Voyage Charters. NOR and Laycan. on:  14-Aug-2014

"Laydays" are literally the agreed days for loading and discharging and as such a form of synonym for "laytime" (save that the expression "time" is more general and flexible than "days"). As used in this charterparty, however, "laydays" appear to be used to describe what elsewhere are often referred to as the "laycan" days, that is to say (a) the earliest day upon which an owner can expect his charterer to load and (b) the latest day upon which the vessel can arrive at its appointed loading place without being at risk of being cancelled.
Per Rix LJ, in Tidebrook Maritime Corporation v Vitol SA of Geneva (The Front Commander) [2006] EWCA Civ 944 at para 38.

Timely arrival

There is abundant authority for saying that the courts always insisted on strict compliance with stipulations as to the time in the contracts of affreightment. In the eighteenth century case of Croockewit v Fletcher (1857) 1 H & N 893 it was held that the stipulation as to the time "is the condition precedent upon the performance of which the defendant contracted to take and load the ship". In more recent case-law on this proposition - Evera SA Commercial v North Shipping Co Ltd [1956] 2 Lloyd’s Rep 367, Devlin J outlined commercial background of charterer’s, expectations to have vessel ready for his cargo by a certain date or range, at p.370:

A charterer manifestly wants, if he can get it, a fixed date for the arrival of the ship at the port of loading. He has to make arrangements to bring down the cargo and to have it ready to load when the ship arrives and he wants to know as near as he can what that date is going to be. On the other hand, it is to the interest of the shipowner, if he can have it, to have the date as flexible as possible because of the inevitable delays due to bad weather or other circumstances that there might be in the course of a voyage. He can never be sure that he can arrive at a port on a fixed and certain day.

Therefore a charterparty usually contains a stipulation, namely a range, within which the owner must present vessel at load port and a further option entitling the charterer to cancel the contract if the ship is not ready to load within a specified time. This option is not qualified by excepted perils clause.

Laycan’ is a period of time within which the vessel should arrive at loading port and tender ready for loading without risk of being rejected by the charterers. As indicated in the name itself, ‘laycan’ is an agreed time range at the end of which comes the date when the charterers are entitled to exercise their option and cancel the charterparty for non-arrival of the owners’ vessel. Thus laycan gives to the charterers very powerful legal instrument of cancellation. Depending on economic factors and substitute tonnage availability the charterer can, but is not obliged to exercise this option, therefore it is not unusual for the parties to come to solution and extend laycan for a day or so, for instance see below cl. 11 of SHELLVOY5 and SHELLVOY6 charter forms, which specifically defines procedure for laycan extension.

Shellvoy5

11. Laydays/Termination
Should the vessel not be ready to load by noon local time on the termination date set out in Part I(C) Charterers shall have the option of terminating this charter unless the vessel has been delayed due to Charterers’quo;change of orders pursuant to Clause 26, in which case the laydays shall be extended by the period of such delay.
However, if Owners reasonably conclude that, despite the exercise of due diligence, the vessel will not be ready to load by noon on the termination date, Owners may, as soon as they are able to state with reasonable certainty a new date when the vessel will be ready, give notice to Charterers declaring the new readiness date andasking Charterers to elect whether or not to terminate this charter. Unless Charterers within 4 days after such notice or within 2 days after the termination date (whichever is earlier) declare this charter terminated, Part I(C) shall be deemed to be amended such that the new readiness date stated shall be the commencement date and the second day thereafter shall be the termination date.
The provisions of this Clause and the exercise or non-exercise by Charterers of their option to terminate shall not prejudice any claims which Charterers or Owners may have against each other.

Shellvoy6

11. Laydays/ Termination
Should the vessel not be ready to load by noon local time on the termination date set out in Part I clause (C) Charterers shall have the option of terminating this Charter unless the vessel has been delayed due to Charterers’quo;change of orders pursuant to Part II clause 26, in which case the laydays shall be extended by the period of such delay. As soon as Owners become aware that the vessel will not be ready to load by noon on the termination date, Owners will give notice to Charterers declaring a new readiness date and ask Charterers to elect whether or not to terminate this Charter. Within 4 days after such notice, Charterers shall either:
(i)  declare this Charter terminated or
(ii) confirm a revised set of laydays which shall be amended such that the new readiness date stated shall be the commencement date and the second day thereafter shall be the termination date or,
(iii) agree a new set of laydays or an extension to the laydays mutually acceptable to Owners and Charterers. The provisions of this clause and the exercise or non-exercise by Charterers of their option to terminate shall not prejudice any claims which Charterers or Owners may have against each other.

