Glencore Energy UK Ltd v OMV Supply & Trading Ltd

Where a buyer requests that a vessel wait outside the contractual discharge arrangements, and the seller accepts that request by procuring the vessel’s wait, the parties may have an implied contract for delay by agreement. The express laytime and demurrage regime does not apply merely because a notice of readiness is tendered during the carrying voyage. The seller is entitled to reasonable remuneration for the additional service. The contractual demurrage rate may provide the fair commercial benchmark without turning the payment into demurrage. A request to record bunkers may support an implied term requiring payment for bunkers consumed during the agreed waiting period.

The claimant sold crude oil to the defendant on CFR terms for discharge at Trieste. Because no berth was available, the defendant asked the claimant to instruct the vessel to wait in the Mediterranean and later specified a waiting area north of Corfu. The vessel waited there before proceeding to Trieste.

The claimant sought payment at the demurrage rate for the waiting period and payment for bunkers consumed. The defendant argued that the waiting period fell within the contractual laytime and demurrage regime, or that the contract had been varied to produce that result. It also argued that the claim was time-barred under the contractual demurrage time bar. The central issue was the legal character and terms of the arrangement created by the defendant’s requests and the claimant’s acceptance.

1. Contractual demurrage regime. The sales contract did not bring forward laytime or demurrage by reason of the notice of readiness tendered at the waiting area. The contract referred to laytime at the discharge port and to loading or unloading. Its definition of notice of readiness did not extend to a mid-voyage waiting position. The contract also did not explain how time would stop on departure from the waiting area or how a second notice of readiness would operate at Trieste. The inward-passage provision concerned passage within the port, not passage from the waiting area to the port.
2. No variation. The defendant’s variation case failed. It would require substantial amendments to the clauses governing laytime, demurrage, notices of readiness, definitions and exceptions. Those amendments were not necessary to give business reality to the parties’ agreement and could impose additional liabilities on the seller.
3. Implied contract. The defendant requested a service which the claimant was not obliged to provide. The claimant accepted the request by instructing the owners and procuring the vessel’s wait. An implied contract therefore arose for delay by agreement. Its necessary terms were that the vessel would wait in the specified area until further orders and that the claimant would be remunerated. The claimant did not, merely by accepting the request, agree to every operational detail in the defendant’s emails, including the tender of a notice of readiness at the waiting area.
4. Remuneration. The demurrage rate was the implied contractual benchmark because the defendant had asked for that rate before the implied contract arose, and it represented a fair commercial rate for the service. Use of that rate did not make the payment demurrage. The defendant’s request to record bunkers supported an additional implied term requiring payment for bunkers consumed because of the waiting period.
5. The owners’ invoices and the claimant’s separate arrangements with its in-house shipping department did not determine the terms of the implied contract. The claimant was entitled to compensation at the demurrage rate and for the bunkers consumed. The parties were expected to agree the figures.

First-instance decision. No prior or appellate decision is stated in the judgment.