An article in Gard News issue No. 162 reported the decision of Mr Justice Langley in the English High Court in the case of the HAPPY DAY. The judge controversially decided that if the charterparty provided for the commencement of laytime to be started by a valid notice "and in no other way", then absent estoppel or the like, it was only the valid notice of readiness that acted as the prescribed trigger for the running of time.
The unhappy consequence of this decision was that unless a valid notice of readiness was tendered then time would not start to run at all even after the cargo operations had commenced. As a result, the owners of the HAPPY DAY were not only prevented from claiming demurrage but were, in fact, held accountable for despatch to the charterers.
Thankfully, and to the relief of the shipowning community, Mr Justice Langley's judgment has been overturned on appeal. The law now appears to have been settled in a practical and commercial way.
The Court of Appeal held1 that under a voyage charterparty which requires a notice of readiness to be served, laytime can commence even where no valid notice of readiness had been served in circumstances where:
- a notice of readiness in the prescribed form is served upon the charterers/receivers prior to the arrival of the vessel;
- the vessel subsequently does arrive and is, or is expected to be, ready to discharge to the knowledge of the charterers; and
- discharge commences to the order of the charterers/receivers without either having given any indication of rejection or reservation in respect of the notice of readiness already served, or any indication that a further notice of readiness is required before laytime commences.
In these circumstances, the charterers may be deemed to have waived their right to rely on the invalidity of the original notice of readiness as from the time of commencement of discharge and laytime will commence in accordance with the charterparty as if a valid notice of readiness had been served at that moment.
Gard Services' advice to shipowners, however, remains, that if there is any doubt as to the validity of a notice of readiness tendered, then a new notice of readiness, without prejudice to the validity of the first, should be issued promptly.
|1|| ||Glencore Grain Ltd v. Flacker Shipping Ltd (The Happy Day) - Court of Appeal (Potter and Arden LJJ and Sir Denis Henry) - 15th July 2002. LMLN 0593 of 8th August 2002.|