Navalmar UK Ltd v Kale Maden Hammaddeler Sanayi Ve Ticart (as "The MV Arundel Castle")

In a charterparty requiring notice of readiness to be given within “port limits”, the expression does not necessarily mean the geographical limits shown on an Admiralty chart. Where legislation defines the limits, those limits apply. Otherwise, the area in which the port authority regulates the movements and conduct of ships provides a good indication. The authorities do not establish an exhaustive definition, and the parties remain free to define the expression contractually.

A general definition of “port” which includes places outside the legal, fiscal or administrative area does not define “port limits” unless incorporated or deliberately adopted by the parties. An Admiralty chart may nevertheless provide sufficient evidence in a particular case, especially where the parties supply no better material.

The owners of the MV Arundel Castle appealed under section 69 of the Arbitration Act 1996 against an arbitration award concerning demurrage. The charterparty required notice of readiness to be tendered on arrival at the loading and discharging ports “within port limits”.

The vessel anchored outside the area marked “Limit of Port of Krishnapatnam” on an Admiralty chart. The arbitrators held that the notice was invalid because the vessel was outside port limits. The central issue was the proper meaning of “port limits”, including whether it extended to places where vessels were required to wait outside the geographical or legal area of the port.

1. Appeal dismissed. The arbitrators were entitled to conclude that the vessel was outside port limits, or that the owners had failed to prove that it was within them.
2. The expression “port limits” was to be construed in light of The Johanna Oldendorff [1973] 2 Lloyd’s Rep 285. Where national or local law defines the limits of the port, those limits apply. In the absence of such a law, the area in which the port authority exercises powers regulating the movements and conduct of ships is a good indication of the port limits.
3. The authorities deliberately left the matter at that level of description. They did not provide an exhaustive definition. The appropriate approach was therefore to avoid extending the concept beyond the guidance given in The Johanna Oldendorff, while recognising that particular features may matter in individual ports.
4. The broader definition of “port” in the Laytime Definitions for Charterparties 2013 could extend beyond those limits, but could not be treated as a definition of “port limits” unless the parties deliberately chose it. The parties’ decision to use “within port limits”, rather than the Gencon wording “at or off” the port, indicated that they had not done so.
5. The Maratha Envoy [1977] 2 Lloyd’s Rep 301 confirmed the importance of legal certainty and explained that parties normally alter the allocation of congestion risk through specific contractual clauses, rather than by making the voyage stage end at any waiting place outside the named port.
6. The Admiralty chart was not necessarily conclusive in every case. On the limited material supplied here, however, it provided a sufficient basis for the arbitrators’ factual conclusion.

The judgment itself states that the owners appealed under section 69 of the Arbitration Act 1996 from an arbitration award dated 7 January 2016. Permission was granted on a point of law concerning the meaning of “port limits”.