voyage charter party laytime interpretation rules 1993

• Contracts and clauses
• BIMCO contracts
• Laytime Definitions for Charter Parties 2013

The Laytime Definitions for Charter Parties have been developed to provide practitioners with a set of meanings of commonly used words and phrases. The objective is to help reduce disputes about party intentions in a market where fixtures are often concluded on the basis of a recap message and listed amendments, without the exchange or return of draft contracts. These provisions have been developed for incorporation into charter parties. The latest edition of these definitions is the Laytime Definitions for Charter Parties 2013.

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Laytime definitions for charter parties 2013

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Explanatory notes, introduction.

Laytime and demurrage are fundamental to tramp shipping. Specialist terms which have evolved over the years have been extensively analysed by legal commentators and frequently tested in the courts. This has resulted in subtle distinctions where a choice of term or use of language can advance or delay the commencement of laytime and mean the difference between demurrage starting on Friday afternoon or the following Monday morning.

The Laytime Definitions for Charter Parties 2013 (Laytime Definitions), have been developed to provide practitioners with a set of meanings of commonly-used words and phrases. The objective is to help reduce disputes about party intentions in a market where fixtures are often concluded on the basis of a recap message and listed amendments, without the exchange or return of draft contracts. The Laytime Definitions are available for incorporation into charter parties or possibly used as an agreed reference for dispute resolution. In addition, they can be used as an educational resource to assist industry entrants and others wishing to develop an understanding of the contractual and legal complexities surrounding laytime and demurrage.

In 1976, the Comité Maritime International (CMI), the private international organisation for maritime legal interests, began work on a project to reduce charter party disputes by developing definitions of commonly-used terms, starting with laytime provisions. A Working Group comprising representatives from BIMCO, CMI, the UK Chamber of Shipping and FONASBA, developed the Charter Party Laytime Definitions 1980. However, the Definitions failed to attract support and were rarely incorporated into charter parties. In response to a highly critical report about contractual arrangements in the shipping industry issued by the United Nations Commission on Trade and Development (UNCTAD) in 1990, the Definitions were revised and issued as the Voyage Charter Party Laytime Interpretation Rules (Voylayrules) 1993 .

In the twenty years since the publication of Voylayrules , significant developments and changes have taken place in case law and commercial practice. A review was therefore put in hand to determine whether the content remained relevant together with the need for any changes, including new or additional provisions, required to meet contemporary trading arrangements.

Detailed work was undertaken by representatives from the original sponsoring organisations together with a participant from the Baltic Exchange:   Mr Jean-Pierre Laffaye, BIMCO (Chairman) Mrs Marygrace Collins, FONASBA Mr Stig Gregersen, CMI Mr Colm Nolan, Baltic Exchange

The resulting Laytime Definitions for Charter Parties 2013 were adopted by BIMCO at the Documentary Committee in Paris in May 2013 and have been similarly endorsed by each of the sponsoring organisations. Accordingly, the provisions are issued as a joint document. 

(a) Principles The Laytime Definitions have been restored to the original 1980 concept and developed as definitions. This is an important change from Voylayrules 1993 which were issued as a selfstanding code of rules and differed in a number of significant respects from generally accepted principles and practice such as the decision to combine three variations of “Weather Working “ day into a single Rule.

The sponsoring organisations agreed that the previous radical approach had been a factor contributing to the limited use of Voylayrules and that a fresh approach was required in the development of updated provisions which would be used in the markets. It was therefore agreed to revert to definitions, setting out statements of meaning, and that the content should reflect contemporary market needs based on the current state of English law. As a result substantive and editorial amendments have been made to a number of the Voylayrules provisions, separate explanations given once again to different forms of “Weather Working” day and new definitions introduced including “Always Accessible” and “Whether in Port or Not”.

The term “Strike”, which was introduced in Voylayrules , has been deleted because the scope and effects are often given their own meaning in the underlying charter party. The term “In Writing” has been removed as unnecessary given that many, particularly BIMCO, charter parties include a clause covering the issue.

The use of abbreviations has, for the most part, been avoided. In many cases, there is no generally accepted meaning and while parties may understand their own exchanges, abbreviations and acronyms can be capable of more than one interpretation. The Laytime Definitions use abbreviations only in respect of Whether in Berth or Not (WIBON) and Whether in Port or Not (WIPON) which are widely understood.

(b) Commentary

The following notes comment on the updated provisions and highlight changes from or amendments to Voylayrules 1993 .

Preamble The provisions relate only to laytime and demurrage issues and apply when any or all are expressly incorporated into a charter party or other contract of affreightment. It is for parties to determine the scope of application either limited to certain agreed and identified provisions or by incorporation in extenso.

List of Definitions

1. PORT has been amended to reflect the wider concept of port area explained in The Johanna Oldendorff (1973) with reference now made to “places outside the legal, fiscal or administrative area”. The term “offshore facilities” has been added to the illustrative, but non-exhaustive, list of cargo handling areas.

2. BERTH consistent with the amendment to PORT, the restrictive reference to “place within a port” has been replaced by an open-ended list of cargo handling locations.

3. REACHABLE ON ARRIVAL this term has been the subject of considerable litigation over the years. The revised text is based on the current position that delay due to bad weather or congestion or both is a breach of charterers’ obligations. The potentially disputatious qualification “in the absence of an abnormal occurrence”, included in Voylayrules, has been deleted.

4. ALWAYS ACCESSIBLE the provision has been treated by the authorities as synonymous with “Reachable on Arrival” in the context of getting into a berth but the position on departure has been less clear. The term has therefore been set out separately with the second sentence covering the position on departure requiring charterers to enable the vessel to leave safely and without delay.

5. LAYTIME this is unchanged.

6. PER HATCH PER DAY and

7. PER WORKING HATCH PER DAY or PER WORKABLE HATCH PER DAY Laytime counting by reference to hatch calculations continues to be used, albeit to a limited extent, in some parts of the world. The provisions have been retained unchanged.

8. DAY in contrast to Definitions No 9 and 10, an unqualified DAY is now described as a period of twenty-four consecutive hours.

9. CALENDAR DAY is new and covers a period of twenty-four consecutive hours running from 0000 to 2400 hours.

10. CONVENTIONAL DAY is new and has been included in recognition of the fact that a period of twenty-four hours in relation to laytime counting is likely to start at any point during a Calendar Day.

11. WORKING DAY the meaning has been brought into line with English law.

12. RUNNING DAYS or CONSECUTIVE DAYS the provision is unchanged.

13. RUNNING HOURS or CONSECUTIVE HOURS this is new and reflects practical usage, particularly in tanker charter parties.

14. HOLIDAY this is the (unchanged) mirror image of Definition No 11 WORKING DAY. 15-18 WEATHER WORKING in contrast to the single provision in Voylayrules covering three alternative forms of Weather Working provisions, separate meanings have been restored in line with English law decisions.

15. WEATHER WORKING DAY deductions for bad weather are calculated by reference to the length an interruption during a vessel’s normal (or notional if waiting on turn) working hours bears to a period of 24 hours. Thus, a two hour stoppage during an eight hour working day is pro-rated to six hours (or four hours in the case of a twelve hour working day) and the time then added to the end of laytime. No deductions are made for rain occurring outside normal working hours.

16. WEATHER WORKING DAY OF 24 CONSECUTIVE HOURS the actual duration of an interruption for bad weather at any time on a working day during or outside normal working hours and including periods on turn, is added to the end of laytime.

17. WEATHER WORKING DAY OF 24 HOURS this is an artificial day made up of twenty-four working hours. An eight hour working day is equal to three calendar days’ laytime but with laytime suspended for stoppages due to bad weather in working hours or in working hours when work was contemplated.

18. (WORKING DAY) WEATHER PERMITTING this has the same meaning and interpretation as Definition No 16 Weather Working Day of 24 Consecutive Hours.

19. EXCEPTED or EXCLUDED the content is unchanged

20. UNLESS SOONER COMMENCED has the effect of bringing forward the commencement of laytime if work begins prior to the contractual start of laytime.

21. UNLESS SOONER COMMENCED, IN WHICH CASE ACTUAL TIME USED TO COUNT the commencement of laytime remains in accordance with charter party provisions but time actually used in any prior period will count against laytime.

22. UNLESS USED time used during excepted periods is set against laytime.

23. TO AVERAGE LAYTIME the provision is unchanged.

24. REVERSIBLE LAYTIME the provision is unchanged. Reversibility applies between loading ports and discharging ports but not between loading ports or between discharging ports.

25. NOTICE OF READINESS this is unchanged.

26. TIME LOST WAITING FOR BERTH TO COUNT AS LOADING OR DISCHARGING TIME or AS LAYTIME the basis is unchanged in principle, subject to minor editorial improvements. Where a vessel is unable to berth but cannot tender Notice of Readiness at a waiting place, time lost will count against laytime or, on expiry, as demurrage. Once a berth is available, laytime or demurrage ceases to count until the vessel is at a place where Notice of Readiness can be given and resumes in accordance with charter party provisions.

27. WHETHER IN BERTH OR NOT (WIBON) or BERTH OR NO BERTH relates to delays due to congestion (but not on account of weather). A change has been made. Under Voylayrules , laytime or demurrage ceased once a berth became available and would not resume until the vessel was at the berth. This meant that the owner would have to bear the risk of any intervening delay, even if not otherwise contractually responsible. An adjustment has therefore been made so that time will always run in accordance with the underlying charter party provisions.

28. WHETHER IN PORT OR NOT (WIPON) this is new. It will enable an owner to give Notice of Readiness from any recognised waiting place “off the Port” if unable to proceed to the usual waiting place.

29. VESSEL BEING IN FREE PRATIQUE has been amended to address the position in Voylayrules potentially restricting time counting arrangements and possibly conflicting with underlying charter party terms. The content has been streamlined with the reference to Custom House entry removed as formalities vary considerably from one state to another. The provision now relates only to compliance with port health requirements.

30. DEMURRAGE in order to avoid conflict with the position in many charter parties, the  Voylayrules provision that “Demurrage shall not be subject to laytime exceptions” has been qualified by “unless specifically stated in the Charter Party”.

31. DESPATCH MONEY or DESPATCH this is unchanged.

32. DESPATCH ON ALL WORKING TIME SAVED or ON ALL LAYTIME SAVED this is unchanged.

33. DESPATCH ON ALL TIME SAVED this is unchanged.

(c) Recommended methods of incorporation As explained above, the provisions have been developed for incorporation into charter parties. There are several possible means of achieving this objective depending on the type of contractual arrangements (for example single or consecutive voyage charters or a contract of affreightment) and whether the intention is to apply the provisions in full or only those selected by the parties. While other methods might be equally effective, the following alternatives are suggested:

(i) clause for incorporation by reference: “The Laytime Definitions for Charter Parties 2013 (Laytime Definitions) are incorporated into this contract in full. In the event of any conflict between this contract and the Laytime Definitions, the provisions of the Laytime Definitions shall prevail to the extent of such conflict.”

If it is agreed to incorporate only certain of the Definitions, the text can be modified to read: “Definition Numbers [ identify selected provisions ] in the Laytime Definitions for Charter Parties 2013 (Laytime Definitions) are incorporated into this contract. In the event of any conflict between this contract and the Laytime Definitions, the provisions of the Laytime Definitions shall prevail to the extent of such conflict.”

(ii) incorporation using a “cut and paste” addendum setting out the full text of all or of those selected Definitions which the parties have agreed to apply. The incorporation clause should clearly state that the agreed Laytime Definitions prevail in the event of any conflict with the underlying charter party provisions.

(iii) application to individual words or phrases in the body of the charter party where the intention is to remove any doubt about the parties’ intended interpretation of one or more specific terms. In such event, the text of the relevant Laytime Definition(s) can be inserted as the agreed meaning.

Originally published in BIMCO Special Circular No. 8, 10 September 2013 - Laytime Definitions for Charter Parties 2013

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The Law of Carriage of Goods by Sea pp 425–450 Cite as

Voyage Charter: Laytime and Demurrage

• Arun Kasi 2  
• First Online: 02 September 2021

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This chapter covers laytime and demurrage in voyage charterparties. The various laytime definitions such as weather working day, etc and the charterer’s obligations arising from the laytime clause are considered.

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Box 16 and cl. 6(a) and (b).

E.g. Stolt Tankers v Landmark [2002] 1 Lloyd’s Rep 786 (EW HC).

[1908] 1 KB 499 (EW CA).

[1963] AC 691 (UK HL).

Reardon Smith Line Ltd v Ministry of Agriculture, Fisheries and Food [1963] AC 691 (UK HL).

Dow Chemical (Nederland) BV v BP Tanker Co Ltd (The Vorras) [1983] 1 Lloyd’s Rep 579 (EW CA).

Margaronis Navigation Agency Ltd v Henry W Peabody & Co of London Ltd (The Vrontados) (HC) [1965] 1 QB 300, [1964] 2 All ER 296 (EW HC).

Another similar decision was reached in Total Transport Corporation v Arcadia Petroleum Ltd (The Eurus) [1996] 2 Lloyd’s Rep 408 (EW HC).

(1868) LR 2 QB 566 (EW HC), affirmed by the Court of Appeal in (1868) LR 3 QB 412 (EW CA).

[2015] SGCA 37, [2015] 5 SLR 178 (SG CA).

Houlder v General SN Co (1862) 3 F&F 170.

Christensen v Hindustan Steel [1971] 1 Lloyd’s Rep 395 (EW HC).

Compania de Naviera Nedelka SA v Tradax International SA of Panama City RP (The Tres Flores) [1974] QB 264, [1973] 2 Lloyd’s Rep 247, [1973] 3 All ER 967, [1973] 3 WLR 545 (EW CA).

Cobelfret NV v Cyclades Shipping Co Ltd (The Linardos) [1994] 1 Lloyd’s Rep 28 (EW HC).

Surrey Shipping Co Ltd v Compagnie Continentale (France) SA (The Shackleford) [1978] 1 WLR 1080, [1978] 2 Lloyd’s Rep 154 (EW CA).

Transgrain Shipping BV v Global Transporte Oceanico SA (The Mexico 1) (CA) [1990] 1 Lloyd’s Rep 507 (EW CA).

