Ocean Pride Maritime Ltd v Qingdao Ocean Shipping Company [2007] EWHC 2796 (Comm)

[2007] EWHC 2796 (Comm)Case No 2006 Folio No. 789
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 27 November 2007
Before
Mr. Richard Siberry QCSitting as a Deputy High Court Judge
Between
OCEAN PRIDE MARITIME LIMITED PARTNERSHIPClaimantQINGDAO OCEAN SHIPPING COMPANYDefendantOCEAN PRIDE MARITIME LIMITED PARTNERSHIP Claimant (Owners)- and -QINGDAO OCEAN SHIPPING COMPANY Defendant (Charterers)
Mr Michael Coburn (instructed by Homan Fenwick & Willan) for ClaimantMiss Rebecca Sabben-Clare (instructed by Middleton Potts) for DefendantHearing Hearing date: 29 October 2007
Judgment

Introduction

[1]This case concerns a claim by Ocean Pride Maritime Limited Partnership, as disponent owners (“Owners”) of the M.V. NORTHGATE, against Qingdao Ocean Shipping Company as voyage charterers (“Charterers”), for demurrage, alternatively damages for detention, alleged to have become payable by Charterers in respect of the call of the NORTHGATE at Guaiba Island Terminal, Sepetiba, Brazil, in November 2005, to load a cargo of iron ore. Charterers are part of the Chinese state-owned COSCO shipping group (“COSCO”), and the cargo was one of a long succession of iron ore shipments from South America to China. The claim is brought under a clause in the charter in question providing that the charter was governed by English law and that disputes were to be submitted to the exclusive jurisdiction of the High Court.[2]The vessel arrived and anchored at the outer anchorage off Guaiba Island Terminal (“the Terminal”), and tendered notice of readiness (“NOR”), at 0550 on 17 November 2005. Owners contend that laytime commenced, after the expiry of a 12-hour notice period, at 1750 the same day. As a result of congestion at the Terminal, the vessel was unable to berth until 0935 on 27 November 2005. Charterers contend that laytime commenced at 1155 that day, when the vessel commenced loading. Loading operations were completed at 0357 on 29 November 2005, whereupon the NORTHGATE sailed for China.[3]If laytime did commence at 1750 on 17 November 2005, as Owners contend, it was common ground that it expired before the vessel berthed, and that demurrage for 8.179861 days, in the sum of US$449,892.35, became payable by Charterers. On Charterers’ case, however, the vessel completed loading before the expiry of laytime, and they earned despatch, in the sum of US$43,274.31, which they deducted from the balance of freight payable to Owners after completion of discharge.[4]The voyage charter fixture pursuant to which the vessel loaded at the Terminal, and discharged at Qingdao, China, in January 2006, was concluded on 17 October 2005, through Clarkson Asia Limited’s Shanghai representative office (“Clarksons”) as brokers: it was on that date that Clarksons sent both parties a fixture recap email confirming that they had “fully fixed” the M.V. MEYNELL, or at Owners’ option the M.V. NORTHGATE, on the terms set out in the recap. Clarksons’ fixture recap included reference to an earlier voyage charter fixture to Charterers of a vessel, the M.V. BRAZIL STAR, in the same management as the NORTHGATE – that of Zodiac Maritime Agencies Limited of London (“Zodiac”), who, like Clarksons, had a representative office in Shanghai. In the event, Owners exercised their option to perform the voyage with the NORTHGATE, and I shall henceforth refer to the 17 October 2005 fixture as “the NORTHGATE Charter”.[5]Although various drafts of a charterparty for the NORTHGATE Charter were prepared and circulated by Clarksons after the fixture had been concluded, no charterparty was ever signed by Charterers. Likewise, although the BRAZIL STAR fixture had been concluded on 10 May 2005, and although various drafts of a charterparty recording that fixture were circulated, it does not appear that Charterers ever signed a BRAZIL STAR charterparty.[6]Against this background, one of the disputes that I have to resolve is as to precisely what terms were agreed between Owners and Charterers, under the NORTHGATE Charter, with regard to the commencement of laytime at the Terminal. I shall also have to decide issues as to the proper construction of such terms as I find were agreed. This will involve considering the evidence relating to the terms, not only of the NORTHGATE and BRAZIL STAR Charters, but also of a voyage charterparty dated 27 October 2004 between Charterers as (in this instance) the owners of the MV CAPE SATURN, and Jinan Iron and Steel Company Limited as charterers.[7]That charterparty (“the CAPE SATURN Charter”) was signed by both parties thereto, and there was no dispute as to its terms. However, the manner in which clause 6B thereof, dealing with when NOR could be tendered, was set out in the CAPE SATURN Charter resulted in subsequent confusion, at least in the minds of Owners, as will appear below.[8]In brief, it was Owners’ case that, having regard to what they described as the “main terms” of the NORTHGATE Charter, which allowed for the tender of NOR “Whether in berth or not, whether in port or not, whether customs clearance or not, whether in free pratique or not” (commonly, and hereinafter, abbreviated as, respectively, WIBON, WIPON, WCCON, and WIFPON), NOR could validly be tendered at the outer anchorage off the Terminal, as the Master of the NORTHGATE had done; and that time counted from the expiry of the prescribed 12-hour notice period after tender of such NOR. They contended that clause 6B of the NORTHGATE Charter was agreed in terms which did not conflict with this; or, alternatively, that clause 6B had to yield to the WIBON, WIPON, WCCON, WIFPON provisions of the “main terms” of that Charter. Charterers for their part contended that clause 6B was agreed in terms which made clear that NOR could only be tendered at the outer anchorage if (no loading berth then being available) the vessel was compelled to wait for a berth at the outer anchorage due to unavailability of space at the inner anchorage. It was common ground that in the present case, however, it would have been possible, though more costly for Owners, for the NORTHGATE to have waited at the inner anchorage. Accordingly, so Charterers submitted, the NOR tendered at the outer anchorage was a nullity, and time only commenced to count when the vessel berthed and loading commenced some 10 days later.[9]In the alternative to their primary case that the NOR tendered on 17 October 2005 when the NORTHGATE arrived at the outer anchorage was valid, Owners contended that Charterers must be taken to have waived any defect in the NOR and/or were estopped from contending that it was invalid, by reason of its having been accepted by the Terminal upon tender at 0550 on 17 November 2005. Charterers riposted that any such acceptance had been by the Terminal, not by Charterers themselves; and that there had been no clear and unequivocal representation by Charterers, and in any event no reliance by Owners, capable of giving rise to any such waiver or estoppel.[10]In the further alternative, if the NOR was invalid and Charterers were not precluded from so contending, Owners claimed damages for detention on the basis that Charterers were in breach of another of the “main terms” of the NORTHGATE Charter, whereby Charterers had undertaken that a berth at the Terminal would be “always accessible” (“AA”). Charterers’ response to this damages claim was that it was not open to Owners to advance such a claim where, as here, it was Owners’ own decision that the NORTHGATE should remain at the outer (rather than the inner) anchorage, waiting for a berth to become available, that had resulted in Owners not having tendered a valid NOR, which they could have done had the NORTHGATE proceeded immediately to, and waited for a berth at, the inner anchorage, where space had been available. There were also issues as to the quantum of Owners’ damages claim.[11]The evidence comprised two bundles of contemporaneous documentation, together with some additional documents, and the witness statements exchanged by the parties. Owners served two witness statements each from Stephen Kunzer, chief representative at Zodiac Shanghai, and Paul Shields, Operations Director of Zodiac in London, and a witnesss statement (relating only to the quantum of Owners’ alternative damages claim) from Andrew Hamish Matthews, a senior broker at Zodiac in London. Charterers served two witness statements from Li Zhao Hui, who works in the chartering department of COSCO Qingdao, and a witness statement of Rodrigo Kill, a ship’s agent based in Rio, who works for Brazshipping Maritima Ltda. (“Brazshipping”), a Brazilian shipping agency which acted as agents in respect of the Vessel’s call at the Terminal. The parties sensibly agreed that, in a case which turned very largely on the documents, there was no need for any oral evidence. The witness statements were agreed to be admissible in evidence, though no admissions were made as to their contents.[12]The trial took place on 29 October 2007, and (as a result of the parties’ agreement that no oral evidence would be called) was concluded within the day (though some additional documents were submitted by the parties shortly after the trial, on which I invited and received short supplementary written submissions). Owners were represented by Mr Michael Coburn, instructed by Homan Fenwick & Willan. Charterers were represented by Miss Rebecca Sabben-Clare, instructed by Middleton Potts.[13]Although Mr Coburn invited me first to consider what the position would have been under what he described as the “main terms” of the NORTHGATE Charter, it is more logical, as Miss Sabben-Clare submitted, and as I shall do, to grapple with the issue as to what were the agreed terms of the NORTHGATE Charter with regard to when NOR could properly be tendered, and then to address the issue as to the proper construction of those terms, having regard to the parties’ respective submissions, including Mr Coburn’s submission that “main terms” should, in the event of conflict with other terms, be accorded priority.[14]I shall then set out the facts relating to the vessel’s call at the Terminal in more detail, before dealing, as appropriate, with the issues raised by Owners’ waiver/estoppel case, and by their alternative claim for damages for detention. What were the agreed terms of the NORTHGATE Charter as to when NOR could be tendered?[15]As indicated above, the story begins with the CAPE SATURN Charter, dated 27 October 2004, between the present Charterers as owners, and Jinan Iron and Steel Company Limited as charterers. It was for the carriage of a cargo of iron ore on a voyage “from one safe berth, one safe port, Ponta da Madeira, always accessible always afloat, Brazil” to China. Clause 6B provided (and was set out) as follows (with spelling mistakes and an obviously mistaken repetition of some words as printed):
“B.NOTICE OF READINESS NOTICE OF READINESS (NOR) MAY BE TENDERED AFTER ARRIVAL OF VESSEL AT THE INNER HARBOUR AREA,INCLUDING THE INNER ANCHORAGE AREA,OF LOADING PORT,AT ANY TIME,IRRESPECTIVE OF OFFICIAL OFFICE HOURS,SATURDAYS, SUNDAYS AND HOLIDAYS INCLUDED, WHETHER THE VESSEL IS IN BERTH OR NOT,PROVIDED THAT THE VESSEL IS WITHIN THE AGREED LAYDAYS,INFREE PRETIQUE,GAS FREE,CLEARED BY PORT AUTHORITIES AND READY TO RECEIVE CARGO IN EVERY RESPECT,OTHERWISE NOTICE OF READINESS WILL BE CANCELED.HOWEVER,IF VESSEL IS COMPELLED TO WAIT FOR BERTH AT THE OUTER OR AT THE INTERMEDIARY ANCHORAGE AREA ON VESSEL’S ARRIVAL DUE TO UNAVAILABILTIY OF SPACE AT THE INNER ANCHORAGE AREA,NOTICE OF READINESS MAY BE TENDERED AFTER ARRIVAL OF VESSEL AT THE OUTER OR AT THE INTERMEDIARY ANCHORAGE AREA AT MAY BE TENDERED AFTER ARRIVAL OF VESSEL AT THE OUTER OR AT THE INTERMEDIARY ANCHORANCE AREA AT ANY TIME IRRESPECTIVE OF OFFICIAL OFFICE HOURS,SATURDAYS, SUNDAYS AND HOLIDAYS INCLUDED,PROVIDED THAT THE VESSEL IS IN FREE PRATIQUE,GAS FREE,CLEARED BY PORT AUTHORITIES AND READY TO RECEIVE CARGO IN EVERY RESPECT,OTHERWISE NOTICE OF READINESS WILL BE CANCELED.”
[16]Although clause 6B of the CAPE SATURN Charter was (as appears above) printed with a paragraph break about half-way though the clause, the paragraph break, which Mr Coburn described as “a rogue line break”, occurs in the middle of a sentence, and it is obvious that what ought to be a single continuous paragraph has mistakenly been divided into two. The sentence interrupted by this paragraph break also contains duplication of the words “at may be tendered after arrival of vessel at the outer or at the intermediary anchorage area”, beginning shortly after the break. However, notwithstanding the paragraph break and this obvious repetition of words, the sense of this sentence is clear: subject to satisfaction of the other requirements listed, it permitted the tender of NOR at the outer or intermediary anchorage area if the vessel was compelled to wait there on arrival for a loading berth, due to unavailability of space at the inner anchorage area. As Miss Sabben-Clare pointed out, the CAPE SATURN Charter contained other clauses with “rogue line breaks”, namely, clauses 18 and 29.[17]Zodiac/Owners were not involved at all in the CAPE SATURN Charter. However, the BRAZIL STAR, the subject of the next relevant fixture, was another vessel under the management of Zodiac. The brokers for the BRAZIL STAR fixture were Parakou Shipping Limited of Hong Kong (“Parakou”). The parties first negotiated and agreed the main terms of the proposed fixture, which were recapped in an email from Parakou dated 6 May 2005, in which the fixture was expressed to be “Subject C/P details BSS [basis] Charterers proforma C/P.” COSCO thereupon sent Parakou, and Parakou forwarded to Zodiac, a copy of the CAPE SATURN Charter to serve as Charterers’ proforma charterparty, with reference to which further negotiations then took place.[18]On 10 May 2005, after reviewing the CAPE SATURN Charter, Zodiac gave their response, in an email from Mr Kunzer which stated that this Charter “is to be used in accordance with main terms as agreed and logical amendments with following alterations:- …”. Among the alterations Zodiac proposed were the following changes to clause 6B:
“Change title “Notice of Readiness” to “Notice of Readiness at Load & Discharge Port”
Insert “Notice of Readiness at Loadport” then text. Para 2 Line 2/3 delete “at may be tendered after arrival of vessel at the outer or at the intermediary anchorage area” Insert “Notice of Readiness at Discharge Port…” [a proposed separate discharge port NOR provision was then set out]. Zodiac did not propose eliminating the paragraph break. On the contrary, their third proposed change to clause 6B, to delete the obviously duplicated words, was expressly referenced to “Para 2” of the clause. Mr Kunzer’s evidence was that it never occurred to him (and to the best of his knowledge it did not occur to anyone else at Owners or at Zodiac) that clause 6B in the CAPE SATURN Charter should have been a single, continuous paragraph.[19]COSCO responded to Zodiac’s comments on the same day, on an “accept/except” basis, which did not refer to, and thereby accepted, Zodiac’s proposed revisions to clause 6B. Zodiac accepted COSCO’s comments, so that, later on 10 May 2005, Parakou were able to send out an email confirming a clean fixture, and recapping the terms thereof. The terms recorded in this fixture confirmation email included: “loading 1 SB 1 SP PDM [Ponta da Madeira], Brazil AA20. NOR to be tendered at load and discharge port WIPON WIFPON WCCON ATDNSHINC [any time of day or night Sundays and holidays included]21. …22. C/P details BSS charterers pro forma C/P CAPE SATURN/JINAN STEEL C/P DD 27/10/04 with main terms agreed and following amendments:23. …24. Cls 6B25. [setting out the amendments as per Zodiac’s proposals]”.[20]Following confirmation of this BRAZIL STAR fixture, on 29 June 2005 Parakou sent the parties thereto a working copy of the charterparty which they had, in accordance with normal practice, drawn up recording the terms they understood to have been agreed. This working copy charterparty provided, by clause 2, for a voyage “FROM ONE SAFE BERTH, ONE SAFE PORT, PONTA DA MADEIRA ALWAYS ACCESSIBLE ALWAYS AFLOAT, BRAZIL”, to China. Clause 6 was drawn up in accordance with the exchanges on 10 May 2005, so that clause 6B read (and was set out) as follows); “B. NOTICE OF READINESS AT LOAD AND DISCHARGE PORT: NOTICE OF READINESS AT LOADPORT NOTICE OF READINESS (NOR) MAY BE TENDERED AFTER ARRIVAL OF VESSEL AT THE INNER HARBOUR AREA, INCLUDING THE INNER ANCHORAGE AREA, OF LOADING PORT, AT ANY TIME, IRRESPECTIVE OF OFFICIAL OFFICE HOURS, SATURDAYS, SUNDAYS AND HOLIDAYS INCLUDED, WHETHER THE VESSEL IS IN BERTH OR NOT, PROVIDED THAT THE VESSEL IS WITHIN THE AGREED LAYDAYS, IN FREE PRETIQUE, GAS FREE, CLEARED BY PORT AUTHORITIES AND READY TO RECEIVE CARGO IN EVERY RESPECT, OTHERWISE NOTICE OF READINESS WILL BE CANCELED. HOWEVER, IF VESSEL IS COMPELLED TO WAIT FOR BERTH AT THE OUTER OR AT THE INTERMEDIARY ANCHORAGE AREA ON VESSEL’S ARRIVAL DUE TO UNAVAILABILITY OF SPACE AT THE INNER ANCHORAGE, NOTICE OF READINESS MAY BE TENDERED AFTER ARRIVAL OF VESSEL AT THE OUTER OR AT THE INTERMEDIARY ANCHORAGE AREA AT ANY TIME IRRESPECTIVE OF OFFICIAL OFFICE HOURS, SATURDAYS, SUNDAYS AND HOLIDAYS INCLUDED, PROVIDED THAT THE VESSEL IS IN FREE PRATIQUE, GAS FREE, CLEARED BY PORT AUTHORITIES AND READY TO RECEIVE CARGO IN EVERY RESPECT, OTHERWISE NOTICE OF READINESS WILL BE CANCELED.” NOTICE OF READINESS AT DISCHARGE PORT…[etc.]” NOTICE OF READINESS AT LOADPORT NOTICE OF READINESS AT DISCHARGE PORT…[etc.]”

