To count or not to count

THE clause 'time lost in waiting for berth' may be used in charter parties in a positive or negative form. Both forms may be suffixed with 'as loading and /or discharging time', or 'as laytime'. Both suffixes produce the same result for each form of clause. The result is that, in the absence of an available operational berth, once the vessel reaches the designated waiting anchorage and completes its sea voyage, and provided that laytime cannot then commence, time would (or would not, depending on the form of clause) begin to count.

In essence, the clause provides for the additional length of time taken for cargo operations as a result of having to wait for the operational berth, which it seems must be unavailable due to congestion, and not merely inaccessible for reasons such as bad weather or fog. In the words of Lord Diplock,
"Time lost in waiting for berth' in the context of the adventure contemplated by a voyage charter…must mean the period during which the vessel would have been in berth and at the disposition of the charterer for carrying out the loading or discharging operation, if she had not been prevented by congestion at the port from reaching a berth at which the operation could be carried out. The clauses go on to say that that period is to count as loading time or as discharging time, as the case may be. That means that for the purposes of those provisions of the charter party which deal with the time allowed to load or to discharge the vessel and how it is to be paid for (i.e., laytime and demurrage) the vessel is to be treated as if during that period she were in fact in berth and at the disposition of the charterer for carrying out the loading or discharging operation."

When used in isolation, the clause would be effective in berth charters before the vessel arrives in berth, in port charters where the usual waiting area is outside port limits, and in either type of charter when the vessel is not at the immediate or effective disposition of the charterers. The analogy below can, therefore, be made and demonstrates who bears the risk of congestion before laytime can commence.

Has the vessel arrived? (Default (no clause); Time lost to count; Time lost not to count)
Yes (Shipowner; Charterer; Shipowner)
No (Charterer; Charterer; Shipowner)

Time under this clause begins to count before, and separately from, laytime, and would count irrespective of whether a valid NOR had been tendered prior to the physical arrival of the vessel at the designated anchorage. In fact, no NOR is necessary for time to commence counting under this clause. Per Lord Diplock, "It cannot have been intended that notice of readiness is required to start time running under the 'time lost' clause for if it were the clause could have no application in a berth charter, for which it is primarily designed, since notice of readiness under such a charter could never be given until the period of waiting was over and the vessel was already in berth."

Furthermore, as per Mr Justice Sellers, "… the notice [of readiness] is something which has to be given for the purpose of calculating lay days. That calculation is independent of the [time lost] provision…, though the one has to be added to the other to reach the true position under the contract."

Such time counts subject to all periods which would normally be excluded from the calculation of laytime. In the words of Lord Diplock,
"In the computation of time lost in waiting for berth there are to be excluded all periods which would have been left out in the computation of permitted laytime used up if the vessel had actually been in berth. So, in the case of an arrived ship under a port charter there is no conflict between the laytime provisions and the time lost provisions."

If time under this clause exceeds the permitted laytime, or resumes, for example, at a subsequent port, when the vessel is already on demurrage, then time would count under this clause in the same way demurrage would count after the permitted laytime. Therefore, if demurrage counts without being subject to any exceptions or interruptions, time would likewise count under this clause. However, if demurrage counts subject to certain exceptions, then time would similarly count under this clause. Effectively, "the shipowner [must] not gain a greater advantage from his ship being kept waiting for a berth than he would get from her being kept at her berth," states Viscount Dilhorne.

In order to make time count continuously, the addition of clear wording such as 'in full, with all exceptions excluded' would be necessary. The addition only of the words 'in full' may not be sufficient. Shifting time would not count under this clause unless separately so negotiated. Although not decisively concluded by the courts, it seems that time lost under this clause, if any, would subsequently be added to laytime at the moment when it occurred.

If the vessel legally arrives once it reaches the designated waiting anchorage, or it subsequently proceeds to a location where it can be considered to have legally arrived, then provided the vessel has tendered a valid NOR, laytime would commence, and would take precedence over this clause. If an invalid notice of readiness is tendered, and provided that such a notice is not 'accepted' without qualification by charterers or their agents, time should count under this clause as if no notice of readiness had been tendered in the first place.

In addition, the clause is commonly found together with the clauses 'whether in berth or not' and 'whether in port or not'. In such an instance, once the vessel reaches its designated anchorage, and has tendered a valid NOR, laytime provisions would by default take precedence, laytime would commence, and this clause would be considered otiose. Similarly, if the charter party contains a clause designed for specific ports, then once the vessel satisfies the contingency for which that clause caters, laytime would likewise commence, and would take precedence over this clause. Exception clauses for congestion may have a negating effect on this provision.

Although of vital commercial importance, it is as yet judicially undecided whether the vessel needs to be ready for cargo operations before time begins to count under this clause. The answer would depend on the construction of the actual charter party. Crucial questions that need to be asked in each instance are, what would the vessel do if the operational berth was unavailable, and, would the time 'lost' while waiting be for the benefit of the owner? In other words, once at the designated waiting anchorage, would the vessel lose time being idle or would the vessel use time in achieving the required level of readiness? It would seem commercially sensible that the vessel does indeed need to achieve the required level of readiness before time under this clause can begin to count.

This submission is supported by the following dictum of Lord Justice Parker, "If in any case a charterer could show that, even if a berth had been available, the vessel could not have been ready for cargo, he would be able to say that all time occupied in waiting for a berth had not been 'lost'."

It seems settled law that where there is more than one charter, or the shipowner has been allowed to complete with other cargo, then with this sort of clause, the waiting must be in respect of the cargo to which the charter relates, and not to the other cargo on board.

The alternative proposition comes from a dictum by Lord Russell, who suggests that time 'lost' under this clause should in fact be read and understood as 'spent':
"There might be an alternative approach to construction which leans on the word 'lost' as meaning 'lost to the shipowner' by not being at a berth… but this would seem to me to lay undue stress on the word 'lost' which I prefer to regard as equivalent to 'spent'."

If such a construction is adopted, the opposite result to the one stated above may follow, as time 'spent' waiting would then count irrespective of whether the vessel had achieved the required level of readiness. Surprisingly, several arbitrations have adopted this alternative reasoning, concluding that the vessel does not have to be ready to commence cargo operations before time can start to count under this clause.

In conclusion, this clause is much used, yet not completely understood, and has surprisingly not been fully developed by the judiciary. It is dependent on other clauses in the charter party, and its effects may easily be excluded. Therefore, before jumping to conclusions on its application, always read the charter party.