Ocean Pride Maritime Ltd Partnership v Qingdao Ocean Shipping Co (The Northgate) [2007] EWHC 2796 (Comm), [2008] 2 All ER (Comm) 330 (EW HC).

Sofial SA v Ove Skou Rederi (The Helle Skou) [1976] 2 Lloyd’s Rep 205 (EW HC).

Glencore Grain Ltd v Flacker Shipping Ltd (The Happy Day) [2002] EWCA Civ 1068, [2002] 2 All ER (Comm) 896, [2002] All ER (D) 219 (Jul), [2002] 2 Lloyd’s Rep 487 (EW CA).

E.g. Pteroti Cia Nav SA v National Coal Board [1958] 1 QB 469 (EW HC); Glencore Grain Ltd v Goldbeam Shipping Inc; Goldbeam Shipping Inc v Navios International Inc (The Mass Glory) [2002] EWHC 27 (Comm), [2002] 2 Lloyd’s Rep 244 (EW HC).

It is not compulsory that the destination point stipulated in the charterparty is a port or berth. It can also be other places like a sea mooring buoy or customary anchorage.

Cl. 6(c) (para 2).

Novologistics SARL v Five Ocean Corp (The Merida) [2009] EWHC 3046 (Comm), [2010] 1 Lloyd’s Rep 274 (EW HC).

Bulk Transport Group Shipping Co Ltd v Seacrystal Shipping Ltd (The Kyzikos ) [1989] AC 1264, [1988] 3 All ER 745, [1989] 1 Lloyd’s Rep 1 (UK HL).

[1950] 2 KB 194 (EW CA).

Oldendorff (E L) & Co GmbH v Tradax Export SA (The Johanna Oldendorff) [1974] AC 479, [1973] 3 All ER 148 (UK HL).

Federal Commerce and Navigation Co Ltd v Tradax Export SA (The Maratha Envoy) [1978] AC 1, [1977] 2 All ER 849 (UK HL).

See also Federal Commerce and Navigation Co Ltd v Tradax Export SA (The Maratha Envoy) [1978] AC 1, [1977] 2 All ER 849 (UK HL).

Navalmar UK Ltd v Kale Maden Hammaddeler Sanayi Ve Ticart AS (The Arundel Castle) [2017] EWHC 116 (Comm), [2017] 2 All ER (Comm) 1033, [2017] 1 Lloyd’s Rep 370 (EW HC).

There are a few LMAA awards that recognise this proposition. See Feoso (Singapore) Pte Ltd v Faith Maritime Co Ltd (The Daphne L) [2003] SGCA 34, [2003] SLR 556 (SG CA).

Bulk Transport Group Shipping Co Ltd v Seacrystal Shipping Ltd (The Kyzikos) [1989] AC 1264, [1988] 3 All ER 745, [1989] 1 Lloyd’s Rep 1 (UK HL).

[2011] EWHC 1361 (Comm), [2011] 2 Lloyd’s Rep 278 (EW HC).

North River Freighters Ltd v HE President of India (North River) [1956] 1 QB 333 (EW CA); Ionian Navigation Company Inc v Atlantic Shipping Company SA (The Loucas N) [1971] 1 Lloyd’s Rep 215 (EW CA); Aldebaran Compania Maritime SA, Panama v Aussenhandel AG Zurich (The Darrah) [1977] AC 157, [1976] 2 All ER 963 (UK HL); Freight Connect (S) Pte Ltd v Paragon Shipping Pte Ltd [2015] SGCA 37, [2015] 5 SLR 178 (SG CA).

Agios Stylianous Compania Naviera SA v Maritime Associates International Ltd Lagos (The Agios Stylianos) [1975] 1 Lloyd’s Rep 426 (EW HC).

Government of Ceylon v Societe Franco-Tunisienne D’armement-Tunis (The Massalia) (No. 2) [1960] 2 Lloyd’s Rep 352 (EW HC).

[2011] EWHC 1165 (Comm), [2011] 2 Lloyd’s Rep 177 (EW HC).

Aldebaran Compania Maritime SA, Panama v Aussenhandel AG Zurich (The Darrah) [1977] AC 157, [1976] 2 All ER 963 (UK HL).

The House of Lords overruled The Radnor [1955] 2 Lloyd’s Rep 668 (EW CA). The Radnor treated ‘time lost’ that did not admit laytime definition and exceptions when dealing with ‘time lost’ clauses.

Huyton SA v Inter Operators SA (The Stainless Emperor) [1994] 1 Lloyd’s Rep 298 (EW HC).

Moerland (Arnt J) K/S v Kuwait Petroleum Corpn (The Fjordaas) [1988] 2 All ER 714, [1988] 1 Lloyd’s Rep 336 (EW HC).

Seatrade Group NV v Hakan Agro DMCC (The Aconcagua Bay) [2018] EWHC 654 (Comm), [2018] 2 All ER (Comm) 843 (EW HC).

Inca Compania Naviera SA and Commercial and Maritime Enterprises Evanghelos P Nomikos SA v Mofinol Inc (The President Brand) [1967] 2 Lloyd’s Rep 338 (EW HC); Nereide SpA di Navigazione v Bulk Oil International (The Laura Prima) [1982] 1 Lloyd’s Rep 1 (UK HL).

Shipping Developments Corpn v v/o Sojuzneftexport (The Delian Spirit) [1972] 1 QB 103, [1971] 2 WLR 1434, [1971] 1 Lloyd’s Rep 506 (EW CA).

Inca Compania Naviera SA and Commercial and Maritime Enterprises Evanghelos P Nomikos SA v Mofinol Inc (The President Brand) [1967] 2 Lloyd’s Rep 338 (EW HC).

Oldendorff (E L) & Co GmbH v Tradax Export SA (The Johanna Oldendorff) [1974] AC 479, [1973] 3 All ER 148 (UK HL). See Chapter  14.4.2.1 for a discussion of this case.

Nereide SpA di Navigazione v Bulk Oil International (The Laura Prima) [1982] 1 Lloyd’s Rep 1 (UK HL).

The compensation payable by the charter, rightly, will be damages for detention, which may most of the time be same as the demurrage, unless the market rates have differed since the charterparty was entered into.

Sunbeam Shipping Co Ltd v President of India (The Atlantic Sunbeam) [1973] 1 Lloyd’s Rep 482 (EW HC): the charterer had a duty to secure ‘jetty challan’ for the ship to enter the port, where that was a requirement of the port authority.

Sociedad Financiera De Bienes Raices Sa v Agrimpex Hungarian Trading Company for Agricultural Products [Appeal in The Aello] [1961] AC 135, [1960] 3 WLR 145 (UK HL).

It follows that the ship could not issue notice of readiness.

Malaysian Contracts Act 1950.

Section 68 of the Malaysian Contracts Act 1950 identically provides.

See Chapter  12.6.1 .

Cl. 6(3) (para 2).

Tidebrook Maritime Corp v Vitol SA of Geneva (The Front Commander) [2006] 2 Lloyd’s Rep 251 (EW CA), speech of Rix JL: where the charterer requires early notice of readiness, the charter sanctions early commencement of laytime.

TA Shipping Ltd v Comet Shipping Ltd (The Agamemnon) [1998] 1 Lloyd’s Rep 675 (EW HC).

Galaxy Energy International Ltd v Novorossiysk Shipping Co (The Petr Schmidt) [1997] 1 Lloyd’s Rep 284 (EW HC), affirmed by the Court of Appeal in [1998] 2 Lloyd’s Rep 1 (EW CA).

See Tidebrook Maritime Corp v Vitol SA of Geneva (The Front Commander) [2006] EWCA Civ 944, [2006] 2 All ER (Comm) 813, [2006] 2 Lloyd’s Rep 251 (EW CA); Total Transport Corporation v Arcadia Petroleum Ltd (The Eurus) [1996] 2 Lloyd’s Rep 408 (EW HC).

[2010] EWCA Civ 713, [2010] 2 Lloyd’s Rep 257 (EW CA).

See Trafigura Beheer BV v Ravennavi SpA (The Port Russel) [2013] EWHC 490 (Comm), [2013] 2 Lloyd’s Rep 57 (EW HC).

Cl. 16 of Gencon 1994 form has detailed provision dealing with strikes.

Grant & Co v Coverdale, Todd & Co (1884) 9 App Cas 470, 53 LJQB 462 (UK HL).

Navrom v Callitsis Ship Management SA (The Radauti) [1988] 2 Lloyd’s Rep 416 (EW CA).

Cl. 6(c) (para 2): “… Time used in moving from the place of waiting to the loading/ discharging berth shall not count as laytime. …”

[1925] AC 799, [1925] All ER Rep 607 (UK HL).

Gem Shipping Co of Monrovia v Babanaft (Lebanon) SARL (The Fontevivo) [1975] 1 Lloyd’s Rep 339 (EW HC).

Blue Anchor Line Ltd v Alfred C Toepfer International GmbH (The Union Amsterdam) [1982] 2 Lloyd’s Rep 432 (EW HC).

Overseas Transportation Co v Mineralimportexport (The Sinoe) [1971] 1 Lloyd’s Rep 514 (EW HC), affirmed by the Court of Appeal in [1972] 1 Lloyd’s Rep 201 (EW CA).

[1920] AC 88 (UK HL).

[2002] 1 Lloyd’s Rep 786 (EW HC).

[1927] 1 KB 879 (EW CA).

[1905] 2 QB 267 (EW HC).

Universal Cargo Carriers Corp v Citati [1957] 2 QB 401 (EW HC).

Inverkip SS Co v Bunge [1917] 2 KB 193 (EW CA).

Wilson & Coventry Ltd v Otto Thoresen Linie [1910] 2 KB 405 (EW HC).

See Chapter  13.7 .

[2003] SGCA 34 (SG CA).

Dias Cia Naviera SA v Louis Dreyfus Corpn (The Dias) [1978] 1 All ER 724, [1978] 1 WLR 261 (UK HL).

Dias Cia Naviera SA v Louis Dreyfus Corpn (The Dias) [1978] 1 All ER 724; Nippon Yusen Kaisha v Marocaine de L’Industrie du Raffinage (The Tsukuba Maru) [1979] 1 Lloyd’s Rep 459.

Rich (Marc) & Co Ltd v Tourloti Cia Naviera SA (The Kalliopi A) [1988] 2 Lloyd’s Rep 101 (UK CA).

DGC Commodities Corp v Sea Metropolitan SA (The Andra) [2012] EWHC 1984 (Comm), [2012] 2 Lloyd’s Rep 587 (EW HC).

Which is identical to Article IV(2) of the Hague/Hague-Visby Rules.

K Line PTE Ltd v Priminds Shipping (HK) Co Ltd (The Eternal Bliss) [2020] EWHC 2373 (Comm), [2020] 9 WLUK 40 (EW HC).

Part II, cl. 15(c)

National Shipping Co of Saudi Arabia v BP Oil Supply Co (The Abqaiq) [2011] EWCA Civ 1127, [2012] 1 Lloyd’s Rep 18 (EW CA).

Waterfront Shipping Company Ltd V Trafigura AG (The Sabrewing) [2007] EWHC 2482 (Comm), [2008] 1 Lloyd’s Rep 286 (EW HC).

The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd v Fr8 Singapore Pte Ltd (The Eternity) [2009] 1 Lloyd’s Rep 107 (EW HC).

Emeraldian Ltd Partnership v Wellmix Shipping Ltd (The Vine) [2010] EWHC 1411 (Comm), [2011] 1 Lloyd’s Rep 301 (EW HC).

Nolisement (Owners) v Bunge and Born [1916-17] All ER Rep 734, [1917] 1 KB 160 (EW CA).

Zim Israel Navigation Co Ltd v Tradax Export SA (The Timna) [1971] 2 Lloyd’s Rep 91 (EW CA).

[1951] 1 KB 240, [1950] 1 All ER 768 (EW HC).

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Kasi, A. (2021). Voyage Charter: Laytime and Demurrage. In: The Law of Carriage of Goods by Sea. Springer, Singapore. https://doi.org/10.1007/978-981-33-6793-7_14

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United States: BIMCO’s 2013 Laytime Definitions - A Model For Reducing Charter Party Disputes?

BIMCO recently promulgated a new document, Laytime Definitions for Charter Parties ("Laytime Definitions") 2013 , which defines various terms used in conjunction with calculating the running of laytime and demurrage for the purpose of reducing tramp shipping (voyage charter) disputes. Laytime Definitions was generated through the joint effort of BIMCO, the Baltic Exchange, the Comité Maritime International, and the Federation of National Associations of Shipbrokers and Agents.

Typical voyage charters (ExxonMobilVOY, ASBATANKVOY, and BPVOY) do not expressly define terms such as laytime, demurrage, berth, or port. Instead, courts construe the meaning of these terms from the context used in the charters and as construed by the common law.

In its Laytime Definitions, BIMCO refrained from altering the definition of laytime from BIMCO's previous iteration, Voyage Charter Party Laytime Interpretation Rules ("Voylayrules") 1993 . The term still means: "The period of time agreed between the parties during which the owner will make and keep the vessel available for loading and discharging without payment additional to the freight." Courts have generally construed laytime as the "time allowed for the charterer to load or unload," which closely approximates the BIMCO definition.

BIMCO still defines demurrage as "an agreed amount payable to the owner in respect of delay to the vessel once the laytime has expired, for which the owner is not responsible." However, the term has been refined to allow exceptions specifically set forth in the charter agreement, whereas in its earlier form no laytime exceptions were permitted, which likely contributed to the industry's general failure to employ the Voylayrules . In contrast to laytime, the courts have construed demurrage in a variety of ways, such as:

• liquidated penalty or stipulated damages for delay;
• "extended freight and the amount payable for delays by the receiver in loading and unloading cargo;"
• the "sum which is fixed by the contract of carriage...as remuneration to the owner of a ship for the detention of his vessel, beyond the number of days allowed by the charter-party for loading and unloading;"
• "[t]he charge assessed under the charter party to the charterer for detaining a vessel beyond the free time stipulated for loading and unloading;" and
• "[a] fine or payment made by the shipper to the vessel owner if the shipper fails to complete the loading of his cargo within an allowed period of time."

