Galaxy Energy International Ltd v Novorossiysk Shipping Company ('The Petr Shmidt')
| Jurisdiction | England & Wales |
| Judge | Evans and Peter Gibson L JJ,Sir Christopher Slade |
| Judgment Date | 10 March 1998 |
| Court | Court of Appeal (Civil Division) |
| Date | 10 March 1998 |
Court of Appeal (Civil Division).
Evans and Peter Gibson L JJ and Sir Christopher Slade.
Nicholas Hamblen QC (instructed by Stephenson Harwood) for the charterers.
Charles Priday (instructed by Lawrence Graham) for the owners.
The following cases were referred to in the judgments:
Agamemnon, The (T A Shipping Ltd v Comet Shipping Ltd) [1998] CLC 106
Compania de Naviera Nedelka SA v Tradax International SA (“The Tres Flores”)ELR [1974] QB 264
Mexico 1, TheUNK [1990] 1 Ll Rep 207
United Scientific Holdings Ltd v Burnley Borough CouncilELR [1978] AC 904
Shipping — Charterparty — Notice of readiness to load or discharge — Commencement of laytime — Notice of readiness to be tendered within certain (office) hours — Whether notice of readiness sent by telex outside office hours was tendered when office opened.
This was an appeal by charterers from a decision of Longmore J ([1997] CLC 402) upholding an arbitrators' award in a demurrage dispute. The question on appeal was formulated as whether if a clause in a charterparty required a notice of readiness to be tendered within particular hours of the day and it was, in fact, tendered outside those hours but at a time when the ship was physically ready to load or discharge, it was an invalid notice and a nullity so that a fresh notice had to be given before laytime could begin or whether the notice took effect when those hours began.
A typed addition to the voyage charterparty on the Asbatankvoy form provided for notice of readiness to be tendered within 06.00 and 17.00 hours local time. The notices in question were sent by telex or fax to the charterers or their agents outside those hours. When those notices were given the vessel was in fact ready and remained ready. The arbitrators held that the notices were tendered at 06.00 and were to be deemed effective when the specified hours or office hours commenced. The judge dismissed the charterers' appeal and they appealed.
Held dismissing the appeal.
A notice sent out of hours by telex, fax or letter which would be available for office staff to deal with when they began work at or after 06.00 was validly tendered at 06.00 under the charterparty. It was not necessary to decide the status of a notice tendered only out of hours. The fact that there was inevitably a time gap between the master declaring his ship's readiness and the receipt of the notice did not invalidate the notice provided it remained true at the moment of receipt.
Evans LJ:
This appeal is from a judgment given by Longmore J in the Commercial Court on 8 November 1996: [1997] CLC 402. He dismissed the charterers' appeal against an award by three arbitrators dated 20 May 1996 in a demurrage dispute. The arbitrators were Mr Michael Mabbs, Mr Mark Hamsher and Mr Donald Davies. The charterers now renew their appeal by leave of the judge. He certified the question of law as follows:
“Whether if a clause in a charterparty requires a notice of readiness 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 a nullity so that a fresh notice has to be given before laytime can begin or whether the notice takes effect when those hours begin.”
The issue is the commencement of laytime under a voyage charterparty of the vessel “Petr Shmidt” on the Asbatankvoy form. The charterparty dated 2 August 1994 was for a loaded voyage from Tuapse to two discharging ports, Trieste and Venice. The time when laytime began at each of these three ports depends upon the validity and effectiveness of the notices of readiness which were given.
Two clauses only of the charterparty are relevant:
“Clause 6
Notice of readiness. Upon arrival at customary anchorage at each port of loading or discharge the Master or his agent shall give the Charterer or his agent notices by letter, telegraph, wireless or telephone that the vessel is ready to load or discharge cargo, [berth] or no berth and laytime, as hereinafter provided, shall commence upon the expiration of six (6) hours after receipt of such notice, or upon the Vessel's arrival in berth…whichever first occurs…
Clause 30 [typed addition]
Notice of readiness clause
Vessel not to tender notice of readiness at loading port prior to laydays, unless Charterers give their constant (sic) to do so. Notice of readiness at loading and discharing port (sic) is to be tendered within 06.00 and 17.00 hours local time.”
Note the laydays (laycan period) were 9/11 August (part 1).
The facts are stated in the judgment (reported at [1997] CLC 402). In summary, notices of readiness were given by telex or fax to the charterers or their agents, as follows:
| Loading | Tuapse | 0001/9 Aug |
| Discharge | Trieste | 1800/16 Aug |
| Venice | 1800/18 Aug |
It is common ground (1) that when each of these notices was given the vessel had arrived at the appropriate place within the port in question and was in fact ready to load or discharge as required by the charterparty; the statement of readiness contained in each notice was in fact correct when it was made; (2) that the vessel's state of readiness continued thereafter; and (3) that no further notices were given.
Pursuant to cl. 6 and 30, the shipowners (respondents) claim that laytime commenced at:
| Loading 1200/9 Aug | (six hours after 0600/9) |
| Discharge | Trieste 0750/17 Aug (vessel berthed within the six-hour period from 0600/17) |
| Venice (six hours after 0600/19) |
The charterers (appellants) contend that the notices of readiness were invalid and of no effect, having been “tendered” outside the period specified in cl. 30, between 0600 and 1700. In each case, they submitted, laytime commenced no earlier than when the loading or discharge operation began.
How were the notices given? The arbitrators' finding is that they were “transmitted and received in the charterers' office by telex or other such means, prior to the 0600–1700 cl. 30 period” (award, para. 9). 0600 was regarded as the time when the office opened (para.1) and the finding in para. 9 continues:
“In short, the valid notice was put in the right form...
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