No Valid Notice of Readiness, No Laytime: Cargo Operations Alone Are Insufficient To Trigger Laytime

In Trans Trade RK SA v Sebat Shipping and Trading Company [2026] EWHC 950 (Comm), the English Commercial Court clarified a key point in voyage charterparty law: an invalid notice of readiness (“NOR”) cannot, without more, trigger laytime, even where cargo operations subsequently commence.

The Court held that laytime will only begin where there is a valid NOR, or where the Charterer has, with knowledge, waived the invalidity, or where estoppel or contractual agreement applies.

Background

A voyage charterparty was entered into by the parties to carry a cargo of Ukrainian origin barley in bulk (“Cargo”) on a voyage from Constanta, Romania to Brake, Germany on board the vessel Sebat (“Vessel”).

The Charterparty required a written NOR to load and/or discharge to be tendered when the Vessel “is in the loading or discharging berth and in all respects ready to load/discharge”.

At the discharge port in Brake, Germany, the Master of the Vessel tendered an NOR at the Brake pilot station on 10.5.2022, before the Vessel had become an “arrived ship”. No further NOR was tendered by the Owners of the Vessel thereafter.

Subsequently:

1. On 13.5.2022, the Vessel proceeded from anchorage to berth.
2. On 14.5.2022, the Vessel’s hatches were opened in preparation for discharge of the Cargo. However, tests for gas showed phosphine levels were substantially in excess of the levels at which the port would permit discharge.
3. The Vessel was ordered to leave the berth and to return to the anchorage on the same day. The Vessel did not berth again until 27.7.2022.
4. The Vessel completed discharge just before 2000 hours on 30.7.2022.

Arbitration Proceedings

Subsequently, the Owners of the Vessel claimed, amongst others, demurrage at the discharge port of Brake. The Charterers, on the other hand, argued, amongst others, that laytime never commenced due to the absence of a valid NOR and, therefore, no demurrage was payable. As a result, arbitration proceedings were commenced.

The Tribunal found that the NOR was invalid as it was served prematurely. Notwithstanding that there was no valid NOR, the Tribunal held that laytime commenced upon the commencement of cargo operations, i.e. when the hatches were opened on 14.5.2022, and that it was this action that triggered time to run as if a valid NOR had been tendered at that point. The Tribunal relied on, amongst others, The Mexico 1 [1990] 1 Lloyd’s Rep 507 and The Happy Day [2002] 2 Lloyds Rep 487, and awarded demurrage to the Owners of the Vessel (“Arbitral Award”).

Issues on Appeal to the English Commercial Court

The Charterers filed an application in the Commercial Court to challenge the Arbitral Award. The question of law which was to be decided was:

“Where the owners of a vessel under a voyage charterparty fail to serve a valid notice of readiness at a load or discharge port and there is no agreement, waiver or estoppel having the effect that an invalid notice is treated as valid, when does laytime start to run, if at all?”

Proceedings & Decision of the English Commercial Court

The Charterers submitted that the Tribunal had wrongly treated laytime as running despite an invalid NOR. The Owners of the Vessel contended that the Tribunal had, in substance, proceeded on the basis that the invalidity of the NOR had been waived, whether by election or by the principle of “deemed waiver”, such that laytime began when cargo operations commenced.

The Court rejected that characterisation. It found that the Tribunal had not determined any issue of waiver, whether actual or otherwise. There was no consideration of waiver principles, no finding that the Charterers had knowledge of the NOR’s invalidity, and no analysis of conduct capable of amounting to waiver or estoppel. Nor was there any suggestion that estoppel or contractual variation arose on the facts. The Tribunal’s reasoning was confined to treating cargo operations as sufficient to trigger laytime despite the absence of a valid NOR.

The Court held that the Tribunal had misapplied the law as stated in The Mexico 1 and The Happy Day, as those authorities confirm that an invalid NOR cannot trigger laytime unless it is cured by agreement, waiver or estoppel. Mere commencement of cargo operations is insufficient.

Accordingly, the Commercial Court held that the Tribunal erred in law in concluding that laytime commenced upon the commencement of cargo operations notwithstanding the invalidity of the NOR.

In particular, the Court rejected the concept of “deemed waiver” as a distinct doctrine and held that waiver by election requires clear and unequivocal conduct undertaken with actual knowledge of the relevant facts and the legal right being waived. Absent such knowledge, no waiver can arise. On that basis, the Court held that the Tribunal’s approach was legally unsustainable.

The appeal was therefore allowed, and the Arbitral Award was varied to disallow the Owners’ demurrage claim at the discharge port.

Practical Takeaway

As demurrage claims often run into hundreds of thousands of dollars, the precise moment laytime begins is one of the most heavily litigated issues under voyage charterparties.

This decision reinforces that shipowners cannot assume cargo operations will cure a defective NOR. Where there is any doubt as to the validity of an NOR, shipowners should consider serving a fresh NOR once the contractual preconditions are satisfied. Charterers, on the other hand, should be cautious not to assume that commencing cargo operations necessarily starts laytime, unless there is a clear contractual basis or conduct giving rise to waiver or estoppel. Failure to do so may result in substantial demurrage being incurred.