BIMCO hopes its Laytime Definitions , if employed in the marketplace, will serve to narrow the scope of vessel delay disputes by defining "demurrage" and other terms at the heart of such disputes. "These provisions bring much needed clarity to the shipping markets and iron out a good deal of uncertainty," said BIMCO's Jean-Pierre Laffaye ( see www.tradewindsnews.com/drycargo/323408/laytime-language-revised ). Mr. Laffaye continued: "In a tough market, the amount of time a vessel spends unloading or loading cargo is under great scrutiny, and it is therefore vital that imprecise laytime definitions and subtleties of interpretation do not provide grounds for expensive legal disputes when an interpretation is tested in the courts." ( See www.tradewindsnews.com/drycargo/323408/laytime-language-revised .)

BIMCO also defined the terms berth and port. Berth is defined as "the specific place where the vessel is to load or discharge and shall include, but not be limited to, any wharf, anchorage, offshore facility, or other location used for that purpose." Port is defined as "any area where vessels load or discharge cargo and shall include, but not be limited to, berths, wharves, anchorages, buoys, and offshore facilities as places outside the legal, fiscal, or administrative area where vessels are ordered to wait for their turn no matter the distance from that area." Note the expansion of the definition of "port" to areas where the vessel is ordered to wait no matter the distance from the physical terminal, and the narrowing of "berth" to the specific place where loading or discharge is to occur. These refined terms will alter when and where laytime and demurrage run, and presumably will also bear on safe berth or port issues.

In summary, BIMCO hopes its Laytime Definitions will be met with acceptance by both sides of charter party transactions— owner and charterer. What remains to be seen is whether Laytime Definitions fares any better than the Voylayrules in the marketplace. A desire to limit the litigation of vessel delay disputes would presumably lead to greater use of BIMCO's Laytime Definitions .

For a complete copy of BIMCO's Laytime Definitions, please visit: www.blankrome.com/LaytimeDefinitions.pdf .

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Laytime Definitions for Charter Parties 2013

To reduce charter party disputes.

The aim of the new Laytime Definitions of Charter Parties 2013 is to assist the industry in reducing the large number of laytime and demurrage related disputes by setting out statements of meaning of words and phrases commonly used in the context of laytime which reflect contemporary market understanding based on the current state of English law.

Separate meanings have been given to the different formulations of phrases such as “Weather Working” day, new definitions included covering “Always Accessible” and “Whether in Port or Not” while a number of other provisions have been updated or clarified.

Related News

The definitions were last updated as the Voyage Charter Party Laytime Interpretation Rules (Voylayrules) in 1993, but significant developments in case law and changes in commercial practices have taken place since then.

Chairman of the Working Group, Jean-Pierre Laffaye (BIMCO), speaking on behalf of the group said:

“These provisions bring much needed clarity to the definitions of commonly used charter party terms used in the shipping industry. In a tough market, the amount of time a vessel spends unloading or loading cargo is under great scrutiny and it is therefore vital that the parties share a clear and common interpretation of laytime terms to avoid expensive legal disputes when an interpretation is tested in the courts or by arbitrators.”

The 2013 Definitions are now available for incorporation into charter parties or as an agreed reference during dispute resolution. They can also be used as an educational resource in the training of new entrants into the industry. Copies of the Laytime Definitions of Charter Parties 2013 together with explanatory notes are freely available from the Chartering/Special Circulars section of www.bimco.org . The Baltic Exchange plans to incorporate the new definitions into the next edition of its code of conduct, the Baltic Code.

For further information, read the BIMCO Special Circular No. 08

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A Layman’s Guide to Laytime, Charter party Agreement and Voyage Charter

The word “Charterer” is probably as old as the word “Ship” itself.

Do you keep hearing this word so regularly?

Well, who doesn’t?

From seafarer’s point of view, it is so much important to understand these terms.

From commercial point of view, it is the moral responsibility of the seafarers to ensure that the ship owner profits from the ship operation.

And for this reason, we must understand when and where our loyalties lies.

But sometimes it becomes difficult to get a hang of all of it.

Not anymore.

In this blog, we will discuss about the terms charterer and charter party agreement.

Concept of Charter party agreement

It is all business.

And like in all kind of business, there are at least two parties involved, one of which provide a service or product to the other for a price.

With respect to carrying the cargo onboard the ships, these two parties are,

1) Ship owner who has the ship and provide the space on the ship to carry the cargo.

2) Shipper who has the cargo and wants a ship to transport the cargo

Then where does the term charterer fits into this?

Charterer is the party that has chartered (think of simple word “hired”) the ship.

If the shipper has chartered the entire ship then shipper will also be the charterer.

In most of the cases, charterer is a kind of middle man between shipper(s) and shipowners

This is particularly the case if there are more than one shipper.

For example, if the vessel is to load 50000 tons of cargo, there could be 10 shipper, say each of them with 5000 tons of cargo.

Alone none of the shippers would want to hire the entire vessel of 50000 tons capacity for their 5000 tons of cargo.

So they contact a charterer for transporting their cargo.

The charterer’s job is to find a vessel for the cargoes they have from different shippers and maximazing the space on ship they plan to hire.

Charterers may not be the only person involved in filling the gap between shipowner and shipper.

Sometime there are some other companies or persons who help shipper, charterer and shipowner to connect with each other for a fees.

They are called “Brokers”.

So the shipper’s broker is the person or company that help shipper find a charterer for a fees called brokerage.

And charterer’s broker is the person that help charterer find a ship to hire.

The charterer may even have brokers for different purpose. For example charterer may have a broker to find a cargo for the ship they want to hire and they may have another broker to find a ship for the cargo they have in hand.

Broker or no broker, the charterer and shipowner would agree on the terms and conditions which would form “ Charter party agreement “.

Charter party agreement is a detailed document which, apart from various clauses, has informations such as

• When and where the vessel is required to be
• the freight agreed
• If the broker was used, who need to pay the brokerage fee and how much

Even though shipowners is primarily dealing with the charterer, it does not mean that the shipowner would have no relation with the shipper.

Shipper and shipowner are connected by the “carriage of cargo at sea act”, also called COGSA .

And one of the main point of it is that shipowner is required to issue bill of lading to the shipper for the cargo loaded onboard.

And with that each of the shipper have entered into an agreement with the ship owner which is called “Contract of  carriage”.

While the “charter party agreement” is a formal agreement, the contract of carriage is governed by various laws and regulations such as Hague-Visby rule .

Charter party agreement supplement the contract of carriage.

Usually you would find a mention of the charter party agreement in the bill of lading. The wording in the bill of lading could be something like this.

This shipment is carried pursuant to charter party agreement between “ Charterer’s name ” and “ Carrier’s name ” and all the terms, clauses, conditions, liberties and exceptions whatsoever contained therein are incorporated into this bill of lading.

But do the shipowners and charterers do this exercise of negotiating the format of the charter party agreement each time they do the business together.

Absolutely not. Hell, it would take a lot of time.

Instead they use pre-defined forms. These forms are developed by Independent International stakeholders such as BIMCO and INTERTANKO and are widely used in the shipping business.

There are different forms for different trades.

For example there is form  SHELLVOY 6 for use in tanker trade and then there is form AMWELSH 93 for coal dry cargo chartering.

Also if a charterer and ship owner have done the business before, they use the same charter party agreement for the future shipments too.

For this reason, many a times even for a voyage in 2019, you may find the mention of charter party dated in 2016 or even before. In the bill of lading issued even in 2019 , it may read something like,

The shipment is carried pursuant to charter party agreement between “ Charterer’s name ” and “ Carrier’s name ” dated 01 January 2016…..

Now that we understand the concept of chartering, let us understand the different ways in which the ships can be chartered.

Voyage Charter, Time charter, Demise charter

There are different ways in which a charterer can charter (Hire) the vessel.

Charterer can charter the vessel for one voyage (Voyage charter), for a particular time period (time charter) or they can hire and run the vessel as if they are the owner of the vessel (Demise or bareboat charter).

In each type of charter, charterers and shipowners have different area of responsibilities.

Each type of charter is a subject in itself. So in this blog we will explore the voyage charter.

Voyage Charter

It should be clear from the name.

Under the voyage charter, the ship is hired from the ship owner for one voyage.

One voyage could consists of multiple load ports and multiple discharge port.

The best analogy to the term voyage charter is that with hiring an Uber for a ride from one place to the other, sometimes with multiple stops in between.

So when we hire an Uber, we hire just the cab. The cab driver is still under the instructions of Uber.

Similarly, under the voyage charter, the charterer has hired the ship’s cargo space. But the Master and crew still remains under the disposal and instructions of ship owner and  ship managers.

When we hire a cab for a ride, we just pay the hire (pre-agreed or by the meter). We do not pay for or are not concerned about the fuel costs or the amount of fuel consumed.

Similarly, under the voyage charter, charterer is not concerned about the fuel consumption. The fuel costs are for the ship owners.

And when we hire an Uber, we do not pay for maintenance of the cab.

Similarly, under the voyage charter it is the ship owner who pays for the maintenance of the ship.

Whenever we have any doubt about anything under voyage charter, just think of this analogy of hiring the cab.

Most likely you will get the answer.

Laytime, Demurrage and despatch

Lord Diplock during one of the leading cases on Laytime described the voyage charter party comprising of four stages .

• Stage 1 is the loading voyage: The voyage from wherever the ship is to the loading port specified in the voyage charter party
• Stage 2 is the Loading operation: The loading of the cargo at the port of loading
• Stage 3 is the carrying voyage: The voyage from load port to the discharge port specified in the voyage charter party.
• Stage 4 is the discharging operation: The discharging of the cargo from the ship to the port of discharging as specified in the voyage charter party.

In the first and third stage, it is only the ship owner that need to perform. For example. ship owner is required to adjust the speed of the ship to arrive at the loading port within the agreed dates (Laycan).

And in the third stage, the ship owner is required to instruct the vessel to maintain the charter party speed.

However it is the second and fourth stage where most of the disputes take place.

Because in these two stages it is mutual reponsibility of the two parties to ensure that cargo loading and discharging is done without any delays.

In case of delays, each one can accuse the other for delays.

It is definately not commercially profiting for the shipowner if the voyage is extended beyond their expectations.

For example, what if the loading of the cargo took 15 days in comparison to just 2 days that shipowner had expected?

Or what if the ship could not berth at load port or discharge port for many days because of other ships ahead in line up?

Too many uncertainties.

But ship owner’s freight (and profits) cannot depend upon so many uncertainties.

So the shipowner and charterers agree on the factors like allowed number of days for loading and discharging.

In chartering terms this is called “Laydays” or “Laytime”.

The laydays is mentioned in the voyage charter party agreement between ship owner and charterer.

It could be mentioned as number of days and hours or as tons per hours or per day.

If the charterer uses more time for loading and discharging than the allowed laydays as per charter party agreement, then charterer is supposed to pay for extra time used.

The chartering term for this additional payment is “Demurrage”.

So we can say that if charterer uses more time for loading/discharging than laydays, they need to pay demurrage to the ship owner.

But if the charterer uses less time than laydays then ship owner need to pay the charterer for the time saved.

The chartering term for this is “despatch”.

Usually the agreed amount of despatch is about half of the agreed amount for demurrage.

Finally at the end of the voyage, a statement is made to shows the time saved and/or extra time taken at different ports.

Below is the simplified version of the laytime summary calculated at the end of the voyage.

This statement would also show the final amount due and to whom it is due. Means if the final amount is demurrage or despatch and how much.

Notice of readiness and statement of facts

For calculation of laytime, it is important to know when the laytime counting and calculation would start.

This information is also provided in the charter party agreement.

In most of the cases, the laytime would commence to start when the vessel has arrived at the port. In chartering term, this is called “ Arrived Ship “.

Legally, a ship is considered as an ‘Arrived Ship” only when

• Ship has arrived at the port of loading or discharging (port voyage charter) or at the designated berth (Berth Voyage charter).
• Ship is ready in all respects to commence loading (or discharging) or the cargo, and
• Master has sent the notice of readiness to the all parties concerned

The charter party agreement contains the information if the voyage charter is a port voyage charter or a berth voyage charter.

Irrespective if it is port or berth voyage charter, from the ship’s point of view it is important that the master of the vessel send the notice of readiness.

Notice of readiness need to  state that the vessel has arrived and she is ready in all respect to commence loading (or discharging ) of the cargo.

The laytime would start to commence at this time or sometimes few hours later if specifically mentioned in the charter party agreement.

Since one of the condition for the laytime to start is for the master to send the notice of readiness, it makes it so much of an important aspect.

Statement of Facts

The vessel and the master of the ship are the owner’s representative at the action site (loading port or discharging port).

Ship Owner would know only know the information that we provide them. They would use this information for calculation of any demurrage due to the charterers.

But for the correct demurrage calculation, the information we provide must be correct and we must not miss any important information such as any delays.

That make the statement of facts (commonly called SOF) an important document.

At the least, statement of facts must include

• any delays from shore side or from ship’s side and reason of delay
• any delays because of weather conditions
• Timings for the movement of the ship (such as times for anchoring, anchor aweigh, pilot onboard, NOR Tendered etc)
• Timings related to cargo operations (Commenced cargo operation and completed cargo operation

Master’s actions during voyage charter

Master and ship staff may not see the actual charter party agreement between the charterer and the ship owner.

And it is for their own benefit too.

Because there would be so many things in that which we seafarers are not concerned about.

But when the  ship is fixed for the voyage charter, master will receive “Voyage instructions” from the charterer through the ship owner’s commercial team.

The voyage instructions contains the information from the charter party agreement that requires master’s attenstion and subsequent actions.

Master must not miss the points in the voyage orders that requires his actions.

One of the way to do it is to highlight the text of the voyage instructions that require his attention for easy follow up.

Once Master reads the voyage instructions, he may come across insufficient information that need more information or clarification.

Like this one in one of the voyage orders.

Clarification must be sought from the ship operator for any of such information in the voyage orders.

After all it just takes a simple email to get everything in place.

And once everything is clear and in place, it is just about following that.

There are may be only a handful of shipowners that do not rely on the charterer to find the cargo for their vessel.

