Monday, July 15, 2024

Contract Interpretation

Contract Interpretation
  1. Construction of NOR clause

    The Owners’ calculations record the vessel arrived at 2100 hrs on 19th June and tendered NOR at that time. The document computes laytime starting at 14.00 hrs the next day, which does not appear right. Paragraph 0 in the fixture note provided, somewhat confusingly, that: “AT LOAD PORT(S) NOR TO BE SERVED……..DURING OFFICE HOURS (0900 HRS TO 1730 HRS) FM MONDAY THROUGH FRIDAY AND BTEN (between?) 0900 HRS TO 1200 HRS ON SAT TO CHRTS / THEIR AGENTS FOR BOTH LOAD AND DISPORT.….LAYTIME TO COMMENCE AT 1300 HRS IF NOR IS TENDERED DURING OFFICE HOURS BEFORE NOON…” (Emphasis added)

    Held, although the clause begins by referring only to NOR at the port of loading, the subsequent words about the notice being given to Charterers or their agents at ” BOTH LOAD AND DISPORT” were intended to mean that the entire clause applies to ports of loading and discharge and that one should not regard the second word of the clause as limiting the scope of the clause only to the load port. This conclusion was supported by the fact that there was no other clause dealing with NOR at the discharge port.

    (LMAA, Sole arbitrator 2012- JM)

  2. Ambiguous force majeure clause required redraftingCLAUSE 45 (FORCE MAJEURE) Charterers shall not be liable, if force majeure including acts of god, war, hostilities revolution, insurrection, acts of public enemy, sabotage, fires, floods, earthquakes, storms, landslides, bore tides, explosions, strikes, embargoes, blockage, direct and proven cause and delay in loading or discharging including unavailability of cargo, whether in whole or part.

    Held, that the clause was very badly drafted, in a sense that there were missing words, which the parties must have intended to have included had they put their mind to it. There were also grammatical errors. While keeping in mind the intention of the parties and taking into account the surrounding circumstances, the clause would need to be redrafted by adding the missing words, as shown in brackets below, to give meaning to the clause in the English language and to give effect to the intention of the parties:

    Charterers shall not be liable, if [a] force majeure [event], including acts of god, war, hostilities revolution, insurrection, acts of public enemy, sabotage, fires, floods, earth quakes, storms, landslides, bore tides, explosions, strikes, embargoes, blockage, [is the] direct and proven cause [of] . and-delay in loading or discharging including unavailability of cargo, whether in whole or [in] part.

    The interpretation of the clause was restricted to the words used as force majeure events, because the word what so ever was not used in the clause. Being an exception clause, any ambiguity in the language of the clause would be interpreted against the party in whose favour the clause was intended.

  3. ( LMAA, Sole arbitrator 2011- JM)