Earlier arrival

Situation when vessel arrives within laycan does not require any additional elaboration. If, however, the vessel arrives earlier than the first date of laycan, then the question whether she may, should or should not tender an NOR will depend on the wording of charter in question.

BPVOY4 in para 6.2 says that NOR shall not be tendered, nor shall the Vessel proceed to berth, prior to the Commencement Date without Charterers’ prior agreement in writing, while SHELLVOY5 and SHELLVOY6 in cl.13(1)(a) states that notice shall not be tendered before commencement of laydays without any qualification for Charterers’ consent. There is, however, further dealing with an earlier NOR in both SHELLVOY5 and SHELLVOY6 cl.13(3), which clarifies that:

Shellvoy5

13. Notice of readiness/Running time
(1) Subject to the provisions of Clauses 13(3) and 14, if the vessel loads or discharges cargo other than by transhipment at sea.
(a)Time at each loading or discharging port shall commence to run 6 hours after the vessel is in all respects ready to load or discharge and written notice thereof has been tendered by themaster or Owners’ agents to Charterers or their agents and the vessel is securely moored at the specified loading or discharging berth.  However, if the vessel does not proceed immediately to such berth time shall commence to run 6 hours after
(i) the vessel is lying in the area where she was ordered to wait or, in the absence of any such specific order, in a usual waiting area and
(ii) written notice of readiness has been tendered and
(iii) the specified berth is accessible. A loading or discharging berth shall be deemed inaccessible only for so long as the vessel is or would be prevented from proceeding to it by bad weather, tidal conditions, ice, awaiting daylight pilot or tugs, or port traffic control requirements (except those requirements resulting from the unavailability of such berth or of the cargo).
If Charterers fail to specify a berth at any port, the first berth at which the vessel loads or discharges the cargo or any part thereof shall be deemed to be the specified berth at such port for the purposes of this Clause. Notice shall not be tendered before commencement of laydays and notice tendered by radio shall qualify as written notice provided it is confirmed in writing as soon as reasonably possible.
(b)Time shall continue to run
(i)  until cargo hoses have been disconnected, or
(ii) if the vessel is delayed for Charterers’ purposes for more than one hour after disconnection of cargo hoses, until the termination of such delay provided that if the vessel waits at any place other than the berth, time on passage to such other place, from disconnecting of hoses to remooring/anchorage at such other place, shall not count.
(2) If the vessel loads or discharges cargo by transhipment at sea time shall count from the arrival of the vessel at the transhipment area or from commencement of the laydays, whichever is later, and, subject to Clause 14(c), shall run until transhipment has been completed and the vessels have separated.
(3) Notwithstanding anything else in this Clause 13, if Charterers start loading or discharging the vessel before time would otherwise start to run under this charter, time shall run from commencement of such loading or discharging.
(4) For the purposes of this Clause 13 and of Clause 14 "time" shall mean laytime or time counting for demurrage, as the case may be.

cl.13 in new Shellvoy6:

