Review Of The Shipping Conditions For Sales Of South African Coal Basis FOBT Richards Bay Coal Terminal

Laycan Fixation and Vessel Nomination Notice
The buyers shall give to sellers 30 days` notice of the 10 days` laycan spread within which the buyers propose to present the vessel for loading the coal cargo. If the sellers will accept the laycan, then not later than 10 days prior to the first day of the laycan, the buyers shall have to nominate the vessel and declare the quantity of cargo required to be loaded with the 5% contractual tolerance.

Vessel Requirements
The vessel nomination is subject to acceptance by Richards Bay Coal Terminal Shipping Coordinator and hence, subject to the requirements of the terminal operator.
The nominated vessel must be single deck, self-trimming bulk carrier, gearless or geared, but the geared vessels, i.e. Handysize and Handymax vessels, will be accepted at Richards Bay Coal Terminal provided that their cranes will be positioned in such a way so as not to impede the normal operation of the shiploaders and thereby reduce the loading rate.
The vessel must be classed Lloyd`s 100A1 or equivalent and be described as “Bulk Carrier” in the Class Certificate.
The nominated vessel must have all the IMO required certificates valid, including a Certificate of Fitness for the Carriage of Solid Bulk Cargoes listing coal as a permitted cargo, a Certificate of Fitness for the Carriage of Dangerous Goods, the Bulk Carrier Booklet endorsed by the Flag State Administration, the International Ship Security Certificate, Maritime Labour Certificate, Safety Management Certificate and the Document of Compliance with the ISM Code.
The nominated vessel must have sufficient deballasting capacity to enable the loading terminal operator to achieve the maximum loading rate applicable to that size of the vessel without the interruption of loading for more than 8 hours.

ETA Notice
If the vessel nomination is accepted by the RBCT Operators, the buyers will charter the vessel and then give the ETA Notice at least 14 days prior to the vessel`s ETA at the Richards Bay Coal Terminal.

ETA Updates
The buyers must ensure that the vessel`s Master will give through the port agents the ETA notices at 7/5/3/2 days and 24 hours before the vessel`s ETA at the pilot station and inform the RBCT operators of any deviation in excess of 24 hours from the initial ETA.

Conditions For The Vessel Substitution
The buyers may substitute the originally nominated vessel provided that:
- they give the vessel substitution notice to RBCT operators at least 5 days before the ETA of the originally nominated vessel;
- the substitute vessel will not arrive earlier than the ETA of the originally nominated vessel;
- the substitute vessel complies with the contract requirements in respect of type, size and de-ballasting capacity to be able to load the cargo quantity ordered by the buyers within the contractual time allowed for loading;
- the vessel`s demurrage rate is not higher than that of the originally nominated vessel.

The Submission Of The Vessel`s Loading Plan
The buyers must ensure that at least 72 hours prior to the vessel`s ETA at the pilot station of the Port of Richards Bay, the vessel`s Master shall furnish to the terminal operator the following information:
- the vessel`s loading plan;
- the final quantity required to be loaded based on the vessel`s loading plan;
- details of previous cargo;
- the quantity of ballast water on board and the estimated time required for de-ballasting.
If the Master does not provide this information to the terminal operator at least 72 hours prior to the vessel`s ETA, the vessel shall not be included in the berthing programme on the ETA date and any time lost thereby shall be solely for the buyers` account.

Conditions For The Vessel Presentation For Loading
The vessels arriving to load coal in bulk at the Richards Bay Coal Terminal must comply with the regulations of South African Maritime Safety Authority (SAMSA) and the shipping regulations of the terminal operators, Richards Bay Coal Terminal Ltd..
The vessel must present for loading with the cargo holds clean, dry, empty, free of waste material and remnants of previous cargo and with the draught marks legible.
The inspection of holds shall be made by a qualified marine surveyor appointed by the sellers. The marine surveyor shall certify the cleanliness of holds by issuing the Hold Cleanliness Certificate. If the vessel has previously carried potential contaminants such as phosphates, sulphur, cement, salt, potash or iron ore, the marine surveyor inspecting the holds must certify that the holds are clean and free of contaminants.
If the vessel is an OBO (Ore/Bulk/Oil) Combination Carrier which has previously carried petroleum products, the Master must advise the loading terminal operator of this fact at least 24 hours before the vessel`s ETA at the pilot station. In such case the vessel will be called to berth only after the cargo holds had been declared clean and gas-free by a local marine chemist. All expenses and time incurred for making the holds gas-free and obtaining the Gas Free Certificate will be for the buyers` account.

