Tidebrook Maritime Corporation v Vitol SA of Geneva MT "Front Commander"

This is a short point about the commencement of laytime when a vessel arrives before the first layday, arising under the standard form of Asbatankvoy voyage charter, with certain common additional clauses.

With admirable initiative and concern for saving costs Mr Davies and Mr Hickey, who appear for the parties , agreed to dispense with pleadings, disclosure of documents, witness statements and other procedural steps and following an order of Mrs Justice Gloster dated 16 August 2005 the case has proceeded on the basis of an Agreed Statement of Facts and Issues.

I first set out the Agreed Statement.

In addition to that statement the parties have also relied upon an agreed bundle containing a copy of the charter as drawn up to reflect the Recap, a notice of readiness, a time sheet and statement of facts, emails from the Defendant Charterers Vitol (“Vitol”) and a Demurrage Statement prepared by the Claimant owners (“Tidebrook”) and the skeleton arguments of each side. As the matter proceeded on the basis of agreed facts. , I reach a decision within the four corners of that document. If this case goes further and the parties wish to rely upon any additional background material of the kind referred to in argument it will be helpful for this to be included in a supplemental agreed document.

The amount in issue $70,489.71 is comparatively small. The advocates describe this as a “Clash of the Titans” and say that there are other cases which might turn on the outcome. It is for that reason that I agreed to put my reasons in writing rather than give my decision on the spot.

Mr Davies submits on a variety of grounds that laytime commenced early. His main ground is as follows. By Clause 5 of the charter laytime cannot commence before the first day of the laydays “except with charterers sanction”. Additional Clause 31 develops the requirement of consent or sanction so that the vessel “shall not tender NOR …. and laytime shall not commence before 06.00 hours local time on the earliest layday …. unless charterer consents in writing”. He submits that since the tendering of NOR and the commencement of laytime are linked in this way consent to one means consent to the other. The three emails referring to the tender of NOR are therefore to be taken as consenting in writing to earlier commencement of laytime.

He submits that Clause 33 is consistent with that pattern and reflects it, referring as it does to “if charterer permits a vessel to tender NOR and berth prior to commencement of laydays”. He develops these points on pages 3 and 4 of his skeleton argument in the Agreed Bundle. Mr Davies suggests that where charterers in their emails not only tendered NOR but made it clear that they wanted the vessel to berth/commence loading on 8 January it is disingenuous for them to claim that laytime was not to start running 6 hours after the tender of the NOR at 06.00 on 8 January.

Owners’ second ground is that consent to laytime was implicit in the consent to loading. Laytime is the time for loading and a reasonable business person would have seen it as obvious that the parties intended laytime to commence.

Mr Davies has a variation of this argument which is that laytime commenced on berthing since under Clause 6 “laytime …. shall commence upon ….. the Vessel’s arrival in berth ….”. He argues that by providing the vessel with a berth and ordering her to proceed to it charterers consented under Clause 5 to the commencement of laytime. He has further arguments of waiver, which he concedes will have no application unless he is successful on one of his earlier grounds.

He has an alternative argument, which he accepted not to be his best point, that laytime commenced by operation of law. This is advanced on the basis of Transgrain Shipping BV Global Transporte Oceanico SA (Mexico 1) [1990] 1 Lloyd’s Rep 507 and Glencore Grain -v- Flacker Shipping (Happy Days) [2002] 2 Lloyd’s Rep 487. The considerations arising in those cases seem to me to be irrelevant to the question whether or not the requisite consent has been given under a contract.

Charterers argue that since they never gave their agreement to laytime commencing early it should not start before 06.00 on 9 January. Additional clauses prevail over the printed clauses and the only question is whether the charterer “consents in writing” under additional Clause 31.