NOTICE OF READINESS AT LOADPORT

[21]On 12 July 2005, Carol Guan of Zodiac Shanghai emailed Parakou, thanking them for this working copy of the BRAZIL STAR charterparty, and stating that Owners had reviewed it and had certain comments as set out in her email. Most of these detailed comments were proposed amendments to the wording as set out in the working copy, in line with the terms as set out in the fixture recap – for example, to change the freight payment clause so as to provide for payment of 90% of freight 7, rather than 10, banking days after release of bills of lading. They indicate a careful review of the working copy by Zodiac. In relation to clause 6B, the only comment was “page 4 cl. 6B ref our telcon, pls kindly check with Chtrs whether the clause in proforma is complete.” Mr Kunzer explained that Ms Guan had (so he understood) telephoned Parakou, asking them to check whether there were any words missing after “unavailability of space” at the end of the first paragraph of clause 6B.[22]On 13 July 2005, Parakou passed on Zodiac’s comments in an email to COSCO which began “Referring to the working C/P of the subject charter, pls find the comments from owners for chrts’ confirmation”, and then quoted the text of Zodiac’s 12 July 2005 email. There had been no reply to this email by the time the negotiations for what became the NORTHGATE Charter commenced.[23]Those negotiations commenced with an inquiry from COSCO to Clarksons on 11 October 2005, for a vessel to carry a cargo of ore from 1-2 safe berths SEPETIBA to 1-2 safe berths Qingdao, with laycan dates of 8-18 November 2005. Clarksons in turn contacted Zodiac Shanghai, who proposed the MEYNELL, or at Owners’ option, the NORTHGATE. Negotiations proceeded speedily, such that on 12 October 2005, Clarksons were able to email the parties confirming agreement on terms which included “LOADING: 1-2 SB(S) 1 SP GUAIBA ISLAND TERMINAL AND/OR CPBS CPBS-COMPANHIA PORTUARIA BAIA DE SEPETIBA, BRAZIL, AA ….. - DEMURRAGE: USD 55,000 DHD PDPR LTS BENDS - LOAD RATE: 55,000 MTS PWWD WITH 12 HRS TT USC ….. - AT LOAD & DISCHARGE PORTS NOR TO BE TENDERED WHETHER IN BERTH OR NOT, WHETHER IN PORT OR NOT, WHETHER CUSTOMS CLEARANCE OR NOT, WHETHER IN FREE PRATIQUE OR NOT” but which stated that the fixture was “SUBJ[ect] CP DETAILS”.[24]These negotiations reminded Mr Kunzer of Zodiac’s outstanding comments on the working copy of the BRAZIL STAR charterparty, and prompted him to email Parakou, on 13 October 2005, asking for a “corrected version of [that] C/P”. Parakou replied, sending another copy of that working copy. But they also sent a chaser to COSCO, reminding them of Zodiac’s comments of 12 July 2005 (again quoting Zodiac’s email of that date), and requesting “Chtrs pls kindly comment/confirm by return.”[25]Later on 13 October 2005, Zodiac emailed Clarksons in relation to the proposed NORTHGATE fixture, stating:
“Owners have reviewed Brazil Star/COSCO Qingdao c/p dtd 10 May 2005 which is to be used in accordance with main terms as fixed and logical alterations with following amendments:- [including] Cls. 6 Notice of Readiness of Loadport 1st Para – Line 4/6 delete ‘provided that the vessel….will be cancelled’ 2nd para - Line 4/6 delete “provided that the vessel….will be cancelled’.”
They also picked up the “7 banking days” amendment to the freight payment provision. [including] Cls. 6

