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Law and Sea.
Laycan.

Laycan is a period of time within which the vessel should arrive at loading port and tender ready for loading without risk of being rejected by the charterers…
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Laycan
Last updated: 28-Nov-2015

Per Devlin J in Evera SA Commercial v North Shipping Co Ltd [1956] 2 Lloyd’s Rep 367 at 370:

A charterer manifestly wants, if he can get it, a fixed date for the arrival of the ship at the port of loading. He has to make arrangements to bring down the cargo and to have it ready to load when the ship arrives and he wants to know as near as he can what that date is going to be. On the other hand, it is to the interest of the shipowner, if he can have it, to have the date as flexible as possible because of the inevitable delays due to bad weather or other circumstances that there might be in the course of a voyage. He can never be sure that he can arrive at a port on a fixed and certain day. Therefore, in order to accommodate these two views as far as possible it has been the general practice for a long time past to have a clause under which the shipowner, without pledging himself to a fixed day, gives a date in the charterparty of expected readiness, that is the date when he expects that he will be ready to load.

Per Christopher Clarke J in SNV Gas Supply v Naftomer Shipping & Trading (The Azur Gaz), [2005] EWHC 2528 Comm, [2006] 1 Lloyds Rep 163:

The term "laycan" is habitually used in the negotiation of charterparties, to refer to the earliest date at which the laydays can commence and the date after which the charter can be cancelled if the vessel has not by then arrived. By extension the term is to be found in FOB sales, so as to provide that the seller can cancel the contract if the vessel, which it is the buyer’s duty to procure, does not arrive at the port by the cancellation date. The expression does not fit so easily into the confines of a CIF contract where it is the seller’s obligation to make a contract of carriage, ship the goods on board and tender the customary documents.

And as Rix LJ observed in Tidebrook Maritime Corporation v Vitol SA (The Front Commander), [2006] EWCA Civ 944, [2006] 2 All ER Comm 813 at para 38-39, laycan is:

(a) the earliest day upon which an owner can expect his charterer to load and (b) the latest day upon which the vessel can arrive at its appointed loading place without being at risk of being cancelled.

The importance of such a laycan period is to enable the charterer to know when he has to have the goods ready for loading, and to enable both parties to know when, if the vessel is late in respect of her … expected time of arrival, the charterer can free himself by cancellation from the obligation of chartering the vessel and turn to alternative arrangements. Of course if a vessel arrives early, the owner may permit her to be loaded before the earliest day, and if she arrives late, the charterer can still maintain the charter.

Mansel Oil Ltd, Vitol S.A. v Troon Storage Tankers S.A. [2008] EWHC 1269 (Comm) per Clarke J at para 78:

78. The making of a nomination would provide no useful information since, ex hypothesi, the vessel was never going to arrive at the nominated port by the cancelling date. Nor would it serve any commercial purpose other than to avoid the present controversy as to the rights of the parties. But I do not regard that as a sufficient reason to attribute to the parties an intention to require the Charterers to give the Owners notice to deliver the vessel at some port or other within the delivery range, which both of them know Owners cannot possibly reach by the cancelling date, in order to avail themselves of the right to cancel when the inevitable non-delivery occurs.

P v A & Anor [2008] EWHC 1361 (Comm) (20 June 2008), per Steel J. at paras.16-17:

Without these matters being written into the COA, it would be unworkable. The selection of the load port and the cargo is accepted to be irrevocable. Thus, the laycan notice must be either revocable or irrevocable. … The idea that over the period of 20 days before the nomination of the vessel has to be made the charterers can change the laycan dates as frequently and as substantially as they see fit, or even thereafter up to the stage that an estoppel be clearly established, is commercially unreal and uncertain.


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