Laytime and Demurrage

John Schofield MA

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CHAPTER 1 General principles

1.1 Laytime and demurrage comprise one aspect of English maritime law, in particular the law relating to voyage charters. The present law has for the most part been developed by judicial interpretation of clauses in commercial charterpar-ties over the last 150 years, although some of the basic principles were established somewhat earlier, at around the time that Queen Victoria came to the throne. 1.2 The development of this branch of the law has been closely allied to the historical and social changes that took place as sail gave way to steam, and more recently as improved methods of communication have given greater central control to those controlling the commercial adventure, which a voyage charter still represents. It is perhaps one of the few remaining areas of English common law in which there has been little statutory intervention. 1.3 The establishment of standard forms of charter, the meaning of almost each word of which has been the subject of judicial interpretation, might have resulted in a static law, but fortunately that has not been so and the law continues to develop to meet present and future needs. The increasing use of additional clauses to charterparties, some of which are not always accidentally ambiguous, will also no doubt continue to provide much material for future litigation. 1.4 Whilst most of the cases relating to laytime and demurrage arise in the context of charterparties, it must always be remembered that the law relating to these matters also plays an important role in contracts, such as sale contracts. 1.5 It is perhaps important to remember that whilst judges, and increasingly arbitrators, lay down the interpretation to be given to particular clauses, these are often drafted by commercial men and the interpretation they are given in practice only rarely reaches arbitration, and still more rarely the higher courts. 1.6 Recent changes in arbitral law and practice have meant fewer appeals and this has reinforced the importance of publishing some arbitration awards of general importance in a form where the identity of the parties is not disclosed and the confidentiality of the award is preserved. Lloyd’s Maritime Law Newsletter is now the accepted forum for this type of limited publication and many of the awards reported in it are quoted in this book. 1.7 An indication of the number of reported cases there have been over the years is given by the length of the table of cases. 1.8 Notwithstanding the earlier reference to the basic principles of laytime and demurrage being traced back to early Victorian times, the concept of laytime, that is the time allowed for cargo operations, can be traced back much earlier, at least

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to the Rolls or Laws of Oleron and possibly through them to Rhodian law in the Mediterranean. 1.9 Oleron is a small island on the Atlantic coast of France, about 20 miles north of the mouth of the Gironde estuary and that in the middle ages was a centre for Atlantic trade. It was part of the duchy of Aquitaine, which extended from Oleron down to the Spanish border. With the death of her father and brother in 1137, control of Aquitaine passed to the tenth Duke’s daughter, Eleanor, who in the same year married the heir to the French throne who, when his father died less than a month later, became Louis VII of France. Louis and Eleanor both went on the second crusade and she brought back with her the code that became the Laws of Oleron. These were based on the ancient Lex Rhodia, which had governed commercial trade in the Mediterranean for over a thousand years and had been adopted by King Baldwin III of Jerusalem as the Maritime Assizes of the Kingdom of Jerusalem. The laws of Oleron were promulgated by Eleanor in Aquitaine in about 1160, Eleanor’s marriage to Louis VII had been annulled in 1152, following which in the same year she married the Duke of Normandy and Count of Anjou, the heir to the British throne, who became Henry II. When their son, Richard the Lionheart (Richard I) went on the third crusade, his mother, Eleanor, became Regent and in about 1190, the Laws of Oleron were introduced into England by Eleanor. 1.10 The Laws of Oleron contain some 47 articles or individual laws dealing with the rights and responsibilities of ship’s captains in relation to discipline, mutiny, pay, cargoes, sickness on board, pilotage, accidents and similar matters. Article XXI is the article relating to laytime and provides:

If a master freight his ship to a merchant and set him a certain time within which he shall lade his vessel that she may be ready to depart at the time appointed and he lade it not within the time but keep the master and mariners by the space of eight days or a fortnight or more beyond the time agreed on, whereby the master loses the opportunity of a fair wind to depart, the said merchant in this case shall be obliged to make the master satisfaction for such delay, the fourth part whereof is to go among the mariners and the other three-fourths to the master because he finds them their provisions.

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