Notice of Readiness of Loadport

[26]Also on 13 October 2005, Mr Kunzer replied to Parakou’s email of earlier that day, pointing out that the working copy of the BRAZIL STAR charterparty, re-sent with Parakou’s email, “doesn’t incorporate Carols email of 12th July where she pointed out some corrections”; and adding, “Please can someone redo.” Parakou replied that they were working on it, would have to confirm some details with Charterers, and would revert as soon as possible. That was clearly a reference to Parakou’s email chaser to COSCO, referred to in para. 24 above. COSCO did not, however, respond, because (according to Mr Li’s evidence) they thought the BRAZIL STAR “was already fixed”. In fact, the BRAZIL STAR voyage had been completed by the end of August 2005.[27]On 17 October 2005, Clarksons were able to send out a fixture confirmation email in respect of the NORTHGATE Charter, confirming that they had “fully fixed” as set out in the email. The terms recorded therein included all those recorded as agreed in Clarksons’ email of 12 October 2005 (see para. 23 above). The email continued:
“FURTHER TERMS AND DETAILS ARE BASED ON Brazil Star/COSCO Qingdao c/p dtd 10 May 2005 which is to be used in accordance with main terms as fixed and logical alterations with the following amendments:- …”
These included the amendments to the loadport NOR provisions of Clause 6B in exactly the terms proposed in Zodiac’s email to Clarksons of 13 October 2005 (see para. 25 above) - ie. changes referenced to the two paragraphs of that clause as they appeared in the working copy of the BRAZIL STAR charterparty. Clarksons’ email concluded with thanks for the fixture.[28]With these specific changes to clause 6B, the clause would, with regard to NOR at the loadport, have read as follows:
“NOTICE OF READINESS AT LOADPORT NOTICE OF READINESS (NOR) MAY BE TENDERED AFTER ARRIVAL OF VESSEL AT THE INNER HARBOUR AREA, INCLUDING THE INNER ANCHORAGE AREA, OF LOADING PORT, AT ANY TIME, IRRESPECTIVE OF OFFICIAL OFFICE HOURS, SATURDAYS, SUNDAYS AND HOLIDAYS INCLUDED, WHETHER THE VESSEL IS IN BERTH OR NOT. HOWEVER, IF VESSEL IS COMPELLED TO WAIT FOR BERTH AT THE OUTER OR AT THE INTERMEDIARY ANCHORAGE AREA ON VESSEL’S ARRIVAL DUE TO UNAVAILABILITY OF SPACE AT THE INNER ANCHORAGE AREA, NOTICE OF READINESS MAY BE TENDERED AFTER ARRIVAL OF VESSEL AT THE OUTER OR AT THE INTERMEDIARY ANCHORAGE AREA, IRRESPECTIVE OF OFFICIAL OFFICE HOURS SATURDAYS, SUNDAYS AND HOLIDAYS INCLUDED.”
[29]Neither party to the NORTHGATE Charter took issue with the way in which that fixture was recorded in Clarksons’ fixture recap email. Indeed, there was no further correspondence regarding the terms of that fixture until 29 December 2005 (see below). In the meantime, the NORTHGATE, duly nominated as the performing vessel, proceeded to the Terminal, and, after her 10-day wait, berthed there, loaded her cargo of iron ore, and proceeded thence to Qingdao, being well on her way there by 29 December 2005. I should record at this point that it was common ground that there was both an outer and inner anchorage, but no “intermediary anchorage”, off the Terminal.[30]In the meantime, on 18 October 2005, Parakou had sent Zodiac and COSCO a revised working copy of the BRAZIL STAR charterparty. Apart from clause 6B, this picked up most, but not all, of Zodiac’s comments of 12 July 2005, repeated on 13 October 2005 (it did not make requested changes to clause 19 line 12, or clause 25). As to clause 6B, Parakou redrafted this to read as follows (with additions to the previous draft underlined, and deletions indicated, by me):
“B. NOTICE OF READINESS AT LOAD AND DISCHARGE PORT: NOTICE OF READINESS AT LOADPORT NOTICE OF READINESS (NOR) MAY BE TENDERED AFTER ARRIVAL OF VESSEL AT THE INNER ARBOUR AREA, INCLUDING THE INNER ANCHORAGE AREA, OF LOADING PORT, AT ANY TIME, IRRESPECTIVE OF OFFICAL OFFICE HOURS, SATURDAYS, SUNDAYS AND HOLIDAYS INCLUDED, WHETHER THE VESSEL IS IN BERTH OR NOT, WHETHER IN PORT OR NOT, WHETHER IN FREE PRATIQUE OR NOT, WHETHER CUSTOMS CLEARED OR NOT, PROVIDED THAT THE VESSEL IS WITHIN THE AGREED LAYDAYS, [words, “in free pretique,” deleted] GAS FREE, CLEARED BY PORT AUTHORITIES AND READY TO RECEIVE CARGO IN EVERY RESPECT, OTHERWISE NOTICE OF READINESS WILL BE CANCELED, HOWEVER, IF VESSEL IS COMPELLED TO WAIT FOR BERTH AT THE OUTER OR AT THE INTERMEDIARY ANCHORAGE AREA ON VESSEL’S ARRIVAL DUE TO UNAVAILABILITY OF SPACE, NOTICE OF READINESS IS STILL VALID. AT THE INNER ANCHORAGE AREA, NOTICE OF READINESS MAY BE TENDERED AFTER ARRIVAL OF VESSEL AT THE OUTER OR AT THE INTERMEDIARY ANCHORAGE AREA AT ANY TIME, IRRESPECTIVE OF OFFICIAL OFFICE HOURS, SATURDAYS, SUNDAYS AND HOLIDAYS INCLUDED, WHETHER IN PORT OR NOT, WHETHER IN FREE PRATIQUE OR NOT, WHETHER CUSTOMS CLEARED OR NOT PROVIDED THAT THE VESSEL IS [words, “in free pratique” deleted], GAS FREE, CLEARED BY PORT AUTHORITIES AND READY TO RECEIVE CARGO IN EVERY RESPECT, OTHERWISE NOTICE OF READINESS WILL BE CANCELLED. NOTICE OF READINESS AT DISCHARGE PORT …..”
Thus it will be seen that, by comparison with their 29 June 2005 working copy, Parakou had incorporated the agreed WIPON, WIFPON, WICCON provisions in the body of the clause, and had added the words, “Notice of readiness is still valid”, at the end of the first paragraph, with a full stop at the end of the paragraph. That left what had been the second half of a sentence split by the paragraph break as a new sentence beginning “At the inner anchorage area”, but continuing by dealing only with tender of NOR after arrival at the outer or intermediary anchorage area. NOTICE OF READINESS AT LOADPORT

NOTICE OF READINESS AT DISCHARGE PORT

[31]Mr Kunzer speculated that Parakou must have made these changes on the basis of confirmation received from Charterers. However, Mr Li denied that he, or anyone else at COSCO, had proposed or agreed to any such changes. As far as he could recall, there was no telephone conversation with anyone at Parakou at the time. On the contrary, he did not pay any particular attention to Parakou’s email of 18 October 2005, as it related to a fixture that was well in the past and a voyage that had already been perfomed. I accept that explanation, and find that it is likely that Parakou made the changes in question on their own initiative, in a misguided attempt, prompted by Zodiac’s comments, to give substance to the paragraph break. At all events, neither party responded to Parakou’s revised draft working copy.[32]As already mentioned, the NORTHGATE arrived and tendered NOR at the outer anchorage on 17 October 2005, berthed and commenced loading ten days later, and completed loading and sailed for China on 29 October 2005.[33]On 29 December 2005, Clarksons sent Zodiac, for signature and return, 1st and 2nd originals of a NORTHGATE charterparty which they had drawn up, supposedly to record the terms which they understood had been agreed. The charterparty was expressed to be for a voyage:
“from one safe berth, one safe port in Guaiba Island Terminal, Brazil, and/or CPBS CPBS-COMPANHIA PORTUARIA BAIA DE SEPETIBA, BRAZIL, always accessible, always afloat, to one or two safe berth(s), one safe port Qingdao, China, always afloat, or Rizhao, China …..”. 40. and incorporated, as the first part of clause 6B, Notice of Readiness at Loadport provisions in the following terms: “NOTICE OF READINESS AT LOADPORT Notice of readiness (nor) may be tendered after arrival of vessel at the inner harbour area, including the inner anchorage area, of loading port, at any time, irrespective of official office hours, Saturday, Sundays and holidays included, whether the vessel is in berth or not. However, if vessel is compelled to wait for berth at the outer or at the intermediary anchorage area on vessel’s arrival due to unavailability of space At the inner anchorage area, notice of readiness may be tendered after arrival of vessel at the outer or at the intermediary anchorage area, irrespective of official office hours Saturdays, Sundays and holidays included.”
Clause 7A provided “Charterers shall load the cargo and spout trimmed at one safe berth, one safe port in Guaiba Island Terminal, Brazil, or CPBS CPBS-COMPANHIA PORTUARIA BAIA DE SEPETIBA, BRAZIL, always accessible, always safety afloat, free of risks expenses to Owner.” 41. Clause 9 provided for demurrage at the rate of US$55,500 per day or pro rata, and for loading laytime to commence “twelve (12) hours after the notice of readiness is tendered, whether in berth or not, unless sooner commenced, in which cash [sic] such time actually used shall count as laytime.”[34]Zodiac checked this charterparty, and reverted to Clarksons on 10 January 2006, with a number of comments. The first was to correct an obvious mistake, on page 2 line 1, to the date of the charterparty: Clarksons had left in the date of the BRAZIL STAR fixture, so Zodiac pointed out that the date should be 17 October 2005 (as already recorded in the heading repeated on each page). As to clause 6B, Zodiac proposed the insertion, into the first paragraph, of “whether in port or not, whether customs clearance or not, whether in free pratique or not”, after “whether the vessel is in berth or not”, the addition of the words, “NOR is still valid”, at the end of the first paragraph (in line with the corresponding amendment to the first paragraph of clause 6B in the second working copy of the BRAZIL STAR charterparty sent out by Parakou on 18 October 2005 - see para. 30 above), and the addition of WIBON, WIPON, WCCON, and WIFPON provisions at the end of the second paragraph.[35]On the following day, Clarksons wrote to Zodiac, enclosing revised 1st and 2nd originals of a NORTHGATE charterparty, incorporating, among other things, Zodiac’s suggested changes to the first (but not the second) paragraph of clause 6B. They also sent COSCO a working copy. Mr Li noticed that it contained a different version of clause 6B to what he thought had been agreed, but he made no comment, as COSCO’s operations department was by then dealing with the dispute that had developed regarding the validity of the NOR that had been tendered[36]There were further exchanges in February 2006 concerning the BRAZIL STAR charterparty. On 24 February 2006, Parakou sent Charterers, for signature, 1st and 2nd originals of a charterparty drawn up in line with their second working copy. Three days later, Charterers responded to Parakou’s email of 13 October 2005 (see para. 24 above), stating “Chtrs hereby confirm Owners comments in order”. It was suggested on behalf of Owners that this constituted Charterers’ agreement to the terms of the BRAZIL STAR charterparty sent by Parakou on 24 February 2006. Charterers did not, however, sign that, or any, version of the BRAZIL STAR charterparty.[37]On 14 March 2006, Clarksons sent Zodiac “originals” of a third version of a NORTHGATE Charterparty. The “Notice of Readiness at Loadport” provisions of clause 6B of this version read simply as follows:
“Notice of Readiness (NOR) may be tendered at any time, irrespective of official office hours, Sunday and Holiday included, whether Customs cleared or not, whether in berth or not, whether in Free Pratique, whether in port or not.”
Zodiac signed and returned one of the copies, whereupon Clarksons sent it to Cosco for Charterers’ signature on 26 April 2006. Unsurprisingly perhaps, as it did not correspond with any of the previous versions, and as the voyage had by this time been completed, Charterers ignored it.

