London Arbitration 4/14.

Facts

The subject vessel tendered NOR around 75 miles from the loadport of Matadi. At the time she was stated to be “in Matadi Roads”, but was in fact at Banana pilot station rather than Matadi Port Anchorage. She then proceeded to the port of Boma, where she awaited a change of pilot, and only eight days later proceeded to Matadi where she anchored at the anchorage.

After loading had eventually commenced, it was temporarily suspended at the request of the vessel “due to contaminated cargo”. The shorelines had to be fully cleaned before loading could recommence.

The buyers of the cargo claimed demurrage, arguing that the NOR tendered at Banana pilot station had been valid, and that laytime started running 6 hours after the tender of NOR. The sellers argued that the NOR was invalid, and also that the time during which loading was suspended should not count as laytime.

Validity of NOR and commencement of laytime

The Tribunal held that the NOR was invalid, applying the test set down by Lord Reid in The Johanna Oldendorff. A NOR could not be considered effective when a vessel was many miles and several hours from the loadport, let alone the loading berth. This simply did not make commercial sense.

Even if the vessel could be considered within the port jurisdiction for administrative purposes (which in this case was doubtful), she was not “at the immediate and effective disposition of the charterer”. Neither was Banana pilot station a “usual waiting place within the port” nor “a place where waiting ships usually lie”. Even if it was, the distance from Matadi would fall within the “extraordinary circumstances” identified by Lord Reid which would rebut the presumption of the vessel’s readiness.

In addition, Banana and Matadi were both ports in their own right. This in itself may not prevent the NOR tendered at the former, for loading at the latter, from being valid, but when considered with all of the other relevant factors, it reinforced the Tribunal’s position.

On that basis, laytime only began to run when the vessel berthed.

Suspension of laytime

Whilst it was not easy to definitively determine the cause of, or responsibility for, the cargo contamination, it appeared on balance that there was some contamination in the cargo being supplied by the sellers from the shore lines.

On that basis, it was reasonable for loading to have been suspended whilst the contamination was investigated and eliminated. There was no fault or breach on the part of the vessel, so the period of suspension should not be deducted from the counting of laytime or demurrage.

Comment

This case highlights that the test set down in The Johanna Oldendorff is still the first and main point of reference in determining with a NOR has been validly tendered. That test must be applied to the specific facts of the case and the nature of the port/s in question. It is notable that the Tribunal applied the test from a commercial perspective, considering whether the parties’ arguments made commercial sense in the context of the facts.

On the suspension of laytime point, it is the cause of and responsibility for the delay that is key. If vessel owners act reasonably in suspending cargo operations, due to causes beyond their control, then they should not be penalised with a suspension of laytime or demurrage (subject always to the specific charter terms).