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
20 thoughts on “NOR at Customary Anchorage”
Phil,
The short answer would lie in the phrasing. Where it specifies a customary anchorage,then, without more, that represents the place where the ship is considered as having ‘arrived’, unless she can berth on arrival. Owners would be well advised anyway to instruct their Master not to simply tender upon arrival at the port, but to continue regularly tendering Notice, whilst awaiting berth, in case an initial Notice be seen as invalid..Time is money, so at least by such means,the prospect of hitting the right button is considerably enhanced.
Problems, such as those arising in relation to ‘pirate prone’ ports/ places would best be dealt with in specific provisions catering for such eventualities.. .
Whether estoppel or waiver may arise remains a matter of fact, but then do Owners really want to pursue that course, when it should prove little problem, but to provide regular NOR updates and check with local agents as to the place of ‘customary anchorage’.?. Time is money, so the extra effort is well worth it.
Thanks for your comments David. I agree multiple NORs are the only way for Owners to protect their postion these days, that way if there is any doubt about an NOR they will not lose to much time.
best regards
Phil
This is quite an interesting question. In my view, a “customary” anchorage does not necessarily mean “the closest” anchorage. Or even within port limits…
It would be quite logic that if it is customary for vessels calling a specific port, to anchor at a certain anchorage then this anchorage should obviously be considered “customary”.
Also believe a NOR does not have to be signed – a court may still deem it valid.
Thanks for your comment Annette. I agree the term "customary anchorage" is interesting. In the context of Asbatankvoy is says "customary anchorage at each port" which i read to mean an anchorage in the port, however i can see how it can be interpreted otherwise.
In common law I understand an NOR may be given orally only. Most c/ps require a written piece of paper to back it up and it is this that gets signed with remarks such as "received" or "accepted" on it.
There are of course a number of ports that have more than one customary anchorage – one for large deep drafted vessels (often outside the river or harbour) and another inner anchorage for smaller coaster-type vessels. Smaller vessels often transit the outer anchorage to proceed to the inner anchorage. Sometimes, if the inner anchorage is full, they may be instructed to anchor in the deep water anchorage. There is certainly potential for confusion for owners of smaller vessels as to which “customary anchorage” is the right one to give Notice. Furthermore a master may need to have a Pilotage Exemption Certificate in order to proceed to the inner customary anchorage and may not have performed the requirements to obtain one. A proverbial can of worms…
Hi Tony, thanks for your comments. You make some interesting points about the practicalities of all this. I prefer the wording of BPVOY4 which clarifies the anchorage with the words "…at an anchorage where vessels of her type customarily anchor at the port…". This wording clearly doesn't help in your example where the master doesn't have the Pilotage Exemption Certificate (PEC) for the inner anchorage. Perhaps you could argue that where the master doen't have the PEC the customary anchorage is the outer anchorage – does this argument work?
best regards
Phil
Hi again Phil. I believe your argument would have to work in these circumstances but fortunately it has not been put to the test from our perspective. Charter Parties of course have to be fairly generic in order to cater for a global trade. It’s such a shame that common sense doesnt always prevail, as it used to, when circumstances cannot always follow the written wording of a c/p clause. Ah but those were the days…
Just rechecked the actual wording of Part II clause 6 in Asbatankvoy. It doesnt specify “the” customary anchorage only “Upon arrival at customary anchorage….” This lends me to believe that any customary anchorage is acceptable. What do others think?
Thanks Tony. Yes it would be good to hear from others on this. Is it likely to be an Owners v. Charterers argument?
Like you I believe it is a shame that common sense doesn't prevail. I'm sure it does in most cases but if someone sees an opportunity to save paying out demurrage on an issue like this they could be tempted.
Sadly it is the master that has to ensure his NOR is correct. He has to try to do it without the same level of knowledge and access to legal advice that we have ashore. He also has the safety of the vessel and the cargo to think about…
Best regards
Phil
Can anyone advise what happens when a vessel (tanker) arrives at the customary anchorage, tenders NOR , but the charterer’s agents instruct vessel to drift outside the anchorage. We ‘ve recently had a case where charterers commented to owner’s demurrage claim, saying time counts from “all-fast” since the NOR the vessel tendered was not from the “anchorage” but while drifting outside port limits, because this was what she was instructed to do ! As a consequence 21 days of vessel’s waiting to berth have been “waived” by charterers, and the case is taking the legal route. I guess the answer has to be linked somehow by the concept of the “arrived ship” . Your comments will be much appreciated.
Hi Phil, Daniel,
My argument would propably depend on the Charter Party,
If on a Shellvoy6, the vessel just have to be where she was ordered to be, or at the “usual waiting place” – terms does not stipulate this place has to be an actual anchorage or even within port limits.
If on a BP4, then vessel just has to be “at the place where vessels of her type customarily wait” – again, it does not have to be within port limits, only the “customary place”.
And most Charter Parties provides, that if Charterers orders vessel to await orders at a place
other than customary anchorage, then such waiting time to either count as laytime/demurrage or to be compensated at demurrage rate.
Similar to an NOR does not have to be signed, in order to be valid, Charterers should not be
able to avoid time counting simply by ordering vessel out of port limits.
