Gard Shipping AS v Clearlake Shipping PTE Ltd

A contractual escalation clause applies according to its specified trigger. Where a charterparty distinguishes between an orders regime and the ordinary laytime and demurrage regime, the court must identify which regime the event activates. An express instruction to stop and wait, or to delay arrival before tendering notice of readiness, is required. A passive failure to give berthing or discharge instructions after notice of readiness does not satisfy that requirement. Once notice of readiness is validly tendered, the ordinary laytime and demurrage regime applies. The court will not imply a term merely because another allocation of risk would be commercially preferable where the contract remains coherent and the proposed term is inconsistent with its express structure.

Owners claimed approximately $976,732 in enhanced demurrage and bunker costs. The claim related to 64.7083 days during which the vessel waited at Rotterdam before Charterers issued discharge instructions. Charterers accepted that the delay arose from their own commercial purposes, but contended that the charterparty required only ordinary demurrage.

The dispute concerned the construction of Additional Clause 11 and Clause 22 of the BPVOY4 form, and alternatively whether an implied term extended the enhanced-rate regime to waiting after notice of readiness had been tendered.

1. Construction. The court applied the objective, unitary approach in Wood v Capita Insurance Services Ltd [2017] 2 WLR 1099. The charterparty had to be read as a whole, giving appropriate weight to its language, commercial consequences and structure.
2. Clause 22. Clause 22 concerned revised voyage orders diverting the vessel to an alternative port. It did not independently govern the Rotterdam waiting period. The relevant provision was Additional Clause 11.
3. Additional Clause 11. The clause operated where Charterers instructed the vessel to stop and wait, delay arrival, or wait at an offshore position in the circumstances specified. A passive failure to provide discharge or berthing instructions was not such an instruction. The vessel had been ordered to proceed to Rotterdam, had tendered notice of readiness, and then waited without further orders. The clause therefore did not apply.
4. The charterparty contained separate regimes. Tender of notice of readiness triggered the ordinary loadport/disport laytime and demurrage regime. That regime was distinct from the stop-and-wait regime, which carried enhanced demurrage and bunker liabilities. The ordinary contractual demurrage rate consequently applied at Rotterdam.
5. The proposed implied term was rejected. Applying Marks & Spencer v BNP Paribas [2015] UKSC 72 and the criteria in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, implication was neither necessary nor obvious. The charterparty was commercially coherent and the proposed term would disturb its express allocation of liability.
6. In any event, even on Owners’ construction, no enhanced rate had been agreed for waiting after day 35. Charterers had discharged their liability by paying ordinary demurrage. No further sum was owing for demurrage or bunkers.