Having the vessel on charter is so common.

And vessel can be chartered in different ways. Vessel can be on a voyage charter, time charter or demise/bareboat charter.

With respect to voyage charter, master and ship staff must understand few thing

First, when is the laycan for the vessel. This is period in which vessel must arrive at the load port.

If master thinks that vessel may not be able to make it to the loadport in laycan period, the commercial operator must be informed who can then try to extend the laycan.

Second, when the notice of readiness need to be tendered.

If the voyage charter is a port charter, NOR can only be tendered when vessel is at least within the port limits. Usually in this case NOR is tendered when pilot boards the vessel.

If the voyage charter is berth charter, the NOR can only be tendered when the vessel is alongside the designated berth.

Wrong tendering of NOR can make the Notice of readiness null and void and shipowner may loose tons of money.

Lastly, the ship staff need to be make sure that a correct record of statement of facts is kept. This is the document that is used for laytime calculations .

If the charterer uses more time than agreed for loading or discharging the cargo, the ship owner is supposed to get a pre-agreed compensation called demurrage.

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About Capt Rajeev Jassal

Capt. Rajeev Jassal has sailed for over 24 years mainly on crude oil, product and chemical tankers. He holds MBA in shipping & Logistics degree from London. He has done extensive research on quantitatively measuring Safety culture onboard and safety climate ashore which he believes is the most important element for safer shipping.

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70 comments.

How i wish that our exam books were written so precisely yet so easy to understand .Thanx for all the pain you take .No amount of words would do justice to match the level of you efforts.

Thanks Alok...The readers liking it make all the hardwork worthwhile...

its amazing how you describe anything sir

what if the vessel is about to tender NOR and shipper cancels the order. what would be the penalty

Great article to understand the business with ease as an ASM candidate

Many thanks for writing such articles with such an ease of understanding sir...

Glad you liked it Sukhchain...

Another good read. Thank you for taking time to write articles. All Seafarers must understand the commercial aspects of ships. All the best and I cant wait to read the next one.

Glad you liked it Marlon...

what if the ship could not berth at load port or discharge port for many days because of other ships ahead in line up?Too many uncertainties.But ship owner’s freight (and profits) cannot depend upon so many uncertainties.So the shipowner and charterers agree on the factors like allowed number of days for loading and discharging.In chartering terms this is called “Laydays” or “Laytime” ??? Laydays refer to the time when a ship must present itself to the charter.If the vessel arrives after the laydays ,than contract can be cancelled. -Laycan. Laytime is the amount of time allowed (in hours and days)in a voyage charter for the loading and unloading of cargo.

Thanks for your input Zibi...

Laydays or "Laycan "I think is the correct term not Laytime. :)

Thanks for such simplified explanations. Sir could you please tell the few famous ship brokers names in india and worldwide.

Interocean is one of them...

Thank Captain for simple & detailed explanation. Information is really worthy .

Glad you found it useful Sajjad...

Thanks Capt. Rajeev for this good information in simple way.

Glad you liked it Dharmdeep...

Very well written capt., pls continue the good work

Thanks Capt Pereira...

This is a scholarly article Great job Captain!

Glad you liked it Tunde...

Good job, Capt. Jassal! These mandatory intricacies of ship's business & chartering are excellently presented. Organized and laid out as you have, this blog subject does a great service to anyone who longs to learn more about it & be more familiar with the clauses, details & positions (which is probably everyone, right?) -- including this marine cargo surveyor!

Glad you liked it Capt Edward...

Many thanks

Thanks Rafik...

sir plz explain magnetic compass

I will do that in a different blog...

Once again thank you very much.

Thanks Raju...

Informative Awaiting next one regarding time charterers

Will write on Time chartering too...

many thanks for this jobs cap

How easy way for explain this matter ,really very good job captain I appreciate your good effort waiting more and more

Thanks Ahmed...

sir waiting for your blog on purging and gas freeing cargo tanks

Very nicely explained and written good effort

Very nice explanation capt,

Generally the CP agreement is never sent to ship..and hence for tendering NOR what criteria(LOCATION) shall be followed as Master will not be aware if the C/P is voyage or Port C/P .These days Master tender NOR on arrival and then they keep re tendering every 24 hrs or at important events like POB, or All Fast.What is the logic behind following this and how we can ensure the NOR tendering doesn't becomes null and void. really APPRECIATE YOUR GREAT EFFORTS

if the vessel arrived at the agreed laycan and gave a valid NOR tendered and waited for almost 5 days before berthing, then while berthing the vessel had an accident and the owner requsted a new laycan, the question here is, does cancelling the old laycan result in canceling the demurrage fees caused by it?

When a vessel suffers breakdown typically NOR becomes invalid as the vessel was not in all respects ready to load her cargo.

U don't see such priceless articles often.. Good work cap. Let's make the world a better place to sail????????

To the writer of this blog- what made you write this? IT IS FANTASTIC. Well done. Also your MBA, was it the distant learning one from Middlesex?

On the Laytime Summary calculation, wouldn't it be correct to say that on the loading it was lost 0d-12h-24 min instead of 1d-00-24m?

Captain sahab, if I ever get a chance, I'll surely shake hand and say thank you, for all your efforts in simplifying the topics

can you advise for the following : in case a vessel is on Voyage Charter, and during loading or discharging alongside berth, there is a rainy period, so the daytime for this period should be NOT TO COUNT, correct??? cause there is the terms "weather permitting".

Great article sir......waiting for more.....

Hi. How does the shipbroker locate a suitable ship to transport the cargo?

Good day! You have mentioned different stages of voyage charter. May I ask what are the different stages of Time Charter and Bareboat Charter? Thank you in advance.

Nice blog...pleasure to read

I love your write up. Please, keep exposing our mind to the rudiments of shipping business.

Sir, in voyage charter party at what time and place charter party agreement will start? After ship arriving on laycan days or after giving notice of readiness? And notice readiness when we can give? Is there any specific time only we can give NOR?

I have a question, How to calculate the freight for a Multiport voyage. for example, there is a Cargo loaded from the country (C) and need to discharge its half portion in other countries multiple ports (A) & (B). For single port discharge, the cost is 8$ in port A and in Port B 11$, but the agent says he could fulfill this in 10$ for both ports. Now my question is how is he calculating the freight 10$ for Multiple port ?

Thank you sir for this great effort helping a lot for phase2 law preparation

Hi Sir! I am so pleased to have found your blog, it is absolutely helpful. if it is not too much to ask, do you have a quote sample for time and voyage charter? and the stardard terms and conditions? sorry if I am asking too much. thank you

Excellent blog about chartering service. This blog cleared my doubt about chartering service for ship

could you please advise that how long a shipowner should wait cargo to load on board (if cargo not ready) and no any specific clause written on voyage cp

Hi, Capt Jassal, I find every write up on any marine subject is excellent and easy to understand for students. I highly appreciate the contents of your blog. Regards Capt MK Srivastava , Ex-DPA, The SCI Ltd.

Wonderfully explained

While the blockchains themselves are secure, the applications running on the blockchain may not be. These applications interact with the blockchain through smart contracts, but just like any other software, bugs in the code can lead to security vulnerabilities. For this, we need to involve the auditors who conduct security audits on the smart contract. Smart Contract Audit helps you find hidden exploits and eventually reduce the risk and provide you an extra layer of security. Bug-free code is nice to have in other types of software, in blockchain applications, it is essential.

Dear Capt Rajeev Jassal, with interest i have seen your blog however the title struck me a bit - A Layman's Guide to Laytime - this sounds very familiar, if not accurate, with the dissertation i wrote for the ICS, Institute of Charterers Shipbrokers London, who hold copyright on this. Kindly amend the title of your blog to avoid confusion in the industry as to whom the readers take their information from. With best regards, Erwin de Zwarte, FICS

sir will you pls write on paramount clause , new jasson clause , cesser clause and both to blame collision clause

Such a great explanation! Thank you so much!

This article is a big help for those individuals that are trying to expound their knowledge in shipping. I much appreciated because at present i am taking my master's degree in ship management. Thank you...

Wow, so clearly written that I didn't have to read it twice to understand! Why don't our text books/ Oral notes be like this?! Thank you so much Capt. Jassal.

It’s a great and useful piece of info. I’m happy that you just shared this useful info with us. Please stay informed like this. Thank you for sharing. Here’s another informative content on Common Law Separation Agreement , may find more details here.

thanks alot of info keren bgt

Sir u r the best , undoubtedly . The confidence which i gain every time when ever I read your blog is just unspeakable and it sharpens my knowledge every single time. A teacher like you is what this shipping industry needs and I am glad to find the perfect one . Every time when ever I am in doubt I refer to your blogs and it works miracle .....thanks a ton to you sir .....simply great.

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A Layman’s Guide to Laytime Charter party Agreement and Voyage Charter

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Voyage Charterparty Laytime Interpretation Rules, 1993 as a International Shipping Documents

The so-called ‘Voylayrules 93’ document was prepared by a joint committee of the Baltic and International Maritime Council ( BIMCO ), CMI, the Federation of National Associations of Ship Brokers and Agents (FONASBA), and the International Association of Dry Cargo Shipowners (Intercargo) to offer to the contractual parties the meaning of twenty-eight sets of initials and most commonly used words in voyage charterparties, such as port, berth, laytime, day, holiday, to average laytime, notice of readiness, demurrage, dispatch money, strike, and so on. by Ship Inspection. A document on which the agent has made a calculation of the amount of demurrage (owed to owners) or despatch (owed to charterers), as the case may be, based on the facts in the Statement of Facts. Laytime can be defined as the amount of time allowed to a ship in a voyage charter for loading and unloading of cargo at a port. If a ship fails to complete the work during this allotted time and the ship is required to stay at a port for a longer time, then demurrage (fine) is incurred to the ship owner.

There are seven stages in a laytime calculation: 1,Read relevant clauses in the charter party. 2,Obtain Statement of Facts from agent. 3,Determine duration of laytime allowed. 4,Establish time of commencement of laytime. 5,Allow for interruptions to laytime as per the charter party. 6,Establish time of expiry of laytime. 7,Calculate despatch or demurrage payable.

Laydays refers to a period of specified days (e.g. “Jan 7/16”) during which owners must present the vessel for loading. Laydays should not be confused with laytime, which is the period allowed to the charterers for loading and/or discharging without payment additional to the freight. 2.5 Fixed laytime may be expressed in one or other units of time, which will form the subject of most of this chapter, or as a rate of working cargo , which, once the amount of cargo is known, will enable the amount of laytime to be calculated. REVERSIBLE LAYTIME means an option given to the charterer to add together the time allowed for loading and discharging. Where the option is exercised the effect is the same as a total time being specifi ed to cover both operations.

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VOYAGE CHARTER PARTY LAYTIME INTERPRETATION RULES 1993

issued jointly by BIMCO, CMI, FONASBA and INTERCARGO.

Code Name: VOYLAYRULES 93

The interpretations of words and phrases used in a charter party, as set out below, and the

corresponding initials if customarily used, shall apply when expressly incorporated in the charter party, wholly or partly, save only to the extent that they are inconsistent with any express provision of it.

When the word "charter party" is used, it shall be understood to extend to any form of contract of carriage or affreightment including contracts evidenced by bills of lading.

LIST OF RULES

3. "REACHABLE ON HER ARRIVAL" or "ALWAYS ACCESSIBLE"

4. "LAYTIME"

5. "PER HATCH PER DAY"

6. "PER WORKING HATCH PER DAY" (WHD) or "PER WORKABLE HATCH PER DAY (WHD)

8. "CLEAR DAYS"

9. "HOLIDAY"

10. "WORKING DAY" (WD)

11. "RUNNING DAYS" or "CONSECUTIVE DAYS"

12. "WEATHER WORKING DAY" (WWD) or "WEATHER WORKING DAY OF 24 HOURS" or "WEATHER WORKING DAY OF 24 CONSECUTIVE HOURS"

13. "WEATHER PERMITTING" (WP)

14. "EXCEPTED" or"EXCLUDED"

15. "UNLESS SOONER COMMENCED"

16. "UNLESS USED" (UU)

17. "TO AVERAGE LAYTIME"

18. "REVERSIBLE LAYTIME"

19. "NOTICE OF READINESS" (NOR)

20. "IN WRITING"

21. "TIME LOST WAITING FOR BERTH TO COUNT AS LOADING OR DISCHARGING TIME" or "AS LAYTIME"

22. "WHETHER IN BERTH OR NOT" (WIBON) or "BERTH OR NO BERTH"

23. "VESSEL BEING IN FREE PRATIQUE" and/or "HAVING BEEN ENTERED AT THE CUSTOM HOUSE"

24. "DEMURRAGE"

25. "DESPATCH MONEY" or "DESPATCH"

26. "DESPATCH ON (ALL) WORKING TIME SAVED" (WTS) or "ON (ALL) LAYTIME SAVED"

27. "DESPATCH ON ALL TIME SAVED" (ATS)

28. "STRIKE"

1. "PORT" shall mean an area, within which vessels load or discharge cargo whether at berths, anchorages, buoys, or the like, and shall also include the usual places where vessels wait for their turn or are ordered or obliged to wait for their turn no matter the distance from that area. If the word "PORT" is not used, but the port is (or is to be) identified by its name, this definition shall still apply.

2. "BERTH" shall mean the specific place within a port where the vessel is to load or discharge. If the word "BERTH" is not used, but the specific place is (or is to be) identified by its name, this definition shall still apply.

3. "REACHABLE ON HER ARRIVAL" or "ALWAYS ACCESSIBLE" shall mean that the charterer undertakes that an available loading or discharging berth be provided to the vessel on her arrival at the port which she can reach safely without delay in the absence of an abnormal occurrence.

4. "LAYTIME" shall mean the period of time agreed between the parties during which the owner will make and keep the vessel available for loading or discharging without payment additional to the freight.

5. "PER HATCH PER DAY" shall mean that the laytime is to be calculated by dividing (A), the quantity of cargo, by (B), the result of multiplying the agreed daily rate per hatch by the number of the vessel's hatches. Thus:

Quantity of cargo

Laytime = ---------------------------------------------- = Days

Daily rate X Number of Hatches

Each pair of parallel twin hatches shall count as one hatch. Nevertheless, a hatch that iscapable of being worked by two gangs simultaneously shall be counted as two hatches.

