SECTION 5 LAYTIME

1. DURATION OF LAYTIME 2. COMMENCEMENT OF LAYTIME 3. INTERRUPTIONS

4. CALCULATION
5. LAYTIME CLAUSE

Laytime

Laytime shall mean the period of time agreed between the parties during which the shipowner will make and keep the vessel available for loading or discharging without payment additional to the freight. Laytime calculating is not an activity to be undertaken lightly. There may be considerable sums of money at stake, which will have a noticeable effect on a ships profitability or on a charterers income.In this section we mainly deal with laytime as well as the calculation of laytime , demurrage and despatch.

1 DURATION OF LAYTIME
Duration of laytime can be sub-divided into three categories:

1.1 Definite laytime 1.2 Calculable laytime 1.3 Indefinite laytime

1.1 Definite Laytime

The simplest of the categories, specifies how many days/hours are allowed, whether for loading or for discharging or for both activities, the latter sometimes being known as for all purposes. Terms might be: Cargo to be loaded within 5 weather working days of 24 consecutive hours or 7 working days of 24 consecutive hours, weather permitting, for all purposes. The use of definite laytime is the standard practice in the tanker trades and is almost always fixed at 72 hours being allowed for the combined loading and discharging, regardless of the size of vessel.

1.2 Calculable Laytime

1.2.1 Tonnage Calculations

Tonnage calculations are the most common types of calculable laytime. A contract will state that a vessel is to load and/or discharge at a set rate of tons/tonnes per day/hour. Thus, for a ship loading 40,000 metric tones of cargo, minimum/maximum, at a rate of 10,000 tones daily, there will be 4 days of laytime available to her charterers. However, it might be that the ships master has a margin within which to load - e.g. 40,000 tones (5% more or less). Thus, if the ship eventually loaded 41,258 tonnes of cargo, available laytime can be assessed as follows: 41,258 tonnes 10,000 tonnes daily = 4.1258 days

1.2.2 Hatch Calculations

Hatch calculations are more complicated than tonnage calculations but occasionally need to be performed, nonetheless, there are well-established procedures to assist. Let us assume that general cargo vessel HERON is discharging bagged wheat flour on the basis of: A discharge rate of 175 tonnes per hatch daily, total cargo of 7,000 tonnes, 1575 tonnes cargo in the largest cargo compartment and vessel has five (5) hatches.

1.2.2.1 Per Hatch Daily

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 vessels hatches. Thus: Laytime = (Quantity of cargo)/(Daily Rate Number of Hatches) = Days 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. The vessel is to be discharged at 175 tonnes per hatch daily. Thus 5 (hatches) x 175 tones = 875 tonnes daily, Thus 7,000 tones cargo 875 = 8 days permitted laytime.

1.2.2.2 Per Workable Hatch Ddaily

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, Thus: Laytime = (Largest Quantity in one Hold)/(Daily Rate per Hatch Number of Hatches serving that Hold.) = Days 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.

Taking the above example of the HERON, first it is necessary to establish the largest unit of cargo in the vessel. Reference to the stowage plan shows that 1,575 tones contained in No. 3 hold and tweendeck beneath No. 3 hatch constitutes the largest unit. Thus 1,575 tones 175 daily = 9 days laytime overall. However, where two or more hatches serve the largest unit of cargo, the unit tonnage must be sub-divided. Assuming two hatches served No. 3 hold and tweendeck, for example, 1,575 tonnes would first be divided by 2 before applying the factor of 175 tonnes daily. In that case, the largest indivisible cargo unit would become the 1,500 tonnes contained in No. 2 hold and tweendeck and the laytime duration calculation would then be: 1,500 tones 175 daily = 8.571428 days laytime.

1.3 Indefinite Laytime

Occasionally, an shipowner or operator will agree for his ship to be loaded or discharged as per custom of the port (COP); customary despatch (CD); customary quick despatch (CQD) or fast as can (FAC) terms.
The risk of bad weather, port congestion and such like are all for the Shipowner / operator to bear.

2 COMMENCEMENT OF LAYTIME
2.1 The vessel must have arrived at the place where cargo operations are to be performed; 2.2 The vessel must in all respects be ready to load or discharge the relevant cargo; 2.3 The notice of readiness must be tendered.

2.1 Arrived ship

In general, laytime commences when a vessel is an arrived ship. Simply put it could be considered the time that the vessel arrives at the agreed place. Therefore, the more detailed the description of that place the more careful the shipowner must be to reach that place. Whether a ship is an arrived ship will depend on whether the charter party is a port charter party or a berth charter party. The vessel shall proceed to Ras Tanura is less onerous than The vessel shall proceed to No.2 berth Tas Tanura. The former is known as a port charter and the latter a berth charter. If the vessel berths on arrival without delay there can be no disagreement as to when the vessel is ready and the clock starts but if there is a delay the situation is less clear.

