Voyage Charter – Effect of General Exceptions Clause on Running of Laytime and Demurrage

August 2000

(Sea Venture Volume 19)

The present position under English law is that general exceptions in a voyage charterparty will not relieve the charterers from their obligation to pay demurrage unless (i) expressly provided by clear language or (ii) a necessary implication from the terms of the charter as a whole¹. In the ''Solon''², a recent case before the Commercial Court, charterers sought to argue that the general exceptions in clause 28 of the Sugar Charter Party 1969 form operated to interrupt laytime.

The general exceptions clause was worded as follows:

28. Strikes or lockouts of men … or stoppages … or any other force majeure causes … occurring beyond the control of the Shippers, or Consignees, which may prevent or delay the loading and discharging the vessel, always excepted.

The background to the dispute was that the vessel had arrived at Paranagua and had not been able to commence loading until about 6 weeks later, which charterers contended was due to a strike at the port. The matter first went to London Arbitration where the sole arbitrator concluded that clause 28 operated so as to interrupt laytime in the event of a strike or other interruption delaying the loading or discharging of the vessel. The owners appealed the decision and argued that legal authority³ had already established that general exceptions clauses, which were relied on to exclude the running of laytime and demurrage, had to be clearly expressed if they were to have that effect on laytime as well as demurrage.

The Commercial Court held that there was nothing in clause 28 to suggest that it was anything other than a general exceptions clause. The charterparty contained in other clauses clear provisions dealing with the running of laytime, for example, in clause 18:

18. In the event of a breakdown of a winch or winches by reason of disablement or insufficient power, the laytime to be extended pro-rata for the period of such inefficiency in relation to the number of working gangs available. If on demurrage, time lost pro-rata to be deducted from same.

Thomas J reasoned that, although as a matter of language clause 28 is wide enough to provide an exception to laytime, it is clear, for the reasons expressed in the ''Forum Craftsman'', that the clause covered other circumstances where loading or discharging was prevented and covered liabilities for unliquidated damages where, for example, there was a failure to load. It would, for example, excuse charterers from liability for failing to provide a cargo where a government ban was imposed preventing the export of sugar before the vessel arrived to load. The clause would also protect the owners from a claim by charterers when a strike of crew prevented the cargo being loaded. Content can sensibly be given to clause 28 without it including an exception to the obligation to load within the laydays.

Accordingly, given the clear words used where the parties intended to provide for a laytime exception and the terms of clause 28, the Commercial Court did not consider that the words of clause 28 made clear that it was intended to provide an exception to the running of laytime, and made their decision accordingly.

¹ See "Sea Venture" Vol. 14, page 45
² [2000] 1 Lloyd's Rep 292
³ E.g. the "Kalliopi A" [1988] 2 Lloyd's Rep 101, the "Forum Craftsman" [1991] 1 Lloyd's Rep 81 and the "Lefthero" [1992] 2 Lloyd's Rep 109