Waiting time, or wasting time?
Can a shipowner have his cake and eat it too? If a ship arrives at a port, gives a valid Notice of Readiness, but cannot berth for reasons beyond owner’s control, can the owner then make use of what would otherwise be wasted waiting time to perform other tasks? A recent High Court decision, (Stolt Tankers v Landmark Chemicals SA – The Stolt Spur) has some illuminating comments to make on the subject. Owners contemplating what to do when their ship is anchored awaiting a berth should think carefully before they take some action which would cause laytime to be interrupted.
In the "Stolt Spur" case, the High Court heard what is increasingly becoming a rare occurrence - an appeal from arbitration. The vessel had arrived at Mumbai and tendered notice of readiness, but no berth was available for another fifteen days, due to congestion in the port. So the owners, rather than seeing the ship sitting idle, sent it first to another anchorage to discharge another parcel of cargo for a different charterer, then to sea briefly to tank clean, then to a third jetty to load a different parcel, and finally back to the anchorage to await the berth for the first charterer. All of these actions were performed in the fifteen day period which the owner knew would have to wait before discharging could be commenced for Landmark. The owners subsequently claimed laytime and demurrage from Landmark for all the waiting time as running without interruption from the notice of readiness until completion of discharge.
The arbitrators disallowed the claim, saying that when the vessel was discharging, loading and tank cleaning, it was not available to the first charterer, and so time should not count for that charterer. On appeal, the High Court agreed, making the point that demurrage was a compensation payment to the owner for loss of availability of the ship. If the owners in fact were using the ship for their own purposes, and it was therefore not available for cargo operations for the charterers, there was no reason why the charterers should pay compensation.
Following that reasoning, it would be simple for a charterer to argue that if a ship was bunkering while waiting, it was similarly being used for the owner’s purposes, and was therefore effectively not available to work cargo and so time should not count. Scrutton on "Charterparties" specifically mentions bunkering as an act which removes the ship from the charterer’s disposition.
The more commercial view had always been that before laytime or demurrage ceased to run, there had to be some "fault" on the part of the owners which would interrupt the laytime. Bunkering for owners’ purposes could not be considered a "fault" for these purposes.
The specific act of bunkering was not considered in the "Stolt Spur" but we expect charterers will no doubt rely on this case to exclude, when they can, bunkering time used by the vessel.
Lesson? Owners be careful. Waiting time is not wasted time if you are being paid for it.
With thanks to Imogen Rumbold of Lawrence Graham for supplying this article.