6. "PER WORKING HATCH PER DAY" (WHD) or "PER WORKABLE HATCH PER DAY" (WHD) shall mean that the laytime is to be calculated by dividing (A), the quantity of cargo in the hold with the largest quantity, by (B), the result of multiplying the agreed daily rate per working or workable hatch by the number of hatches serving that hold.

Largest Quantity in one Hold

Daily Rate per Hatch X Number of

Hatches serving that Hold.

Each pair of parallel twin hatches shall count as one hatch. Nevertheless, a hatch that is capable of being worked by two gangs simultaneously shall be counted as two hatches.

7. "DAY" shall mean a period of twenty-four consecutive hours running from 0000 hours to 2400 hours. Any part of a day shall be counted pro rata.

8. "CLEAR DAYS" shall mean consecutive days commencing at 0000 hours on the day following that on which a notice is given and ending at 2400 hours on the last of the number of days stipulated.

9. "HOLIDAY" shall mean a day other than the normal weekly day(s) of rest, or part thereof, when by local law or practice the relevant work during what would otherwise be ordinary working hours is not normally carried out.

10. "WORKING DAYS" (WD) shall mean days not expressly excluded from laytime.

11. "RUNNING DAYS" or "CONSECUTIVE DAYS" shall mean days which follow one immediately after the other.

12. "WEATHER WORKING DAY" (WWD) or "WEATHER WORKING DAY OF 24HOURS" or "WEATHER WORKING DAY OF 24 CONSECUTIVE HOURS" shall mean a working day of 24 consecutive hours except for any time when weather prevents the loading or discharging of the vessel or would have prevented it, had work been in progress.

13. "WEATHER PERMITTING" (WP) shall mean that any time when weather prevents the loading or discharging of the vessel shall not count as laytime.

14. "EXCEPTED" or "EXCLUDED" shall mean that the days specified do not count as laytime even if loading or discharging is carried out on them.

15. "UNLESS SOONER COMMENCED" shall mean that if laytime has not commenced but loading or discharging is carried out, time used shall count against laytime.

16. "UNLESS USED" (UU) shall mean that if laytime has commenced but loading or discharging is carried out during periods excepted from it, such time shall count.

17. "TO AVERAGE LAYTIME" shall mean that separate calculations are to be made for loading and discharging and that any time saved in one operation is to be set off against any excess time used in the other.

18. "REVERSIBLE LAYTIME" shall mean an option given to the charterer to add together the time allowed for loading and discharging. Where the option is exercised the effect is the same as a total time being specified to cover both operations.

19. "NOTICE OF READINESS" (NOR) shall mean the notice to charterer, shipper, receiver or other person as required by the charter party that the vessel has arrived at the port or berth, as the case may be, and is ready to load or discharge.

20. "IN WRITING" shall mean any visibly expressed form of reproducing words; the medium of transmission shall include electronic communications such as radio communications and telecommunications.

21. "TIME LOST WAITING FOR BERTH TO COUNT AS LOADING OR DISCHARGING TIME" or "AS LAYTIME" shall mean that if no loading or discharging berth is available and the vessel is unable to tender notice of readiness at the waiting-place then any time lost to the vessel shall count as if laytime were running, or as time on demurrage if laytime has expired. Such time shall cease to count once the berth becomes available. When the vessel reaches a place where she is able to tender notice of readiness laytime or time on demurrage shall resume after such tender and, in respect of laytime, on expiry of any notice time provided in the charter party.

22. "WHETHER IN BERTH OR NOT" (WIBON) or "BERTH OR NO BERTH" shall mean that if no loading or discharging berth is available on her arrival the vessel, on reaching any usual waiting-place at or off the port, shall be entitled to tender notice of readiness from it and laytime shall commence in accordance with the charter party. Laytime or time on demurrage shall cease to count once the berth becomes available and shall resume when the vessel is ready to load or discharge at the berth.

23. "VESSEL BEING IN FREE PRATIQUE" and/or "HAVING BEEN ENTERED AT THE CUSTOM HOUSE" shall mean that the completion of these formalities shall not be a condition precedent to tendering notice of readiness, but any time lost by reason of delay in the vessel's completion of either of these formalities shall not count as laytime or time on demurrage.

24. "DEMURRAGE" shall mean an agreed amount payable to the owner in respect of delay to the vessel beyond the laytime, for which the owner is not responsible. Demurrage shall not be subject to laytime exceptions.

25. "DESPATCH MONEY" or "DESPATCH" shall mean an agreed amount payable by the owner if the vessel completes loading or discharging before the laytime has expired.

26. "DESPATCH ON (ALL) WORKING TIME SAVED" (WTS) or "ON (ALL) LAYTIME SAVED" shall mean that despatch money shall be payable for the time from the completion of loading or discharging to the expiry of the laytime excluding any periods excepted from the laytime.

27. "DESPATCH ON ALL TIME SAVED" (ATS) shall mean that despatch money shall be payable for the time from the completion of loading or discharging to the expiry of the laytime including periods excepted from the laytime.

28. "STRIKE" shall mean a concerted industrial action by workmen causing a complete stoppage of their work which directly interferes with the working of the vessel. Refusal to work overtime, go-slow or working to rule and comparable actions not causing a complete stoppage shall not be considered a strike. A strike shall be understood to exclude its consequences when it has ended, such as congestion in the port or effects upon the means of transportation bringing or taking the cargo to or from the port.

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VOYAGE CHARTER PARTY LAYTIME INTERPRETATION RULES 1993

issued jointly by BIMCO, CMI, FONASBA and INTERCARGO.

Code Name: VOYLAYRULES 93

The interpretations of words and phrases used in a charter party, as set out below, and the

corresponding initials if customarily used, shall apply when expressly incorporated in the charter party, wholly or partly, save only to the extent that they are inconsistent with any express provision of it.

When the word "charter party" is used, it shall be understood to extend to any form of contract of carriage or affreightment including contracts evidenced by bills of lading.

LIST OF RULES

3. "REACHABLE ON HER ARRIVAL" or "ALWAYS ACCESSIBLE"

4. "LAYTIME"

5. "PER HATCH PER DAY"

6. "PER WORKING HATCH PER DAY" (WHD) or "PER WORKABLE HATCH PER DAY (WHD)

8. "CLEAR DAYS"

9. "HOLIDAY"

10. "WORKING DAY" (WD)

11. "RUNNING DAYS" or "CONSECUTIVE DAYS"

12. "WEATHER WORKING DAY" (WWD) or "WEATHER WORKING DAY OF 24 HOURS" or "WEATHER WORKING DAY OF 24 CONSECUTIVE HOURS"

13. "WEATHER PERMITTING" (WP)

14. "EXCEPTED" or"EXCLUDED"

15. "UNLESS SOONER COMMENCED"

16. "UNLESS USED" (UU)

17. "TO AVERAGE LAYTIME"

18. "REVERSIBLE LAYTIME"

19. "NOTICE OF READINESS" (NOR)

20. "IN WRITING"

21. "TIME LOST WAITING FOR BERTH TO COUNT AS LOADING OR DISCHARGING TIME" or "AS LAYTIME"

22. "WHETHER IN BERTH OR NOT" (WIBON) or "BERTH OR NO BERTH"

23. "VESSEL BEING IN FREE PRATIQUE" and/or "HAVING BEEN ENTERED AT THE CUSTOM HOUSE"

24. "DEMURRAGE"

25. "DESPATCH MONEY" or "DESPATCH"

26. "DESPATCH ON (ALL) WORKING TIME SAVED" (WTS) or "ON (ALL) LAYTIME SAVED"

27. "DESPATCH ON ALL TIME SAVED" (ATS)

28. "STRIKE"

1. "PORT" shall mean an area, within which vessels load or discharge cargo whether at berths, anchorages, buoys, or the like, and shall also include the usual places where vessels wait for their turn or are ordered or obliged to wait for their turn no matter the distance from that area. If the word "PORT" is not used, but the port is (or is to be) identified by its name, this definition shall still apply.

2. "BERTH" shall mean the specific place within a port where the vessel is to load or discharge. If the word "BERTH" is not used, but the specific place is (or is to be) identified by its name, this definition shall still apply.

3. "REACHABLE ON HER ARRIVAL" or "ALWAYS ACCESSIBLE" shall mean that the charterer undertakes that an available loading or discharging berth be provided to the vessel on her arrival at the port which she can reach safely without delay in the absence of an abnormal occurrence.

4. "LAYTIME" shall mean the period of time agreed between the parties during which the owner will make and keep the vessel available for loading or discharging without payment additional to the freight.

5. "PER HATCH PER DAY" shall mean that the laytime is to be calculated by dividing (A), the quantity of cargo, by (B), the result of multiplying the agreed daily rate per hatch by the number of the vessel's hatches. Thus:

Quantity of cargo

Laytime = ---------------------------------------------- = Days

Daily rate X Number of Hatches

Each pair of parallel twin hatches shall count as one hatch. Nevertheless, a hatch that iscapable of being worked by two gangs simultaneously shall be counted as two hatches.

6. "PER WORKING HATCH PER DAY" (WHD) or "PER WORKABLE HATCH PER DAY" (WHD) shall mean that the laytime is to be calculated by dividing (A), the quantity of cargo in the hold with the largest quantity, by (B), the result of multiplying the agreed daily rate per working or workable hatch by the number of hatches serving that hold.

Largest Quantity in one Hold

Daily Rate per Hatch X Number of

Hatches serving that Hold.

Each pair of parallel twin hatches shall count as one hatch. Nevertheless, a hatch that is capable of being worked by two gangs simultaneously shall be counted as two hatches.

7. "DAY" shall mean a period of twenty-four consecutive hours running from 0000 hours to 2400 hours. Any part of a day shall be counted pro rata.

8. "CLEAR DAYS" shall mean consecutive days commencing at 0000 hours on the day following that on which a notice is given and ending at 2400 hours on the last of the number of days stipulated.

9. "HOLIDAY" shall mean a day other than the normal weekly day(s) of rest, or part thereof, when by local law or practice the relevant work during what would otherwise be ordinary working hours is not normally carried out.

10. "WORKING DAYS" (WD) shall mean days not expressly excluded from laytime.

11. "RUNNING DAYS" or "CONSECUTIVE DAYS" shall mean days which follow one immediately after the other.

12. "WEATHER WORKING DAY" (WWD) or "WEATHER WORKING DAY OF 24HOURS" or "WEATHER WORKING DAY OF 24 CONSECUTIVE HOURS" shall mean a working day of 24 consecutive hours except for any time when weather prevents the loading or discharging of the vessel or would have prevented it, had work been in progress.

13. "WEATHER PERMITTING" (WP) shall mean that any time when weather prevents the loading or discharging of the vessel shall not count as laytime.

14. "EXCEPTED" or "EXCLUDED" shall mean that the days specified do not count as laytime even if loading or discharging is carried out on them.

15. "UNLESS SOONER COMMENCED" shall mean that if laytime has not commenced but loading or discharging is carried out, time used shall count against laytime.

16. "UNLESS USED" (UU) shall mean that if laytime has commenced but loading or discharging is carried out during periods excepted from it, such time shall count.

17. "TO AVERAGE LAYTIME" shall mean that separate calculations are to be made for loading and discharging and that any time saved in one operation is to be set off against any excess time used in the other.

18. "REVERSIBLE LAYTIME" shall mean an option given to the charterer to add together the time allowed for loading and discharging. Where the option is exercised the effect is the same as a total time being specified to cover both operations.

19. "NOTICE OF READINESS" (NOR) shall mean the notice to charterer, shipper, receiver or other person as required by the charter party that the vessel has arrived at the port or berth, as the case may be, and is ready to load or discharge.

20. "IN WRITING" shall mean any visibly expressed form of reproducing words; the medium of transmission shall include electronic communications such as radio communications and telecommunications.

21. "TIME LOST WAITING FOR BERTH TO COUNT AS LOADING OR DISCHARGING TIME" or "AS LAYTIME" shall mean that if no loading or discharging berth is available and the vessel is unable to tender notice of readiness at the waiting-place then any time lost to the vessel shall count as if laytime were running, or as time on demurrage if laytime has expired. Such time shall cease to count once the berth becomes available. When the vessel reaches a place where she is able to tender notice of readiness laytime or time on demurrage shall resume after such tender and, in respect of laytime, on expiry of any notice time provided in the charter party.

22. "WHETHER IN BERTH OR NOT" (WIBON) or "BERTH OR NO BERTH" shall mean that if no loading or discharging berth is available on her arrival the vessel, on reaching any usual waiting-place at or off the port, shall be entitled to tender notice of readiness from it and laytime shall commence in accordance with the charter party. Laytime or time on demurrage shall cease to count once the berth becomes available and shall resume when the vessel is ready to load or discharge at the berth.

23. "VESSEL BEING IN FREE PRATIQUE" and/or "HAVING BEEN ENTERED AT THE CUSTOM HOUSE" shall mean that the completion of these formalities shall not be a condition precedent to tendering notice of readiness, but any time lost by reason of delay in the vessel's completion of either of these formalities shall not count as laytime or time on demurrage.

24. "DEMURRAGE" shall mean an agreed amount payable to the owner in respect of delay to the vessel beyond the laytime, for which the owner is not responsible. Demurrage shall not be subject to laytime exceptions.

25. "DESPATCH MONEY" or "DESPATCH" shall mean an agreed amount payable by the owner if the vessel completes loading or discharging before the laytime has expired.

26. "DESPATCH ON (ALL) WORKING TIME SAVED" (WTS) or "ON (ALL) LAYTIME SAVED" shall mean that despatch money shall be payable for the time from the completion of loading or discharging to the expiry of the laytime excluding any periods excepted from the laytime.

27. "DESPATCH ON ALL TIME SAVED" (ATS) shall mean that despatch money shall be payable for the time from the completion of loading or discharging to the expiry of the laytime including periods excepted from the laytime.

