Terms used in chartering practice
DEFINITIONS:LAY DAYS: This refers to range or spread of days between which the owners must present the vessel for loading
LAY TIME: Time allowed to the charterers for loading and or discharging by the owners without payment additional to freight. In this period the owner is to make and keep the vessel available for loading or discharging.CANCELLING DATE: Is a date beyond which if the vessel is not presented for loading, the charterers may reject her. This is found in the canceling clause in C/P agreement.LAY CAN: It is a period of lay days plus canceling date. During this period vessel must arrive and be presented at the agent port / place.
If the vessel arrives before that date the charterer need not accept her until the commencement of the agreed lay days. If she arrives after the last day of the period, the charter can reject the vessel and cancel the charter. NOTICE OF READINESS (NOR): It is a notice given when a ship arrives as per charter party and is in every respect ready to commence cargo operations.
NOR IS GIVEN:-a) Before laytime commences
b) Within the Lay Can period
c) In accordance with the procedure in the notice clause or lay time clause in the C/P.
d) May usually be tendered during office hrs. usually from Monday-Saturday (But check C/P for instructions)
e) Need only be tendered at the first of two load ports by the C/P should be checked for any special requirements.
f) May be tendered orally but as mostly all C/P require should be given in writing. NOR may be tendered by delivery of a printed form .or letter or by telex, fax, or cable etc. unless C/P provides otherwise.
g) Should be addressed to charterers or their agents and not to owners agent
h) In duplicate with request that the 2nd copy with time and date of acceptance completed in should be returned to the ship.
i) If not acknowledged on the 1st day of the notice, daily/frequent attempts should be made to have it accepted. However please check terms of charter party for acceptance of NOR. If the ship is not ready to receive cargo, whether alongside or not, by the cancellation date the charterer may cancel the charter.
j) The charter party normally states what time the laytime commences (certain number of hours or days after NOR is tendered or as soon as NOR in tendered or when NOR is accepted). If the cargo work starts earlier than that then it counts as lay time as per charter party.
LAYTIMEThere are three types of lay time:
- Definite Laytime
- Calculable Laytime
- Indefinite Laytime
DEFINITE LAYTIME: Is stated in the C/P as a definite period of time e.g. on tankers it may be 48 running hours or for cargo ships it may be 6 days etc.
CALCULABLE LAYTIME: Is determined by making a calculation from the information in C/P e.g. A cargo weighing 20,000 t to be loaded at the rate of 10,000 t/day, Laytime is 2 days. INDEFINITE LAYTIME: In this the charter party states that the cargo is to be loaded with “Customary despatch” or “Customary quick despatch” OR As fast as vessel can receive.
Thus lay time starts to count when the following condition are fulfilled:
- When the vessel is an “ARRIVED SHIP’ as per C/P.
- A vessel is in all respects ready to load or discharge and
- NOR is served on charterer or their agents and in a few cases when the NOR in accepted.
ARRIVED SHIP: Is also determined from the C/P. There are two types of C/P: a Port C/P, Berth C/P.
e.g. Port C/P: a port is defined as the place for loading without specifying a particular berth. Further a C/P may state in a port C/P that she has arrived if:-
- She has entered port limits or
- In port at charterers disposal or
- Fully ready to load in waiting area of particular port.
e.g. Berth C/P: a particular berth will be mentioned and it is necessary for her to be along side this berth to be considered (ARRIVED)
PLEASE NOTE: The Port C/P is beneficial for owner as berthing delays will be on charterers account. In order to protect themselves the owner may add a waiting for berth clause. This will mention that lay time will count whether in berth or not (WIBON)
STOPPAGE IN TRANSIT
- A seller is legally allowed to stop his goods while in transit to the buyer after it becomes known that the buyer is bankrupt and has failed to pay for the goods (As per Indian B/L act 1836).
- Three conditions must be satisfied to exercise this right of the seller.
- The purchaser must be insolvent.
- The seller must be unpaid.
- The goods must not yet have come in the possession of the buyer (i.e. in transit)
- The seller must give the ship written instructions, for example by telex, fax etc. which should be retained by the master as evidence.
- The carrier is then obliged to have the goods returned to the port of shipment, the seller being liable for back freight and other expenses.
- As this concept is time consuming and a lot of money may be wasted in the process, the seller may alternatively opt for litigation in court.
