Commencement of laytime

Commencement of laytime. “Laytime” is’ the amount of time agreed in a voyage charter between the shipowner and the Charterer during which the vessel will be made and kept available for loading or discharging the cargo.

This period must commence (and end) at a specified instant. When it commences it can be considered that a “clock” has commenced, working backwards, as it were, and counting down the “stock” of time, which the Charterer has. The “laytime clock” cannot begin until certain requirements are met and some event takes place which “triggers off” the commencement of laytime. One such event is the vessel must be an “arrived ship” and another is that a “Notice of Readiness” must be given to. the Charterer or shipper or cargo receiver. The Notice of Readiness is usually a written document containing information that makes it certain to the Charterer, shipper, receiver or other person as required by the Charterer that the vessel has arrived at the contractual destination and is ready for cargo-handling operations. The requirements before a Notice of Readiness can be given must be met before laytime can commence. For example, in a berth charterparty it may be permitted for the master to give notice “whether in berth or not” if the berth was unavailable. However, the clause may also state that Notice of Readiness is to be given after the vessel is “cleared by Customs”. If the vessel is at the usual waiting place outside the port limits, it may be difficult to obtain Customs clearance and if this is not done, the document headed “Notice of Readiness” may be invalid. The laytime would not commence.

Commencement of laytime. “Laytime” is the period during which the owner makes the vessel available for cargo operations. It is important to know when the period begins. For certainty, the charterparty usually expressly relates the commencement of laytime to the happening of a particular event. This event is the giving of a Notice of Readiness. However, the Notice of Readiness must be valid when it is given. This will require two prerequisites to be fulfilled, namely, the vessel must be an “arrived ship” and it must be physically and legally “ready” to receive or deliver the cargo. If the Notice of Readiness is invalid when given, it will be ineffective to trigger the laytime (or to start the “laytime clock”) upon the expiry of the stipulated period of notice. If the vessel is not actually ready, the giving of a document named “Notice of Readiness” will not relate to the true facts and the owners will not be entitled to advance the commencement of laytime.

The words “unless the charterparty otherwise provides” have a meaning if the phrase “whether in berth or not” is inserted into the “laytime clause” of a berth charter: These words, usually abbreviated to “WIBON”, were designed to convert a berth charter into a port charter. This effect operates only in the situation where a berth is not available for the vessel on its arrival. It does not apply where a berth is available but unreachable because, for example, of bad weather. The phrase ensures that under a berth charter, the Notice of Readiness can be given as soon as the vessel has arrived within the port so that laytime would start to run on its expiry. The “expiry” is usually stated in the laytime clause, so that the laytime commences to count against the charterer at a specific instant or after a specified number of hours, after the “notice” has been given.

An example of a “laytime clause” can be found in the GENCON charterparty:

Commencement of laytime (loading and discharging)

Laytime for loading and discharging shall commence at 1 p.m. if notice of readiness is given before noon, and at 6 a.m. next working day if notice is given during office hours after noon . . .

Time actually used before commencement of laytime shall count.

Time lost in waiting for berth to count as loading or discharging time, as the case may be.”

Of course, the above printed clause can be added to and amended by deletions and insertion of other words arid also by the insertion of a “rider clause”.

In the case of The Mexico 1, 1990, a document headed “Notice of Readiness” was given by the master when the vessel was not actually ready to discharge the cargo carried under the voyage charter in dispute. This was not a valid notice and, the judge said in the English Court of Appeal, β€œ . . . unless something happened after the notice was sent to make the laytime start, it never started at all, with the consequence not only that the owners have earned no demurrage, but also that they are obliged to pay the Charterers despatch money for the whole of the laytime”.

In this situation, if the cargo operations are in fact carried our, these occur without laytime having commenced. In practice it may very well be accepted that despite no Notice of Readiness having been given, “laytime” commenced. In The Mexico 1 it was conceded by the charterers that laytime began to run when discharge actually commenced. This may make good sense but it was not what the charter states. The charter is a contract and, as the judge said in the above case, “a contract is a contract” and if there is any dispute arbitrators and the courts will regard a contract strictly. If the charterers and the owners who agree to voyage charter terms choose to make laytime refer to the happening of a particular event, that is the way the law will regard the commencement of laytime, not as if the contract contained in the 

charterparty had expressed the commencement of the laytime in terms of some quite different event. The particular event is the giving of a valid Notice of Readiness. 


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