The Hidden Dynamics of Laytime and Demurrage

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Laytime and demurrage are essential principles in voyage charterparties, regulating the time allowed for loading and discharging cargo. While the application of these concepts can vary between jurisdictions, this guide provides a fundamental overview of their definitions and practical operation under English law.The shipownersclub source.

  • Allocated period for cargo operations in voyage charterparties.
  • Compensation for exceeding laytime in breach of contract.
  • Clauses absolving charterer’s liability for laytime delays.

Loading and Discharging Periods

Laytime is the allocated duration for cargo loading and unloading during a voyage charterparty. It encompasses cargo placement, stowage, securing, and other operations vital for safety. The critical concept is that “loading is not complete until the cargo is so placed in the ship that the ship can proceed on her voyage in safety.” The commencement of laytime follows the issuance of a Notice of Readiness (NOR), indicating the vessel’s readiness to load or discharge both physically and legally.

Factors and Modifiers

The duration of laytime is determined at the contract formation stage, commonly expressed as a specified period or load/discharge rate. Modifiers like “running days,” “weather working days,” and “Sundays and holidays excepted” influence laytime interruptions. These terms account for continuous operation regardless of time or weather conditions, ensuring fair measurement of laytime.

Understanding Delays

Exceptions clauses absolve the charterer of liability for exceeding the allowed laytime in specific events. These clauses are strictly interpreted against the benefiting party. Laytime doesn’t accrue during delays caused by the owner’s fault or valid lien exercise. If no laytime is agreed upon, discharge should occur within a reasonable time, accounting for unforeseeable delays beyond the charterer’s control.

Liquidated Damages for Delay

Demurrage is the compensation for exceeding laytime. It’s a liability for breach of contract resulting from not discharging or loading within the stipulated laytime. The charterer is typically responsible for demurrage payments. The principle “once on Demurrage always on Demurrage” implies that if a vessel enters demurrage, it remains there until loading completes, often even for delays not usually counted toward laytime.

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