Owners’ submissions

[38]Owners’ case was that the incorporating provisions of the NORTHGATE Charter were intended to incorporate the BRAZIL STAR terms as finalised in the light of Owners’ comments on the 29 June 2005 first working copy BRAZIL STAR charterparty, still outstanding when the NORTHGATE Charter was made on 17 October 2005, but subject to the agreed “main terms” of that fixture, and the amendments to clause 6B which had been specifically agreed. The terms of the BRAZIL STAR charterparty were, so Owners submitted, finally agreed on 27 February 2006, when COSCO, having just received from Parakou a BRAZIL STAR charterparty drawn up in line with Parakou’s second working copy of 18 October 2005, confirmed that Owners’ comments forwarded on 13 July 2005 were in order, and thereby assented to the terms of that charterparty. Accordingly, the agreed version of clause 6B was that set out in the revised version of the NORTHGATE charterparty sent out by Clarksons in January 2006, which most significantly included, not only WIPON, but also the additional words, and a full stop, at the end of the first paragraph.[39]As to the proper construction of clause 6B, Owners stressed that the parties had throughout negotiated the terms of clause 6B on the basis that it was divided into two paragraphs, and submitted that it must be construed with that division firmly in mind. Moreover, the parties had agreed clause 6B subject to the agreed “main terms”, including the WIBON, WIPON provisions recorded in Clarksons’ fixture confirmation email, which had to be accorded priority to the extent that they conflicted with the detailed provisions of clause 6B. In this connection, Owners relied on the express terms of the incorporating provision in the fixture confirmation email (see para. 27 above), and the principle that clauses of a written agreement will prevail in the event of any conflict with clauses incorporated by reference from another document (see Chitty on Contracts, 29th. Edition, para. 12-079).[40]As was common ground, the effect of the WIBON, WIPON provisions (had they stood alone) would have been that the vessel would have been entitled to tender NOR at the outer anchorage, which was a – albeit not the only - usual waiting place for a vessel loading at the Terminal. In the light of those provisions, it did not matter whether the outer anchorage was within or outside port limits (as to which there was no clear evidence). All that mattered was that it was a usual waiting place. And as it was also common ground that the NORTHGATE was waiting there for a berth to become available, and not, for example, for fog to clear as in The Kyzikos [1989] 1 Lloyds Rep.1, it did not matter, for the purposes of those “main terms”, that the NORTHGATE could physically have proceeded a little further, to the inner anchorage, and waited there. As was common ground, the fact that the NORTHGATE waited at the outer, rather than the inner, anchorage, did not in the event make any difference to the time at which she berthed.[41]Clause 6B as set out in the January 2006 version of the NORTHGATE charterparty made sense construed in the light of these “main terms”. In particular, the second paragraph, apart from the first five words, which should be rejected as meaningless or surplusage, made clear that Owners could indeed tender NOR from the outer anchorage. The last sentence of the first paragraph was permissive, in the sense that it stated that NOR would be valid if the vessel was compelled to wait at the outer anchorage due to unavailability of space (at the inner anchorage) – but not that NOR would be valid only if the vessel was compelled so to wait. Construed in the light of the WIBON, WIPON provisions, clause 6B permitted tender of NOR at the outer anchorage whether or not the vessel was compelled to wait there for a berth because there was no space at the inner anchorage. But in any event, those “main terms”, which had that effect, took precedence.

Charterers’ submissions

[42]Subject to one qualification, Charterers submitted that the agreed terms of clause 6B were those set out in the first version of the NORTHGATE charterparty, sent out by Clarksons on 29 December 2005. The NORTHGATE Charter had been negotiated and finalised with reference to the 29 June 2005 version of the BRAZIL STAR charterparty which was the only version then in existence, and the version which the parties used as a proforma for the purpose of negotiating and agreeing the details of the NORTHGATE Charter. Owners had made specific proposals for amendments to clause 6B as set out in that proforma, which had been accepted by Charterers. It was this amended version of clause 6B that was correctly incorporated into the 29 December 2005 version of the NORTHGATE charterparty. Subsequent debate about the terms of the BRAZIL STAR fixture could not affect the terms of that NORTHGATE Charter concluded on 17 October 2005.[43]In any event, Charterers had never assented to the terms of clause 6B as set out in the second, 18 October 2005, working draft of the BRAZIL STAR charterparty, or the version sent out by Parakou on 24 February 2006. Although Owners had, before the NORTHGATE Charter was concluded, queried whether clause 6B of the BRAZIL STAR charterparty was complete, they had received no response by the time it was concluded on 17 October 2005. Charterers’ 27 February 2006 confirmation that “Owners comments in order” could not be read as assent to this later version of clause 6B, not least because Zodiac had not actually proposed any amendment to clause 6B in those comments – they had merely queried whether the clause in the proforma was complete, and COSCO’s response, in relation to clause 6B, meant that it was. It had rightly not been suggested by Owners that Charterers had ever expressed their assent to the January 2006 version of the NORTHGATE charterparty.[44]The one qualification referred to above was that Miss Sabben-Clare accepted that the WIPON provision should have been incorporated in clause 6B, as the WIBON provision was, since both had been agreed – along with the amendments to clause 6B in the BRAZIL STAR proforma – in the course of negotiations. However, given Charterers’ concession that the waiting place did not have to be within port limits, so long as it was – as it was in this case – a usual waiting place, this omission did not make any practical difference.[45]There was, so Charterers submitted, no inconsistency between WIBON, WIPON, and the other provisions of clause 6B as set out in the 29 December 2005 charterparty. The NORTHGATE was permitted to tender NOR at the outer anchorage, whether or not within port limits, provided that she was compelled to wait there for a berth because of congestion at the inner anchorage (and, of course, at the Terminal itself). But clause 6B as agreed made it clear that NOR could not validly be tendered at the outer anchorage if there was space at the inner anchorage, as it was common ground that there was in the present case. The principle relied on by Owners said to accord priority to “main terms” over incorporated terms did not apply where, as here, there had been specific negotiation of and agreement to the terms of clause 6B.[46]Even if Owners’ case on what were the contract terms was accepted, the last sentence in the first paragraph of Owners’ version of clause 6B had the same effect as the sentence in Charterers’ version (that which spanned the two paragraphs) upon which Charterers relied: there was nothing in Owners’ submission that the language of that last sentence was “permissive”, and Owners’ case on construction effectively involved ignoring the first paragraph. The first sentence of the second paragraph made no sense as written, and should be construed as dealing only with the time at which NOR could be tendered at the outer anchorage, if such tender was permitted by the first paragraph.

Conclusions

[47]It is clear, as Charterers submitted, that the NORTHGATE fixture negotiations were conducted with reference to the terms set out in a charterparty document, namely the 29 June 2005 working copy of the BRAZIL STAR charterparty, which was used as a proforma for the purposes of those negotiations. The “Brazil Star/COSCO Quingdao c/p dated 10 May 2005 which is to be used in accordance with main terms as fixed and logical alterations with the following amendments”, as referred to in both Zodiac’s email to Clarksons of 13 October 2005, and Clarksons’ fixture confirmation email of 17 October 2005 (see paras. 25 and 27 above), was, and would have been understood by any reasonable reader of those emails to be, a reference to the document then before the parties and Clarksons, namely that 29 June 2005 working copy. As was common ground, the NORTHGATE Charter was concluded on 17 October 2005: the agreed terms of that fixture, as set out in or to be deduced from the fixture confirmation email, were finalised on that date. Contrary to Owners’ submissions, the negotiations for the fixture were not conducted with reference to whatever terms might ultimately be agreed in relation to the content of the BRAZIL STAR charterparty. Accordingly, any subsequent alteration to the BRAZIL STAR terms could not have affected the terms of the NORTHGATE Charter.[48]Accordingly, clause 6B of the NORTHGATE Charter was agreed in the terms of clause 6B of that proforma, subject to the amendments thereto specifically proposed by Owners on 13 October 2005, and agreed by Charterers as evidenced by the fixture confirmation email (and subject to the further “logical alteration” required to incorporate WIPON). Those terms were, with the exception of the omission of WIPON, correctly recorded in Clarksons’ 29 December 2005 NORTHGATE charterparty.[49]In any event, I find that Charterers never agreed the revisions to clause 6B of the BRAZIL STAR charterparty proposed in Parakou’s second working copy sent out on 18 October 2005, and subsequently incorporated in Parakou’s February 2006 version of the BRAZIL STAR charterparty (and partially incorporated in Clarksons’ January 2006 version of the NORTHGATE charterparty). COSCO’s email of 27 February 2006 cannot be read as an assent to that version. On the contrary, as Charterers submitted, by confirming that “Owners comments in order”, COSCO were effectively confirming that clause 6B of the original working copy was complete.[50]Turning to the issues of construction, I reject Owners’ submission that the paragraph break in clause 6B, in the terms that I find that clause was agreed, was significant. It is true that comments were made on the various pre-17 October 2005 versions of clause 6B (including that contained in the CAPE SATURN Charter) by reference to the paragraph break as printed. That is not in itself significant – the paragraph break merely provided a convenient reference tool for comments. What is significant is that, in their initial comments of 10 May 2005 on the CAPE SATURN Charter, Owners did not query the paragraph break – though they did request the removal of the repeated words in the second paragraph. Owners were then content to propose amendments to clause 6B for the purposes of the NORTHGATE Charter, before they had had a response to their query, made via the brokers for the BRAZIL STAR fixture, as to whether clause 6B in the proforma was complete.[51]I find Mr Kunzer’s statement that it did not occur to him that clause 6B in the CAPE SATURN Charter should have been a single, continuous, paragraph, surprising. It seems to me obvious that that was what was intended, and that the paragraph break was unintentional (or at least not intended to be significant) - not least because neither half of what reads naturally as a single continuous sentence, overlapping the two paragraphs, made sense on its own (and there was no full stop at the end of the first paragraph). But in any event, Mr Kunzer’s subjective understanding is irrelevant for purposes of construction. I am satisfied that any reasonable person reading the clause as it appeared in the CAPE SATURN Charter, and also in the 29 June 2005 working copy of the BRAZIL STAR charterparty, would have realised that the paragraph break was no more than, in the words of Mr Coburn, “a rogue line break”, and that it had no contractual significance.[52]I accept Charterers’ submission that there was no inconsistency between WIBON, WIPON (which should have been included), and the other provisions of clause 6B as set out in the 29 December 2005 charterparty. The provisions of clause 6B, read as it should be as a single continuous paragraph, and with the addition of WIPON, made clear that the vessel was permitted to tender NOR at the outer anchorage (assuming that was, as in this case, a usual waiting place, and irrespective of whether it was within or outside port limits), provided she was compelled to wait there for a berth because of congestion at the inner anchorage (and, of course, at the Terminal itself). But clause 6B as agreed made it clear that NOR could not validly be tendered at the outer anchorage if there was space at the inner anchorage, as it was common ground there was in the present case.[53]As there is no inconsistency between the WIBON, WIPON “main terms” and the rest of clause 6B, Owners’ submission that precedence should be given to those main terms does not arise. But in any event, I doubt whether the principle relied on by Owners, that clauses of a written agreement will prevail in the event of any conflict with clauses incorporated by reference from another document, has any application to a case where, as here, the terms of the incorporated provision in question are subject to specific consideration and amendment in the course of the negotiations.[54]Accordingly, Owners were not entitled to tender NOR when the vessel arrived at the outer anchorage, because the vessel had not been compelled to wait at the outer anchorage on arrival due to unavailability of space at the inner anchorage: on the contrary, she could have proceeded to and waited for a berth at the inner anchorage. Accordingly, on the true construction of the NORTHGATE charterparty terms, the NOR tendered on 17 November 2005 was invalid.[55]In view of the above conclusions, it is unnecessary for me to reach a decision on what the position would have been if clause 6B had been agreed in the terms set out in the January 2006 version of the NORTHGATE charterparty. As the matter was fully argued, however, I should record my conclusion that, even on those terms, the NOR would have been invalid. That is because, reading the clause as a whole, and doing one’s best to make sense of it despite the difficulties posed by the wording of the second paragraph, one is left with the clear impression that the general rule prescribed by the clause is that NOR should be tendered at the inner anchorage (or inner harbour area); and that it is only permissible to tender NOR from the outer (or any intermediary) anchorage, if the vessel is compelled to wait there for a berth “due to unavailability of space”, viz. at the inner anchorage. I do not think it could be assumed that the use of “if”, rather than “only if”, was significant. Thus I would have rejected Owners’ “permissive” point (see para. 41 above). The second paragraph makes sense if the first five words are ignored, as Owners submitted they should be, and if the remainder of the paragraph is read as relating to the time at which NOR can be tendered after arrival at the outer anchorage, as Charterers submitted. Owners’ construction of this version of the clause does indeed, as Charterers submitted, involve ignoring much, if not all, of the first paragraph.