Mr Hickey cites the commentaries to be found in the agreed bundle and two cases Nelson & Sons -v- Nelson Line Liverpool Ltd (No 3) [1908] 113 CC 235 (HL); Pteroti Compania Naviera, SA -v- National Coal Board (Khios Breeze) [1958] 1 Lloyd’s Rep 245. These support the general proposition that work in loading/discharging a vessel prior to the commencement of laytime under a charterparty has no effect on the laytime computation. He relies more on the express words of Clause 31 and submits that the emails do not amount to consent in writing to the commencement of laytime. He says that it is obvious that if an email had been replied to with a suggestion that laytime had commenced this would have been vigorously denied by charterers.

Mr Hickey argues that there is no room for the implication of the term and that since Clause 6 is subject to and overridden by additional Clauses 31 and 33 there is nothing in Mr Davies’ point about berthing. Since additional Clause 33 deals expressly with early loading and the situation which arose in this case where NOR has been tendered and the vessel berths before the laydays begin, there is no justification for implying a term or loosening the wording of the requirement for consent.

The relationship between Owners and Charterers is of course governed by the charterparty. This specified that the laycan was 9-10 January 2004. Laytime is only to commence before the stipulated date with (Clause 5) “the charterer’s sanction” and, more explicitly (additional Clause 31) “charterer consents in writing”. The question is whether Owners have shown that the emails amounted to that consent in writing. In my judgment they did not. The emails do not give consent explicitly. I do not consider that they give consent implicitly either. The emails confirm that NOR is to be tendered on arrival and that Charterers want the vessel to berth/commence loading early.

Additional Clause 33 entitled “Early Loading” provides expressly for what is to happen when there is early loading prior to commencement of laytime. It is not necessary or right to read into emails which consent to the situation for which additional Clause 33 provides consent in addition that laytime start early under additional Clause 31.

While the cases cited by Mr Hickey are useful background they are of no direct application. The only question is whether or not the emails constitute consent under Clause 5 and additional Clause 31. In my view they do not as they are not explicit enough to have the contractual significance claimed by Owners. The points of construction advanced cannot displace what seems to me the clear answer to the central question.It follows that I see no room for the implication of terms as suggested by Mr Davies. The issue is not the terms of the contract but whether there has been consent. His point on berthing fails because of the existence and terms of the additional clauses.

It follows that the answers to the 3 issues for determination set out in Paragraph 14 on page 4 of the agreed Statement of Facts and Issues are as follows. Laytime commenced at 06.00 on 9 January 2004 as provided by additional Clause 31 of the charterparty. Charterers did not either by their emails or by commencing loading consent to earlier commencement of laytime.

It is common ground that “time saved” under additional Clause 33 cannot have its normal meaning of referring to the period from the completion of loading/discharge to the expiry of the laytime and must be a reference by the parties to all time used in loading or discharging before the commencement of the laydays.

Although I have answered the questions raised by this application Mr Davies put forward in his skeleton argument an alternative submission based on Clause 33. He says it does not matter when laytime actually starts because all “time saved” is to be split 50/50 between owners and charterers. He says that Owners are to receive a 50% credit but, on Charterers interpretation in their calculations, receive none at all. He submits that the only realistic approach to the clause is to “count” time saved before laydays as laytime in fact and then credit equally to both sides.

Mr Hickey does not address this matter in his skeleton argument but submits, as I understand it, that the meaning of the clause cannot be shaped by what may or may not be commercial consequences. He suggests that the only sensible interpretation to be given to the 50/50 wording is that Charterers are to receive later only half the credit given by additional Clause 33 in its unamended form. I agree. Whatever difficulty this presents it is not a justification for departing from Clause 31 and starting laytime early. The additional words should be read to mean that the amount of credit to the charterer should be reduced to 50% of what it would have been under the unamended clause. However this question is not strictly before the court. Mr Hickey said that if my view of the agreed issues would be different but for the amendment of additional Clause 33 it would be helpful for me to record this even though my observations would be strictly irrelevant. As it happens that distinction makes no difference to my view.

I believe I have dealt with the issues which arise for decision. If there are additional matters unresolved I shall be grateful if the parties will let me know and, at the same time, submit corrections of the usual kind and a draft order. I am grateful to Mr Davies and Mr Hickey for their very helpful submissions informed as they were by their very considerable experience in this area of the law.