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Demurrage- holds readiness and statement of facts were challenged

The totality of the evidence showed that the five holds into which the master had advised that he was going to load the cargo were ready when the notice of readiness was tendered. The notice of readiness was therefore valid so as to trigger the running of laytime.

The background

The vessel was chartered under an amended Gencon form to carry salt in bulk from one safe berth in Damietta, Egypt, to one safe berth in Toledo, Ohio, USA.  A dispute arose about the demurrage accrued at Damietta for US$44,012.50, mainly due to an alleged invalid NOR. Accordingly, the dispute was referred to arbitration, and a sole arbitrator was appointed under the LMAA Terms.

The parties’ contentions

Charterers denied the demurrage claim and argued that the NOR tendered at Damietta was not valid since the vessel arrived with three holds that were not available. In support of their case, the charterers relied on the statement of facts.

In response, owners contended that all the holds were ready for loading when the vessel tendered her NOR. The charterers were confusing the number of holds the shippers wanted to load simultaneously compared to the number of holds available for loading cargo when NOR was tendered.

The statement of facts

The vessel had six holds and six hatches served by three cranes. The NOR tendered at 0600 hours on 23rd October 2018, and according to the statement of facts:

“COMMENCE LOADING AT 0345 HRS ON 29/10/2018

AS PER MATER’S (sic) INSTRUCTION ONLY 3 HOLDS ARE ALLOWED

TO USE DURING LOADING

VSL COMPLETED LOADING AT 0100 HRS ON 31/10/2018 …”

The masters’ letter of protest

The master endorsed the statement of facts with a remark that his LOP was considered part of the SOF. The LOP stated:

“I hereby wish to draw your attention to the fact that upon the vessel arrival p.Damietta, no any request or proposal from stevedores to revise pre-stow plan or loading sequence. Vessel commenced cargo operation by ship cargo gears and 2 conveyors for loading cargo. At beginning, conveyors used only for loading cargo hold no. 5 and not cargo holds nos. 1;2 and 3 due to conveyors has height limitation. I never discuss with stevedores to use ONLY 3 cargo holds for loading. Taking into account abovementioned, I totally reject the notice “AS PER MASTERS INSTRUCTIONS ONLY 3 HOLDS ALLOWED TO USE DURING LOADING” from Statement of Fact as it is not correct. In this respect, neither the Master, Owners or Disponent Owners of the vessel, will accept any responsibility for any claims which may arise there from.”

Stowage plan

On 12 October, ten days before arrival at Damietta, the owners sent to the charterers the masters’ proposed stowage plan showing that cargo was loaded in all the holds except for H4. The master asked the shippers to advise how many gangs were planning to use for loading and confirm the ship’s gear would be used for loading. They replied, “We will work 24 hrs with 3 gangs using vsl gear.”. As a result, the master submitted a proposed loading sequence by three gangs with H4 remaining empty.

On 29 October, [REDACTED] surveyor issued a hold cleanliness letter confirming all holds (save H4) would be loaded and were ready.

The tribunal

Held, that the totality of the evidence showed that the five holds into which the master had advised that he was going to load the cargo were ready when the notice of readiness was tendered. There was nothing in the documentation to suggest that anything had changed in the condition of the holds between the tender of the notice of readiness on 23rd October and the inspection by [REDACTED] on 29th October. The notice of readiness was therefore valid so as to trigger the running of laytime.

Even if the statement of facts was correct that only three holds at one time were to be used during loading, that would not render the notice of readiness invalid. At most, it would mean that the Charterers would have been able to argue that demurrage should be adjusted to reflect the fact that the loading period had been extended because of the master wrongfully restricting the number of holds that could be loaded at any one time. Such an argument, if made good on the evidence, would have warranted a reduction in the demurrage payable to reflect the period by which loading had been extended compared to the period that would have been required if more holds could have been loaded at one time. It would not reduce it to “a much smaller amount” as argued for by the Charterers.

In the event, however, the factual foundation that the master wrongfully restricted the number of holds to be loaded at one time was not made out.

Consequently, it followed that the Owners’ claim succeeded in full. Costs followed the event in the usual manner.

Final Award, 13 June 2019

Note: for more LMAA published awards dealing with NOR / SOF issues, including similar disputes, check this free guidebook:https://charterpartydisputes.com/a-snapshot-guide-to-laytime-demurrage/

This website removes the names of the parties involved in this or other awards. The reader can find more details on Jus Mundihttps://jusmundi.com/en/.These awards mostly come into the public domain through enforcement under the NYC 1958.

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