2.1.1 Berth charter parties

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. Where the charter parties expressly reserve to the charterer the right to name a particular dock or berth, the laytime do not begin until the ship has arrived at that dock or berth. The duty to reach this agreed point or place for loading or discharging is very tough on the shipowners. Even if the vessel has to wait at the immediate vicinity for the particular berth agreed in the charter party, the vessel is not considered to have arrived. Therefore any loss of time in waiting for the berth to become vacant will fall on the shipowners.

WIBON

Nowadays it is more common to find port charter parties. Admittedly many charter parties are agreed on the basis of one safe berth, one safe port, and that technically is still a berth charter party. But there is the usual provision of whether in berth or not inserted in the charter parties and that will effectively expand a berth charter party into a port charter party. WHETHER IN BERTH OR NOT (WIBON) 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 ender notice of readiness from it and laytime shall commence in accordance with the charterparty. 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.

2.1.2 Port charter parties

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. The English courts once held that the vessel must be within the commercial area of the port and this had been amended to mean the normal waiting area for a port. The importance, of course, being as to who will pay for the time waiting for a berth or the commencement of the cargo operation.

Rule and case

The rule is that the charter party names a port simply, without further particularity or qualification, the ship is an arrived ship when, if she cannot proceed immediately to a berth, she has reached a position within the port where she is at the immediate and effective disposition of the charterer. If she is at the place where waiting ships usually lie, she is in such a position unless there are some extraordinary circumstances, proof of which lies on the charterer. A vessel carrying grain under a port charter party anchored at the Bar anchorage at Liverpool. The anchorage was 17 miles from the usual discharging berth, but was the usual place where grain vessels lay while awaiting a berth. Held by the House of Lords that she was an arrived ship when she reached the anchorage, for she was then at the immediate and effective disposition of the charterer.

2.1.3 Port Congestion

Port congestion is now commonplace and brings with it a further worry for shipowners in that it is the reason for most cases of lengthy delay and the accruing of huge demurrage. Who must bear the financial risk of delay in a congested port will depend on what is stated in the charter party. Contracts usually specify that notices of readiness can be tendered from a normal waiting place, whether in port or not (WIPON), whether in berth or not (WIBON), whether in free pratique or not (WIFPON) and whether customs cleared or not (WCCON). The above terms are often combined into the one abbreviation WWWW.

Kyzikos case

WIBON was designed to convert a berth charter party into a port charter party and to ensure that under a berth charter party notice of readiness could be given as soon as the ship had arrived within the port concerned so that laytime could start to run on its expiry. But English law has restricted the meaning of WIBON somewhat. That is in the Kyzikos.

The Kyzikos was fixed to load a cargo of steel products in Italy for Houston. In the charter party in the Gencon form, the discharge port or place was state as 1/2 safe always afloat, always accessible berth(s) each port-----. So it was a berth charter. But Clause 5 stated: Time to commence at 2 pm if notice of readiness is given before noon at 8 am next working day if notice given during office hours after noon. Time to count ---WIPON/WIBON/WIFPON/WCCON---- The Kyzikos arrived at Houston, the discharge port, at 0645H on December 17, 1984. Notice of readiness was tendered by the master soon enough. The berth she was supposed to proceed to was available at all times. However, as fog had closed the pilot station, she could not proceed untill December 20, 1984, on which date she was berthed at 1450H.

The shipowners claimed that laytime commenced at 1400H on December 17. But the charterers, maintained that WIBON was not protection for the shipowners if the berth was available and the vessel was prevented from berthing due to other reasons beyond the control of the charterers. Thus, the charterers would only accept laytime commencing after the vessel became an arrived ship when she berthed on December 20. Only a little over three days demurrage was in dispute ----US$30,435.72 --- but the case was taken all the way to the House of Lords. In arbitration, it was decided that the shipowners claim succeeded in full on the ground that on well established authority the words had the effect of making the charter into a port charter.

On appeal in the High Court, the award was reversed. It was held that there was no previous decision of any court which was binding on him on the point. The Lord said when a vessel is unable to come alongside because no berth is available, the WIBON provision in the ordinary case has, in practice, that effect; but in my view it cannot be said without doubt that the authorities which I have considered, read as a whole, support the proposition that it has that effect in law, still less that it actually converts a berth charter into a port charter. In the Court of Appeal, however, the arbitration award was restored again and it was held that WIBON turned a berth charter into a port charter so that time commenced to run when the vessel was waiting in the named port of destination to proceed to berth.

