Arbitration – Holiday Exceptions (BIMCO Calendar) and Notice of Readiness at CJK

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator

The dispute arises under the terms of a GENCON form of Charter Party, with these issues for determination:

a)    Whether Good Friday was to be counted as a holiday under the Charter Party since it was not listed as one in the BIMCO Holiday Calendar for the State of New York.

b)    Whether the Port of Nanjing is considered within the “Shanghai area” as stipulated in the Charter Party … and as a consequence …

c)    Whether Notice of Readiness (NOR) can be tendered/accepted at the CJK anchorage at the mouth of the Yangtze River and outside the Port of Shanghai … or … upon reaching the anchorage (or berth) at the nominated discharge port of Nanjing

The holiday period

Clause 20 of the charterparty stated, “ It is understood the word ‘holidays' as it appears throughout this Charter Party includes local and/or national and/or public and/or stevedore holidays.”

The owner argued that the BIMCO Holiday Calendar should apply notwithstanding that there was nothing to that effect in the Charter Party. The BIMCO Holiday Calendar did not list Good Friday as a holiday in the State of New York. However, it was well known in chartering circles that cargoes of scrap loaded in New York Harbour were actually loaded at piers in the State of New Jersey, for which the BIMCO Calendar clearly lists Good Friday as a holiday. Besides being a well-known fact in tramp shipping circles that Good Friday was a recognised labour holiday in New York harbour, it was also a Wall Street and bank holiday, which was widely reported every year in the international press.

The panel denied the Owner's claim and also noted that the Owner has overlooked the Saturday after Noon excepted provisions of Clause 18 when preparing its Load Port Laytime Statement [Editor's comment: It is unsurprising that, in several cases, parties devote insufficient attention to laytime calculations even at the stage of arbitration. Such oversight may adversely affect their overall position, including the allocation of costs.]

The “Shanghai area” vs. Nanjing issue

The ship arrived at the mouth of the Yangtze River, dropped anchor at the C.J.K. anchorage off Shanghai and tendered Notice of Readiness. The ship waited until the following morning when a sea pilot boarded and guided her to Nanjing. At the same day the ship anchored, the sea pilot left the ship and a river pilot boarded. The ship waited until daylight and then resumed her passage to Nanjing. The vessel arrived and anchored at Nanjing's “Q” anchorage, where she waited for a berth.

The panel considered the following in coming to its decision:

The expression “Shanghai area” was not uncommon in the scrap trade. It was pretty well accepted that “Shanghai area” was understood to include all the scrap discharge ports along the Yangtze River -- e.g. Shanghai, Zhangjiagang, Yangzhou, Nanjing.

Since the discharging rate in Nanjing was the slowest and included a longer manoeuvring time on the river, a higher freight rate was often paid to compensate. It was also not unusual for charterers to fix a set of ports along the Yangtze, or “Shanghai area, including Nanjing”, to avoid misunderstanding. Some owners often try to specifically exclude Nanjing to avoid the longer time on the river, including frequent fog delays and slower discharge.

It was also fairly common for owners who know the trade to spell out in the charter party where NOR is to be tendered. Unless the Charter Party spells out that the NOR can be tendered upon arrival at the sea pilot station at CJK pilot station (the Yangtze River mouth), it was a custom of the trade that NOR will only be accepted upon arrival at Nanjing port.

Therefore, once the Charterer named Nanjing as the discharge port, the Owners were obliged to accept or protest that nomination. The fact that the Owner did not dispute or question the nomination of Nanjing, as it was given, persuaded the panel to conclude that the Owner accepted the nomination as presented.

Therefore, the notice of readiness procedures for the port of Nanjing should apply. The Charterer's laytime statement appears to be correct.

SMA 3798

Editor’s Note: In practice, numerous disputes have arisen concerning the validity of NOR tendered at CJK anchorage. These disputes prompted the development of contractual clauses specifying the precise place and time for tendering NOR. Regarding the BIMCO Calendar, there are several awards, both in London and New York, that address this matter.

#laytime #demurrage #NOR