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CONTRACTS AND CLAUSES | LLOYDS LAW November 2017 JUdgMent (2017) 979 LMLN 3 Ship wait at port and not en route remuneration Gard Shipping AS v Clearlake Shipping Pte Ltd (QBD Comm Ct) (Sir Jeremy Cooke sitting as a Deputy High Court Judge) [2017] EWHC 1091 (Comm) 12 May 2017 Charterparty Demurrage Bunkers consumed Charterparty clause giving liberty to charterers to instruct vessel to stop and wait for orders in which event charterer to pay demurrage at escalated rate and value of bunkers consumed Whether clause applied where vessel waited over 64 days at discharge port after giving notice of readiness The vessel Zaliv Baikal was chartered for one voyage from Ust-Luga to one or two safe port(s) UK CONT NORTH SPAIN HAMBURG RANGE. The charterparty was subsequently varied to provide for a second voyage in direct continuation from the first, with the loadport specified as one safe port UstLuga or St Petersburg and the discharge range as before. A dispute arose out of the second voyage, the issue being whether the owners were entitled to claim demurrage at an escalated rate, and the value of the bunkers consumed, over a period of 64.7083 days, during which the vessel was waiting to discharge cargo at Rotterdam between 26 January 2016 and 31 March 2016. The charterers accepted that they gave no discharge instructions during that period, and that the vessels delay in berthing and discharging her cargo was caused by them for their own commercial purposes. The charterparty consisted of a fixture recap dated 9 December 2015 which provided for a number of amendments to the terms of a previous fixture between owners and charterers for the vessel dated 12 November 2015 (the Gard/Clearlake Terms) and otherwise incorporated the printed BPVOY4 form, with amendments. The key clauses upon which argument turned were Additional Clause 11 of the Gard/Clearlake terms and clause 22 of the BPVOY4 form, as amended, which was in materially identical terms. Additional Clause 11 provided: [Subparagraph (1)] Notwithstanding any term of this charter to the contrary, Charterers shall have the liberty, at any stage of the voyage, of instructing the vessel to stop and wait for orders FOR MAX 3 DAYS at a safe place WITHIN THE RANGES AGREED. In particular and without prejudice to the generality of the foregoing, Charterers shall be entitled to instruct the vessel not to tender NOR on arrival at or off any port or place or to delay arriving at any port of place until Charterers give the order to do so. Time to count as used laytime or time on demurrage, if vessel is on demurrage. AND ALL THE BUNKERS CONSUMED TO BE FOR CHRTS ACCOUNT. [Subparagraph (2)] AFTER FIRST 5 DAYS WAITING FOR ORDERS/DISCH INSTRUCTIONS AT SEA VESSEL TO BE CONSIDERED AS BEING USED FOR STORAGE, AND, UNLESS OTHEREWISE AGREED, FOLLOWING INCREASE OF DEMMURAGE RATE TO APPLY DAYS 615 DEMM RATE PLUS $5,000 DAYS 1625 DEMM RATE PLUS $10,000 DAYS 2635 DEMM RATE PLUS $15,000 PRIOR TO EXPIRATION OF 35 DAYS PERIOD CHRTS TO INFORM OWNERS IF THEY REQUIRE MORE TIME TO USE VSL AS A STORAGE, AND NEW RATES TO BE MUTUALLY AGREED LATEST ON 35TH DAY OF SUCH A WAITING. SUCH A WAITING TIME TO BE COMPENSATED AT RATES AGREED ABOVE AND PAYABLE TOGETHER WITH FREIGHT AGAINST OWNERS SEPARATE INVOICE. [Subparagraph (3)] Chrs option to order the ship to wait at an offshore position provided they give final destination and expected cargo delivery window, In WHICH case the above increase in rates not to apply in case when final destination a/or cargo delivery window changes, then increase Of rates to apply as per this clause. Photo: Danny Cornelissen at www.portpictures.nl There was additionally a bespoke Interim Ports Clause which provided for the charterers to pay for additional interim loading or discharging ports within the agreed ranges, by paying for actual additional time spent in steaming to and from such additional ports, for all time spent from the moment of arrival at such ports until the point of departure at the demurrage rate and for all bunkers consumed in those periods. The owners contended that Additional Clause 11 meant that if the vessel was to be considered as used for floating storage then charterers would be obliged to pay demurrage at the escalating rates provided and for bunkers consumed in the relevant period. Alternatively, the words: Whenever, after first 5 days waiting for orders/disch instructions at sea or in port, for reasons not beyond Charterers reasonable control, were to be implied in the second paragraph of Additional Clause 11. On the basis of their construction of the charterparty the owners claimed US$976,731.79. Held, that the first paragraph of Additional Clause 11 gave the charterers liberty to give a positive order to the vessel to stop and wait for orders. If such an order was given, time taken was to count as laytime/demurrage, with a liability on charterers to pay for bunkers consumed, in that period of three days. Although there was no express provision for what was to happen in days 4 and 5 demurrage would necessarily be payable in that period, with concurrent liability for bunkers. Any waiting time in excess of five days was to be considered as storage time which justified increasing rates of demurrage the longer the wait continued. The third paragraph provided for a different situation from the second paragraph, whether by reason of the different location where the vessel was to wait or as an exception to the situation otherwise covered by the second paragraph, where a final destination was designated and a cargo window specified. The fundamental issue was whether an instruction had been given to the vessel to stop and wait for orders. A passive failure to give orders did not fall within the meaning of the wording used. No such instruction or implied instruction was given. The vessel was instructed to sail to Rotterdam, where she gave NOR and thereafter no berthing instructions were given for some 64 days. That did not fall within the wording of the clause. Similarly, there was no order to wait at an offshore position within the third paragraph of the clause. In the absence of any relevant order, Additional Clause 11 had no application. The charterparty provided for a series of different regimes for payments in the form of demurrage and/ or payment for bunkers used, or other costs. There was the ordinary laytime and demurrage regime, a regime when the Interim Ports Clause was invoked, and the stop and wait for orders regime which was governed by Additional Clause 11, the trigger for which was the instructions of the charterers referred to in that clause. In the present case, since there was no order to stop and wait prior to the service of the NOR at Rotterdam, it was the ordinary laytime regime which applied and not the stop and wait for orders regime. Accordingly, demurrage at the ordinary contractual rate was payable. There was no implied term as contended for by the owners. It was not necessary to imply the term into the contract, and the implication of the term was inconsistent with the charterparty as properly construed. The charterparty did not lack commercial or practical coherence and worked perfectly well with the express allocation of differing liability in respect of different situations. The claim would be dismissed. Alexander Wright, instructed by Thomas Cooper LLP, for the claimant; Fionn Pilbrow, instructed by Reynolds Porter Chamberlain, for the defendant. Jun 8 2017 TAP To NAvIGATE PAGES 1 2 More judgments are available from Lloyds Maritime Newsletter at www.lmln.com Connect with BIMCO Facebook Twitter Linkedin YouTube