NOR And Commencement Of Laytime
The vessel`s Master shall tender NOR upon the vessel`s arrival at the outer anchorage or pilot station of the Port of Richards Bay at any time, day or night, including Saturdays, Sundays and Holidays.
The 18 hours` Notice time shall start to count from the time of acceptance of NOR by the Richards Bay Coal Terminal operator provided that the vessel has arrived within the agreed laycan not prior to the expiry of the 14 days` ETA pre-advice period and is in all respects ready to load the coal cargo.
The vessel shall be considered ready in all respects for loading if:
- she has obtained the ISPS clearance prior to the NOR tendering;
- she is not subject to an arrest order;
- she presents for loading in a seaworthy condition;
- she passes the holds` inspection after berthing.
If the Master tenders NOR before obtaining the ISPS clearance, the NOR shall be invalid and the Master will have to tender a new NOR upon receiving the ISPS clearance.
If the vessel is arrested or attached at berth prior to the commencement of loading, the NOR shall be deemed invalid and the Master will have to tender a new NOR only after the issuance of the release warrant by the Court.
If, after berthing, the vessel is found by the port authorities not ready in all respects to load the coal cargo, the vessel`s NOR shall be invalid and the Master will have to tender a new NOR after the vessel is in fact ready all respects for loading.
If the marine surveyor appointed by the contracting parties rejects the holds, the NOR tendered at anchorage shall be deemed invalid and the Master will have to tender a new NOR after he obtains the Hold Cleanliness Certificate from the marine surveyor. The Shipping Regulations of Richards Bay Coal Terminal provide that in such case the laytime will start to count at 18 hours after the new NOR has been received by the Richards Bay Coal Terminal operator, unless Richards Bay Coal Terminal operator commences loading sooner in which case the laytime will start to count from the time of commencement of loading. This requirement has been adopted by the Richards Bay Coal Terminal operator to avoid disputes like in the English law case Cobelfret N.V. v. Cyclades Shipping Co. Ltd. (The "Linardos")¹.
In that case, the loading berth was occupied at the time of the vessel`s arrival at the Port of Richards Bay. The vessel`s Master tendered NOR upon arrival at the customary waiting place at 16:50 hours on 4 October 1991.
Two days later the vessel was called to berth but upon berthing on 7 October the vessel failed to pass the holds` inspection. After further cleaning the vessel passed the holds` inspection on the following day at 06:30 hours on 8 October.
The case was a charter party dispute as to whether the Notice time and laytime should have counted for the two days between the time of tendering the NOR on 4 October and berthing on 7 October.
The dispute concerned the interpretation of the second paragraph of the Clause 4 of Richards Bay Coal Charter Party form which has the following provisions:

"Time commencing, subject always to the undermentioned provisos, 18 hours after Notice of Readiness has been given by the Master, certifying that the vessel has arrived and is in all respects ready to load, whether in berth or not; [...]
…
Any time lost subsequently by vessel not fulfilling requirements for Free Pratique or readiness to load in all respects, including Marine Surveyor`s Certificate and acceptable gas-free Certificate for OBO-carriers, or for any other reason for which the vessel is responsible, shall NOT count as Notice time, or as time allowed for loading."

The English Commercial Court held that these provisions do not mean that a valid NOR cannot be given unless and until the vessel`s holds are accepted as ready for loading by the marine surveyor but that if the vessel is obliged to wait for an available berth, it can tender NOR and the Notice time will begin to run notwithstanding that the vessel`s holds are not ready for loading.