Shellvoy6

13.Notice of readiness/ Running time
(1) Subject to the provisions of Part II clauses 13(3) and 14,
(a)Time at each loading or discharging port shall commence to run 6 hours after the vessel is in all respects ready to load or discharge and written notice thereof has been tendered by the master or Owners’ agents to Charterers or their agents and the vessel is securely moored at the specified loading or discharging berth. However, if the vessel does not proceed immediately to such berth time shall commence to run 6 hours after
(i) the vessel is lying in the area where she was ordered to wait or, in the absence of any such specific order, in a usual waiting area and
(ii) written notice of readiness has been tendered and
(iii) the specified berth is accessible. A loading or discharging berth shall be deemed inaccessible only for so long as the vessel is or would be prevented from proceeding to it by bad weather, tidal conditions, ice, awaiting daylight, pilot or tugs, or port traffic control requirements (except those requirements resulting from the unavailability of such berth or of the cargo).
If Charterers fail to specify a berth at any port, the first berth at which the vessel loads or discharges the cargo or any part thereof shall be deemed to be the specified berth at such port for the purposes of this clause. Notice shall not be tendered before commencement of laydays and notice tendered by radio shall qualify as written notice provided it is confirmed in writing as soon as reasonably possible.
Time shall never commence before six hours after commencement of laydays unless loading commences prior to this time as provided in clause 13 (3).
If Owners fail;
(i) to obtain Customs clearance; and/or
(ii) to obtain free pratique unless this is not customary prior to berthing; and/or
(iii) to have on board all papers/certificates required to perform this Charter, either within the 6 hours after notice of readiness originally tendered or when time would otherwise normally commence under this Charter, then the original notice of readiness shall not be valid. A new notice of readiness may only be tendered when Customs clearance and/or free pratique has been granted and/or all papers/certificates required are in order in accordance with relevant authorities’ requirements. Laytime or demurrage, if on demurrage, would then commence in accordance with the terms of this Charter. All time, costs and expenses as a result of delays due to any of the foregoing shall be for Owners’ account.
(b)Time shall:
(i)   continue to run until the cargo hoses have been disconnected.
(ii) recommence two hours after disconnection of hoses if the vessel is delayed for Charterers’ purposes and shall continue until the termination of such delay provided that if the vessel waits at any place other than the berth, any time or part of the time on passage to such other place that occurs after two hours from disconnection of hoses shall not count.
(2) If the vessel loads or discharges cargo by transhipment at sea time shall commence in accordance with Part II clause 13 (I) (a), and run until transhipment has been completed and the vessels have separated, always subject to Part II clause 14.
(3) Notwithstanding anything else in this clause 13, if Charterers start loading or discharging the vessel before time would otherwise start to run under this Charter, time shall run from commencement of such loading or discharging.
(4) For the purposes of this clause 13 and of Part II clause 14 and Part II clause 15 "time" shall mean laytime.

Another widely used tanker voyage charter form ASBATANKVOY provides in clause 5 that laytime will not begin before commencement of laydays but for charterers sanction, and clause 6 (Notice of Readiness) requests the master to give NOR upon arrival at customary anchorage at each discharge and loading port.

In Tidebrook Maritime Corporation v Vitol SA of Geneva (The Front Commander) [2006] EWCA Civ 944 the vessel arrived at Escravos and tendered her NOR at 00.01 hours on 8 January 2004 prior to the first day of the laycan which was 9 January 2004. In spite of written (e-mailled) confirmation from the Charterers’ brokers that they "want her to berth/ commence loading 08 January" the charterers contended that, pursuant to clause 5 of the standard ASBATANKVOY form and additional clause 31, laytime should not start to count prior to 0600 on the first day of the laydays, which was 9 January 2004. Additionally the charterers insisted that they never gave their consent to laytime commencing prior to 0600 hours on 9 January 2004.

In the Commercial Court the learned judge concentrated on the question whether or not the emails constituted consent under clause 5 and the additional clause 31. He proffered the Charterers’ point of view, concluding that emails were not explicit enough to have the contractual significance claimed by owners.

The Court of Appeal considering combined effect of amended clause 6 and the charterer’s order to the vessel to load before the beginning of the earliest layday. It was held:

that the owner is obliged to give notice of readiness to load, as required by amended clause 6 of ASBATANKVOY, if he can, upon arrival, even if he has arrived early;

irrespective of loading, time will commence to count at the end of the 6 hour notice period, or when the vessel is all fast in berth, whichever is the earlier;

combined effect from application of these clauses is thus that the start of laytime under clause 6 is postponed to the beginning of the earliest layday, unless the charterer sanctions otherwise.

Lord Justice Rix said at para 45:

Is the charterer’s order to or request of the vessel to load before the beginning of the earliest layday such a sanction? Subject to authority, I would be inclined to think so. The charterer is not obliged to commence loading before the earliest layday if he does not want to load, but if he does, he is entitled to, once the vessel is presented as ready to load: and it seems to me that if once he has decided to ask the vessel to load earlier than he, the charterer, was obliged to load, then he has sanctioned the earlier commencement of laytime, the protection of the provision regarding the earliest layday is spent, and clause 6 rules as the clause otherwise governing the commencement of laytime.

Accordingly it would be correct to conclude, that NOR tendered before commencement of laydays, i.e. before specified laycan range, will not lead to commencement of laytime even when such NOR is required by the terms of charter, because it would contradict commercial sense of contract – obliging the charterers to start loading before the date when otherwise he shall have his goods ready for loading. Indeed, only when charterer is ready and willing to commence loading operation earlier than stipulated in laycan then such notice given on arrival, again subject to the Charterers’ consent, will trigger running of laytime from commencement of such loading.

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