NOR clause from previous fixture can have unintended consequences: ITIC

A Notice of Readiness (NOR) clause in a previous fixture might not have the same effect if used in a new fixture, and shipbrokers should bear this in mind when copying wordings from previous fixtures, the International Transport Intermediaries Club (ITIC) has warned.

In a recent case referred to ITIC a fixture for a vessel trading from the Black Sea to Spain used the NOR clause from a previous fixture, in which the same vessel was trading into China.

As agreed by the parties, the clause contained an exclusion that time did not count on Saturdays and Sundays. However, it also contained an exclusion in respect of time outside of local working hours.

While Chinese local working hours allowed for NOR to be tendered up until 23:59 on the day of arrival, in Spain local working hours were only until 17:00, and then from 08:00 the following day.

The owners failed to notice that the broker had reproduced the whole clause from the China fixture.

The vessel arrived at the Spanish port at 21:55 on Friday (when NOR was tendered) but had to wait until 20:00 the following Monday for a berth.

The owner calculated laytime to include time from arrival at 21:55 until 23:59 on the Friday and then to include the period from 00:01 until 20:00 on the Monday.

The Charterer’s calculation excluded these hours – calculating only from 08:00 on the Monday. This resulted in a difference of just over $50,000 in demurrage between the two calculations.

The issue was eventually resolved by mutual agreement whereby the owner, charterer and shipbroker each contributed a third of the disputed amount. The shipbroker, therefore, paid around $17,000, which was covered by ITIC.

ITIC said that it was important that shipbrokers did not simply copy and paste wordings from previous fixtures, if those wordings would not reflect accurately what their principals wanted in the current fixture. “Here it was clear that the Owners did not ask for the local working hours exclusion and would not have agreed to it if it had been brought to their attention.”

That said, they did have a chance to see it if they had read the clause properly, but they did not do so. This, said ITIC, was why the parties agreed to split the costs evenly on this occasion.