"[B]ut if and to the extent that the vessel`s unreadiness delayed cargo operations when a berth became available, the running of time would be interrupted until the vessel was accepted as ready. The rejection of the holds after the vessel got into berth would not in such a case deprive owners of the benefit of time lost at the anchorage, but merely of subsequent loss of time at the berth."

It would have been useful for the Association of Ship Brokers & Agents to amend the Clause 4 of Richards Bay Coal Charter Party form to include provisions similar with the current provisions of the Shipping Regulations of Richards Bay Coal Terminal, but it did not make any changes to date and the FOB buyers facing similar situations will have to pay demurrage to shipowners under charter party without the possibility to recover from the sellers.
The commencement of laytime shall depend not only on the time when the buyers` vessel tenders valid NOR but also on the buyers` compliance with other contract requirements.
One of the contract requirements that may affect the commencement of laytime is the requirement to present the vessel ready in all respects for loading within the agreed laycan, after the expiry of the ETA pre-advice period.
The Richards Bay Coal Terminal operator schedule the coal shipments in function of the vessel`s laycan and ETA at the port of Richards Bay. Therefore, the commencement of laytime will depend not only upon the time when the vessel is ready in all respects to load and tenders valid NOR, but also on whether the NOR is tendered within the laycan and after the expiry of the ETA pre-advice period.
If the vessel arrives at the loading port and tenders valid NOR within the agreed laycan after the expiry of the 14 days` ETA pre-advice period, the laytime will commence to run at 18 hours after the terminal operator`s acceptance of the NOR, unless the terminal operator commences loading sooner in which case the laytime will commence to run from the time of commencement of loading.
If the vessel arrives at the loading port and tenders valid NOR before the first day of the agreed laycan, the NOR shall not become effective before 00:00 hours on the first day of the agreed laycan and the 18 hours` Notice time shall commence to run from 00:01 hours on the first day of the laycan period.
If the vessel arrives at the loading port and tenders valid NOR before the expiry of the 14 days` ETA pre-advice period, the NOR shall not become effective before 00:00 hours on the fourteenth day after the day of nomination and the 18 hours` Notice time shall commence to run from 00:01 hours on the fourteenth day after the day of nomination.
If for any reason, including the vessel`s late arrival or failure to pass the holds` inspection, the vessel does not tender valid NOR before the end of the cancelling day (the last day of the laycan period), the berthing of vessel after the laycan shall be subject to the consent of the terminal operator and the laytime will commence to run when the loading starts.
The commencement of laytime will also be in function of the Master`s compliance with the deadline imposed in the Shipping Regulations of Richards Bay Coal Terminal for the submission of the vessel`s loading plan. If the Master fails to provide the vessel`s loading plan to the terminal operator at least 72 hours prior to the vessel`s ETA, the vessel shall not be included in the berthing programme on the expected readiness date and the 18 hours` Notice time shall not commence to run before the 72 hours` time limit from the submission of the vessel`s loading plan has elapsed.
In case of the vessel substitution, the commencement of laytime will also be in function of the buyers` compliance with the 5 days` time limit imposed in the Shipping Regulations of Richards Bay Coal Terminal for the submission of substitution notice. If the substitute vessel arrives and tenders NOR before the expiry of the 5 days` notice period, the NOR shall not become effective before 00:00 hours on the fifth day after the day of substitution and the 18 hours` Notice time shall not commence to run before 00:01 hours on the fifth day after the substitution notice date.
The laytime shall cease to count at the time when the loading, trimming and final draft survey have been completed or when the cargo documents required to effect the Customs clearance are on board, whichever is the later.

Loading Conditions
The coal cargo shall be delivered free on board the vessel spout trimmed. Any extra trimming (beyond spout trimming) necessary due to the vessel`s construction shall be for the buyers` account and any time lost thereby shall not count.

Cargo Weight Determination
The weight figure used for invoicing and issuance of Bills of Lading shall be determined by the marine surveyor appointed by the sellers based on the vessel`s draft survey before and after loading.

by Vlad Cioarec, International Trade Consultant

This article has been published in Commoditylaw`s Coal Trade Review Edition No. 2.


Endnotes:

1. [1994] 1 Lloyd`s Rep. 28