In the House of Lords, finally, the Court of Appeals decision was unanimously reversed. Lord Brandon gave the only reasoned speech. It appeared the main reason for the House of Lords decision was based on the absence of any reported case which applied the WIBON to any cause of delay other than the non-availability of a berth, thus justifying the inference that purpose of WIBON was only for the limited application of non-availability of berth/congestion. Lord Brandon has said that whether in berth or not was the shorthand for whether in berth (a berth being available) or not in berth (a berth not being available). It is clear that WIBON will still protect the shipowners in the event of a port congestion, hence preventing the vessel in berth charter to become an arrived ship. WIPON would be even better in protecting the shipowners if the waiting for the nominated berth to be free is not within the port limit.

2.1.4 Time lost in waiting for berth to count

Time lost in waiting for berth to count as laytime is a well-known printed clause that can be found in the Gencon form of charter and is freely incorporated by many shipowners in the rider clauses of other forms of voyage charter parties. It is a further important provision aimed at relieving shipowners of the hardship caused by narrow interpretation of the arrived ship under English law. The purpose of the clause is to make charterers assume the financial burden of the risk of waiting for a berth due to congestion--- be it a port charter or berth charter.

The Darrah was chartered to carry a cargo of cement from Novorossisk in the Black Sea to Tripoli. The charter party was a port charter based on the Gencon form. The Darrah duly completed her carrying voyage and reached a usual waiting place for her turn within the limits of the port of Tripoli. The Darrah rightly gave notice of readiness to discharge on January 2 1973, laytime being triggered off shortly after the notice time. The Darrah had to wait for an available discharge berth for over seven days. That seven days and six hours, included two non-working days, a Friday (non working day in Tripoli) and a legal holiday, and a period from noon on the day before each. If this seven days and six hours waiting time counted, as proper laytime, the non-working period would have to be disallowed under the charter party. The shipowners claimed that the whole of the seven days and six hours would have to be counted continuously under the time lost provision, because it took priority over the laytime provision. This would effectively exhaust all the laytime (eight days and seven hours) save for only 25 hours. These 25 hours were promptly used after berthing and so, the shipowner argued, the vessel was thereafter on demurrage counting continuously without applying any excepted periods for the benefit of the charterers. The shipowners ended up with 10 more days on demurrage than the charterers would admit.

Case study

In the High Court, it was held that where time was lost waiting for berth, all the time so lost was to count whenever and wherever the waiting took place, and the special exceptions with regard to laytime calculation would only operate until the berth was ready. When it came to the Court of Appeal, it was held that the ship was an arrived ship, the laytime provisions would apply, with all the exceptions to be applied. In the House of Lords, justice was further expanded. The House of Lords now had the chance to correct the earlier decisions and held that the time lost provision would have to be computed exactly like the permissible laytime calculation, as if the vessel had actually been berthed. So in the case of an arrived ship under a port charter, there is no conflict between the laytime clauses and the time lost provision, because both calculations are the same and neither need prevail over the other. But even in the berth outside the port would still be counted as the laytime with all the exceptions like Sunday and holidays being excluded.

Case

Voylayrules 93

According to the Voylayrules 93, the time lost provision 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 charterparty.

2.2 Readiness

Not only must a ship have arrived under the charter party but she must also be ready in order to tender effective Notice of Readiness so as to trigger off the laytime clock. Readiness means that the vessel must be in all respects ready to load or to discharge in both the legal and physical sense.

2.2.1 Legal Readiness 2.2.1.1 Free pratique

Requirement for free pratique is a legal readiness that a vessel has to fulfil. It used to be harsh on the shipowners. In normal circumstances free pratique is mere formality. However the time for its granting depends entirely on the custom of the particular port that the vessel is calling at. Some ports make it very simple by radio if the vessels last port of call is a healthy place. Some ports are the other extreme that free pratique could not be obtained from the authority in accordance with the port regulations in force until the vessel had actually berthed.

Case

A vessel reached the commercial area of Tuapse at 0100 hours on 19 February. Her master gave notice of readiness to load. She was directed to her berth on 24 February and arrived there at 1320 hours. Free pratique was granted at 1600 hours. Loading began at 2150 hours. It was held that the mere fact that free pratique had not been obtained did not prevent the vessel from being able to commence the laytime counting, as long as the free pratique could be obtained at any time and without the possibility of delaying the loading or discharging. The Delian Spirit [1971] 1 Lloyds Rep. 506.

2.2.1.2 Customs clearance

Normally this is again an idle formality. If the vessel supplies copies of cargo manifest and other necessary documents customs clearance will be almost automatic. But if shipowners voluntarily or negligently permit the customs clearance as a condition precedent in the charter party before the ability to tender notice of readiness they can be caught badly.