Waiver and estoppel

[56]I now turn to deal with Owners’ alternative case that Charterers must be taken to have waived any defect in the NOR and/or are estopped from contending that it was invalid, by reason of its having been accepted by the Terminal when tendered at 0550 on 17 November 2005. For these purposes, I must first set out some other material provisions of the NORTHGATE Charter, and then describe the facts relating to the NOR in more detail.[57]Clause 6A was agreed in the following terms (which were not in dispute):
“A. NOTICES OF ARRIVALS: On sailing from the preceding port, Master, Owners and/or Charterers shall inform to seller and to seller’s port administration at port of Guaiba Island Terminal, Brazil or CPBS CPBS-COMPANHIA PORTUARIA BAIA DE SEPETIBA, BRAZIL, by telex or fax, the expected time of arrival (ETA) of each vessel. Such information shall be updated fifteen (15) days, eight (8) days, three (3) days, two (2) days and one (1) day before the vessel’s expected arrival at port of Guaiba Island Terminal, Brazil or CPBS, CPBS-COMPANHIA PORTUARIA BAIA DE SEPETIBA, BRAZIL, or at any time upon seller’s request. Master, Owners and/or Charterers shall, with the eight (8) days notice, also inform seller about the vessel’s cargo plan and provide the following details: i) arrival and departure drafts; ii) air draft (distance from water line to the top of the hatch coamings); iii) amount of ballast on arrival and, if in cargo holds, how distributed; iv) time required for deballasting after berthing; v) loading sequence; and vi) information on whether a “gas free” certificate is required or not.”
Thus the ETA notices and other information called for by this clause were to be provided “to seller” (and, in the case of the ETAs, “to seller’s port administration”) by “Master, Owners and/or Charterers”. Clearly the ETAs and other required information could not be provided by Charterers to “seller”, unless first provided by the Master or Owners to Charterers. But Owners could comply with the provisions of the clause by providing the ETAs and other information directly to the seller.[58]None of the versions of clause 6B identified the intended recipient of NORs at the loadport or the discharge port. The usual requirement would be for such NORs to be given to charterers, or charterers’ agents on their behalf, charterers obviously being owners’ contractual counterparties, who would usually be obliged to make the necessary arrangements for the loading and discharge of the cargo. I shall have to consider whether, in this case, and having regard (among other things) to the terms of clause 6A, it was contemplated that the recipient, or at least the primary recipient, of the NOR would be the seller – and whether, in this case, that meant or included the Terminal.[59]Clause 7A (which I have set out in para. 33 above) provided that Charterers were to load the cargo free of expense to Owners. Clause 9 (also set out in para. 33) provided that laytime should commence 12 hours after NOR was tendered, and specified the loading and discharging, demurrage, and despatch rates.[60]The only other provision to which I need refer is clause 17, which provided for “Charterer’s agents both at loading and discharging ports.”[61]I now turn to the relevant facts relating to the vessel’s call at the Terminal.[62]On 1 November 2005, Charterers notified Owners, via Clarksons, of their nomination of Brazshipping as their loadport agents. Owners thereupon contracted Brazshipping, noting Charterers’ nomination, and stating “We will send to you our official agency appointment”, and asking that Brazshipping notify them when the loading terminal was confirmed. Brazshipping responded by giving the latest line-up of vessels schedule to load at the Terminal, showing the NORTHGATE as expected to berth on 17 November 2005.[63]Also on 1 November 2005, the Master of the NORTHGATE sent the first of a series of email ETAs – the 15 days ETA – to Brazshipping, with copies to Charterers and Zodiac, giving an ETA Sepetiba Pilot Station on 15 November 2005, with a request to “kindly notify all concerned parties.” The information in the Master’s ETAs was duly forwarded by Brazshipping, by email, to the (prospective) shippers, Mineracoes Brasileiras Reunidas SA (“MBR”), with copies to Owners and Charterers. It is material to note that the Terminal was owned by MBR.[64]On 2 November 2005, Charterers concluded a sub-charter fixture with Shandong Laiwu Steel International Corp. for the carriage of a cargo of ore from the Terminal to China. At or about this time, Charterers must also have confirmed that the NORTHGATE was to load at the Terminal.[65]Also on 2 November 2005, Owners requested Brazshipping to provide a breakdown of estimated port disbursements and agency fees. Brazshipping replied on 4 November 2005, among other things providing the following details regarding tender of NOR, port clearance, and anchorages:
“3 – Clearance: Upon vessel’s arrival in case berth is not free, there are two options for vsls clearance as follows, but both cases subject to your final instructions and subj to vsls fixture terms ‘cp clauses’.: 3.1 – The vsl will arrive and drop anchor at pilot station. 24 hrs before berthing pilot will board to bring her to the inner anchorage to perform the port authorities inward clearance/inspection in order to be ready for berthing. 3.2 – Or the ship will proceed straight to inner anchorage upon arvl (pilot on board), perform clearance and wait until berthing vacancy. 3.3 – On both abv items, gangway watchman will be placed on board at inner anchorage (transport only by launch), but of course as longer ship waits the invoices for gangway watchman and launch hire will increase. Estimated costs involved if vsl proceed to inner anchorage waiting for berth: Pilotage + pilot transportation ‘anchoring’ . . . USD 4,830.00 Gangway watchmen (per day) . . . . . . . . . . . . USD 580.00 launch hire for gangway watchmen . . . . . . . . USD 800.00 launch hire for clearance . . . . . . . . . . . . . . . . . USD 350.00 ========= Estimated cost involved. . . . . . . . . . . . .. . . . USD 6,560.00 Special note: presently at ‘sepetiba’ port area/complex, where includes ‘git’ [the Terminal], vsls’ time to count usually starts after free pratique granted + cleared by port authorities and ready to rcve the cgo in all respects. Considering the abv, vsl’s inward port authorities clearance and free pratique, only can be granted/performed when the vsl is anchored at inneroads, which unfortunately both items can not be done while the vsl is at outeroads. The vsl could be shifted fm outeroads to inner anchorage on arvl to perform the port authorities clearance on the 1st available daylight and good weather condition. Also, as usual vsls’ n.o.r. may be given/tendered by master right after arvl at sellers Guaiba Isld terminal, which this area is the one mentioned abv as inner anchorage or eventually at outeroads ‘as usual’, but always subj to c/p clauses fixed. Pls pay attention that sometimes, there are several cp fixed with different clauses, which sometimes is in contrary to contract fixed by cargo seller/buyers. The vsl can be shifted fm outeroads to inner anchorage 01 day prior berthing for port clearance formalities, once the ‘git’ can eventually check if free pratique was granted on arvl or 1 day prior berthing, then they can apply the acceptance of nor based to the fact that vsl was not in free pratique since her arrival (always subj to cp clauses fixed). Pls keep in mind that the official anchoring area for ‘git’ is at inneroads, where pilotage/gangway watchmen/launch hire are compulsory. (*) It is clear that if the vsl stay at outeroads awtng for the berthing vacancy, the port expenses can be minimized once ‘compulsory gangway watchmen + pilotage for anchoring maneuver + launch hire for gangway watchmen’ can be avoided.”
Thus they pointed out the additional costs of proceeding straight to the inner anchorage, and indicated that vessels could be shifted from outer to inner anchorage a day before berthing for clearance purposes, but warned that (as is obviously the case) charterparties vary as to when NOR can validly be tendered. Estimated costs involved if vsl proceed to inner anchorage waiting for berth: Pilotage + pilot transportation ‘anchoring’ . . . USD 4,830.00 launch hire for gangway watchmen . . . . . . . . USD 800.00 =========

