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Arrived Ship

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Berth and Port Charters

Proceeding from commercial necessity, the charterer has an option to choose whether to send the vessel to a particular berth or to limit his instructions by nomination of a port only. This choice is expressed in terms of voyage charterparty in form of either a port or a berth charter

Berth and Port Voyage Charters
Last updated: 28-Nov-2015

In Stag Line v Board of Trade (1950) 83 Ll. L. Rep. 356 Devlin J formulated the following test, at p.358:

that if the berth at which the vessel ultimately has to load or discharge is named in the charter-party, she is not an arrived ship until she arrives at the berth, and by named in the charter-party I mean either named in it when originally drafted or named in it by virtue of a power of nomination expressly given by the charter-party. If, on the other hand, there is no power of nomination expressly given so that no berth is named therein, and she proceeds to the berth ordered by the charterers merely by virtue of the implied right which the charterers have to select the loading berth, then she becomes an arrived ship when she arrives at the place then named in the charter-party which is the port.

EL Oldendorff & Co GMBH Appellants v Tradax Export SA Respondents (The Johanna Oldendorf), [1974] AC 479 per Lord Diplock:

In the case of two common types of voyage charters, berth charters and dock charters, principles had been formulated by the end of the 19th century as to how the loss occasioned by delay in loading or discharging was to be borne, when the delay was due to the place at which the vessel was obliged by the terms of the charter party to load or discharge her cargo, being occupied by other shipping. Berth charters are those in which the place to which the vessel is to proceed and there load or discharge is a single berth, either named in the charterparty itself or nominated thereafter by the charterer in the exercise of an express power to do so. Dock charters are those in which the corresponding named or nominated place is a dock containing, it may be, several berths. So charterers and shipowners when fixing the freight under these types of charters knew where they stood as respects this risk. They knew when lay time would start to run. But there is another common type of voyage charter, a port charter, in which the named or nominated place of loading or discharge is a port containing, it may be, several docks each with several berths.

In The Finix [1975] 2 Lloyd’s Rep. 415 Donaldson J in the course of his judgment, put the matter of a berth or a port charter as follows (at p.422):

It is well settled that where the destination is a named berth or there is an express right to nominate a berth, the charter is a berth charter-party, i.e., the ship is not ‘arrived’ before she reaches the berth. It is also well settled that where the destination is an area of wider extent, but there is an implied right in the charterer to nominate the berth or other discharging spot, the ship is ‘arrived’ when she reaches the appropriate part of the wider area and not when she later reaches the discharging berth or spot. But there is a realm of uncertainty where the charter-party provides that discharge shall take place at, for example,

(a) 'One safe berth, London' or

(b) 'London, one safe berth'.

The test is undoubtedly whether on the true construction of the charter-party, the destination is London or the berth. My own view is that in case (a) it is the berth and in case (b) it is London. This point arose in The Radnor and Lords Justices Singleton and Parker seem to have inclined to this view.

Aldebaran Compania Maritima SA Panama v Aussenhandel AG Zurich (The Darrah), [1977] AC 157, per Lord Diplock at p.165:

Under a berth charter the vessel does not complete the loading or the carrying voyage until the vessel reaches the designated berth. So any time spent waiting for the berth to become available serves only to prolong the voyage stage and in the absence of express provision to the contrary any loss occasioned to the shipowner by reason of the delay falls on him alone. Under a port charter on the other hand the voyage stage is completed upon arrival of the vessel at a usual waiting place within the limits of the port. If because of congestion the charterer cannot designate a berth to which she can proceed immediately, laytime nevertheless starts to run against the charterer and if, as a consequence of her being compelled to wait until a berth becomes available, the charterer is unable to complete the loading or discharge within the stipulated laytime he must pay demurrage for any additional time used to complete it. In the case of a port charter it is only when the carrying vessel is compelled to wait her turn at a place outside the limits of the port that the time spent waiting for a berth would operate to prolong the voyage stage and to cast the loss occasioned by the delay upon the shoulders of the shipowner.

The commercial interest of the shipowner in a voyage charter is to make profitable use of his vessel. Unlike the charterer he is not primarily concerned with the choice of ports between which she is used to carry goods, though it may be to his interest that the loading port in any voyage charter is as near as possible to the discharging port in the immediately preceding charter, and that the discharging port in the new charter is not too remote from potential loading ports for subsequent charters. But his primary concern is that his vessel should earn the stipulated freight in as short a time as possible. To the charterer, on the other hand, the identity of the particular ports between which the cargo is to be carried is vital. So if he wants his cargo to be carried to or from ports where there is risk of delay in loading or unloading cargo owing to congestion, it makes good sense commercially that, irrespective of whether it be a berth charter or a port charter, the charterer should assume the financial burden of that risk and compensate the shipowner for the additional time that his vessel has had to be employed in the adventure in the event of delay resulting from this cause.

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