Case

The vessel, Puerto Rocca, arrived at the Mersey Bar anchorage and gave notice of readiness to the charterers. The charterers rejected on the ground that the vessel was not custom cleared in accordance with the clause. It was not possible for a vessel to obtain customs clearance at Mersey Bar. So the shipowners, whilst maintaining the validity of the notice of readiness tendered upon arrival at the anchorage, took effort and expense to procure a lay-by berth in Seaforth Dock for the vessel, so as to obtain custom clearance and then served a second notice of readiness four days later than the first one, but without prejudice to it. It was held by the High Court that the first notice of readiness was valid and the clause entitled him to do so if she was unable to berth immediately on arrival.

2.2.2 Physical readiness

A ship must be physically capable of performing cargooperations e.g. at a loading port, holds must be cleaned and prepared for receiving cargo and, if the contract so specifies, holds must be inspected and declared suitable by an appropriate authority before notice of readiness will be accepted. In general providing that all the space requited for the carriage of the contracted cargo is reasonably clean, available and accessible the ship would be considered ready unless there was some overriding clause in the charterparty which stipulated conditions beyond these.

2.2.2.1 Seaworthiness

The vessel must of course be seaworthy. But it seems she need not be seaworthy in the sense of being ready and able to sail to the open sea, unless of course she cannot even shift to the loading or discharging berth designated and/or safely to load or to discharge cargo. Therefore the vessel is perfectly entitled to tender notice of readiness, and have laytime commenced while simultaneously effecting repairs to the main or auxiliary engines, or having bunker supplied in preparation for sailing after cargo work.

2.2.2.2 Cargo holds and inspection

The ship must be completely ready in all her holds so as to afford the charterers complete control of every portion of the ship available for cargo. Unless there is an express provision in the charter party that notice of readiness may not be tendered until after inspection by the charterers inspector or other relevant authority, then if the vessel is in all respects ready to load and all that is required is a routine inspection of holds in which nothing is found to cause delay for the loading, then such inspection is a mere idle formality and not a condition precedent to the ability to tender notice of readiness and commencement of laytime.

2.2.2.3 Cargo gears

It appears that the rule for readiness to load or to discharge applicable to cargo gear is not as stringent as the rule for cargo space. The vessel is ready to tender the notice of readiness if the facts reveal that the loading or discharging method does not require the use of ships gears or shore crane could be readily employed.

Case

The vessel, Demosthenes, arrived at Alexandria on the May 26, 1983 and tendered notice of readiness. It was rejected on the ground that the vessel did not have the necessary vacuators for the discharging according to clause 18 which stated that shipowner to supply sufficient vacuators and consequently the vessel was not considered ready for discharge. To the shipowner, it looked like the charterer was finding any excuse to decline the notice of readiness to avoid laytime from commencing, when it was known there would be prolonged delay in berthing. So the shipowner was forced to take precautions to make the notice of readiness mature just in case. Three vacuators were arranged to be put on board two days later on May 29, and another three were put on board on June 15, enabling the master to re-tender a second notice of readiness on June 17, without prejudice to the earlier one. The vessel eventually berthed July 12. The shipowner claimed demurrage. The charterer resisted, contending the vessel was not ready without vacuators. The Judge held that the vacuators were essentially equipment which was to emerge from the shore when the operation of discharge was to commence; the vessel as a vessel was ready. Therefore the notice of readiness on arrival Alexandria was a valid notice of readiness.

2.2.2.4 Lightening at discharge port

Arrival draft for the discharge port or berth can be a serious matter. It may hamper the ability of the vessel to go alongside to commence discharge, unless lightening is carried out at outer anchorage until desired draft is met. In that case, if the charter party is explicit on the arrival draft, this must affect the vessels ability to tender and effective notice of readiness. But more often, the overdraft is minimal and does not effect the ability to go alongside a discharging berth, and the sole reason that the vessel is waiting at an outer anchorage is congestion of the port.

