One safe berth, London or London, one safe berth

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It was in the case of the Finix [1975] 2 Lloyd’s Rep 415 where the judge decided that if a charter party described the loading or discharging ports as “One safe berth, London” the charter party is a berth charter whereas the words “London, one safe berth” means that the charter party is a port charter party.

Of course it matters whether the charterparty is a berth or port charter party as this dictates where the vessel may tender its Notice of Readiness and who takes the risk of delays prior berthing.  In a berth charter party the NOR can only be tendered at the berth unless there is congestion or a lack of cargo.  As such the Owner, under a berth charter takes the risk of delays such as tide and bad weather.   As seen in the case of the Happy Day an NOR given at the anchorage under a berth charter party is not valid.

I don’t know what charter party form the Finix was fixed on but I assume it was a form where the words in the body of the charter gave no indication of whether it was a berth or port charter.

The Finix is often mentioned on a course where I am one of the speakers and I occasionally have a debate with the other speakers regarding the phrases “One safe berth, London” and “London, one safe berth”.  There is a view that these phrases change a charter party to a berth or port charter party irrespective of what the printed words say in the body of the charter party.

I don’t subscribe to this view as I believe the Finix judgement is there as guidance when there are no other clues.  Where the body of the charterparty clearly states where NOR can be tendered then the words “One safe berth, London” or “London, one safe berth” cannot overrule this.  To interpret these words in any other way would, I think, cause chaos in the business as I suspect such care is not normally taken over recaps in the tanker world.

Where I think it could cause charterers a real problem is the use of either phrase where the body of the charterparty states that charterers will exercise due diligence in nominating a safe port.  The use of these phrases could be argued to bind the charterers to an absolute warranty of providing a safe berth which is a higher hurdle than exercising due diligence, but that is a different matter.

What do you think about these phrases?  Do they change the body of the charterparty?  Have you come across other phrases in recaps which cause confusion or conflict?  Share your thoughts and experiences by posting your comments here.

NOR at Customary Anchorage

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I’m just putting my finishing touches to my next course, “Tanker Delays in Ports – How ship, terminal and shore staff can minimise claims for demurrage”. During this course I will be giving delegates my opinion and guidance on when to tender, receive and accept NOR together with other practical points around the operations in port.

This got me thinking again about ASBATANKVOY which is not my favourite Charter party. Clause 6 – The Notice of Readiness clause requires the master to give his notice of readiness upon arrival at customary anchorage, this gives rise to a number of questions.

1. When should the NOR be tendered when berthing on arrival?
According to common law we have the Reid test which tells us that the NOR must be tendered once the vessel comes to a stop which in this case will be on arrival at the berth, but the wording of this charter party says ‘on arrival at customary anchorage’.

2. If berthing on arrival and the NOR has to be tendered at the customary anchorage what happens if that anchorage is not in the direct line of sailing for the vessel?
Does the vessel have to deviate in order to travel through the customary anchorage to tender the NOR? That seems a little ludicrous.

3. What happens if the customary anchorage is some way outside the port limits?
There have been two arbitrations in the last few years where the arbitrators have said in one case that it was ok for an NOR to be tendered 50 miles off shore when the vessel is discharged at Lagos. The reason for the NOR being given at such distance was to avoid the risks of piracy. In the other arbitration they decided that an NOR given at the entry buoy to Ras Tanura was good enough, rather than at one of the anchorages that the vessel would be ordered to.

What do I think?
Well in questions 1 and 2 the Charter party wording clearly states that the vessel must tender NOR at the anchorage, so I think that is where the NOR should be tendered, even if it means deviating from the direct route to the berth. Of course with ASBATANKVOY this is quite an academic question as lay time will always start on berthing anyway.

On point 3 I think the anchorage must be within port limits and I don’t agree with the decisions made in the arbitrations and I am not sure what the courts would say. Certainly in the case of Lagos it would need the Owners and the Charterers to have some conversation around when the NOR should be tendered as I doubt any responsible Charterer would want his cargo put at risk with the threat of piracy and a compromise should have been agreed upon before the vessel arrived in Lagos.

I think most arguments in laytime and demurrage negotiations centre on the validity of the NOR and as a result an invalid NOR can turn a claim for a substantial amount into something quite minimal and Charterers will always look for a way of minimising costs.

At the same time incorrect acceptance of an invalid NOR by the shore or Agent can create liabilities for Charterers and suppliers. Receivers and shore staff should be aware of the consequences when they sign that little bit of paper presented by the Master. If you want to know more about this course please click here or contact me direct philip.stalley@googlemail.com.

If you have any comments or thoughts on this topic please join in the debate here