- Introduction
The decision of the English Commercial Court (the “Court”) in Trans Trade RK SA v Sebat Shipping and Trading Company (The “Sebat”) [2026] EWHC 950 (Comm) clarifies whether laytime may commence where no valid notice of readiness (“NOR”) has been tendered.
The Court confirmed that cargo operations do not, by themselves, cure an invalid NOR or cause laytime to begin. In the absence of a fresh valid NOR, laytime will commence only where the parties have reached a contrary agreement or the facts establish an effective waiver or estoppel.
- Background
The M/V SEBAT was chartered to carry approximately 14,757 metric tonnes of barley from Constanta to Brake under a voyage charterparty incorporating the Synacomex 2000 form.
At Brake, the Master tendered NOR at the pilot station at the same time that the Vessel completed her sea passage. The arbitral tribunal found that the NOR was invalid because it had been tendered before the Vessel became an “arrived ship”. No further NOR was tendered. After the Vessel berthed, her hatches were opened in preparation for discharge. Excessive phosphine levels were then detected, preventing discharge and requiring the Vessel to return to anchorage.
The tribunal nevertheless held that the commencement of cargo operations caused laytime to run as though a valid NOR had been tendered. It therefore awarded the Owners approximately US$840,000 in discharge port demurrage. The Charterers appealed under section 69 of the Arbitration Act 1996.
- Legal Implications: When Can Laytime Commence Without a Valid NOR?
The Court held that the tribunal had made an error of law by treating the commencement of cargo operations as an automatic trigger for laytime in the absence of a valid NOR.
The Owners relied on The Happy Day [2002] 2 Lloyd’s Rep 487 and argued that cargo operations could amount to a “deemed waiver” of the Charterers’ right to rely on the invalidity of the NOR. The Court rejected this interpretation.
The Happy Day does not establish an independent rule under which cargo operations automatically cure an invalid NOR. It concerned waiver by election, which requires the charterer to know the relevant facts and the right available to it, and then to act unequivocally in a manner inconsistent with the exercise of that right.
In The Sebat, the tribunal had neither considered waiver nor made the necessary factual findings to support it. The opening of the hatches could not, without findings establishing waiver or estoppel, cause laytime to commence.
The Court accordingly varied the award. The Owners’ recovery was limited to US$4,114.06 in load port demurrage and €21,616.40 in discharge port expenses, together with interest, while the substantial discharge port demurrage award was removed.
- Conclusion
The Sebat confirms that an invalid NOR does not become effective merely because time has passed, the Vessel subsequently becomes ready or cargo-related activities begin. Where no valid NOR has been tendered, laytime will not commence unless a fresh notice is served or the requirements of waiver, estoppel or contrary agreement are established.
The decision also places The Happy Day within its proper limits. Cargo operations may be relevant to a waiver analysis, but they do not create an automatic “deemed waiver”.
Owners should therefore comply strictly with the contractual NOR requirements and, where there is any uncertainty, tender a fresh NOR as soon as the Vessel is entitled to do so.
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