2.3 Notice of readiness

Notice of readiness (NOR) shall mean the notice to charterer, shipper, receiver or other person as required by the charterparty that the vessel has arrived at the port or berth, as the case may be, and is ready to load or discharge. Laytime for loading and discharging shall commence at 13.00 hours, if notice of readiness is given up to and including 12.00 hours, and at 06.00 hours next working day if notice given during office hours after 12.00 hours. Notice of readiness at loading port to be given to the shippers or if not named, to the charterers or their agents named in charter party. Notice of readiness at the discharging port to be given to the receivers or, if not known, to the charterers or their agents

2.3.1 Valid notice of readiness

Notice of Readiness can be given orally but usually a written form is used, an example of which can be found in Appendix. It is an important function of a port agent to assist a ships Master in tendering notice of a ships arrival and also to ensure that shippers/receivers officially accept the vessels notice of readiness, accomplished usually by signing and timing acceptance on the notice form, although many shippers/receivers or Charterers nominated port agents, will accept subject to charterparty terms and conditions. It should be noted that the giving of a notice of readiness is an essential element in the laytime process. Furthermore, a ships Master or agent must have tendered Notice of Readiness, in accordance with the contract requirements (e.g. within office hours, Mondays to Fridays). It is not however conclusive proof that the ship is in fact ready. Since the Master gives the notice of readiness it is in truth only his opinion that the ship is ready. On final inspection the Charterer may not agree and refuse to accept the notice of readiness. A notice of readiness is not valid unless it indicates that the vessel is ready to load or discharge as the case may be, at the time at which it is given. It is insufficient if the notice merely indicates that she will be ready at a future time.

The Mexico I

The Mexico I had been chartered to carry 5000 tons of bagged maize from Argentina to Angola. It was a part cargo and the shipowners were expressly given the right to complete the vessel with other lawful merchandise. The vessel did load other cargo at Santos after loading the 5000 tons of bagged maize at Necochea. The vessel arrived at Luanda, Angola, and gave notice of readiness on January 20, 1985. However, it was not until February 6, 1985 that the overstowed cargo was cleared and the maize cargo became accessible. It was even later February 19, 1985 before a start was made on unloading the bagged maize. The arbitration was in favour of the shipowners for the bad notice of readiness tendered on January 20 became effective or revived when the maize cargo was fully accessible on February 6.

The charterers appealed to the court. In upholding the award in the shipowners favour, the court said that the facts of the particular case show that the charterers no longer have the right to insist upon a further notice of readiness being given. The correct conclusion in law is that the notice became effective on the time 1025 on February 6. The charterers took the matter further to the Court of Appeal. It was held to be wrong insofar as it suggested that when a notice of readiness was given before the vessel was in fact ready, no further notice of readiness was required. The notion that the invalid notice of readiness became inchoate and automatically became effective without further notice at the moment when the ship was actually ready, was rejected. As a result, the charterers appeal was allowed and the laytime started to count, not from the moment of the invalid notice of readiness on January 1, 1985, not from the time the vessel was ready physically and cleared of overstowed cargo on February 6, 1985, but from the moment of actual discharge given later, at 1130 on February 19, 1985.

2.3.2 Arrival Before Laydays

(1)Meaning of Laycan It is usual in any charterparty to specify laycan dates. Laycan is an abbreviation of laydays/canceling date. Laydays being the time when the commencement of loading is contracted to take place and canceling date being the point at which, if the ship has not arrived at the load port, the Charterer is free to cancel the contract. In practice the laycan consists of a spread of dates although it is not uncommon for a single date to be specified for both.

(2)Giving NOR before laydays

There is nothing to prevent a vessel that arrives before her laydays are due to start from giving notice of readiness. From a legal viewpoint laytime will start to count in accordance with the relevant terms of the c/p. However the period between then and the point at which the agreed laydays commence will be excluded time under the c/p terms. There are advantages to the Owner when giving notice before laydays particularly in the dry cargo trades. This is because Dry cargo charters usually require notice to be given in office hours with laytime starting to commence at the beginning of the next work period following. By giving notice before laydays it is likely that the time allowed to the Charterer will have passed and that therefore time will start to count at 00:00 hours on the first layday. Had the notice been given during office hours in the first layday time would only have started to count at 13:00 or 14:00 on that day. In order to avoid such situations Charterers will try to include clauses expressly prohibiting presentation of the notice of readiness before the commencement of laydays.

(3)Commencement of laytime

Once a vessel has arrived at a port, complied with all formalities and contractual commitments and tendered notice of readiness, laytime will commence in accordance with the contract terms e.g. at 0700 hours next working day or 12 hours following tendering and accepting notice of readiness. For the tanker trades it is common practice to allow the tendering of the notice of readiness to take place at any time on any day and for time to begin to count 6 hours later.

(4)Different of time counting and actual loading or discharging

It is important to remember that the commencement of time counting and the commencement of actual loading or discharging can, under certain circumstances, be quite different. Take, for example, a charterparty with 36 hours turn time even if used also Sundays and Holidays excepted even if used and Notice of Readiness to be given during normal office hours. Such a ship could arrive at, say, 6 pm on a Friday, work the entire weekend and time would not commence to count until 36 hours after 8 am Monday. Such a ship would have been working for over four days before time even commences to count. Vital, therefore, to ensure also that Notice of Readiness is handed in at the earliest permissible moment. Never think that as work has already started a Notice of Readiness is not needed.

