Ocean Pride Maritime Ltd v Qingdao Ocean Shipping Company

A notice of readiness tendered at an outer anchorage is invalid where the charterparty permits tender there only if the vessel is compelled to wait because the inner anchorage is unavailable. A vessel’s ability to proceed to the inner anchorage prevents the notice from satisfying that condition. However, the intended recipient of the notice may have implied authority to waive the defect. Acceptance by that recipient, communicated through the charterers’ nominated agents, can constitute waiver where the recipient knew the facts making the notice defective. Reliance is required for estoppel but not for waiver by election. Owners cannot bypass the contractual laytime regime by claiming detention damages where they could have proceeded to a position from which a valid notice could have been tendered.

Ocean Pride Maritime Limited Partnership, as disponent owners, claimed demurrage or alternatively damages for detention from Qingdao Ocean Shipping Company under a voyage charter for the NORTHGATE’s loading of iron ore at Guaiba Island Terminal, Brazil.

The vessel tendered notice of readiness at the outer anchorage, although it could have proceeded to the inner anchorage, where space was available. The issues were the agreed construction of the charterparty’s notice provisions, whether the terminal’s acceptance waived any defect or created an estoppel, and whether owners could recover detention damages under an always-accessible berth obligation.

1. Agreed terms and construction. The charter was concluded on 17 October 2005 by reference to the 29 June 2005 working copy of the BRAZIL STAR charterparty, subject to specified amendments and the necessary inclusion of WIPON. Later amendments to the BRAZIL STAR terms could not alter the NORTHGATE Charter. The apparent paragraph break in clause 6B was a rogue line break and had no contractual significance.
2. Read as a continuous provision, clause 6B allowed notice of readiness at the outer anchorage only where the vessel was compelled to wait there because of unavailability of space at the inner anchorage. The vessel could have proceeded to the inner anchorage. Its notice tendered at the outer anchorage was therefore invalid. The WIBON and WIPON provisions did not override the specifically negotiated clause 6B.
3. Waiver. MBR and the terminal were the intended primary recipients of notice under the charter. In the circumstances, they had implied authority, as a matter of commercial practicality, to waive a condition governing commencement of laytime. The terminal knew that the vessel was at the outer anchorage. Its acceptance of the notice, communicated by Brazshipping, constituted an unequivocal representation that the notice had been accepted for the purposes of the charter. Charterers had taken the risk of failing to communicate the relevant charterparty restriction. Under The Happy Day and The Shackleford, reliance was unnecessary for waiver, although the owners had established reliance in any event.
4. Alternative damages. An owner cannot recover detention damages for breach of an always-accessible or reachable-on-arrival obligation where the vessel could have proceeded to a position from which a valid notice could be tendered. Such a claim would circumvent the agreed regime for notice, laytime and demurrage.
5. Owners were entitled to judgment for demurrage of US$449,892.35.