launch hire for gangway watchmen . . . . . . . . USD 800.00

[66]The Master sent further email ETA notices to Brazshipping, with copies to Owners and Charterers, with the request to notify all concerned parties, on 4, 9, 14, 15 and 16 and November 2005.[67]Brazshipping provided both Owners and Charterers with a series of emailed “Arrival Prospects Report[s]”, giving the vessel’s ETA (based on the Master’s advices) and expected time of berthing (“ETB”) (based on the current Terminal vessel line-up). The first of these, sent on 5 November 2005, gave an ETB for the NORTHGATE of 24 November 2005.[68]On 10 November 2005, Zodiac wrote to Brazshipping as follows:
“AA- FYG A/P OUR CONTRACT N.O.R. CAN BE TENDERED WIBON, WCCON, WIFPON, WIPON. THEREFORE, VESSEL IS TO REMAIN AT OUTER ANCHORAGE UNTIL SUCH TIME ABT 12 HOURS PRIOR TO ACTUAL BERTHING. BB- FYG A/P OUR CONTRACT AGREED LAYCAN IS 9-18 NOV 05. SAKE OF THE GOOD ORDER, PLS CHECK AND ADVISE LAYCAN BETWEEN SHIPPER AND RECEIVERS. CC- ONCE VSL ARRIVES AT G.I.T. [the Terminal] AND MASTER TENDERS N.O.R, PLS CHECK AND CONFIRM DATE/TIME N.O.R. ACCEPTED BY SHIPPERS. DD- PLS KEEP US WELL ADVISED RE VSL’S PROSPECTS IN G.I.T.”
Brazshipping acknowledged these instructions and inquiries as follows:
“ … fully noted and instructions well understood, which will be complied accordingly. Pls be guided that we are trying to sort out the laycan between shippers and receivers and hopefully will revert with such soonest. Based on present vessl’s ETA on Nov 16th the latest prospects are ETB Nov 28th and ETS Nov 30th. We will keep you duly informed.”
On the following day, they advised that the laycan dates agreed between shippers and receivers were 1 – 18 November 2005. DD- PLS KEEP US WELL ADVISED RE VSL’S PROSPECTS IN G.I.T.” We will keep you duly informed.”[69]On 17 November 2005, at 0550, the vessel arrived at Sepetiba Outer Roads (the outer anchorage for the Terminal), and dropped anchor. The Master signed, and tendered to Brazshipping, a NOR on Owners’ printed NOR form, addressed to Brazshipping, advising that the NORTHGATE had arrived at Sepetiba Roads on 17 November 2005 at 0550, and was ready in all respects to load her cargo. The printed form concluded, “Kindly sign and return a copy, acknowledging receipt of this Notice of Readiness”. Brazshipping duly signed and returned a copy of the NOR, signing “As Agents Only.”[70]A second NOR was prepared, on Brazshipping headed paper, addressed to MBR, advising of the vessel’s arrival at Sepetiba Roads on 17 November 2005 at 0550, and her readiness to load her cargo. It also stated:
“As to the acceptance of this Notice of Readiness tendered to you on November 17th, 2005 at 05:50 hours LT, reference shall be made to the relevant Charter-Party, which covers the present voyage.”
It was signed by the Master. It is indorsed and signed by MBR under the following rubric: “NOR Accepted on November 27th, 2005 at 11.55 LT. Vessel Out of Laydays.” (It was - as already mentioned - at 1155 on 27 November 2005 that the vessel commenced loading, having berthed at 0935 that day.)[71]The Master also sent an email NOR to Brazshipping, copied to Charterers and Owners, on 17 November 2005. This recorded the arrival of the NORTHGATE “at the Port Sepetiba” at 0550 that day, and her readiness to load, and requested Brazshipping to notify all concerned parties.[72]Brazshipping for their part sent an email NOR to MBR on 17 November 2005, with copies to Charterers and Owners, advising that the vessel had “arrived roads” at that time, and was ready to load. The email concluded:
“As to the acceptance of this Notice of Readiness TENDERED to you on November 17th, 2005 at 05:50 local time, reference shall be made to the relevant Charter Party which governs the present voyage.”
In addition, they emailed an “Arrival Report” and a “Berthing Prospects Report” to both Owners and Charterers. Both referred to the NORTHGATE’s arrival and dropping anchor at Sepetiba Outer Roads, and tender of NOR, at 0550 that day. The latter stated that the vessel’s ETB was then 27 November 2005.[73]Thus the position, as at the end of 17 November 2005, was that:(1) The NORTHGATE had arrived, and anchored, at Sepetiba Outer Roads, the outer anchorage for the purposes of clause 6B, but a usual waiting place for vessels waiting for a berth at the Terminal;(2) The Master had tendered a NOR addressed to Brazshipping, who had been appointed as Charterers’ agents pursuant to clause 17 of the NORTHGATE Charter (albeit that they were also performing an agency role for Owners), and who had signed a copy of this NOR as an acknowledgement of receipt thereof;(3) The Master had also tendered a NOR addressed to MBR, but MBR had neither formally “accepted” nor rejected this NOR;(4) In addition, the Master had sent an email NOR to Brazshipping, copied to both Owners and Charterers;(5) Brazshipping had emailed NOR in similar terms to MBR, copied to Owners and Charterers;(6) Brazshipping had separately notified Charterers (as well as Owners) of the vessel’s arrival and anchorage at Sepetiba Outer Roads, and of the fact that NOR had been tendered, at 0550 – and that the vessel’s ETB was then 27 November 2005 (this ETB date did not change thereafter).[74]On 18 November 2005, Owners emailed Brazshipping, requesting them to “Pls kindly check and advise date/time Master’s NOR accepted.” Mr Lessa of Brazshipping replied later that day [at 1308], stating:
“Fyg, the terminal have informed us that the NOR was accepted on vessel’s arrival. Therefore, on Nov 17th at 05:50 LT.”
[75]Mr Kill of Brazshipping confirmed, in his statement, that Mr Lessa had checked verbally with the Terminal’s scheduling staff before responding as above. There was no dispute that Mr Lessa had accurately relayed what he had been told by the Terminal.[76]Brazshipping continued to send Owners and Charterers daily updated Berthing Prospects Reports while the vessel remained at the outer anchorage awaiting a berth. In their report of 20 November 2005, and in all subsequent reports up to and including that for 25 November 2005, they advised “As per previously instructed we are going to bring MV NORTHGATE to inner roads 24 hour prior actual berthing for clearance purposes.”[77]The NORTHGATE duly shifted to the Inner Roads on 26 November 2005, where port clearance and free pratique were granted. She shifted thence to her loading berth on 27 November 2005, berthing at 0935 and commencing loading at 1155 that day. Loading operations were completed at 0357 on 29 November 2005, and the vessel sailed for her discharge port, Qingdao, at 0820 that day.[78]It was common ground that, whilst the decision that the vessel should remain at the outer anchorage until 26 November 2005 had saved Owners money in terms of the costs of gangway watchmen and launch hire (see Brazshipping’s email quoted at para. 65 above), it had not resulted in any delay to the vessel’s berthing, given that the vessel had, as planned, shifted to the inner anchorage the day before she berthed, to obtain port clearance and free pratique.[79]There does not appear to have been any communication from Charterers to Owners from the time the Terminal was confirmed as the loading port to the time of the vessel’s departure on completion of loading[80]In their “Final Overall Report” sent to the parties on 29 November 2005, Brazshipping recorded the NOR as having been accepted at 1155 on 27 November 2005. This obviously came as something of a surprise to Owners. They asked Charterers, via Clarksons, to confirm that “the NOR tendered by the Master is valid and accepted”, and asked Brazshipping for clarification in the light of the latter’s confirmation, on 18 November 2005, that the NOR has been accepted on the vessel’s arrival (at the outer anchorage) the previous day.[81]Mr Kill of Brazshipping responded, stating that after re-checking with the Terminal, he had learnt that the previous information was wrongly disclosed by their programming staff, and apologising for “this misunderstanding”. (There was a suggestion in Mr Kill’s statement that the Terminal’s commercial department, rather than its “scheduling staff”, were responsible for accepting or rejecting NORs, but no point was taken by Charterers as to authority of the scheduling staff to communicate acceptance of the NOR on behalf of the Terminal/MBR.) Charterers for their part responded to Owners’ inquiry, by asking Brazshipping why, when the vessel had arrived on 17 November 2005, free pratique had not been granted until 26 November, and asking the reason for this delay. Brazshipping explained that vessels were never inspected by the port authorities or granted free pratique at the outer anchorage, but that the vessel had been brought to the inner anchorage for clearance purposes and free pratique 24 hours before berthing, as the Berthing Prospects Reports had indicated would happen.[82]This led Charterers to ask why the vessel could not be anchored at the inner anchorage “in time”, to which Brazshipping responded, explaining that, before a vessel’s arrival, they asked owners to instruct whether the vessel should be brought to the inner roads “as it could interfere on VSL’s NOR acceptance,” but indicating that expenses would be saved if the vessel did not proceed immediately to the inner anchorage. Charterers also obtained confirmation that the NORTHGATE could have anchored at the inner anchorage on arrival, as it was not congested.[83]The vessel discharged at Qingdao from 15-20 January 2006. Thereafter Owners drew up their final voyage account/invoice and laytime/demurrage calculation, which they sent to Charterers on 20 February 2006. Loadport demurrage, in the sum of US$449,892.35, was calculated on the basis that laytime had commenced 12 hours after tender of NOR on 17 November 2005.[84]Charterers responded with their rival voyage account/invoice and laytime/demurrage calculation on 21 February 2006. They calculated loadport laytime on the basis that NOR had been accepted, and laytime commenced, when the vessel commenced loading at 1155 on 27 November 2005, such that dispatch in the sum of US$43,274.31 had been earned at the loadport.[85]This exchange crystallised the dispute now before the Court.

Owners’ Submissions

[86]Owners contended that, reading clause 6B in the light of clause 6A and the requirement therein that ETA notices and other information material to loading operations should be communicated “to seller” (and, in the case of ETA notices, “to seller’s port administration”) at the loadport, it was clear that the loadport NOR had to be given to the MBR/the Terminal (between whom, as was common ground, no material distinction was to be drawn), as the organisations responsible for arranging the berthing and loading of the vessel. What was important was that notice of the vessel’s arrival and readiness to load be communicated to MBR/the Terminal, rather than Charterers.[87]In this instance, NOR had been given to MBR (as well as to Brazshipping as Charterers’ Agents, and to Charterers themselves). And the Terminal had orally communicated their acceptance of the NOR, via Brazshipping. It was of no significance that such acceptance had been communicated orally, rather than by being written on the NOR itself.[88]For the purposes of this Charter, the Terminal’s action, in accepting NOR upon tender to MBR on 17 November 2005, was capable of giving, and did indeed give, rise to a waiver and/or an estoppel that bound Charterers: as Mr Coburn put it, if a charterparty provides, whether expressly or by implication, that a NOR can be given to someone, X, other than the charterer, X can waive any defect in the NOR. In this connection, Owners relied on the decisions of the Court of Appeal in The Shackleford [1978] 2 Lloyds Rep. 154, and The Happy Day [2002] 2 Lloyds Rep. 487, both of which considered the circumstances in which a third party might be impliedly authorised by charterers to accept an invalid notice of readiness and thereby waive a condition as to the commencement of laytime – see the discussion of those cases below.[89]Insofar as it was necessary to establish that Owners had acted in reliance on the Terminal’s acceptance of the NOR, such reliance was proved by the evidence of Mr Shields, who said, in para. 11 of his first witness statement, that:
“If we had thought that the Charterers might later challenge the validity of the NOR because it had been tendered while the vessel was in the outer anchorage, we would undoubtedly have protected the Owners’ position by instructing the Master to wait at the inner anchorage instead. While that would have meant incurring the cost of gangway watchmen for a longer period, this would have been far outweighed by the need to protect Owners’ entitlements under the laytime regime. However, we did not see any need to do so in this case, having received the above confirmation [sc. of 18 October 2995] from the Charterers’ nominated agents, Brazshipping Rio.”
[90]Owners did not contend that the signature of the NOR by Brazshipping, by way of acknowledgment of receipt but without any reservation of Charterers’ rights as to the validity of the NOR, of itself gave rise to a waiver or estoppel. It was the Terminal’s acceptance of the NOR upon which they relied.

