Nordisk Circular
March 2020

NOTE - NOR/Laytime Regimes

The first step to trigger laytime is the service of a valid NOR. Free pratique is a requirement of readiness, however, under common law, obtaining free pratique has been treated by the courts, in the absence of any express clauses, as a mere formality. Thus, NOR can be tendered despite the Vessel having not yet obtained free pratique. In present times, with COVID-19 and increased health screening for vessels and crew, this is may no longer be the case.

Even if NOR can be tendered before free pratique is obtained, in the event free pratique is ultimately refused or there are reasonable grounds for believing it will be refused, it is unlikely this would bring forward the commencement of time, (see para. 3.197 of Schofield, Laytime & Demurrage).

In all instances, if there is a delay obtaining free pratique it is recommended that owners re-tender NOR on a without prejudice basis, as soon as free pratique is granted, while also ensuring that any required letters of protest are issued

Dry Charter Forms

1.  AMWELSH 93

The relevant provisions can be found in Clauses 6 and 7.

Under Clause 6(a) where the berth is available on arrival, NOR is to be tendered on arrival in berth. If the berth is not available on arrival, NOR can be tendered from a layby berth or anchorage. Clause 6(b) extends this further to allow tender of NOR at the usual anchorage outside port limits, if the vessel is prevented from entering port (amongst other reasons) on the order of Charterers or “any competent official body or authority” whether customs cleared or in free pratique or not. This would therefore potentially cover the scenario of a vessel being ordered to wait outside port during a quarantine period.  Note, however, that if the vessel is subsequently found not to be ready in all respects, time lost from discovery thereof is excluded from laytime or demurrage.

There are no express exceptions to laytime or demurrage in the printed form that would apply to delays relating to COVID-19 and/or quarantine.

2.  GENCON 94

The relevant provisions can be found in Clauses 6 and 7.

Under Clause 6(c) NOR can be tendered at or off port if the berth is not available on arrival, whether in free pratique or customs cleared. However, if the factor preventing berthing is not congestion, but the Vessel is prevented from berthing due to quarantine or other delays related to COVID-19, Owners may find themselves in a situation where they are unable to get into a position to be able to tender valid NOR. Assuming NOR could be tendered, if the Vessel is subsequently found not to be ready, all time lost after discovery thereof until the vessel is in fact ready shall not count as laytime.

There are no express exceptions to laytime or demurrage in the printed form that would apply to delays relating to COVID-19 and/or quarantine.

Wet Charter Forms

1.  Asbatankvoy

With the usual combination of Clauses 6 and 9, NOR can be tendered at the customary anchorage and time will count, where the berth is not reachable on arrival. This is not simply limited to congestion or physical matters and should extend to situations where a vessel is prevented from proceeding to berth on arrival as a result of quarantine or other protective measures.

There are no express exceptions to laytime or demurrage in the printed form that would apply to delays relating to COVID-19 and/or quarantine.

2.  BPVOY 4

The relevant provisions can be found in Clauses 6 and 18.

NOR can be tendered under Clause 6 on arrival at port. However, it will not be effective to start time running unless free pratique is obtained within 6 hours, see Clause 6.3.3. If free pratique is not granted within that timeframe and the delay is not attributable to Owners, the Master is required to issue a Letter of Protest, failing which time will only start to count towards laytime or demurrage when free pratique is granted.

There are no express exceptions to laytime or demurrage in Clause 18 that would apply to delays relating to COVID-19 and/or quarantine.

3.  BPVOY 5

The relevant provisions can be found in Clauses 10 to 12.

As with BPVOY 4, if free pratique has not been obtained within 6 hours of tender of NOR, the Master is required to issue a Letter of Protest. The NOR then becomes effective for the purpose of counting time (laytime or demurrage) on the earlier of the issue of the Letter of Protest or the granting of free pratique. Note this Clause also requires the Vessel to re-tender NOR immediately on obtaining free pratique, failing which all time from the granting of free pratique to the earlier of such re-tender of NOR or commencement of cargo operations will not count as laytime or demurrage.

Clause 11.4 provides for half rate demurrage for delays arising from “act of god”. Depending on the facts, Charterers may be able to bring themselves within this, however the Clause that neither the cause of the delay or the resulting delay could have reasonably been prevented by either party.

4.  ExxonMobil VOY2012

The relevant provisions can be found in Clauses 11, 13 and 14.

Under Clause 11, NOR can be tendered on arrival at the customary anchorage or waiting place. There is no express requirement for the Vessel to have obtained free pratique to tender NOR, thus the common law position applies.

Clause 14(c)(vi) excludes from laytime and demurrage time spent/lost due to the requirements of (amongst others) port authorities, or Health Authorities. Clause 14(c)(vii) provides a further exception for time spent/lost by reason of the action or inaction of the same entities.

In addition, there is the Quarantine Clause at Clause 23 which excludes from laytime and demurrage time lost due to quarantine, unless the quarantine was in force at the time the port/place was nominated by Charterers.

5.  Shellvoy 5

Under Clause 13(1)(a), if the Vessel does not proceed immediately to berth, NOR can be tendered at the usual waiting place or where she has been ordered to wait, as long as the berth is accessible. Accessible in this context means the Vessel is not prevented from proceeding by bad weather, ice, tide, tugs, port traffic requirements or awaiting daylight.

There is no express requirement for the Vessel to have obtained free pratique to tender NOR, thus the common law position applies.

See also, Clause 23 for the Quarantine Clause, which provides an express exception to laytime and demurrage for time lost due to quarantine, unless the quarantine was in force at the time the affected port was nominated by Charterers.

6.  Shellvoy 6

Clause 13(1)(a) has been amended (to the disadvantage of Owners) to require Customs clearance and free pratique to be obtained within 6 hours of tender of NOR. If not, the NOR is invalid and a new NOR can only be tendered once both these requirements have been satisfied, at which time, laytime and/or demurrage starts to count. This places the risk of obtaining free pratique on Owners and it is quite possible that in the current circumstances Vessels will have difficulty obtaining timely  clearances.

Note, however, there is also a Quarantine Clause at Clause 23 which provides that time lost will not count against laytime or demurrage unless the quarantine was in force at the time the affected port was nominated. Whilst there is no authority as to how Clause 13(a) and Clause 23 interact, the logical way to read these two clauses together is that if charterers nominate a quarantine affected port, any time lost as a result will count against laytime or demurrage even where the vessel has been unable to obtain free pratique or otherwise been unable to get into a position to tender valid NOR.

Written by Vicki Tarbet.