28. "STRIKE" shall mean a concerted industrial action by workmen causing a complete stoppage of their work which directly interferes with the working of the vessel. Refusal to work overtime, go-slow or working to rule and comparable actions not causing a complete stoppage shall not be considered a strike. A strike shall be understood to exclude its consequences when it has ended, such as congestion in the port or effects upon the means of transportation bringing or taking the cargo to or from the port.

RECOMMENDED BYTHE BALTIC AND INTERNATIONAL MARITIME CONFERENCE (BIMCO)AND THE FEDERATION OF NATIONAL ASSOCIATIONSOF SHIP BROKERS AND AGENTS (FONASBA)

Printed by The BIMCO Charter Party Editor

Name and signature (Agents)* Name and signature (for the Charterers/Shippers/Receivers)*

STANDARD STATEMENTS OF FACTS (SHORT FORM)

* See Explanatory Notes overleaf for filling in the boxes

2. Vessel's name 3. Port

4. Owners/Disponent Owners 5. Vessel berthed

6. Loading commenced 7. Loading completed

9. Discharging commenced 10. Discharging completed

11. Cargo documents on board

13. Charter Party* 14. Working hours/meal hours of the port*

15. Bill of Lading weight/quantity 16. Outturn weight/quantity

17. Vessel arrived on roads 18.

19. Notice of readiness tendered

21. Next tide available

DETAILS OF DAILY WORKING*

12. Vessel sailed

Day No. of gangs Quantityload./disch.

Hours worked Hours stopped

From Fromto to

General remarks*

Place and date Name and signature (Master)*

It is recommended to fill in the boxes with a short text. When it is a matterof figures to be inserted as is the case in most of the boxes, this shouldbe done as follows:

the figures being mentioned in the following order: year-month-date-time.

Insert name and date of charter, for instance, "Gencon" dated 1975-03-01.

Indicate normal working hours/meal hours of the port and not the actual hoursworked on board the vessel which may be longer or shorter than the hoursnormally worked in the port. Such day-by-day figures should be indicatedin the box provided for under "Details of Daily Working".

Some empty boxes are made available in which other relevant informationapplying to the particular port or vessel could be inserted, such as, time ofgranting free pratique, if applicable, etc.

Insert day-by-day figures and indicate in the vertical column marked "Re-marks * " all relevant details as to reasons for stoppages such as bad weather,strikes, breakdown of winches/cranes, shortage of cargo, etc.

This box should be used for insertion of such general observations which arenot covered in any of the boxes provided for in the first main group of boxes,for instance, reasons for berthing delay or other general observations.

It is of importance that the boxes provided for signatures are duly signedby the parties concerned.

INSTRUCTIONS FOR FILLING IN THE BOXES

6. Loading commenced

1975-03-15-0800

Boxes Calling for Special Attention

Charter Party*:

Working hours/meal hours of the port*:

Details of Daily Working*:

General Remarks*:

Signatures*:

Inter-Club New York Produce Exchange (N.Y.P.E.) Agreement 1996

Inter-Club New York Produce Exchange Agreement (1996)

This Agreement is made on 1 September 1996 between the P&I Clubs

being members of The International Group of P&I Associations

(hereafter referred to as "the Clubs").

This Agreement replaces the Inter-Club Agreement 1984 in respect of

all charterparties specified in Clause (1) hereof and shall continue

in force until varied or terminated. Any variation to be effective

must be approved in writing by all the Clubs but it is open to any

Club to withdraw from the Agreement on giving to all the other Clubs

not less than three months' written notice thereof, such withdrawal

to take effect at the expiration of that period. After the expiry of

such notice, the Agreement shall nevertheless continue as between

all the Clubs, other than the Club giving such notice who shall

remain bound by and be entitled to the benefit of this Agreement in

respect of all cargo claims arising out of charterparties commenced

prior to the expiration of such notice.

The Clubs will recommend to their Members without qualification that

their Members adopt this Agreement for the purpose of apportioning

liability for claims in respect of cargo which arise under, out of

or in connection with all charterparties on the New York Produce

Exchange Form 1946 or 1993 or Asbatime Form 1981 (or any subsequent

amendment of such forms), whether or not this Agreement has been

incorporated into such charterparties.

Scope of application

(1) This Agreement applies to any charterparty which is entered into

after the date hereof on the New York Produce Exchange Form 1946 or

1993 or Asbatime Form 1981 (or any subsequent amendment of such

(2) The terms of this Agreement shall apply notwithstanding anything

to the contrary in any other provision of the charterparty; in

particular the provisions of Clause (6) (time bar) shall apply

notwithstanding any provision of the charterparty or rule of law to

the contrary.

(3) For the purposes of this Agreement, cargo claim(s) mean claims

for loss, damage, shortage (including slackage, ullage or

pilferage), overcarriage of or delay to cargo including customs dues

or fines in respect of such loss, damage, shortage, overcarriage or

delay and include:

(a) any legal costs claimed by the original person making any such

(b) any interest claimed by the original person making any such

(c) all legal, Club correspondents' and experts' costs reasonably

incurred in the defence of or in the settlement of the claim made

by the original person, but shall not include any costs of

whatsoever nature incurred in making a claim under this Agreement

or in seeking an indemnity under the charterparty.

(4) Apportionment under this Agreement shall only be applied to

cargo claims where:

(a) the claim was made under a contract of carriage, whatever its

(i) which was authorised under the charterparty;

(ii) which would have been authorised under the charterparty but

for the inclusion in that contract of carriage of Through

Transport or Combined Transport provisions, provided that

(iii) in the case of contracts of carriage containing Through

Transport or Combined Transport provisions (whether falling

within (i) or (ii) above) the loss, damage, shortage,

overcarriage or delay occurred after commencement of the loading

of the cargo onto the chartered vessel and prior to completion

of its discharge from that vessel (the burden of proof being on

the Charterer to establish that the loss, damage, shortage,

overcarriage or delay did or did not so occur); and

(iv) the contract of carriage (or that part of the transit that

comprised carriage on the chartered vessel) incorporated terms

no less favourable to the carrier than the Hague or Hague Visby

Rules, or, when compulsorily applicable by operation of law to

the contract of carriage, the Hamburg Rules or any national law

giving effect thereto; and

(b) the cargo responsibility clauses in the charterparty have not

been materially amended. A material amendment is one which makes

the liability, as between owners and charterers, for cargo claims

clear. In particular, it is agreed solely for the purposes of this

(i) that the addition of the words "and responsibility" in

Clause 8 of the New York Produce Exchange Form 1946 or 1993 or

Clause 8 of the Asbatime Form 1981, or any similar amendment of

the charterparty making the Master responsible for cargo

handling, is not a material amendment; and

(ii) that if the words "cargo claims" are added to the second

sentence of Clause 26 of the New York Produce Exchange Form 1946

or 1993 or Clause 25 of the Asbatime Form 1981, apportionment

under this Agreement shall not be applied under any

circumstances even if the charterparty is made subject to the

terms of this Agreement; and

(c) the claim has been properly settled or compromised and paid.

(5) This Agreement applies regardless of legal forum or place of

arbitration specified in the charterparty and regardless of any

incorporation of the Hague, Hague Visby Rules or Hamburg Rules

(6) Recovery under this Agreement by an Owner or Charterer shall be

deemed to be waived and absolutely barred unless written

notification of the cargo claim has been given to the other party to

the charterparty within 24 months of the date of delivery of the

cargo or the date the cargo should have been delivered, save that,

where the Hamburg Rules or any national legislation giving effect

thereto are compulsorily applicable by operation of law to the

contract of carriage or to that part of the transit that comprised

carriage on the chartered vessel, the period shall be 36 months.

Such notification shall if possible include details of the contract

of carriage, the nature of the claim and the amount claimed.

The apportionment

(7) The amount of any cargo claim to be apportioned under this

Agreement shall be the amount in fact borne by the party to the

charterparty seeking apportionment, regardless of whether that claim

may be or has been apportioned by application of this Agreement to

another charterparty.

(8) Cargo claims shall be apportioned as follows:

(a) Claims in fact arising out of unseaworthiness and/or error or

fault in navigation or management of the vessel:

100% Owners

save where the Owner proves that the unseaworthiness was caused

by the loading, stowage, lashing, discharge or other handling of

the cargo, in which case the claim shall be apportioned under

sub-Clause (b).

(b) Claims in fact arising out of the loading, stowage, lashing,

discharge, storage or other handling of cargo:

100% Charterers

unless the words "and responsibility" are added in Clause 8

or there is a similar amendment making the Master

responsible for cargo handling in which case:

50% Charterers

save where the Charterer proves that the failure properly to

load, stow, lash, discharge or handle the cargo was caused

by the unseaworthiness of the vessel in which case:

(c) Subject to (a) and (b) above, claims for shortage or

overcarriage:

unless there is clear and irrefutable evidence that the

claim arose out of pilferage or act or neglect by one or the

other (including their servants or sub-contractors) in which

case that party shall then bear 100% of the claim.

(d) All other cargo claims whatsoever (including claims for delay

claim arose out of the act or neglect of the one or the

Governing Law

(9) This Agreement shall be subject to English Law and Jurisdiction,

unless it is incorporated into the charterparty (or the settlement

of claims in respect of cargo under the charterparty is made subject

to this Agreement), in which case it shall be subject to the law and

jurisdiction provisions governing the charterparty.

The Federation of National Associations of Ship Brokers and Agents

TIME CHARTER INTERPRETATION CODE 2000

Where any of this code conflicts with any of the terms of the relevant time charter, those of the latter shall prevail to that extent, but no further:

Introduction:

AIMS AND OBJECTS

In commercial practice many aims and objectives for standardisation are often frustrated by the laws in different jurisdictions and where the legal understanding and interpretation may differ the one from the other.

The main jurisdictions applicable to maritime disputes are:

a) The Common Law countries – mainly England and the USA.

b) The Civil Law countries such as France, Germany, Italy, etc.

The endeavour is not going to be the alter-ego of the Laytime Definitions for Voyage Charters; nor is this an attempt to create new charter party clauses, but merely a Code of how to interpret existing charter party clauses as well as to assist disputing parties where charter parties are silent or non-determining.

There is a vast difference between definition and interpretation, but in some ways and sometimes they may compliment one another. For example, nobody in shipping needs a definition of what speed and consumption are or mean, but how should one deal with a speed claim, if any?

The chief objective of the Code is to try to eliminate many often occurring and avoidable maritime charter parties disputes in the field of time charter.

1. Speed and Consumption

The following is to apply to any dry cargo time charter not containing a performance clause, and to any combination carrier when engaged in dry cargo trading:

The speed and consumption warrantees of the time charter are to apply for its duration and whether the vessel is fully, partly loaded or in ballast, and shall be computed from pilot station to pilot station on all sea passages while the vessel is on hire, excluding:

a) Any day on which winds of Beaufort Wind Scale 4 or above are encountered for more than six (6) consecutive hours;

b) Any time during which speed is deliberately reduced for reasons of safety, or on charterers’ orders to steam at economical or reduced speed, or when the vessel is navigating within confined waters, or when assisting vessels in distress;

c) Any complete sea passage of less than 24 hours duration from pilot station to pilot station;

d) Periods in which time is lost on charterers’ instructions or due to causes expressly excepted under terms of the time charter;

e) Periods when the vessels’ speed is reduced by reason of hull fouling caused by charterers’ trading orders.

When specific figures have been agreed to for the vessel in ballasted condition these shall be taken into consideration as shall agreed specifics for reduced or economical speed and consumption, when computations are made.

The mileage made good during qualifying periods shall be divided by the warranted speed and compared to the time actually spent. Any excess is to be treated as off-hire. If the word ‘about’ precedes the speed and consumption, same will be understood to mean ½ knot less in the speed and 5% more in the consumption, not be cumulative.

As to consumption, the recorded qualifying periods, as above shall be multiplied by the warranted consumption on the qualifying days and compared to the actual consumption. In case of any excess, the charterers are be to compensated by the owners for such excess in cost to the charterers calculated at the prices at the last port bunkers were supplied during the time charter, or those at delivery whichever applicable. Such amount may be deducted from hire.

The immediate financial consequences of a speed deficiency shall be set-off with any saving caused by under-consumption.

The computations shall be made sea passage by sea passage. The vessel’s speed and consumption shall be reviewed at the end of each twelve months, or other lesser period as appropriate.

If in respect of any such review period it is found that the vessel’s speed has fallen below the warranted speed, hire shall be reduced by an amount equivalent to the loss in time involved at the rate of hire. And if in respect of any review period it is found that the vessel’s consumption has exceeded the warranted consumption, the additional costs shall be borne by the owners.

The foregoing is without prejudice to any other claim(s) that a party may have on the other.

2. Withdrawal for late/non payment of hire

Except where otherwise specifically permitted in the provisions of the charter party, the charterers shall have no right to make arbitrary deductions from hire which shall remain payable punctually and regularly as stipulated therein. Nothing in the charter party shall, however, prejudice the charterers’ right to make any equitable set-off against a hire payment due provided that the calculation is reasonable, made bona fide, and that it is in respect of a claim arising directly out of their deprivation of the use of the vessel in whole or in part.

Except as provided herein, the owners shall have a right of permanent withdrawal of their vessel when payment of hire has not been received by their bankers by the due date by reason of oversight, negligence, errors or omissions of charterers or their bankers. In such cases prior to effecting a withdrawal of the vessel, the owners shall put the charterers on preliminary notice of their failure to pay hire on the due date, following which the charterers shall be given two clear banking days to remedy the default. Where the breach has been cured the payment shall be deemed to have been made punctually.

In respect to a payment of hire made in due time, but insufficient in amount, the owners shall be permitted a reasonable time to verify the correctness of a deduction. If, thereafter, there is found to be disagreement on the amount of the deduction, then the amount in dispute shall be placed in escrow by the charterers and the matter referred to immediate arbitration in accordance with the terms of the charter party’s arbitration clause. In that event there shall be no right of withdrawal.

Except as provided heretofore, withdrawal of the vessel may be made by the owners, which shall be without prejudice to any other claim they may otherwise have on the charterers.

3. Off-hire

Any period of time qualifying as off-hire under terms of the charter party shall be allowed to the charterers for any time lost in excess of three consecutive hours for each occurrence.