Charterers’ submissions

[91]Charterers made two main submissions. The first relied on the fact that Owners had taken the decision that the vessel should wait at the outer anchorage, based on their own mistaken understanding of the charterparty terms (as communicated to Brazshipping), and had instructed Brazshipping accordingly – see Owner’s 10 November 2005 instructions to Brazshipping, quoted in para. 68 above. It was not until eight days later that Owners received Brazshipping’s 18 November 2005 notification that NOR had been accepted on the vessel’s arrival. Accordingly, so Charterers submitted, Owners were unable to prove reliance on any representation contained in that notification. Owners had relied on their own mistaken interpretetation of the charterparty terms, rather than on any representation attributable to Charterers as to acceptance of NOR. Charterers relied on the decision of the Court of Appeal in The Mexico I [1990] 1 Lloyds Rep. 507, as establishing that, insofar as Owners relied on estoppel, the strict elements of estoppel must be made out, which Charterers submitted they were not.[92]Charterers’ second main submission was that any representation contained in Brazshipping’s 18 November 2005 notification was a representation as to the Terminal’s position, not that of Charterers. That notification would reasonably have been understood by a party in the position of Owners as a statement that the NORs addressed to the shippers, MBR, had been accepted.[93]Charterers accepted that, because of MBR’s ownership of the Terminal, no material distinction was to be drawn between MBR and the Terminal. But MBR/theTerminal had no authority to waive Charterers’ contractual rights, and in particular the right to rely on the charterparty provisions to the effect that, because there was no congestion at the inner anchorage, NOR could not validly be tendered at the outer anchorage. The Terminal would not have been privy to the terms of the NORTHGATE Charter, or, therefore, in a position to speak as to the validity of a NOR under that Charter. Indeed, the NORs addressed to MBR probably reflected obligations under the underlying contract of sale, not the NORTHGATE Charter, and Owners’ inquiry about acceptance of NOR followed an inquiry as to the laycan between shippers and receivers. Owners could not reasonably have understood Brazshipping’s response that the Terminal had accepted the NOR as speaking for Charterers’ position under the NORTHGATE Charter.[94]The charterparty terms were silent as to the intended recipient of NOR, and so in that respect (as in others) the present case was distinguishable from The Shackleford and The Happy Day, in both of which the intended recipient was clearly specified. Even if the Terminal/MBR were intended recipients of NOR under the NORTHGATE Charter, they had no authority to waive Charterers’ contractual rights.[95]The Master had addressed separate NORs to Brazshipping, as Charterers’ agents (and indeed, by email, to Charterers themselves), and to MBR. Brazshipping merely acknowledged receipt of the NOR addressed to them, and Charterers remained silent. Owners could have asked Charterers directly whether they accepted the NOR, but they did not do so. No representation on behalf of Charterers, and no shared assumption, capable of giving rise to an estoppel, could be spelled out of the parties’ conduct, in the above circumstances.[96]In any event, even if Brazshipping’s 18 November 2005 notification was to be interpreted as (at least in part) a statement on behalf of Charterers, Brazshipping, albeit Charterers’ nominated agents, had no authority to accept an invalid NOR on behalf of, and so as to bind, Charterers.[97]In short, Owners had failed to establish the requirements of either waiver or estoppel, as spelled out in The Mexico and The Happy Day. Charterers had accepted in the present case that laytime commenced when loading commenced. Nothing that had occurred before then prevented Charterers from invoking the invalidity of the NOR.

