Case Note & Summary
The dispute arose from a Charterparty dated 15 November 2010 between Steel Authority of India Ltd. (charterer/appellant) and Pacific Gulf Shipping Co. Ltd. (owner/respondent) for the vessel m.v. Navios Sagittarius to carry coking coal from Australia to three Indian ports. The issue concerned demurrage payable after discharge. Notice of Readiness was tendered at Vizag on 28 February 2010 at 1515 hours, and laytime commenced 24 hours later on 29 December 2010 at 1515 hours. On 31 December 2010, the vessel reported engine trouble from 0845 to 1415 hours, after which it was rectified. The charterer argued that this period should be excluded from laytime because the vessel was not ready. The arbitral tribunal rejected this, holding that laytime had already commenced and there was no provision for suspension. The Single Judge under Section 34 of the Arbitration and Conciliation Act, 1996 dismissed the challenge. The Division Bench upheld the decision, finding the tribunal's interpretation plausible and not patently illegal. The court noted that the charterer's obligation to provide a berth did not make the owner liable for delays caused by the vessel's unreadiness. The appeal was dismissed with no order as to costs.
Headnote
A) Arbitration - Challenge to Arbitral Award - Section 34 of Arbitration and Conciliation Act, 1996 - Limited Grounds - The court considered whether the arbitral tribunal's interpretation of the Charterparty was patently illegal or contrary to public policy - Held that the tribunal's construction was a plausible one and not open to interference under Section 34 (Paras 1-6). B) Charterparty - Laytime - Commencement and Suspension - Clause 33 of Charterparty - Time Counting Provision - Laytime commenced 24 hours after Notice of Readiness - Engine trouble did not suspend laytime as there was no express provision for suspension and the vessel was already on demurrage - Held that once laytime has commenced, it continues unless an exception clause applies (Paras 2-5). C) Demurrage - Calculation - Engine Trouble - Charterparty - The charterer sought exclusion of time when vessel had engine trouble - The arbitral tribunal and Single Judge rejected this - Held that the vessel's unreadiness due to engine trouble after laytime commenced does not stop time counting (Paras 3-5).
Issue of Consideration
Whether the period during which the vessel was unable to proceed due to engine trouble should be excluded from laytime for demurrage calculation under the Charterparty.
Final Decision
Appeal dismissed. No order as to costs.
Law Points
- Laytime once commenced continues until completion of discharge unless an exception clause applies
- Engine trouble does not automatically suspend laytime
- Charterer's obligation to provide a berth does not shift risk of vessel unreadiness to owner
- Section 34 of Arbitration and Conciliation Act
- 1996 - limited grounds for challenge
