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Thursday, September 20, 2018


Hyundai Oil – laytime provisions considered

Members’ attention is drawn to the following clauses in Hyundai Oil’s standard additional clauses to the Asbatankvoy form of charterparty:

“Further to the relevant clauses of the charter party, laytime shall be calculated based on following clauses :

  1. When vessel arrives at anchorage at discharging port(s), master and/or agent shall tender notice of readiness to the Charterer after pratique is granted.
  2. In case the vessel arrives at quarantine station at discharging port(s) and pratique is granted and then tenders N.O.R. to discharge between three(3) hours before sunset and 01:00 hour on the next day, laytime shall count from 07:00 hours on the next day.
  3. Deballasting / ballasting / discharging slops / internal stripping unless carried out concurrently with cargo loading / discharging operation, and shifting shall not count as used laytime or as demurrage time even if laytime has expired. Shifting from berth to berth shall count as used laytime.
  4. Any waiting time for berthing due to weather or tidal conditions to be considered beyond Charterer's control as stipulated in clause 6 part II of this charter party (asbatankvoy) shall count as one half laytime or, if on demurrage, at one half demurrage rate.
  5. Any delay in waiting for loading / discharging due to Owner's/Master's/ Vessel's conditions and/or faults shall not count as used laytime.
  6. Charterer shall have the benefit of 6 hours free time for N.O.R. for all ports even if the vessel is on demurrage.
  7. Running of laytime shall, unless otherwise interrupted, cease upon disconnection of hoses at completion of loading or discharging. If, however, vessel is not free to sail more than three hours following disconnection of hoses by reason of failure of terminal to furnish cargo documentation or failure of cargo surveyor to complete inspection, running of laytime shall resume at the end of said three-hour period and continue thereafter until cargo documents have been furnished and/or cargo inspection has been completed.
  8. Vessel is not to tender Notice of Readiness, to berth and/or to load the cargo prior to the commencement of layday without the prior written permission of Charterer. If Owner requests and Charter agrees that Vessel commence loading prior to the commencement of laycan, time between the commencement of loading and 06:00 hours after the commencement of layday shall constitute additional laytime for the purpose of loading and discharging.
  9. If vessel fails to arrive at load port within laycan and Charterer still maintains the Charter Party laytime shall count from commencement of loading.
  10. The concept of "once on demurrage, always on demurrage" shall not  apply to this charter party.”

A number of comments can be made about these provisions.

The granting of free pratique is generally accepted to be a mere formality and not a condition precedent to a Notice of Readiness (NOR) being valid. Consequently, the provision in clause 1 above that the vessel shall only tender NOR after free pratique has been granted is somewhat contradictory to the generally accepted position and will lead to a delay in the NOR becoming effective and consequently the commencement of laytime or demurrage.

The second of the clauses may give rise to owners having to shoulder a greater amount of the delay than would normally be expected. Given that vessels are usually fixed to a range of ports it would seem somewhat arbitrary for owners to be penalised where the particular port the vessel is calling at has a daylight restriction.

The third clause may give rise to laytime not counting where for example an SBT vessel deballasts whilst waiting for cargo operations to begin. Owners should ensure that no ballasting or deballasting takes place unless concurrently with cargo operations otherwise laytime or time on demurrage will be delayed.

The clauses also include a provision that the expression “once on demurrage always on demurrage” is not to apply. This expression means that the laytime exceptions do not apply once demurrage commences. Consequently, by seeking to exclude the application of this expression charterers are seeking to ensure that the laytime exceptions do also apply when the vessel is on demurrage. The approach of an English court to the construction of an exceptions clause is that they are construed restrictively and against the party which is seeking to rely on the clause. Whether this clause will have its desired effect is open to argument. However, owners should consider the possible effects of this provision.

Should any member wish to discuss these or indeed any other charterparty terms they should contact