2.3.3 Overstowage

A charter entered into under the Gencon form for the carriage of part cargo of flour, liberty was given in the charter for the shipowner to top up with general cargo en route. This the shipowner did overstowing above flour in four out of the five cargo holds. At the discharge port, argument arose on whether effective notice of readiness could be tendered until all overstowed cargo was removed and all flour cargo was accessible? The shipowner argued that he had an express right to complete with cargo en route, which necessarily meant to overstow. The shipowner did nothing wrong in that. The charterer submitted that an overstowed cargo is exactly like a jammed hatch cover, effectively blocking the charterers cargo. It was held that the charterer was right in his contention. Laytime did not begin to run until all the flour cargo was accessible, and there was no difference between loading and discharging in that all holds for the intended cargo must be ready in all respects so as to give the charterer complete control of every portion. In the later case of The Mexico I as previous mentioned gives the same result.

3. INTERRUPTIONS
Once laytime has commenced, unless a vessels cargohandling equipment breaks down, it will continue unhindered until the completion of cargo operations or until laytime expires or demurrage commences. Nevertheless, contracts frequently include express clauses interrupting laytime in the event of: 3.1 Weekends and Holidays 3.2 Shifting to and Between Anchorages/Berths 3.3 Strikes 3.4 Bad Weather 3.5 Breakdowns

3.1 Weekends and Holidays

SHEX terms (Sundays and Holidays Excepted) FHEX terms (Fridays and Holidays Excepted) SHINC (Sundays and Holidays Inclusive) FHINC (Fridays and Holidays Inclusive) SSHEX (Saturdays, Sundays and Holidays Excepted)
SSHINC (Saturdays, Sundays and Holidays Inclusive)

Meaning of day

DAY shall mean a period of twenty-four consecutive hours running from 0000 to 2400 hours. Any part of a day shall be counted pro rate. Running days or consecutive days shall mean days which follow one immediately after the other. Working days shall mean days not expressly excluded from laytime. Weather working day 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.

3.2 Shifting to and Between Anchorages/Berths

It is common practice for contract wording to permit loading/discharging at more than one berth or anchorage at each port. Consequently, time spent shifting between berths/anchorages is normally taken to be for shipowners account. However, should the agreed number of berths/anchorages be exceeded, it becomes reasonable that the shifting time involved should count as laytime and that the expenses involved e.g. towage and pilotage should also be for the account of the Charterers. In almost all trades if the vessel has anchored off on arrival either to wait for suitable tides or a free berth the time taken to shift to the berth is excluded from laytime.

3.3 Strikes

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.

There is nearly always an express clause in a contract to the effect that delays due to shore strikes are not to count as laytime.

3.4 Bad Weather

(1)weather working days

WEATHER WORKING DAY (WWD) or WEATHER WORKING DAY OF 24 HOURS 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.

(2)days, weather permitting

WEATHER PERMITTING (WP) shall mean that any time when weather prevents the loading or discharging of the vessel shall not count as laytime. For many years it had been accepted that the former expression favoured Charterers and the latter favoured shipowners.

(3)Explanation of WWD

In cases of weather working days, laytime does not count during periods of bad weather that interrupt loading or discharging nor (and this is the important factor) does laytime count when bad weather occurs during a working day even if, had the weather been fine, no attempt would have been made to work. Weather working day describes a type of working day. It does not matter whether the vessel was actually working or not. It follows, therefore, that even if a ship is not actually on the loading (or discharging) berth, for example because it is occupied by another ship, if time has started to run and bad weather occurs during a working day, that time will not count against Charterers as laytime.

(4) Working day

A working day not only refers to a day when work normally take place, it is also that part of the day when work is normally done in the port in question. If, therefore, the word working were not qualified in any way, the bad weather would have to occur during the port working part of the day for it to be deducted from the laytime. Conversely, where the charterparty reads weather working day of 24 consecutive hours (which is now more normal), then bad weather occurring at any time (once laytime had started to run) would be deductible even if the Charterer had no intention of working during such a period.

(5) Days weather permitting

In cases of days, weather permitting it was understood until 1982 that only working time actually interrupted by bad weather would fail to count as laytime. All this, however, was before the case of the VORRAS in that year, that vessel was a tanker and the judges of the English Court of Appeal has to determine the meaning of the term '72 running hours, weather permitting, Sundays and holidays included, where the vessel was kept from a loading berth for some days owing to bad weather. They held that bad weather at the time was such as to prevent the loading of a vessel of the VORRAS type and as such, laytime should not count. In other words, that decision on a tanker has effective eroded the longheld and sacred distinction in the dry-cargo market between weather working and weather permitting.

