill J. in Inca Compaina Naviera S.A. and Commercial and Maritime Enterprises Evanghelos P.Nomikos S.A. v Mofinol, Inc (The President Brand) [1967] 2 Lloyd’s Rep. 338.

The President Brand [1967] 2 Lloyd’s Rep. 338

Few years later in Inca Compaina Naviera S.A. and Commercial and Maritime Enterprises Evanghelos P.Nomikos S.A. v Mofinol, Inc (The President Brand) [1967] 2 Lloyd’s Rep 338, a dispute arose over charterparty over charterparty relevant wordings of cll.5, 6, 7 and 25 as below:

Clause 5.

120 running hours (Sundays and Holidays excepted), weather permitting, shall be allowed the Charterers for loading and discharging...

Clause 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, and where she can always lie afloat…

Clause 7.

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

Clause 25.

Owners undertake that the vessel will arrive at Lourenco Marques with a maximum draft of 32 feet 5 inch with no deadfreight for Charterers» account.

When the vessel arrived off Lourenco Marques at 0800 on 19th April, she anchored at pilot station outside port and cabled NOR because berth was occupied by another vessel. Berth became vacant at about 0800 hrs. on 21st April, but since there was then insufficient water over the bar for the President Brand, the berth was allotted to yet another vessel.

The President Brand was able to cross the bar and proceed towards the port at 0130 on 23rd April, but because of berth was still occupied it was therefore necessary for her to anchor at 0400 on 23rd April and wait until the berth was free. Same day at 1100 the owner’s local agents delivered to the charterers’ agents a written notice of readiness.

The owner claimed either damages for detention or demurrage for time spent at anchor, from 0800 on 19th April and until 1100 on 23rd April.

Roskill J. noted a remarkable similarity between The Angelos Lusis and The President Brand cases with the only significant difference being the reason of delay in berthing, namely, congestion in the port of Constantza in the former case, and shortage of water which prevented the vessel crossing the bar at the entrance to the port of discharge in the later. Again, as in The Angelos Lusis the tanker was at all material times physically ready for cargo operations but was not an ‘arrived ship’ for the purpose of laytime and demurrage. The council for defending charterers criticised decision of Megaw J. in The Angelos Lusis and argued that to stretch the Charterers’ liabilities for demurrage or detention to instances when the vessel on arrival was unable to get within the commercial limits of the port owing to shortage of water, was to cast upon the charterers the responsibility for something over which they had no control.

Roskill J., in answer, stressed that in cases like The Angelos Lusis and The President Brand, when breach occurred without fault from either side, the ultimate question is how does the charterparty provide for risk apportionment between the owner and charterer in case of such breach. He held that it was the Charterers’ obligation was to nominate a berth which the vessel could reach on arrival and they are in breach of that obligation if they are unable so to do.

On detailed examination of cl.6 the judge disagreed with the charterers’ argument that the word "reachable" had to be construed by reference only to what was reachable in the light of the vessel’s draught. He said:

"Reachable" as a matter of grammar means "able to be reached". There may be many reasons why a particular berth or discharging place cannot be reached. It may be because another ship is occupying it; it may be because there is an obstruction between where the ship is and where she wishes to go; it may be because there is not a sufficiency of water to enable her to get there. The existence of any of those obstacles can prevent a particular berth or dock being reachable and in my judgment a particular berth or dock is just as much not reachable if there is not enough water to enable the vessel to traverse the distance from where she is to that place as if there were a ship occupying that place at the material time. Accordingly, in my judgment, the charterers' obligation was to nominate a berth which the vessel could reach on arrival and they are in breach of that obligation if they are unable so to do.

It may be that the breach arises without what one might call fault on their part but the ultimate question is what does this charter-party provide are the respective liabilities of owners and charterers if the ship cannot cross the bar owing to shortage of water and then proceed to a berth. My answer to that as a matter of construction of the four words in Clause 6 is that liability for that loss of time falls upon the charterers and not the owners.

The charterers further argued that it did not make any difference whether a berth was nominated or not because the vessel would not be able to proceed alongside anyway, not because of the want of a berth but because of insufficiency of water. The judge, however, pointed out that:

The crucial consideration is that because of shortage of water there was not a place or a dock reachable on the vessel’s arrival at Lourenco Marques and therefore the resulting loss of time has to be borne by the charterers.

Thus owners succeeded in their claim for damages for detention at the demurrage rate.

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