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How Do You Define the ‘Limits’ of a Port? Court of Appeal Guidance

Anyone involved in international trade will know that ports get busy and that vessels are often required to anchor offshore and wait for a berth. Such delays can have serious financial consequences and, in an important decision, the Court of Appeal has given guidance on what exactly is meant by the ‘limits’ of a port.

shipBy the terms of a charterparty, the owners of a vessel were required to give notice to her charterers that she was ready to take on cargo at the loading port. Such notice had to be given on the ship’s arrival ‘within port limits’. The port was congested and, at the instructions of the port authority, the vessel was put at anchor outside the geographical area of the port, as defined by Admiralty charts.

The ship was in that position when notice of readiness was purportedly given and a dispute arose as to whether that notice was valid. The issue came before arbitrators as the owners sought compensation from the charterers in respect of an alleged failure to load the ship on time. The arbitrators found in favour of the charterers on the basis that the vessel was not within port limits at the relevant time.

In dismissing the owners’ appeal against that ruling, the Court noted that there was no law, either local or national, that defined the limits of the particular port. Given the paucity of the material before them, the arbitrators were entitled to rely on Admiralty charts and to conclude that the owners had failed to establish that the ship was within port limits when the notice was given.