The meaning of "port limits": where can you tender nor?

Mr Justice Knowles in the "ARUNDEL CASTLE" [2017] EWHC 116 (Comm) considered a very short point of law relating to the meaning of a requirement that Notice of Readiness be tendered "within port limits".

The vessel arrived at Krishnapatnam and, because her intended berth was occupied, anchored at a location directed by the port authorities. Owners tendered NOR and claimed demurrage for the time spent at this location, which was outside the port limits shown on the relevant Admiralty chart. Owners argued that "port limits" included any area within which vessels are customarily asked to wait by port authorities.

In the "JOANNA OLDENDORFF" [1973] 2 Lloyd's Rep. 285, the House of Lords had held that at common law a vessel was not an arrived ship until she was within the area within which a port authority exercises its various powers relating to the movements and conduct of ships, unless the port limits were defined by law.

Some might think that a result unfair to the owners. In agreeing these charterparty terms though, they always took the risk of this result. Congestion at Indian ports is hardly a new phenomenon.

Unfortunately for owners, there was little evidence of the area of exercise by the port authority of these powers. All they provided to the Tribunal (and then the Court) was the Admiralty chart, which showed certain limits and that there were other anchorages within the port limits. While the chart was not conclusive evidence of the port limits, the inference was, therefore, that the vessel was outside the area described in the "JOANNA OLDENDORFF". The court also rejected submissions based on definition of "Port" set out in the Baltic Code 2014, which suggests this includes places outside the legal, fiscal or administrative area where vessels are ordered to wait, no matter the distance.

In many ways, it was something of a surprise to see this case appear on appeal. The law on the point was set out with clarity by the House of Lords almost exactly 40 years ago. One of the arbitrators, Mr John Schofield also writes the leading text book on laytime and demurrage. All the Judge really did was to repeat the existing law, say it then becomes a factual question and the Tribunal was quite entitled to make the findings it did.

Some might think that a result unfair to the owners. In agreeing these charterparty terms though, they always took the risk of this result. Congestion at Indian ports is hardly a new phenomenon. To have avoided what, frankly, seemed an inevitable decision it would have been necessary to negotiate much more specific terms into the charterparty.

In normal circumstances, this case would seem destined to be confined to history. Doubtless though it will appear in the 8th edition of Mr Schofield's text book as and when that is published.

Related resources

Get in touch

Bentleys, Stokes and Lowless, International House, 1 St Katharine's Way, London E1W 1YL - Tel: +44 (0)20 7782 0990

This form collects your contact details so that we can respond to your request. We will never share your personal information with a third party. Please read our privacy policy; to proceed, you will need to check the box below to indicate your acknowledgement:

* Required fields