This page uses so called "cookies" to improve its service (i.e. "tracking"). Learn more and opt out of tracking
I agree

Kronos Worldwide Limited v. Sempra Oil Trading S.A.R.L. [2004] EWCA Civ 03

Kronos Worldwide Limited v. Sempra Oil Trading S.A.R.L. [2004] EWCA Civ 03
Table of Contents

Kronos Worldwide Limited v Sempra Oil Trading S.A.R.L

Court of Appeal (Civil Division)

Judgment Date
23 January 2004

Case No: A3/2003/0905

Court of Appeal (Civil Division)

Neutral Citation No. [2004] EWCA Civ 03, 2004 WL 62002

Before: Lord Justice Thorpe Lord Justice Mance and Mr Justice Evans-Lombe

Friday 23 January 2004

On Appeal from the Queen's Bench Division (Commercial Court) (HHJ Nicholas Chambers QC)


14.. I move to the judge's primary proposition, which is that the laytime and demurrage provisions can be separated from the contractual provision requiring presentation of a letter of credit. The meanings of laytime and demurrage were identified by Lord Diplock in Dias Co. Nav. S.A. v. Louis Dreyfus Corpn. [1978] 1 WLR 261 , 263:

““What “laytime” and “demurrage” mean was stated succinctly by Lord Guest (with the substitution of “lay days” for “laytime”) in Union of India v Compania Naviera Aeolus S.A. [1964] A.C. 868 , 899:

“Lay days are the days which parties have stipulated for the loading or discharge of the cargo, and if they are exceeded the charterers are in breach; demurrage is the agreed damages to be paid for delay if the ship is delayed in loading or discharging beyond the agreed period.”

For the purposes of the adventure in four stages contemplated by a voyage charterparty, laytime is that period of time, paid for by the charterer in the freight, for which the shipowner agrees to place the ship at the disposition of the charterer for carrying out the loading operation or the discharging operation. Laytime for discharging is generally based upon an estimate of the time which will be needed to carry out the operation with reasonable diligence if everything else goes well.

The formula states at what point of time laytime will start and what period of time thereafter shall be excluded from the calculation and so prevent its running continuously. These excluded periods are sometimes expressed as exceptions, e.g. “Sundays and holidays excepted,” sometimes by some such phrase as that time used for a stated purpose is “not to count as laytime [or discharging time]” or simply “not to count.”
If laytime ends before the charterer has completed the discharging operation he breaks his contract. The breach is a continuing one; it goes on until discharge is completed and the ship is once more available to the shipowner to use for other voyages ....”

15.. The four stages contemplated in a voyage charter are the approach voyage to the place of loading, the loading operation at that place, the carrying voyage to the place of delivery and the discharging operation at that place: see E. L. Oldendorff & Co. GmbH v. Tradax Export SA (The Joanna Oldendorff) [1973] 2 Ll.R. 285 , per Lord Diplock at pp. 304–6. Lord Diplock pointed out that it was only the second and fourth stages that involved the charterer in obligations to perform; and that the boundary between the first two stages would vary according to whether the charter was a berth or port charter. In the present case, the second stage began after the vessel arrived at the Constantza anchorage and gave notice of readiness.


Referring Principles
A project of CENTRAL, University of Cologne.