In Trans Trade RK SA v Sebat Shipping and Trading Company [2026] EWHC 950 (Comm), the English Commercial Court held that, where a notice of readiness is invalidly tendered, the commencement of cargo operations does not invariably trigger the commencement of laytime. Laytime does not begin to run unless there is an effective waiver or estoppel.
Key facts
Owners and charterers entered into a voyage charterparty on 9 April 2022 to carry a cargo of barley in bulk on a voyage from Constanta, Romania to Brake, Germany on board the vessel “Sebat”.
The charterparty requires written notice of readiness (the “NOR”) to load and/or discharge to be tendered when the vessel “is in the loading or discharging berth and in all respects ready to load/discharge”.
At the discharging port, the vessel’s master tendered a NOR at the pilot station on Tuesday, 10 May 2022 at 1000 hours. No further notice of readiness was tendered by owners thereafter.
On 13 May 2022, the vessel proceeded from anchorage to berth. On 14 May 2022, the vessel’s hatches were opened in preparation for discharge of the cargo the following day. However, due to phosphine levels being substantially in excess of the levels at which the port would permit discharge, the vessel was ordered to leave the berth and to return to the anchorage. The vessel did not berth again until 27 July 2022 and completed discharge just before 2000 hours on 30 July 2022.
Arbitration
Among others, owners claimed demurrage at the discharge port of Brake. Charterers’ defence was on the basis that no valid NOR had been tendered and thus laytime never began to run.
The tribunal found that the NOR was tendered before the vessel became an “arrived ship” and the NOR tendered was therefore invalid when served.
The tribunal held that, absent tender of a valid NOR, the trigger for laytime to commence is the commencement of cargo operations. It accepted that laytime commenced when hatches were opened at 0550 on 14 May 2022. The tribunal later amended its award to refer to The Happy Day [2002] 2 Ll. Rep. 487 as its basis and allowed owners’ claim for demurrage at the discharge port.
Appeal
Charterers appealed the arbitration award on the following point:-
Where the owners of a vessel under a voyage charterparty fail to serve a valid notice of readiness at a load or discharge port and there is no agreement, waiver or estoppel having the effect that an invalid notice is treated as valid, when does laytime start to run, if at all?
Invalid NOR
The Commercial Court found that the tribunal’s decision was that, where an invalid NOR was tendered because it was premature, having been tendered before the vessel was an “arrived ship”, laytime began to run from the commencement of cargo operations as if a valid NOR had been tendered at that point of time.
The Court also found that the tribunal was not determining an issue of waiver. There were no findings that charterers were aware that the NOR had been served prematurely or of any other circumstances that might have supported a finding of waiver.
The Court noted that, in The Happy Day, what Potter LJ held was rather that time will not start to run without a valid NOR, unless there is a waiver or an estoppel. The Court therefore held that there had been an error of law made by the tribunal.
Deemed waiver
The Commercial Court noted that a waiver by election requires unequivocal conduct, provided that the waiving party had actual knowledge of the circumstances giving rise to its legal right and of the legal right itself.
If a NOR is invalid when tendered, it cannot trigger the commencement of laytime unless the parties agree otherwise or if there is waiver or estoppel. The commencement of laytime requires a validly tendered NOR. A NOR may not be valid, e.g. because it does not comply with the formal or other requirements of the governing charterparty or because it is tendered at the discharge port before the vessel has arrived at the destination and is ready to discharge. Such an invalid NOR will not be operative for laytime and demurrage purposes, even if all the requirements are satisfied later. The NOR must be valid in all respects at the time of tender.
The Commercial Court emphasised that there is no principle of “deemed waiver”, in particular the knowledge required of the waiving party, which is a critical requirement of an effective waiver.
The Commercial Court held that the law is therefore that, where an invalid NOR is given, laytime does not begin when the ship commences loading or unloading, unless there is:-
- waiver by or on behalf of the charterers of the invalidity by accepting the NOR with knowledge of the invalidity, or by loading or discharging with knowledge of the invalidity and without reservation; or
- a contractual variation or estoppel.
The Commercial Court allowed charterers’ appeal and varied the award to disallow owners’ claim for demurrage at the discharging port.
Key takeaways
The Commercial Court provided useful clarification following the decision in The Happy Day. Namely, if a NOR is tendered invalidly, laytime does not commence automatically upon cargo operations, but may begin to run if charterers waive the invalidity of the NOR.
Owners should carefully comply with the requirements for a valid NOR under charterparties. It may also be worth tendering further NORs when in doubt, to ensure that there is a valid NOR.
Charterers should clearly reject an invalid NOR and to reserve their rights if the NOR does not comply with the charter, or is tendered before the vessel had arrived and is ready to discharge. It may also be useful to indicate that a further NOR is required.