The decision of the Court of Appeal on notices of readiness delivered on 10 March 1998 demonstrated a rare case of laytime and demurrage.
Their Lordships had to decide: "Whether if a clause in a charterparty requires a notice of readiness (NOR) to be tendered within particular hours of the day and it is, in fact, tendered outside those hours but at a time when the ship is physically ready to load or discharge, it is an invalid notice and annuity so that a fresh notice has to be given before laytime can be given or whether the notice takes effect when those hours begin."
The court took the sensible, commercial approach, upholding both the arbitrators and the judge at first instant, in deciding that, although the notice was given outside the contractual hours stated in the charterparty and was thus "non contractual", the notice was not a nullity.
Time would therefore count at the commencement of the next contractual period in which the NOR could be tendered. It was common ground between the parties that, when NORs were given, the vessel had arrived at the appropriate place within the load or discharge ports and was ready to load or discharge her cargo.
The vessel's state of readiness continued thereafter so that nothing changed between the time of the giving of the NOR and 6.00am the following day at which time the master could have tendered another contractual NOR.
The court accepted, to quote Gibson LJ, that "the receipt by the charterers of the notice can be said to be the counter part of the tender by the owners. Realistically, the notice was received when there was someone in the charterers' office to read and act upon it at the opening of office hours". It also accepted the view of the arbitrators that it would never have occurred to the master to send another NOR after 6.00am as he would only have repeated what he had said, thus making a another notice "a futile exercise".
In coming to this conclusion, the court was following an earlier decision where it was held, inter alia, that the law never compels a person to do that which is useless and unnecessary. The charterers of the "Petr Shmidt"* have not suffered as a result of this decision. The owners did not claim that laytime commenced under the Asbatankvoy charterparty six hours after giving their "non-contractual" NORs.
All their calculations were made on the basis that time only started counting either on berthing, as is permitted by the Asbatankvoy charterparty, or six hours after 6.00am on the day following tender of the NOR. It is good to see the courts taking such a commercial approach.
This is sure to be a decision which meets with the general approval of the shipping market. This notwithstanding, my advice to shipowners will continue to be that NORs should be tendered ad nauseam in order to counter arguments by charterers that the master's first NOR was invalid.