Issue 24


We referred to the judgement of the High Court in The “Nikmary” in News Update No. 22. The charterers subsequently appealed and the Court of Appeal has just handed down its judgment, upholding the High Court’s decision. The judges in the Court of Appeal agreed that the final inspection of the ship’s tanks which was carried out by three inspectors appointed separately was not an inspection by “jointly appointed inspectors” as required by the additional clause 30(c)(v) of the charter party.

However, the Court of Appeal judges were more influenced by the underlying principle that the charterers had an absolute obligation to provide a cargo. The failure to have a cargo available meant that they were not entitled to rely either on the last sentence of clause 6 of Part II of Asbatankvoy (the charterers’ warranty in clause 9 to provide a berth “reachable on arrival” having been deleted) or on additional clause 30(c)(v). These exceptions would have been available to the charterers if the delay had been caused by loading problems or berth congestion, but not when the cause was non-availability of cargo. As a result, laytime commenced 6 hrs after the ship’s tanks were finally accepted, not at the time the hoses were connected 28 days later.

The lack of cargo, in the judges’ opinion, was the result of the charterers’ contractual relationship with their suppliers. They reached this conclusion even though a cargo was undoubtedly available when the vessel arrived and loading would have proceeded as normal if the ship’s tanks had been passed as clean at the initial inspection.


In view of the heightened security procedures for entry to US ports, it comes as no surprise that vessels are increasingly encountering inspection delays. Tankers still need to hold a valid TVEL (U.S. Coast Guard tanker vessel examination letter). The Coast Guards have also commenced inspecting ships to ensure compliance with the IMO’s International Ship and Port Facility Security Code which will take effect from 1 July 2004. In addition, all vessels intending to trade in US waters should have filed a vessel security plan (VSP) by 31 December 2003 , under the recently introduced Maritime Transportation Security Act.

Failure to comply may lead to a fine of up to USD 25,000. One can sympathise with the plight of the ship owner who wants to trade in the US . However, one should bear in mind that the commencement of laytime is dependent on the ship's readiness to load/discharge. Most charter parties specify that all the ship's documentation must be in order. In U.S. arbitration decisions, the absence of a valid TVEL (U.S. Coast Guard's tanker vessel examination letter) has been held to invalidate NOR’s. This particular requirement is incorporated into BPVOY4 (cl.6.3.4).

Tankers have also been subject to routine USGC security inspections which might well be considered a formality, at least in the English courts. The running of laytime would therefore not be interrupted unless access to the berth was subsequently refused. To avoid liability for the time for such inspections, charterers would need to include a suitable exception clause in their charter parties. One of the most comprehensive ones we have found is ExxonMobil Voy2000 Clause 14 (c)(v). The wording of this clause can be found in News Update No.22.

Finally, we understand the US Coast Guards have stepped up enforcement of their requirement that all vessels give at least 96 hours’ notification prior to arrival. This may prove problematic for short-haul voyages.


In a London Arbitration, LMLN 9/03, there had been a delay arising from a stoppage of labour by stevedores in sympathy with a colleague who had been killed by a bomb. The explosion had occurred at a location some distance from Lagos, Nigeria, the disport.

The arbitrators held that this was not a strike. They considered that a strike, as defined by the Oxford dictionary, was “a cessation of work by workers in an industry as a protest against working conditions or low pay”. The stoppage was therefore not covered by the force majeure clause in the charter party that referred to “Time lost by reason of…riots, strikes, or lockouts”. The stoppage counted as used laytime/demurrage.


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