(6) Days of 24 consecutive hours

Where the term days of 24 consecutive hours is incorporated into a charterparty laytime provisions and this is the term used in almost all modern dry-cargo charterparties it in effect means that a laytime day will run continuously for 24 hours each day, unless specifically interrupted by some charterparty factor such as a weekend or holiday, bad weather or a strike. It is of no consequence whether the working day of a port is of less than 24 hours. The parties to the contract have agreed, in effect, to ignore port working days and to define a laytime day as running continuously for 24 hours, except for any specified interruptions.

(7) WWD without qualification

The term weather working day on its own without qualification is indeed affected by the number of hours actually worked in a port. Should bad weather occur outside working periods in the normal, non-working and otherwise idle time, laytime will not be affected. However, if bad weather occurs in normal working time, even if the vessel was idle at the time, laytime will be interrupted and the degree of interruption has to be reached by apportioning working time in a port against a 24-hour day.

Day 1 Day 2 Day 3 Day 4 Day 5 Day 6

Worked Worked Rain Rain Rain Worked Rain Worked Rain

0700/1900 1.0 day 0700/1900 1.0 day 2200/2400 0001/2400 0.0 day 0070/1900 0.0 day

24 hours 24 hours 00 hours 00 hours

0700/1300 0.5 day 12 hours 1300/1900 0700/1000 0.25 day 06 hours 1000/1900

Day 7

Rain Worked

0700/1000 0.75day 1000/1900

18 hours

3.5 Breakdowns

It is reasonable that if a vessels gear is being used and it breaks down, laytime should not continue during the period of breakdown. It may be that, for example, one crane out of four has broken down and, in such a case; apportionment of the degree of loss must be carried out. In that relatively simple example, laytime would continue at a rate of 75% until the crane is repaired.

Shore breakdaown

There are, however, shore breakdowns and it may be that the shipowners have knowingly or unwittingly assumed responsibility for these in their contract. Some charterparties exclude time lost due to stoppages of shore machinery beyond the Charterers control, which means just that under English law. Thus a shore crane breakdown that is judged to be beyond Charterers control (i.e. Charterers do not own or otherwise control the crane) such a breakdown will, therefore, interrupt laytime. Under American law it may be that the alternative view would be upheld, in the shipowners favour, although that is not completely certain.

4. CALCULATION

4.1 Damages for detention 4.2 Demurrage 4.3 Despatch money 4.4 Averaging laytime

4.1 Damages for detention

If Charterers fail to abide by the provisions of a contract and, as a result, permitted laytime is exceeded, shipowners are normally entitled to reimbursement for their loss, if any. One method of reimbursement could be by claiming damages for detention, however this could be a lengthy and costly legal exercise. Consequently, most parties to a shipping contract avoid the problem by negotiating a daily level of demurrage for the time spent in excess of agreed laytime. The difference between demurrage and damages for detention is that demurrage is only be paid for an agreed number of days and damages for detention is to be paid for further delay takes place.

Gencon Form 76

It is rare to find a similar provision like Clause 7 in the Gencon form 76 limiting only to ten days on demurrage. Naturally, under such a provision, if the vessel continues to be delayed, the charterers will have to pay damages for detention beyond the ten days. This is cumbersome to say the least. It is only to be expected that this provision is no longer to be found in the new Gencon form 94.

4.2 Demurrage

Once laytime has been fully used, demurrage should normally run continuously, night and day, weekend and working period, with no interruptions until cargo work is completed unless the contract expressly provides otherwise e.g. shifting time from anchorage to berth not to count as laytime or as time on demurrage. Normally, however, laytime interruptions such as bad weather, weekends and holidays, will not interfere with demurrage time, although breakdowns on a vessel affecting discharge will interrupt demurrage time. Given these exceptions, it can usually be said that the much used shipping expression: once on demurrage, always on demurrage means what it says.

4.3 Despatch money

It has already been stated despatch is not a feature of the tanker market. Within the dry cargo markets it can be agreed that if a vessel completes cargo operations within the available laytime, the Charterer will be rewarded by the payment of despatch money, which is normally set at half the daily rate of demurrage. It should be borne in mind, however, that a few Charterers negotiate that daily despatch is the same as daily demurrage, while, by contrast, for vessels that normally might expect a fast turn-round in port e.g. ro-ro ships, car carriers or coasters it is not at all unusual for the contract to specify free despatch i.e. no despatch at all . However, no address commissions or brokerages are payable on despatch money. Where despatch is payable. It can be sub-divided as being payable on:

4.3.1 All time saved

DESPATCH ON ALL TIME SAVED (ATS) shall mean that dispatch 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. It is perhaps easier to understand despatch on all time saved by the use of an example.

