View source for Laytime

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{{Admiralty law}}
In commercial [[shipping]], '''laytime'''  is the amount of time allowed, measured in days (or portions thereof), hours, or even tides, within a [[voyage charter]] for the loading and unloading of cargo.<ref>[http://www.maritimeknowhow.com/English/Know-How/Charter_parties/voyage_charter_party/gencon_clause_6-introduction.html Maritime knowhow website: Gencon, clause 6] {{webarchive|url=https://web.archive.org/web/20110404021818/http://www.maritimeknowhow.com/English/Know-How/Charter_parties/voyage_charter_party/gencon_clause_6-introduction.html |date=2011-04-04 }}</ref><ref>[http://www.maritimeknowhow.com/English/Know-How/Charter_parties/voyage_charter_party/gencon_clause_6-notice_of_readiness.html Maritime knowhow website: Notice of Readiness] {{webarchive|url=https://web.archive.org/web/20110714034840/http://www.maritimeknowhow.com/English/Know-How/Charter_parties/voyage_charter_party/gencon_clause_6-notice_of_readiness.html |date=2011-07-14 }}</ref>

Under a voyage charter or time charter, the shipowner is responsible for operating the vessel, and the master and crew are the employees of the shipowner, not the charterer. However, once the vessel has "arrived" at a port the charterer then assumes responsibility for the loading and unloading of cargo and has a period of laytime in which to carry that out. The actual loading may be performed by a third-party [[stevedore]].

The moment that laytime commences is determined by a '''Notice of Readiness''' (or "NOR"), which the [[Captain (nautical)|master]] or agent of the ship must give to the port when the ship has arrived at the port of loading or discharge. The charterparty contract determines the precise meaning of "arrival". Usually, "arrival" is when the ship has arrived at the port and is ready in all respects to load or discharge; but it may be, say, when the ship has passed buoy #2 in the approach channel, or once the vessel has pass through lock gates.<ref>[http://www.maritimeknowhow.com/English/Know-How/Charter_parties/voyage_charter_party/gencon_clause_9_cancelling_clause.html Maritime knowhow website: Gencon, clause 9] {{webarchive|url=https://web.archive.org/web/20110404021823/http://www.maritimeknowhow.com/English/Know-How/Charter_parties/voyage_charter_party/gencon_clause_9_cancelling_clause.html |date=2011-04-04 }}</ref>

If the charterer does not comply with the NOR, the carrier may [[anticipatory repudiation|cancel]] the contract and seek [[damages]].<ref>''[[The Mihalis Angelos]]''</ref> If the charterer's delay means that laytime is exceeded, a predetermined penalty (i.e. [[liquidated damages]]) called "[[demurrage]]" is incurred.<ref>''[[Suisse Atlantique Societe d'Armament SA v NV Rotterdamsche Kolen Centrale|The Suisse Atlantique]]''</ref><ref>''[[Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd]]''</ref> If the whole period of laytime is not needed, a refund called "despatch" may be payable by the shipowner to the [[chartering (shipping)|charterer]]. Despatch is normally paid at 50% of the demurrage rate, but that depends on the terms of the [[charter party|charterparty]].  The ship may thus be able to leave port early. Despatch does not normally apply to tanker charters.{{citation needed|date=January 2018}}

==Case law==
The [[legal case]] of Flacker Shipping Ltd. v Glencore Grain Ltd. (the ''Happy Day'') raised a question regarding the need for a valid NOR to be issued where an earlier NOR was submitted but not valid. [[Mark Potter (judge)|Potter LJ]], supported by [[Mary Arden, Lady Arden of Heswall|Lady Justice Arden]] and [[Denis Henry (English judge)|Sir Denis Henry]], ruled that{{quote|Laytime can commence under a voyage charterparty requiring service of a notice of readiness when no valid notice of readiness has been served in circumstances where (a) a notice of readiness valid in form is served upon the charterers or receivers as required under the charterparty prior to the arrival of the vessel; (b) the vessel thereafter arrives and is, or is accepted to be, ready to discharge to the knowledge of the charterers; (c) discharge thereafter commences to the order of the charterers or receivers without either having given any intimation of rejection or reservation in respect of the notice of readiness previously served or any indication that further notice of readiness is required before laytime commences.<ref>England and Wales Court of Appeal (Civil Division), [https://www.bailii.org/ew/cases/EWCA/Civ/2002/1068.html Flacker Shipping Ltd v Glencore Grain Ltd <nowiki>[</nowiki>2002<nowiki>]</nowiki> EWCA Civ 1068], paragraph 85, delivered 15 July 2002, accessed 14 May 2024</ref>}}
 
Another case in 2011, [[Siberian Coal Energy Company|Suek AG]] v [[Glencore International AG]] (The "Hang Ta"),<ref>[2011] EWHC 1361 (Comm)</ref> addressed a difference of interpretation between the parties to the contract as to giving of a NOR at "a usual waiting place" instead of at the intended discharge berth. The intended berth was occupied, and also access was affected by inclement weather conditions, so there were two contending reasons for the delayed berthing. Glencore argued that the NOR was given too early and was therefore invalid, because the berth's occupation by another vessel was not the sole reason operating to affect berthing, but the court rejected their argument and supported SUEK.<ref>Nowak, S., [https://www.steamshipmutual.com/publications/articles/hangta0911 Competing Causes - Agreeing the Risk of Delay], ''Steamship Mutual'', published 1 September 2011, accessed 2 February 2024</ref>

==Lay days==
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"Laytime" should not be confused with "Lay days". The latter refers to the period within which the shipowner should make the vessel "ready" to the Charterer at the place and time agreed in the charter party. "Cancelling Date" is the last day of "Lay days" and acts as a deadline to tender "Notice of Readiness". A ship (vessel) failing to become an "Arrived Ship" by tendering a valid Notice of Readiness bears the risk of being refused/cancelled by Charterers as per Charter-Party provisions.

== References ==
{{Reflist}}

==External links==
{{Wiktionary}}

== Further reading ==
*Todd, Paul (1988), ''Contracts for the carriage of Goods by Sea'', page 88, BSP Professional Books, Oxford, U.K ISBN

{{Ship chartering}}

[[Category:Ship chartering]]