Conclusions

[98]I accept Owners’ submission that the NORTHGATE Charter contemplated the tender of NOR to MBR/the Terminal, as well, no doubt, as to Charterers and/or Charterers’ agents, and indicated that it was the notification to MBR/theTerminal of the vessel’s arrival and readiness to load that was important. It was to the “seller and to seller’s port administration” at the Terminal to whom ETAs and (in the case of the “seller”) other information pertinent to loading had to be communicated under clause 6A. MBR as shippers were clearly “the seller” for these purposes, and it was MBR and the Terminal which, equipped with this information, would be making the arrangements for the vessel to berth and load, including scheduling her turn, and which would therefore be primarily interested in being notified of her arrival and readiness.[99]Charterers themselves do not appear to have played any part in making the arrangements for the scheduling, berthing and loading of the NORTHGATE. As stated above, there does not appear to have been any communication from Charterers to Owners from the time the Terminal was confirmed as the loading port to the time of the vessel’s departure on completion of loading. NOR was given to Charterers, both by the “hard” NOR addressed and given by the Master to Brazshipping in their capacity as Charterers’ agents, and by emails from the Master and from Brazshipping. Brazshipping in turn clearly prepared the “hard” NOR given by the Master to MBR, and emailed NOR to MBR themselves. Charterers were clearly content to leave it to Brazshipping to see that MBR and the Terminal were given whatever notices were necessary.[100]In the circumstances, I am satisfied that a NOR communicated to MBR and/or the Terminal, whether by Owners/the Master, or by Brazshipping as Charterers’ agents (having received such NOR themselves from the Master/Owners), would (if otherwise valid, and subject to any waiver or estoppel) be good NOR for the purposes of the NORTHGATE Charter.[101]It is at this point appropriate to consider the authorities to which I was referred, to see what light they shed on whether MBR/the Terminal were impliedly authorised by Charterers to waive the defect in the NOR tendered to them arising from the fact that the NOR had been tendered when the NORTHGATE was at the outer anchorage, although she had not been compelled to wait there for a berth due to unavailability of space at the inner anchorage.[102]In the The Shackleford (supra), the charterparty provided that NOR at the discharge port, Constanza, was to be given to the receivers, Agroexport, or their agents, Navlomar, after the vessel’s entry at the Custom House, whereupon, on expiry of the prescribed notice period, laytime would commence WIBON, WIPON, WIFPON. The vessel arrived and anchored at Constanza roads, and immediately gave NOR, addressed to Agroexport c/o Navlomar, although the vessel had not been entered at the Custom House. Despite this, it was accepted by Agroexport. The owners and master relied on such acceptance of the NOR in not making arrangements to procure a berth at which customs entry could have been obtained. The Court of Appeal dismissed an appeal from the judgment of Donaldson J, who had upheld the decision of the arbitrator to the effect that laytime commenced following Agroexport’s acceptance of the NOR, notwithstanding the charterparty requirement for entry at the Custom House.[103]Sir David Cairns delivered the leading judgment, with which Buckley and Bridge LLJ agreed (subject only to a qualification by the former in relation to another point). In his judgment, Sir David Cairns considered the question of whether the receivers were authorised to accept a NOR tendered before customs entry. At pages 159-160, he said this:
“The award proceeds on the tacit assumption that the receivers had authority to accept the notice of readiness. I would infer from this that in the arbitrator’s experience such an authority was normally given or was implied. On such a matter I would attach weight to the views of a commercial arbitrator. . . . . The receivers must have authority to make some commercial decisions on behalf of charterers. They must be able to decide whether the vessel and its equipment are in a state of readiness to begin discharge of the cargo. As a matter of commercial practicality I consider that they must have implied authority to waive a condition as to the commencement of laytime.”
Accordingly, he held that the acceptance of the premature NOR was within the receivers’ authority. He also held that receivers would have known that customs entry could not be obtained at Constanza until berthing, and that:
“So far as knowledge of the contents of the charter-party is concerned, the charterers themselves of course must have had or must be deemed to have had that knowledge and it was for them to impart to the receivers as much information as it was necessary for them to have when a notice of readiness was tendered to them. If the notice of readiness was accepted with ignorance of what the effect would be under the charter-party I do no consider the charterers can take advantage of that ignorance.”
There had been no challenge to the arbitrator’s finding that the owners had relied on receivers’ acceptance of the NOR. The Judge’s decision, that charterers were estopped by conduct from invoking the fact that the vessel had not been entered at the Customs House as a ground for challenging the validity of the NOR, was accordingly upheld.[104]In The Mexico I (supra), NOR to discharge had been given, and apparently also accepted, when the cargo in question was inaccessible, because it was overstowed by cargo carried under another contract. The NOR was invalid, as the vessel was not physically ready to discharge the overstowed cargo, and the acceptance had no effect because it was given on the basis of the master’s implied assurance that the vessel was ready to discharge the cargo, which the charterers did not then know was inaccessible. Owners argued that the NOR took effect when the cargo became accessible, such that a valid notice could then have been given, or when charterers first knew or had the means and knowledge that it was ready to discharge. Charterers conceded that laytime commenced when discharge of the relevant cargo began, but denied it began before then. The arbitrators had decided that the NOR took effect when the cargo became accessible. Evans J. had upheld their award on this point. The Court of Appeal, however, rejected owners’ arguments, holding that an invalid NOR did not have any such “delayed action” effect, and that there was no basis for the inference of any waiver, estoppel, or agreement to the effect that no fresh NOR need be given, so that laytime did not commence before commencement of discharge of the cargo in question (as charterers had conceded it did).[105]In The Happy Day (supra), the charterparty in question provided that NOR at the discharge port was “to be given to Receivers/Agents during normal local office hours and laytime to start counting at 8 am next working day [WIBON, WIPON].” The vessel arrived off the discharge port, Cochin, but missed the tide and so was unable immediately to enter the port. The Master nonetheless tendered NOR to the receivers’ agents, who endorsed it “received.” The vessel berthed and commenced discharge the following day. Discharging operations occupied nearly three months. Owners claimed demurrage, contending that laytime commenced no later than the commencement of discharge. Charterers argued that the original NOR was invalid because the delay in berthing was due, not to congestion, but to the vessel missing the tide (cf. The Kyzikos, supra), and that as no further NOR had been given, laytime had never commenced and so they had earned despatch. The Court of Appeal, allowing an appeal from Langley J and restoring the award of the arbitrators, held that, although the original NOR was indeed invalid, and no fresh NOR had been given, the commencement of discharge by charterers amounted to a waiver of the invalidity of the NOR as from that time, such that laytime commenced thereafter in accordance with the notice regime in the charterparty.[106]The leading judgment in the Court of Appeal was delivered by Potter LJ, with whom Arden LJ and Sir Denis Henry agreed. Potter LJ’s judgment contains a detailed review of the authorities on the commencement of laytime where a premature or otherwise invalid NOR has been given, including The Shackleford, supra, and The Mexico I, supra. He pointed out that, whereas in the case of both waiver and estoppel, it is necessary for there to have been an unequivocal representation of fact, by words or conduct, waiver by election is to be distinguished from estoppel, in that in the case of the latter, but not the former, it is necessary to demonstrate that the representee has acted in reliance on the representation (see The Kanchenjunga [1990] 1 Lloyds Rep. 391, at page 399) – see generally the discussion at paras 64 – 67. At para. 72, Potter LJ said this:
“….. it seems to me, if (i) in purported compliance with the terms of the charter-party the master serves on the charterers or their agents for service NOR which is in fact invalid because the ship has not yet arrived, and (ii) thereafter the charterers and/or the receivers to whom NOR is required to be given become aware of the actual readiness of the vessel, and (iii) the charterers and the receivers' agents, being aware of the facts giving rise to the invalidity, do nothing to indicate any rejection or reservation in respect of the NOR, but instead commence unloading, then there is every good reason for the reasonable shipowner to assume an intention and acceptance by the charterers that laytime should start to run without the formal necessity of a fresh notice, such intention and acceptance being unequivocally communicated by involvement in the operation of unloading. The only realistic basis on which the conduct of the charterers/receivers could be regarded as equivocal in relation to their intention to waive the invalidity of the notice is to make the assumption that the charterers intend, and reserve the right, later to rely upon the invalidity without disclosing that intention, when, as commercial men, they must be aware that if such intention or reservation were made clear, the shipowner would immediately serve fresh NOR to protect his position. An assumption of lack of fair dealing of that kind is not one which it seems to me appropriate to make on an objective consideration of the parties' intentions for the purposes of the doctrine of waiver.”
It is true that this paragraph is directed to a situation in which the conduct relied on as giving rise to a waiver was the commencement of unloading, not the acceptance of a NOR. However, the concluding remarks about fair dealing are of more general application.[107]Potter LJ also considered the issue as to the whether charterers’ agents have authority to waive a condition as to the commencement of laytime, stating as follows, at para. 76:
“…. if the charter-party provides that NOR is to be served not upon the charterers but upon the receivers/agents through whom the charterers propose to perform their obligation to discharge then, so far as the owners are concerned, the receivers are not only the charterer’s agent to receive the NOR but also the persons to whom he is entitled to look to make decisions as to the readiness of the vessel and its equipment for such discharge to begin. Like Sir David Cairns in The Shackleford, I consider that in these circumstances, as a matter of commercial practicality, the receivers/agents must have implied authority to waive a condition as to the commencement of laytime. Although the decisions in The Shackleford was reached in the clearest of circumstances i.e. where the NOR had been expressly endorsed “accepted”, it depended on a principle of waiver or estoppel apt to apply more widely than in those limited circumstances. … It was on the basis of the Court’s own view of the law in that case that it concluded it was open to the arbitrator to decide, in the absence of any evidence directed to the point, that such implied authority existed in the case before him. I share that view, and it similarly seems plain to me in this case that the arbitrators must so have decided. …. In my view, on the facts found by the arbitrators, the receivers/agents had implied authority to waive the invalidity of the NOR.”
[108]In the light of these authorities, I have concluded that MBR/the Terminal, as the intended recipient (or at least the intended primary recipient) of NOR under the NORTHGATE Charter, must have been impliedly authorised by Charterers to waive any defect in the NOR, as Owners submitted they were. The fact that they were not identified in the charterparty terms by name is not a valid ground for distinguishing The Shackleford and The Happy Day, given my conclusions above. On the contrary, I consider that as matter of commercial practicality, such an intended recipient of the NOR must have implied authority to waive a condition as to the commencement of laytime.[109]A waiver of a defect in a NOR will be ineffective unless the recipient knows of the facts which make the NOR defective, as in The Shackleford but not in The Mexico I.It can, however, safely be inferred that the Terminal/MBR knew that the vessel was at the outer anchorage – the notices to MBR referred to the vessel’s arrival at Sepetiba Roads, and the Terminal will doubtless have had knowledge of which waiting vessels were at the inner anchorage, and which were not. There is no evidence that the Terminal or MBR were aware of the charterparty terms, but Charterers of course were so aware. Brazshipping’s email of 4 November 2005 (see para. 65 above) states the obvious, that charterparty terms vary, and thereby indicates that some charters allow for tender of NOR at the outer anchorage, whilst other do not. In these circumstances, and in line with what Sir David Cairns said in The Shackleford (supra – see para. 103 above), if Charterers did not communicate the NORTHGATE Charter terms to the Terminal/MBR and/or give specific instructions that NOR was not to be accepted from the other anchorage unless the vessel was compelled to wait there because the inner anchorage was congested, it seems to me that they took the risk that the Terminal/MBR would accept a NOR that could have been rejected under the NORTHGATE Charter, and thereby waive Charterers’ right to invoke the invalidity of that NOR.[110]I reject Charterers’ submissions to the effect that the NOR accepted, orally, by the Terminal had nothing to do with the NORTHGATE Charter. Owners for their part had no knowledge, beyond what they had been told about laycan dates, about any underlying contractual arrangements to which they were not parties. The Master clearly took care to ensure that NOR was tendered, and forwarded, to anyone concerned. But Owners’ 18 November 2005 inquiry to Brazshipping as to the “date/time Master’s NOR accepted” was not directed, in terms or by its context, to an inquiry exclusively for the purposes of any underlying sale contract. Owners’ concern was clearly to establish when the NOR(s) given under their contract with Charterers had been accepted, and the answer they received was clear, namely that, as was the case, the Terminal had informed Brazshipping that the NOR had been accepted on vessel’s arrival – and therefore that it had been accepted on 17 November 2005 at 0550 local time. Brazshipping, who were of course Charterers’ designated agents under the NORTHGATE Charter, gave no indication whatsoever, in their reply, that such acceptance was not relevant for the purposes of that Charter. On the contrary, any reasonable person receiving that notification would have understood it to be a confirmation, on behalf of Charterers, not merely that the NOR had been accepted by the Terminal at 0550 on 17 November 2005 (though that would have been sufficient), but also that it had been accepted at that time for the purposes of the NORTHGATE Charter.[111]That was, as it seems to me, an unequivocal representation by the Terminal/MBR, as the intended primary recipients of NOR, communicated to Owners via Brazshipping – and indeed by Brazshipping on behalf of Charterers - that the NOR had been accepted at the time stated, when the Terminal would have known (and Brazshipping as Charterers’ agents knew) that the NORTHGATE was at the outer anchorage. That, on the authorities, is sufficient, in the circumstances, to constitute a waiver of the invalidity of the NOR by reason of its having been tendered when the vessel was at the outer anchorage though not compelled to wait there by reason of congestion at the inner anchorage. As Potter LJ pointed out in The Happy Day (supra), in the case of waiver it is not necessary to go further and prove reliance on the representation.[112]If, however, it were necessary in addition to show reliance by Owners on that representation, Owners have proved such reliance, because, as Mr Shields stated, if Owners had thought that the Charterers might later challenge the validity of the NOR because it had been tendered while the vessel was in the outer anchorage, they would undoubtedly have instructed the Master to wait at the inner anchorage instead, albeit that would have involved some extra cost.[113]I do not regard as significant the fact that the Master addressed separate NORs to Brazshipping, as Charterers’ agents (and indeed, by email, to Charterers themselves), as well as to MBR, and that Brazshipping merely acknowledged receipt of the “hard” NOR addressed to them, while Charterers themselves remained silent; or that Owners did not ask Charterers directly whether they accepted the NOR. Charterers’ lack of involvement in any of the arrangements for loading serves to emphasise the fact that what mattered was the NOR to MBR/the Terminal. I do not have to consider what the position would have been if Charterers had accepted the NOR, but the Terminal /MBR had not.[114]Since my primary conclusion is that MBR/the Terminal were impliedly authorised by Charterers to, and did, waive the defect in the NOR by accepting the NOR, such that time commenced to count as if the NOR had not been defective, it is not necessary to recalculate demurrage on the basis that time should only count from (or from the expiry of a notice period after) Brazshipping’s 18 November 2005 notification of the acceptance of NOR (ie. from the time at which Owners could be said to have been acting in reliance on such notification).[115]Accordingly, I have concluded that, by reason of the Terminal’s acceptance of NOR, as communicated and confirmed by Brazshipping, Charterers are to be taken to have waived, and are therefore not entitled to invoke, the invalidity thereof by reason of its tender when the NORTHGATE was at the outer anchorage, though not compelled to wait there by reason of congestion at the inner anchorage[116]It follows that Owners’ demurrage claim succeeds in full.

Owners’ alternative damages claim

[117]In view of the above conclusions, I can deal briefly with Owners’ alternative damages claim. The parties’ respective submissions are sufficiently summarised in para. 10 of the Introduction above. I accept Charterers’ submission that it cannot be open to Owners to pursue a claim for damages for breach of the obligation to nominate a berth that is “always accessible”, in circumstances where the vessel could have proceeded to a position where a valid NOR could have been tendered, such that that the laytime clock would have started ticking once the prescribed notice period had expired.[118]The loss typically suffered by owners for breach of such an obligation is that the vessel is delayed in berthing, as a result of which owners are wrongly deprived of the use of the vessel for an equivalent period, and suffer resultant financial loss.[119]It is, however, well established that owners cannot claim damages for detention for breach of an obligation to nominate a berth “reachable on arrival”, in circumstances where the vessel has became an arrived ship for laytime purposes. See The President Brand [1967] 2 Lloyds Rep 338, The Delian Spirit [1972] 1 QB 103. In the latter case, Sir Gordon Willmer (at page 127C-D) questioned whether owners would be entitled to claim damages for detention, without giving credit for the laytime allowed, even if the vessel had not become an arrived ship.[120]Where, as here, a vessel is in a position to become an arrived ship, and to tender a valid NOR, so as to start the laytime clock running, but owners for their own reasons choose to instruct the vessel not to proceed to the point where she would become an arrived ship, I cannot think it can have been intended that owners should be entitled to sue for damages for breach of a “reachable on arrival” or “always accessible” provision. It seems to me that such provisions are designed to cater for a situation where the vessel is unable, due to some impediment, whether it be a topographical one such as a bar, or congestion at the berth or an anchorage, to become an arrived ship. To permit owners to claim damages in a case where no such impediment exists would, as it seems to me, allow them to circumvent the contractual regime for tender of NOR, the commencement of laytime, and the accrual of demurrage if the laytime is exceeded.[121]If owners do choose not complete the voyage stage in such circumstances, the effective cause of the detention of the vessel while waiting to become an arrived ship is their own decision, and not any breach of contract by charterers.[122]Thus I find that on the true construction of the NORTHGATE Charter, Owners would not, if Charterers had not been precluded from invoking the invalidity of the NOR, have been entitled to claim damages for breach of the “always accessible” provision. In these circumstances, it is unnecessary for me further to lengthen this judgment by considering the quantum of Owners’ alternative damages claim.

Conclusion

[123]In conclusion, I find that Owners are entitled to judgment for demurrage in the sum of US$449,892.35