In addition to matters referred to as off-hire in the charter party, shall be included time lost to the charterers caused by interference by a legal, port of governmental authority, resulting in the charterers being deprived of their unfettered use of the vessel at any given time during the currency of the charter party, or in the vessel being prevented from leaving the jurisdiction contrary to charterers’ requirements.

4. Deviation

All periods of off-hire due to deviation shall run from the commencement of the loss of time to charterers, deviation or putting back, and shall continue until the vessel is again in a fully efficient state to resume her service from a position not less favourable to the charterers than that at which the loss of time, deviation or putting back occurred.

5. Legitimacy of the Last Voyage

In the absence of any specific provision in the time charter relating to redelivery and orders for the final voyage, the following shall apply:

Charterers undertake to arrange the vessel’s trading so as to permit redelivery within the period and permissible redelivery area as contained in the charter party. As soon as the charterers have arranged the final voyage they shall immediately so inform the owners giving a realistic estimated itinerary up to redelivery time. The owners shall notify the charterers within two working days thereafter as to whether they agree or disagree with charterers’ estimate. Should they disagree and consider the vessel will overlap the maximum period, they shall nonetheless allow the voyage to be undertaken at the time charter rate of the charter party without prejudice to their ultimate right to compensation for additional hire at the market rate should an overlap subsequently have proven to have occurred, and should the market rate be higher than the charter party rate of hire.

Dr. K r i s t i n a M a r i a S i i g

Associate professor

Page 1 af 21

CHARTER-PARTIES

11 October 2010 NIFS2010/kms

A. IN GENERAL ON USING A SHIP AS A MEANS OF

SECURING AN INCOME

Overview of the Owners’ options for commercially using a ship –

listed in receding order according to the Owners’ influence upon the

use and management of the ship.

Transporting the Owners’ own cargo

Liner trade

(Tramp trade)

Voyage chartering (”normal”)

Contracts of afreightment (V/C / COA)

Consecutive voyage charters

Time chartering

Bareboat chartering

Page 2 af 21

B. VOYAGE CHARTERING

1. Situation

- liner trade: Sending a parcel

- voyage chartering: Pre-booking a taxi

2. NMC Chapter 14: Scope of application, freedom of contract etc.

2.1 Which agreements?

- § 321, sec. 1: Chartering of ships including consecutive voyage

- § 321, sec. 2, no. 6: When chartering a part of a ship: The

distinction between chapter 14 and chapter 13 seems –

ultimately – to depend upon which transport documents are

2.2 Geographical scope of application

- § 322, sec. 2: Applies to Inter-Nordic trade and to domestic

trade within the Nordic countries.

- § 322, sec. 4: Applies to other trades as well insofar as Nordic

law is to be applied.

2.3 Freedom of contract

Starting point: § 322, sec. 1: Freedom of contract. Above scope of

application etc. is thus to be seen as declaratory application.

Modifikation No. 1; § 322, sec. 2, in conjunction with § 347: Voyage

chartering in domestic trade in the Nordic countries as well as inter-

Page 3 af 21

Nordic trade is subject to the general rules on cargo claims set out in

the NMC chapter 13, including the rules on time bar on cargo claims.

Modification No. 2: If bills of lading are issued

1) § 322, sec. 3: If the NMC chapter 13 is to be applied

to the contract of carriage, it cannot validly be

agreed that bills of lading should not be issued, see

2) § 322, sec. 4: If bills of lading are issued, the rules

on documentary liability for issuance of bills of

lading apply, as do the general rules on cargo

claims the moment the bill of lading is held by a

third party.

3. How is the contract entered into

Brokers, see Gencon box 1, box 24 and clause 15.

Normal rules of formation of contracts apply.

4. The subject of the contract

The usage of a ship for a contract of carriage by sea from the port of

loading to the port of discharge, carrying a certain cargo, within a

certain time, against the payment of freight.

5. The ship

5.1 Which ship/the particulars

- Gencon cl. 1, box 5-6-7

- frame description (the ship’s a generic good, meaning that the

Owner will have to deliver such a ship and that the loss of the

vessel intended to perform the contract does not relieve the

Owner of the obligation to present a ship)

- vessel to be named (the ship’s a generic good until a specific

vessel is nominated)

Page 4 af 21

- specific vessel (the ship’s a specific good). see § 323, sec. 1: The

Owner can only fulfil the contract with this vessel, and if the

vessel is lost due to an accident at sea the Owner is neither at

duty nor at liberty to substitute the vessel with another

vessel, see § 350.

- specific vessel with a substitution clause (the named ship – and then

the named substitute are both specific goods) NB:

Substitution is an option for the Owner, not an obligation. As

a declaratory rule, a substitution clause may be used several

times, see § 323, 1st sentence.

5.2 The properties of the ship

Seaworthy and cargo worthy

- § 339: § 262, sec. 2, apply as declaratory rules

- Warranty of seaworthiness under English law. The position

under Scandinavian law???

- if the obligation to keep the ship seaworthy is not kept

throughout the voyage, the charterer will have the remedies

mentioned in § 349 jf. § 351

- NB. Gencon 1994, cl. 2, sec. 1: Cargo claims from the charterer

are only accepted insofar as they are caused by the Owners or

Managers own personal negligence in respect with maintaining

the ship’s seaworthiness (board room errors)

6. Port of loading and port of discharge

6.1 Which ports

- both may be specified

- from the port of loading to a port of discharge in the

charterer’s option (normally specified which ports are an

option; see regarding the exercise of the option § 328, sec. 1).

- from the port of loading to a port of discharge in the Owner’s

Page 5 af 21

- near-clause (if the ship may/can not discharge in the intended

port, then a port as near thereto as possible. Declaratory

”near-clause” in § 340).

6.2 Where in the port

- ”port” or ”berth” charter, will generally be specifically agreed

upon. NMC § 328, sec. 1 regards port charters, whereas § 329,

sec. 1, regards berth charters

- in a port charter the charterer must at a later stage (not too

late, however) state the berth, see regarding the instructions

regarding the berth in a port charter, § 329, sec. 1.

- Gencon box 10 og 11

6.3 The legal effects of the choice between a port and a berth

The general line of thought is that the Owner gets paid for – and

hence assumes the responsibilities and risks connected to – getting

the vessel to the place to which he has agreed in the charter-party.

Meaning that if he has accepted a berth charter, he bears the risk of

getting the ship all the way to the berth – thus he assumes the risk of

congestion in the port. This is the traditional/anglo-american rule.

The NMC has, however, accepted another rule as the default rule: The

master may issue a NOR even if the vessel is not at berth; meaning

that under Nordic law, all charters are now port charters.

7. The cargo

- Gencon box 12

- The Owner has a right to receive the full cargo. If not, the

charterer must pay damages, see § 352, sec. 1, generally in the

form of dead freight (thus, he will pay the full freight anyway)

- NB.: If the full cargo is not delivered the Owner/Master may

provide a time limit within which the remaining cargo must

Page 6 af 21

be delivered. If it is not, the Owner may cancel/terminate the

charter-party. § 353, sec. 2.

- dangerous goods: § 342: The Owner has the same remedies as

in chapter 13. The charterer’s liability, however is slightly

different: According to § 357 the charterer is only assumed

liable; under chapter 13’s rules, the charterer has a strict

liability for dangerous goods (the reason being that under a

charter-party (more than in liner trade) the charterer is in

many cases not carrying his own goods).

8. The time within which the voyage should be carried out

8.1 In general as regards the obligation to carry out the voyage

within a certain time frame

- in the contract: Often: simply a lay-can, combined with a due-

dispatch obligation to bring the ship quickly and safely to the

port of discharge

- § 339 and § 262, sec. 1: Due dispatch-obligation is the default

- if the obligation is not kept, damages are due under §§ 349

8.2 Delay in delivering the ship

- spot prompt

- ahead (due diligence)

o from “spot” to port of loading

o finish present engagement and then proceed to port

of loading (intermediate journey-due dispatch)

o often: due dispatch, but no later than …

- lay-can, § 348, sec. 1 (objective criteria)

- right of interpellation, § 348, sec. 2

- if cancelling: Damages according to sec. § 351 are due. Full

damages – cannot be limited as this is not a cargo claim. (If

the delay is after loading, it is a cargo claim, see § 347)

Page 7 af 21

- Gencon: Box 21, cancelling date, cl. 9: Cancelling clause, box

8: Present position, cl. 1: Proceed to loading port.

8.3 In particular regarding delay in loading or discharging

1) The freight is paid calculating quantity of goods*length of

voyage. Thus, the Owner assumes the risk of delay. At the

same time it is often the charterer, who decides where and

how to load and discharge, wherefore a need to regulate the

relation between the Owners and the charterers on this point

is needed. The solution chosen is the rules on lay time and

2) The parties assess in advance how long they assume loading

and discharging will take. This time is lay time. The lay time

is already paid for, as the freight is calculated so that is takes

into account the time used for loading and discharging of the

goods. Demurrage, on the other hand, is the extra time spent

(due to congestion in the port, strike amongst the stevedores

or just, generally, that things end up taking more time than

they were supposed to). For such extra time demurrage must

be paid. Demurrage is set damages, accruing continuously

from the time when the lay time is spent to the time when the

loading or discharging operation is finished - ”Once on

demurrage always on demurrage”. The demurrage rate is set in the

charter-party. It is a fixed amount per 24 hours/day etc., thus

the actual loss is irrelevant. (Please note that sometimes

”inverse demurrage” is agreed; so-called ”despatch”. The idea

is that if the ship finishes before the set time, a bonus should

be paid to the charterer. Normally, half the demurrage rate is

agreed. However, the default rule is that despatch should not

be paid, so it may only be claimed by the charterer if the

parties have so agreed.)

3) The lay time will be stated in the charter-party. Often by

using a stated time (e.g. 72 running hours) and certain

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abbreviations (SHINC/SHEX) or additions (“weather

permitting”, e.g.)

4) To trigger that the lay time should start to count, Notice of

Readiness must be given. Often, this takes place pr. e-mail,

and in general an oral NOR should never be given. The NOR

can only be rendered if the ship is in the right place and ready

to accept cargo. Furthermore, NOR should normally be given

in normal office hours and generally a set amount of hours

should pass from the NOR before the lay time actually starts

to run. (So that the charterer may get stevedores etc. ready).

And exception to this is pipelines where the lay time will

normally start immediately. If it turns out that NOR has been

given without the ship actually being ready (often because

additional cleaning is needed or such-like), two options exist:

Either that the time lost in necessary cleaning is deducted

from the lay time (which seems to be presupposed in NMC §

333, sec. 2, 1st sentence) or that the whole NOR-procedure has

to be repeated. The first option is the default rule.

5) The calculation of the lay time takes place by comparing e.g. a

Laytime Statement with the actual clauses used.

6) Demurrage must be paid for all time spent in excess of the lay

time, unless the excess is due to an incident for which the

Owners are responsible, see § 333, sec. 2, 1st sentence. See

examples of the calculation, below point 11.

9. The freight

In general it should be noted that payment of freight and the carrying

of goods are a quid pro quo. It is the paramount obligation upon the

charterers, and if freight is not specified or agreed it may be a strong

indication that no contract is entered into in the first place.

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9.1 Freight risk

As a starting point the Owners must carry the cargo to the port of

discharge, or he will not have earned the freight, see § 344, sec. 1.

A modification may be the ”near-clause” or other clauses indicating

that freight should be paid nonetheless, e.g. ”cargo lost or not lost”

If the cargo is not delivered in full:

- because the vessel cannot (or did not) get to the port of

discharge: Freight should be paid for the actual distance made

good by the vessel, see § 341

- because the cargo is so damaged that it cannot be said to be

delivered (“physically”); Only freight earned for the part

actually delivered (does, however, not apply to goods that

have perished due to “inherent vice” or negligence etc. on the

part of the charterers). Please note: Under English law, the

cargo must exist in a “business sense” if the freight is to be

paid; thus in Asfar v. Blundell [1896] 1 QB 123 freight did not

have to be paid for dates that had been in the rather polluted

waters of the Thames and therefore could not be used for

human consumption (for which they were intended). This

applied even if they could still be used for the production of

spirits. In Nordic law – maybe – otherwise. At least in Høeg

Carrier, ND 1948.13 NH freight was earned for grain damaged

by oil as the grain could still be used for fodder (however the

consignee of the goods was Statens Kornforretning, who sold

fodder themselves).

- Set off in cargo claims: Often agreed: Freight to be paid in full.

This is also the default rule under English law, however in

Nordic law a set off will often be allowed.

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9.2 The freight debtor

9.2.1 In general

Owner Charterer

Receiver/consignee

The starting point of the NMC is that the charterer remains liable for

the freight, even if the ownership of the goods are transferred to the

receiver/consignee who takes possession of the goods, see § 345, sec.

2. In the charter-parties, however, a cessor clause is generally included

meaning that the Owner must 1) claim the freight from the

consignee/receiver, 2) then, if unsuccessful, he must sell the goods at

auction, and only 3) if that does not cover the freight, he may direct a

claim as against the charterers.

9.2.2 In particular as regards the issuance of bills of lading

The Owner may direct a claim for freight against a good faith holder

of a bill of lading if (and only if) this concurs with the contents and

text of the same bill of lading, see hereto NMC § 325 and § 299, sec. 3.

- thus, if the B/L is issued prepaid there can be no claim as

against the consignee(see Gencon cl. 4.b)

- however, if the bill of lading is issued freight collect the Owner

may claim as against the consignee, see § 345, sec. 1 in

conjunction with § 269. Please note that the Owner is obliged

to seek payment of the freight primarily from the consignee if

1) there is a cessor clause in the B/L or 2) it is otherwise clear

that not doing so will cause the charterer to suffer a loss.

(Meaning that the owner must always demand the payment

of freight before handing over the cargo if he knows that the

consignee is insolvent.)

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9.3 Lien on the cargo

If the charterer and/or consignee can or will not pay the freight the

Owner has the right to retain his own performance of the contract

and to detain the goods insofar as they are still in his possession. This

applies as a general principle of background law both in the Nordic

countries and in most other countries.

