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Last updated: 21-Jun-2015

Leonis Steamship Company, Ltd v Rank, Ltd [1908] 1 K.B. 49 by Kennedy LJ at pp.517-518:

The law respecting the relative obligations of shipowner and charterer under a simple form of charterparty such as that which existed in the present case is, I think, clear. The ship is to proceed to a named destination, and when she has arrived at that destination her master has to give the charterer, or his representative there, notice of her readiness to load the chartered cargo, and the ship must be ready to load so far as she is concerned. The charterer on his part binds himself to complete the loading within a definite period of time computed in the charterparty either by a number of days or by a specified daily rate of loading, and commencing so many hours or so many days (as the case may be) after the master of the ship has given notice of the ship being ready to load as above mentioned. The ship’s obligations, therefore, under such a charterparty, the performance of which must precede the commencement of the lay days (as the fixed loading period is commonly termed) are three. First, the ship must have arrived at her destination, and so be within the designation of an "arrived" ship. Till then she is not entitled to give notice of readiness to load. Secondly, she must have given the prescribed notice of readiness to load. Thirdly, she must in fact be, so far as she is concerned, ready to load. The shipowner cannot claim against the charterer that the lay days begin to count until the ship is an "arrived" ship; the prescribed notice has been given and expired; and in fact the ship is ready, so far as she is concerned, to receive the cargo.

Depending on whether charter party in question is a berth charter or a port charter, the vessel may become an ‘arrived ship’ either on arrival at the berth or to the port nominated by the charterers. In case with the berth charters the vessel is an ‘arrived ship’ simply when she gets into the berth. Position of the law concerning to the port charters is not same straightforward.

The rule was set out in EL Oldendorff & Co GMBH v Tradax Export SA (The Johanna Oldendorf), [1974] AC 479 per Lord Reid and since then known as the Reid’s Test. This test stipulates several requirements for the vessel to meet in order to be an ‘arrived ship’:

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 unless in some extraordinary circumstances proof of which would lie on the charterer.

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