Example

The HERON completes loading at 1200 hours on a Friday, her charterparty being per weather working day of 24 consecutive hours, Saturdays, Sundays and Holidays excepted, even if used. Thus laytime would be suspended in normal circumstances from Friday 2400 hours through to Monday 0001 hours. At 1200 hours on Friday there are 3 days of laytime remaining and, since the term all time saved means exactly what it says, the calculator of laytime has to base figures on the hypothetical case that if the vessel had not completed loading on the Friday at 1200 hours but had remained in port working cargo when would laytime have been fully used?

Despatch would thus be calculated in the following fashion: All time saved Laytime Friday 1200/2400 hours 12 hours Saturday 0000/2400 0 hours Sunday 0000/2400 0 hours Monday 0000/2400 24 hours Tuesday 0000/2400 24 hours Wednesday 0000/1200 12 hours 5 days 3 days Allowing for the weekend that has been saved by the Charterers due to their finishing before the expiry of permitted laytime, they have in effect saved the Shipowner some 5 days and, under all time saved terms, are thus entitled to 5 days despatch.

4.3.2 Working time or laytime saved

DESPATCH ON (ALL) WORKING TIME SAVED (WTS) or ON (ALL) LAYTIME SAVED shall mean that dispatch 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. Using the same example but on the basis of working time or laytime saved, only the 3 remaining days of laytime would apply as despatch, despite weekends or holidays or bad weather or any other factor occurring once the ship had departed.

The question remains, however, is working time saved the same as laytime saved? With laytime described as a day of 24 consecutive hours it will be the same. Otherwise, if one is involved in apportioning working time in the manner shown under 5.4 above, then despatch should be apportioned in the same manner. You will readily see that despatch on all time saved favours the Charterer whilst laytime saved or working time saved is better for the shipowner; the fairness of one versus the other is a perpetual debate. The shipowners naturally say that as laytime excepts certain periods like Sunday and holidays then despatch should be on the same basis. The Charterer counters this by arguing that a ship is earning all the time she is at sea regardless of which day of the week it is so that getting the ship to sea that much quicker should reward the Charterer for every day without exception.

Note

One final word about despatch, it should be borne in mind that some markets (e.g. bulk sugar) are based on laytime far in excess of the time actually required to perform cargo operations. It is, therefore, important for shipowners to take this into account when negotiating business and to reflect the saved time as a despatch expense in a voyage estimate.

4.4 Laytime calculation

4.4.1 Normal (or Non Reversible) Laytime 4.4.2 Reversible laytime 4.4.3 Average laytime

4.4.1 Normal or Non-reversible Laytime

If nothing is specifically mentioned in the contract and where loading and discharging port laytime allowances are separately assessed, it can be taken that laytime is normal or non-reversible. Thus laytime for loading port(s) and for discharging port(s) are assessed entirely separately and it is possible even to calculate, claim, negotiate and settle the load port(s) despatch/demurrage sums before even a vessel has reached her discharge port(s).

4.4.2 Reversible laytime

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. Where allowance for both the loading and discharging ports are added and calculated together. Either the contract may openly be on reversible terms without actually stating so e.g. 7 days, all purposes or 16 total days or there may be an express clause giving the Charterers the right or the option to apply reversible conditions if they so wish in other words, if they calculate it to be in their favour to do so. Thus any laytime saved from the loading ports can be carried forward and added to laytime allowed at the port(s) of discharge.

4.4.3 Average Laytime

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. Arises where separate calculations are performed for the loading and for the discharging ports, with the final results for each being combined in order to assess what is finally due E.g. 2 days demurrage at load port would be cancelled out by 2 days despatch at discharge port, even though the daily value of demurrage may be twice that of despatch.

Difference

At first sight it may appear there is no difference between the application of reversible and average laytime. In fact, differences can arise and, with the same basic facts, it is possible to reach three different results by applying each of the above alternatives.

65161640 N/R66861212 674624 161640N/R625 862620 3WWDSHEXEIU3000 1500N/R8


65 1600 65 1640 NOR 66 0800 2400 =16 67 0000 ------- 0400 =0 67 0400 ------- 2400 =20 68 0000 ------- 2400 =24 69 0000 ------- 1200 =12 69 1200 ------- 2400 =12 610 0000 ------ 2400 =24 611 0000 ------ 2400 =24 612 0000 ------ 1200 =12 3

 624161640 N/R 6258 16 62620 20 6262024 4 627 628024 24 62908 8 1.5 31.5=1.5 1.53000=4500USD