Port charter

Port charter. A voyage charter is a contract to carry goods from a loading port or a range of ports to an agreed destination.

When the vessel arrives at the agreed destination various events take place, for example the Notice of Readiness is given by the master or the agents and this can trigger off the commencement of laytime. When the agreed destination is a named port the ship is treated as an “arrived ship” when it arrives in a particular area in which there is a berth at which the ship will load and/or discharge cargo.

The classic definition of the position which the ship must reach before it can be treated as an “arrived ship” comes from House of Lords decision in The Johanna Oldendorf , 1973, It was said:

“Before a ship can be said to have arrived at a port she must, if she cannot proceed immediately to a berth, have reached a position within the port where she is at the immediate and effective disposition of the Charterer. If she is at a place where waiting ships usually lie, she will be in such a position . . .”

The area comprising a “port” may have different limits for different purposes. For example, an area which may appear geographically to be a port may have other limits for legal purposes, such as for taxes and port dues (that is for “fiscal” purposes). The area which may be defined on a navigational chart by lines identifying “port limits” within which the “port authorities.” and pilotage authorities responsible for the running of the “port” and provision of pilotage services may exercise their functions. These may be called “administrative limits”. There may be other portions outside these limits where the commercial cargo handling is usually carried out. These can be within the commercial meaning of the word “port”. In chartering (and in legal disputes that can arise from voyage charters) the words used in an older case, Leonis v. Rank (No. 1 ) , 1908, may be useful to define the area being considered as a “port”:

“Just as a port may have one set of limits, if viewed geographically, and another for  fiscal or pilotage purposes, .so when it is named in a commercial document, and for commercial purposes, the term is to be construed in a commercial sense…”

Therefore it is the area in which the normal “commercial” activities are carried out that comprises a “port”. Indeed, shippers, charterers and shipowners should understand the word “port” in its ordinary sense, in its business sense and therefore in its commercial sense because “business” means commercial business. This is paraphrased from what was said by a judge in an early case in 1885 and there is no reason for the word “port” in a charterparty to have any different meaning. In the “Charterparty Laytime Definitions 1980”:

“PORT – means an area within which ships are loaded with and/or discharged of cargo and include the usual places where ships wait for their turn or are ordered or obliged to wait for their turn no matter the distance from that area. If the word `Port’ is not used, but the port is (or is to be) identified by its name, this definition shall still apply.”


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