I don’t think it makes a difference whether the agent is Charterers or Owners, since the agent is anycase just passing instructions from port/terminal authorites of berthing schedules, orders to anchor and where.
hi Annette and thank you for your reply. I forgot to say that the case I am referring to is based on Asbatankvoy, and its infamous clause 6 . Many will argue that this clause should not be interpreted on its own, as further down, clause 9 of the c/p clearly stipulates that Charterers shall nominate a berth which is reachable on the vessel’s arrival. But is that all there is to defend this ?
Hi Phil – I have a case on an unammended BPVoy4 c/p where the vessel is orderd to discharge in Baton Rouge – Up the Mississippi river. the berth is ocupied and the vessel is ordered by the agents to wait at south west pass and subsequently an anchorage in the river. The master tenderes nor (without prejudice) at each waiting area. The charterers are choosing to interpret the term ‘customary waiting area at the port’ to be within port limits and are rejecting all the waiting time. I completely disagree but would appreciate your opinion and wondered if you knew of anyone trying this before and its outcome.
Hi Daniel, NOR issues are always interesting. In your case, the NOR was premature as the vessel was not geographically ready (i.e. at the customary anchorage), and thus laytime is not triggered. Nonetheless, by virtue of the Vessel following the Charterer's agent's orders, compensation for the delay is paid in the form of detention (usually at the demurrage rate). There are possibly other points to consider as well. Please let me know if I can assist you further in resolving this matter in order to forego the legal / arbitration route.
Hi Annette
Thanks for your comments and my apologies for the late response. I agree with your point on Shellvoy6 in that if a vessel was ordered to wait someway off the port it would seem to qualify as an arrived ship. Shellvoy6, BPVOY4, ExxonMobil Voy2012 and Asbatankvoy all use the words ‘customary anchorage’, ‘usual waiting area’ or ‘where vessels … customarily wait’ and it is interesting to see how arbitrators have interpreted this in the case of Asbatankvoy to a) a place 50 miles off port and b) the pilot station instead of an anchorage. I still think the anchorage or waiting place should be within the port but maybe it won’t be long before this is tested.
As Kathy points out in her reply to Daniel the owner of a vessel instructed to wait outside port limits may still be able to claim this time as detention.
Best regards
Phil
Hi Daniel
Thanks for your post, my apologies for the late response. You have an interesting case on your hands and I agree with K that you may be able to recover this time as detention. It would be great to hear how it gets resolved particularly if you go to court or arbitration, and perhaps you would post it here if you are permitted.
Best regards
Phil
Hi Chris
Thanks for your comment and my apologies for the late response. I think your charterers could be alluding to the case of the Agememnon where the vessel tendered NOR at south west pass for loading at Baton Rouge. It wasn’t a BPVOY4 charter party but it was decided that the NOR was not valid at SW Pass for Baton Rouge. I think this could be the case under BPVOY4 and you would need to prove that SW Pass was the customary waiting area. Do you know why the vessel could not proceed to the Baton Rouge anchorage?
If you have seen K’s reply to Daniel on his case you may wish to take the same approach in that the delay at SW Pass could be detention if it is not demurrage. As Annette points out in her comments the agent is probably passing instructions from the port/terminal authorities and you may be able to make a case that the agent is acting on behalf of the charterer. In this way you could argue that the vessel, by anchoring at SW Pass, is complying with Charterers instructions.
Best regards
Phil
Hi K,
I agree detention may be a remedy for Daniel in his case, I’ve also suggested the same to Chris.
Sadly NORs are becoming one of the most argued about areas in this business lately.
Best regards
Phil
Hi Phil many thanks for your reply, The vessel did not proceed to berth as the waiting areas up river were all full. Its very common for vessels going to ports in the river to wait at South West Pass. The charterers claim that that the ‘customary waiting area at the port’ has to be within port limits of Baton Rouge. Personally i dont agree and have not seen it interpreted in this way before. I dont think under BPvoy4 charterers are obliged to pride a berth reachable on arrival so im not sure how I could claim detention. Irrespective of who chooses the agents they are the sevants of the owner so i think i might struggle on that front. I would be interested to know if the intention of the clause was to require the vessel to enter port limits or simply arrive at the customary waiting area for the port whether technically inside or outside the port litits. Best regards chris
Hi Chris
You are right that BPVOY4 doesn’t impose an obligation on Charterers to provide a berth reachable on arrival.
I have always thought the vessel must be in the port to tender NOR under BPVOY4 but as you will see on this thread some arbitrators are giving the words “customary anchorage” a wider interpretation and you could argue the vessel is arrived at South West Pass.
Alternatively I think you have a good case for detention in that although the agents are servants of the Owners I assume they were taking their instructions from the terminal as to where the vessel must wait. Such instructions must be deemed to come from Charterers in my view even though the agents are the messengers.
There is obviously a lot of money at stake here and you may want to take legal advice.
Perhaps some other readers of this blog have a view?
Best regards
Phil
Regarding the case under discussion, there are specific Mississippi clauses designed to cater for this type of problem. Such a clause would serve to avoid issue over what might otherwise be argued as a premature and invalid NOR tendered say at the SW pass for a delivery somewhere up river. Question over the contractual effect of an agents instruction to the ship remains another matter, but again there have been cases on this, and whether a waiver point might arise.