DMC Category Rating: Confirmed
Background
By a charterparty dated 25 October 2001, on the Approved Baltimore Berth
Grain Form, IMC Maritime Group ("IMC") fixed the vessel "Adventure
1" to Russian Farm Community Project ("RFCP") for a voyage
with 30,010 tons of corn from port/s US Gulf to St.Petersburg in Russia, where
the cargo was to be discharged at the average rate of 1,500 tons per day,
"free of risk and expense to the vessel…." Laytime was to be
calculated on the basis of "weather working days, Sundays and holidays
excepted, even if used" and the demurrage rate was US$5,000.00 per day.
Notice of readiness ("NOR") was to be delivered in writing at the
office of the Receivers within regular office hours at or before 4pm on
weekdays, Monday to Friday, or 12pm on Saturdays, whereafter laytime would begin
at 0800hrs the next working day, whether in berth or not. An additional clause
provided that "If discharge port is iced, vessel must be able to navigate
icy waters in the wake of icebreakers. If icebreakers are required, Owners must
arrange and pay for same."
The vessel loaded her cargo of yellow corn at Ama, Louisiana and
proceeded without incident to Russia. On 15 January, she arrived at the outer
ice edge off the port of St.Petersburg and, having proceeded as far as practical
under these circumstances, she anchored at 1435hrs to await icebreaker
assistance and berthing instruction. The Master tendered notice of readiness
accordingly. The vessel’s position was near fairway buoy No.10, as recommended
by the icebreaker "Kapitan Sorokin", approximately 17 miles
west of the port’s inbound pilot station. Some ten other vessels were also
anchored and waiting at this anchorage. The "Adventure 1"
remained there until 21 January 2001, when – with the assistance of the
icebreaker "Ermak" - she proceeded to the inbound pilot
station, where she anchored and re-tendered her notice of readiness,
"without prejudice" to her earlier notice. On 9 February, she shifted
from the anchorage to her discharging berth but did not commence discharge until
14 February. Delayed by bad weather, rail car shortages and Customs formalities,
discharge was not completed until 11 March, the vessel sailing for her next
commitment around noon that day.
As a result of the long delay at St.Petersburg, IMC calculated
that the vessel had earned some 27 days demurrage amounting to US$136,200.00.
RFCP refused to pay any demurrage and claimed, on the contrary, that they were
due despatch.
The issues between the parties were 1) the time at which laytime
began and 2) the extent to which laytime was to be interrupted by periods of bad
weather. IMC’s calculations were based on the premise that the notice of
readiness given on 15 January, when the vessel was anchored at the outer edge of
the ice off the port, was valid; and that the only periods of bad weather to be
deducted were those recorded in the vessel’s logs and corroborated by the log
entries from two other unrelated vessels in port, discharging corn for RFCP at
the same time. These amounted to 40 hours and 43 minutes. According to IMC, the
dominant cause of the delay in discharging was a shortage of rail cars in the
port.
RFCP, on the other hand, contended that the notice of readiness
given on 15 January was invalid, as the vessel was not an "arrived
ship" at the ice edge and further that both notices of readiness given (the
one on 15 January and the other on 21 January, on reaching the inbound pilot
station) were invalid, since they had been addressed to the wrong party. As a
result, laytime did not begin until discharge commenced on 14 February, on which
basis, RFCP were due despatch of US$16,632.00. As regards the bad weather
periods, RFCP based their calculations on the data from the St.Petersburg
station of the official state agency, the Russian Federal Agency for
Environmental and Hydrometeorological Monitoring. These showed bad weather
deductions of 549 hours 5 minutes.
Award
Arrived Ship
On this question, the panel found that the Notice of Readiness given at the ice
edge on 15 January was "premature and not effective. The charterparty
described the discharge port as "one safe port, St. Petersburg,
Russia" which by definition makes this a "port charter" and so
obliges the vessel to reach jurisdictional limits of the port before she can be
considered an arrived ship. The position off the outer ice edge near buoy No.10,
although considered part of the fairway into port, clearly was outside the port’s
fiscal limits. Whereas the vessel herself may have been physically ready in all
respects to discharge her cargo she was not at the ready disposition to the
Charterer. Further, the custom of the port required the vessel to tender her NOR
from the pilot station in order to be considered for a berth assignment by the
[relevant authority]. The prevailing ice conditions do not provide relief
either; the charter party, in no uncertain terms, required the vessel to either
be able to navigate in "icy waters" or, if she was not
ice-strengthened, to make arrangements for ice breaker service."
Readiness
Applying, however, the doctrine of "substantial readiness", the panel
found that it was permissible for the vessel to tender her NOR from the ice edge
position, being substantially ready to discharge, only that time would not count
until she actually reached the pilot station. As a result, it was not necessary
for the vessel to give a second NOR at the pilot station; the earlier one took
effect on her arrival there and laytime started accordingly on 23 January, at
0800hrs. The panel concluded " If indeed a berth had been available for the
"Adventure 1" upon her arrival, she could have entered port and
proceeded to her berth which was to be assigned by Charterer/Receiver. The
proximate cause for the delay at St.Petersburg was the lack of an available
discharging berth and not whether the vessel tendered her NOR at the ice edge or
at the inbound pilot station."
NOR given to Wrong Party
The panel dismissed Charterer’s argument that the NOR had been given to the
wrong party, describing Incotec Steamship, to whom the notice had been given, as
comprising all branches of the agency business. The fact that Incotec was the
agent nominated by the Charterer/Receiver for IMC to appoint and pay for, in
compliance with the charterparty, did not make it Owner’s agent. Its
connection and ties to the Receivers were, the panel held, clearly implied if
not totally established and giving notice to them accordingly satisfied the
charterparty requirement of delivery to the office of the Receivers.
Weather Delays
As regards the weather delays, the panel held that the "most realistic
proof for the weather conditions and the effect upon the cargo operations is the
contemporaneous entries in the vessel’s logs, work reports for the port, other
vessels discharging the same cargo and the vessel’s stevedoring records. With
the presence of the "Adventure 1" logs, the burden is upon
Charterer to disprove Owner’s assertions conclusively." This Charterer
was unable to do, the panel thereby accepting the vessel’s observations as
prima facie [at first sight] evidence of the prevailing weather conditions.
Rail Car Shortages
That led the panel to consider the contentions of rail car shortages and their
effect upon the discharge operations. From the available evidence, the panel
concluded that "the rail stock of the port of St.Petersburg is heavily
burdened, that the logistics of marshalling cars from depots and rail yards to
the different berths in the port area and their assignment to individual ships
for discharge and cargo work was, to say the least, a challenging and cumbersome
operation". Although the panel accepted that RFCP had made particular
efforts to prepare for an efficient and effective discharge of the vessel, well
in advance of her arrival, they held that such was a Charterer/Receiver was
expected to do. "The procurement of rail wagons and their availability for
an uninterrupted discharge of the vessel was Charterer’s burden and the delays
which their unavailability caused, can hardly be held against the Owner."
As a result, the panel awarded IMC demurrage in the amount of
US$93,358, together with interest and an allowance towards costs.
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