Thursday, May 23, 2024

Chinese Ports: NOR evidence and interpretation issues

The parties commonly disagree on a vessel’s position to tender NOR before discharging her cargo to Chinese Ports. Therefore, the parties have shaped their “NOR clauses” to deal with common issues.

China Maritime Arbitration Commission decided the below on 14 November 2012, but it was published again in 2021.

The Mv RIZHAO EXPRESS was chartered on an amended GENCON94 form to load part cargo from Kosichang(Thailand) and discharge it to Taizhou, Jiangsu. The ship loaded different charterers’ cargoes on this voyage.
The Owners claimed demurrage, and the Charterers disputed it on various grounds:

  1. The claimants were not the cargo carrier and had no right to apply for demurrage. Further, the respondents were not the consignee of the cargo, thus not liable for demurrage.
  2. The NOR was not delivered adequately at the Yangtze River Estuary. Only a copy of the NOR was provided, which should not be the basis for identifying the facts.
  3. The Owners applied the wrong unloading time calculation.

The parties’ arguments

The NOR issue

The Owners argued that the NOR could be delivered at the Yangtze River Estuary under clause 8 of the charter. Clause 8 stated that the NOR could be provided by telegraph or fax, etc., at any time, WWWW.

The Charterers said that only a copy of the NOR was sent and did not identify the facts. According to Chinese laws, the claimant, a company outside the mainland, which provided evidence on the action in the mainland, should certify it by notarization. Thus, this evidence was illegal in its form. Further, the evidence was just a copy, which other evidence could not prove and therefore did not have the probative effect.

With the evidence provided by the claimant, the ship was at the Yangtze River Estuary, not at the Taizhou Port regulated by the charter. It takes about two or three days to reach Taizhou port. So, the ship was not ready to discharge the cargo when the NOR was initially sent on 6 March; instead, the NOR was just an ETA.

The claimant said it was the carriers’ right to decide when the NOR was sent. The claimant also alleged it was a practice to tender NOR at Yangtze river and approved by the relevant cases. However, these cases might be different since “the unloading port was the main port of China”, not a named port as here.

The Calculation

The claimant had not excluded the unloading time from demurrage. The claimant said that since the cargo was stored in hold 1, the unloading time was 2.58 days, with a 2500t/day unloading rate, which the claimant deducted. The respondent disagreed: the full cargo was more than 33000 mts stored in many holds. By applying 2500t/day, the agreed unloading time of all four spaces was 13.2 days. Thus, the vessel was on demurrage for 4.8 days. As the cargo in No1 was 6400 mts (1/5 of total weight), the demurrage time was less than 0.9 days.

The claimant applied the discharging rate for each cargo space. Thus, he could claim demurrage from all charters.

The decision


On the first issue not addressed in detail here, the tribunal disagreed with the Charterers’ view and held that the parties’ roles were clear, and the claimant was the shipowner, while the respondent was the charterer.

The NOR

After the hearing, the tribunal decided that:

  1. The claimant got all the pieces of evidence. Albeit these were copies, the respondent could not deny the authenticity. Instead, the respondent should provide counter-evidence to reverse the truth of the evidence.
  2. As for the point of notarization, the tribunal held that the evidence offered by the claimant was legal and valid.
  3. The parties have chosen the GENCON94 as the legal basis and deleted/ changed part clauses for their benefit. In addition, the parties agreed on the delivery time and place of NOR. The English laws adore the freedom of contract, which is prominent on the voyage charter party. Therefore, the present wording is relevant and the parties’ common intention.
  4. The claimant could not provide evidence to prove the NOR tendering at Yangtze River Estuary was valid or complied with the shipping practice.
  5. The NOR clause allowed the ship to tender NOR on the vessel’s arrival WWWW. However, the parties disagreed on interpreting the ‘vessel’s arrival” as appearing in the clause.
  6. In the absence of evidence from the claimant, the tribunal could not confirm whether the delivery of NOR at Yangtze River Estuary conformed to the word of “arrival” or not.
  7. The ship must arrive in ‘port or not’ shall be interpreted as the appropriate distance, not far away from the loading port. The respondents said that 2-3 days of sailing time was not the proper distance from the port. The claimant did not rebut it or offer evidence to prove the agreed point to tender NOR.
  8. The tribunal construed the wording of the GENCON 94 and, in particular, the words ‘arrival’ and ‘off’ port. So, the vessel should arrive in a certain range even if the word ‘off’ the port was added in the clause.
  9. The tribunal held that the NOR sent on the first time was premature and the 2nd NOR tendered when the ship arrived at the Port of Taizhou was valid.

The Calculation

The tribunal adopted the below calculation.
Laytime runs from 19 March 0800 hrs till 04 April 0300 when the discharging is completed. Therefore, Laytime shall be 15 days and 19 hours altogether, i.e. 15 days + 0.79167= 15.79167 days. Then, it deducted 2.58745 days to find the demurrage time 13.20422 days x 4000 USD per day = 52,816.88 USD.


The tribunal held that the respondents’ argument that the 4 spaces were unloaded equably so the unloading time should be counted according to the total weight of 4 spaces cargo but not each space’s quantity had no contractual basis.




 







 



















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