The answer to the question of liability will depend on the actions of the parties involved: shipowners and charterers in the voyage charter party, respectively the sellers and buyers in CFR and CIF sale contracts.
If the berth at the port of discharge is available, the vessel must proceed to berth and tender NOR upon berthing. The shipowners cannot refuse the berthing of vessel due to unavailability of the Bills of Lading and then claim damages for detention1. The late presentation of Bills of Lading may be due to delays in the banking chain. In such cases, the vessel could enter the berth, but the Master shall be entitled to refuse delivery of the cargo until the presentation of the original Bills of Lading2.
If the shipowners will incur demurrage and extra berth charges while waiting for the Bills of Lading at the berth, they shall be entitled to claim the reimbursement of these charges from the charterers, shippers and/or Bill of Lading holders.
If the sellers are the shippers they will remain liable as an original party to the contract of carriage, but if the sellers are not the shippers, then they cannot be held liable under the Bills of Lading.
The buyers will become liable as Bill of Lading holders upon getting into the possession of the Bills of Lading and making a formal demand for delivery of the cargo.
The party liable should be the party responsible for the delay in the presentation of the Bills of Lading. To avoid disputes, the CFR/CIF sale contracts should stipulate who shall bear the demurrage and berth charges incurred by the shipowners while waiting for the Bills of Lading at or off the berth.
What if the Master receives instructions from the charterers not to proceed to berth?
In Glencore Grain Ltd. v. Goldbeam Shipping Inc.3, the vessel arrived at the port of discharge on 14th June but it was not allowed to proceed to berth by the charterers due to a dispute with the buyers under the sale contract. When the dispute was settled and the Bills of Lading were presented to the ship`s agent on 9th August, the Master received instructions to proceed to berth.
The shipowners claimed damages for detention of vessel prior to berthing. The LMAA Tribunal held that the vessel berthing delay was caused by the charterer`s breach of charter party contract. Insofar the charterer`s breach of charter party contract prevented the vessel from reaching the berth and become an "arrived ship", the shipowners were entitled to recover damages for detention of vessel prior to berthing.
Therefore, only when the Master receives instructions from the charterers or the holders of Bills of Lading not to proceed to berth, the shipowners can recover the costs for the time lost by the vessel prior to berthing. The shipowners cannot refuse the berthing of vessel due to unavailability of the Bills of Lading and then claim damages for detention prior to berthing.

by Vlad Cioarec, International Trade Consultant

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


Endnotes:

1. London Arbitration No. 11/03 (2003) 619 LMLN 4
2. London Arbitration No. 11/03 (2003) 619 LMLN 4
3. [2002] 2 Lloyd`s Rep. 244, [2002] EWHC 27 (Comm)