Furthermore, the charter-parties always contain a lien clause, so the

Owners’ right to detain the goods is also based in contract. Please

note that the concept of a lien is not directly translatable into Nordic

legal terminology. From a Danish point of view, however, it is

something in between “tilbageholdsret” (the right of detention) and

“håndpant”, (which may in some cases be translated as a pledge …).

However: Remember that a third party holder of the bill of lading in

good faith always can rely on the text of the bill of lading. Thus, if the

bill of lading is issued prepaid the Owner has neither a right of

retention nor a right of detention even if he has de facto not been paid.

9.4 Exercising the right of detention / lien on the cargo

Statutory right of detention/lien with expedient execution, NMC §§

345, 69 and 270-273: Freight and other claims regarding the goods are

vested with a maritime lien on the cargo, meaning that the goods may

be stored on the account of the consignee/receiver, see § 271, and that

they may be sold easily on private auction, see § 272.

10. Cargo claims under voyage charter-parties

10.1 The rules

- mandatory application of the rules on liability for cargo

claims and the rules on the liability connected with goods

transported under bills of lading, according to §§ 322, 347, 325

Page 12 af 21

- in other situations very extensive disclaimers of liability will

tend to apply, see eg. Gencon cl. 2. However, an increasing

amount of charter-parties now apply a set of cargo claim rules

ad modum the Hague Visby Rules.

10.2 Bills of lading issued under charter-parties – problems and

10.2.1 The legal effect of the bill of lading in different relations

- the charterer holds the bill of lading: The bill of lading is a

receipt for goods received and a prima-facie evidence as

regards the kind, number, quantity and quality of the goods,

as well as a prima-facie evidence of the contents of the

transport contract, see § 299, sec. 1 and sec. 2.

- a third party in good faith holds the bill of lading: The bill of

lading becomes an independent contract of carriage. The bill

of lading is further conclusive evidence of the kind, number,

quantity and quality of the goods, as well as conclusive

evidence of the contents of the transport contract, see § 299,

sec. 3. Evidence to the contrary of what is stated in the bill of

lading (even if true) is not allowed. In a Scandinavian line of

thought it might help to regard it so that the right to present

evidence to the contrary is extinguished. This is the whole point

of the bill of lading being a document of title and “the key to

the cargo”.

10.2.2 Problems due to conflicting transport documentation of

mandatory rules on liability for cargo claims

- Charter-party between the Owner and the charterer; however

the goods to be delivered to a good faith holder of a bill of

lading with different contractual provisions (e.g. a liner bill of

lading instead of a tramp bill of lading)

- Charter-party and bill of lading in principle compatible,

(tramp-K/M fx), but the relationship between the Owner and

Page 13 af 21

the consignee is ”caught” by mandatory application of

different rules on cargo claims either due to the issuance of

bills of lading (the Hague-Visby technique) ad modum NMC

§ 299 and §§ 275 ff, or due to provisions on geographical

mandatory application irrespectively of the issuance of bills of

lading, ad modum NMC § 322, sec. 2, and § 347.

10.2.3 How to solve the problem

- coordinate the contractual relationship (e.g. issue tramp bills

of lading) to obtain a ”back-to-back”-situation and/or

o according to statutory rules, see NMC § 338, which

provides for recourse insofar as there is a difference in

the contractual provisions,

o contractual provisions regarding recourse, as in

Baltime cl. 9: “Charterers to indemnify … “, and

Gencon cl. 10, 2nd sentence,

o or according to background law/default rules due to

the division of labour and responsibilities, see arbitral

ruling Jobst Oldendorf: Regres kan følge alene af den

interne funktionsfordeling. (NB: Vestkyst 1, NH, ”Gl.

Gencon cl. 2 is a shield but not a sword).

11. Examples – lay time, demurrage, congestion etc.

Presuppose in the following:

- that the NMC is the default rule

- that normal working hours start at 0730 hours

- that the lunch break ends at 1230 hours

- that normal office hours are from 0830 hours until 1630 hours

Eksemple 1: Tanker v/c

Clause: Laytime 26 running hours, whether permitting

Page 14 af 21

- Monday 1630: The vessel arrives to the port of loading

(pipeline ”off port”)

- Monday 1645: NOR is rendered to the shipper

Q 1: When does the lay time start according to NMC § 332, sec. 4?

- Tuesday: Bad weather conditions from 1300-1500 necessitate

that loading is postponed

- Wednesday: 0900 hours one of the ship’s pipelines breaks. It

is repaired but the work can not be resumed before 1100 hours

- Wednesday: 1900 hours: Loading is completed

Q2: According to the NMC, who pays for the two periods where the

loading could not be carried out? (§ 333, sec. 2)

Q3: Is demurrage due and if so for how many hours?

Eksemple 2: Cargo of grain

- ship to proceed to dock A, berth 23, Port of Rotterdam

- laytime: 3 working days, SHEX, whether permitting

- Thursday 0900: Vessel arrives at port. Dock A, berth 23 is

occupied. The Master immediately issues a NOR to the

shipper. Also informs the shipper that the berth is occupied

- Thursday 1400: The vessel is berthed at berth 23. The Master

informes the shipper of this.

Q 1: When does lay time start?

Page 15 af 21

- Friday 0730: It turns out that some of the cargo holds are not

sufficiently clean due to dust etc. from the previous voyage

which consisted of wood pulp. The shipper requests further

- Firday 1300. The holds are clean and the loading resumes

immediately

Q2: When does lay time expire?

Eksempel 3, kullast

- port of loading: Rotterdam

- port of discharge: Aarhus

o loading: 2 working days, SHEX unless used

o discharge: 2 working days, SHEX unless used

- on departure from Rotterdam, only 1½ working day is used.

Departure takes place on Tuesday afternoon

- Wednesday 0900: The Master informes the shipper that the

vessel is off the port of Aarhus ready to take in cargo. He

requests that the shipper appoints a berth. This is done but it

turns out that said berth is occupied. The Master

consequently asks the shipper to appoint another berth and

in the mean time the Master ankers up at a waiting berth.

- Wednesday 1400: The shipper informs the Master that no

alternative berth may be found, so the vessel will have to wait

until the original berth becomes available which will

probably not take place until Thursday 1200 hours.

- Thursday 1100: Shifting to berth is commenced.

- Thursday 1200: The vessel is ready to discharge, however this

is impossible due to lunch break amongst the stevedores.

Page 16 af 21

- Thursday 1230: The lunch break ends and discharge is

commenced immediately.

Q 1: When does lay time commence?

Q 2: When does lay time expire?

Q3: Is the vessel on demurrage, and if so for how long?

Q4: Assume that the charterer agrees with the stevedores that they

work extra time Saturday morning from 0900 to 1400. Which effect

(if any) would this have on the calculation of lay time and demurrage?

C. TIME CHARTERING

1. The properties and conditions of the vessel, NMC § 372, sec. 2

1.1 The agreed ship (almost always a named vessel, thus a specified

good, see § 393)

1.2 In conditions as stated in the contract

- Baltime cl. 1, jf. boxes 5-12

- NYPE, l. 1-12

If not, remedies ad modum the Sales Act, see NMC §§ 376 and 377,

2nd sentence. (Meaning cancellation, compensation or pro rata

reduction of hire depending on the circumstances).

The general rules of interpretation of contracts decide whether a

certain feature/property is guaranteed or just stated according to

“best knowledge” (however, remember, under English law:

Warranty of sea worthiness).

Page 17 af 21

Apart from the features/qualities specifically stated the vessel

must also be sea worthy and cargo worthy according to the general

rules on this. If not, the charterer does not have to accept the

vessel. The Owner may remedy the defects and present the ship

again, as long as lay/can is not exceeded, if not the charterer may

opt to terminate the contract.

1.3 In particular regarding speed deficiencies:

Normally the speed will be stated using the abbreviation “abt.”.

According to Court and Arbitration practice, “abt.”allows for a

leeway of 0.5 knots. Also note whether it is state that the vessel is

“capable of” (as in Baltimes preamble line 12 and NYPE lines 9-10),

or whether it states ”at an average speed of no less than” (Shelltime

4). According to case law, if the speed deficiency is not so alarming

that it provides for cancelling the charter-party (of if the charterer

does not wish to use this option) the pro rata reduction may be

calculated thus:

1) The loss of time is calculated thus:

(contractual speed – actual speed) time at sea x contractual speed

2) The agreed freight rate is then multiplied with the loss of time.

Calculate the pro rata reduction in these examples:

Gas carrier, 3500 m3 capacity

Agreed speed: Average speed abt. 16,5 knots

Actual speed: Average speed 14,5 knots

The vessel has been on the c/p for 150 days

Freight rate: USD 230.000/30 days

Cape size bulk carrier, 172.000 ts deadweight

Agreed: Guaranteed average speed 17 knots

Page 18 af 21

The vessel has been on the c/p from 0101 2001 to (incl.) 3112 2002

Freight rate: USD 39500/day

1.4 In particular on over-consumption of bunkers: The pro rata

reduction is calculated as the precise costs of the extra

consumption (and not as an estimated lump sum). Please note that

a claim for speed deficiency will often be met with a set off for less

used bunkers from the Owners.

2. Delivery and redelivery of the vessel, § 372, sec. 1

- Baltime cl. 1, and cl. 7, incl. boxes 14 and 16

- NYPE l. 14-15, and l. 91 -93

2.2 Where? NMC § 388 and 389

- Baltime box 21 and cl. 7

- NYPE cl. 4, in particular l. 53-55

2.3 In what condition?

- on-hire and off-hire surveys stipulated in NMC § 373, § 374,

sec. 2 and § 388.

- Baltime cl. 7, l. 109-110

- NYPE cl. 4, l. 54

3. Division of competence, risk and payment – see grid in the

Important in relation to

- who bears a particular cost, not specifically mentioned in the

- when the vessel is off-hire

- if a claim for recourse may be successful

4. Payment of freight

Page 19 af 21

NYPE cl. 5, ”semi-monthly in advance”. If payment is not made when

due, the Owner may withdraw the vessel immediately. Baltime cl. 6:

Per 30 days in advance. The Owner also in this case permitted to

withdraw the vessel without further ado. NMC § 390: Per 30 days in

advance. Please note that the Owner in both NYPE and Baltime (and

the NMC’s default rule) has a claim for full freight without

deductions. (NB: NYPE 93 cl. 17, l. 234 and 235).

In the NMC: Full freight should as a starting point be paid, however

the Owner shall provide security for any claims that may be disputed.

De facto, the charterer often sets off off hire periods form the previous

month in the next month’s payment. This may lead to disputes,

particularly in a rising market, as the Owner will use this as a

reason/excuse to withdraw the vessel.

NMC § 391: Anti technicality clause: 72 hours ”days of grace”. See

likewise NYPE 93, cl. 11.

5. Off-hire

Please note the different wordings:

NMC § 392 – ”is lost”

Baltime cl. 11 – ”any time lost”, > 24 hours, ”service immediately

NYPE cl. 5: “the time thereby lost”, NYPE 93 cl. 17 however: “same or

equidistant position from the destination and the voyage resumed

therefrom”.

See case in the collection of materials, “Prosperity”

6. Cargo claims …

6.1 In the relation between the Owner and the charterer

- Baltime: Cl. 13, 1. led and cl. 9, 3rd sentence: Basically, no cargo

claims may be directed as against the Owners

- NYPE 46???.

Page 20 af 21

- NYPE 93 cl. 27: According to the “Interclub agreement”

- NMC: § 383, sec. 1

6.2 Between the Owner and a third party

- Baltime: Master to issue bills of lading, but ”charterers to

indemnify”, meaning that the Owner will be liable as towards

the third party, but will be reimbursed by the charterer, see cl.

9, 3rd sentence.

- NYPE cl. 8: ”to sign bills of lading as presented”.

- NYPE 93 cl. 30: same as Baltime

- NMC § 382, sec. 1, 1st sentence, § 383, sec. 2 and § 325

6.3 Recourse: NMC § 382, sec. 1, 2nd sentence in conjunction with

”indemnify-provisions” of the c/p. (See above regarding voyage charter

Page 21 af 21

Owners Charterers

Nautical management Decides the course, speed (normally), the route etc. between the ports the charterer directs. Master has a right (and duty) to reject irresponsible or dangerous routes/ports or other requests. Baltime cl. 9, NYPE cl. 8-11, NYPE/NYPE 93, cl. 26 explicitly The Owner shall, acc. to § 378, perform the voyages that are according to the c/p. However, never voyages that are unsafe to the vessel or the crew, or which for other reasons might entail excessive “bother”. See also NMC § 979, sec. 3 regarding dangerous goods. War: The Owner (Master) can decide that the vessel should leave the area, NMC § 394. Baltime cl. 21; not directly stated in NYPE, but ”Safely afloat” in cl. 6. Normally a rider may be attached

Commercial management: § 378, sec. 1: The charterer decides the voyages, within the trade/time-limits agreed upon, with cargoes according to the contract, and generally decides which contracts of carriage he wishes to employ the ship in. Charterer also decides which ports and berths to be called at/used. Has, however, a “nautical obligation” to assure a safe port (“always lie safely afloat”), see NMC § 385, sec. 2 (charterer presumed liable for grounding etc.). Baltime cl. 2, 1,5 NYPE, preamble, .l 18-35

Crews the vessel and pays the regular salaries to the crew. Baltime cl. 3, NYPE cl 1

Hires stevedores, port workers/agents etc. and is in general responsible for loading, storing and discharging of cargo (with necessary help from the crew), see NMC § 321, sec. 1. Baltime cl. 4, NYPE cl.2

Pays the overhead expenses ( - interest and instalments on

ship’s mortgages or other finance programme for the ship

- insurance - maintenance - food, stores, water for cleaning

etc. Must in general ensure that the vessel constantly is equipped and maintained according to the charter-party. Baltime cl. 3, NYPE cl 1

Betaler according to § 387, the expenses flowing from the orders he gives to use the ship in a particular way, including in particular:

- bunkers, § 380 - water for engine etc. § 380 - port and canal fees etc. - extra insurance incl. war-risk, §

394, sec. 2, - overtime in port, § 381, sec. 2, 2nd

Baltime cl. 4, 1,7 NYPE cl.2

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