How The CIF Buyers Could Take Advantage Of The Exceptions To Time Counting

In Suek AG v. Glencore International AG¹, a vessel carrying a coal cargo sold on CIF basis could not proceed to berth because the berth was occupied by another vessel at the time of the vessel`s arrival at the port of discharge. However, the low tide would have prevented the vessel anyway to proceed to berth had it been available. Nonetheless, the vessel`s Master tendered NOR upon arrival at the usual waiting place based on the WIBON terms of the charter party and sale contract.
The CIF sale contract provided that:

"In case the berth is occupied on arrival, vessel can tender NOR at the usual waiting place ATDN SSHINC, whether in berth or not, whether in port or not, whether in free praticque or not, whether customs cleared or not.
…...
Time taken waiting for first available tide after the Carrying Vessel`s arrival and/or to shift from pilot station or anchorage to berth, and opening of the Carrying Vessel`s hatch covers shall not count as Laytime or time for Demurrage."

The dispute was whether the vessel`s Master was entitled to give NOR at the usual waiting place given that the vessel could not have proceed to the berth due to the tidal conditions.
The English Commercial Court held that:

"notwithstanding the presence of tidal conditions also preventing access to the berth, the unavailability of that berth entitled the Master of the HANG TA to give NOR."

Therefore, the NOR tendered at the usual waiting place was valid but the time lost by the vessel waiting for the next high tide had to be deducted from the laytime.
The case showed how the CIF sellers can take advantage of the fact that the berth is occupied at the time of the vessel`s arrival, notwithstanding the tidal conditions. To avoid such claims, the CFR buyers should stipulate in the sale contracts that if the vessel is prevented from proceeding to berth due to the tidal conditions, bad weather, strikes of tugs or pilots, the vessel`s NOR shall not be accepted until such hindrance has ceased in integrity.

by Vlad Cioarec, International Trade Consultant


This article has been published in Commoditylaw`s Coal Trade Review Edition No. 4.

Endnotes:

1. [2011] 2 Lloyd`s Rep. 278, [2011] EWHC 1361 (Comm)