In Trans Trade RK SA v Sebat Shipping and Trading Company [2026] EWHC 950 (Comm) the English Commercial Court considered when laytime commenced, following tender of an invalid Notice of Readiness (“NOR”). The Court clarified the precedent judgment provided in The Happy Day [2002] EWCA Civ 1068; [2002] 2 Lloyd’s Rep 487.
Background Summary
The case concerned an application challenging an Arbitration Award, by way of an appeal pursuant to section 69 of the Arbitration Act 1996.
Dias J granted permission to appeal on two questions of law, namely:
“(1) 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?
(2) On the facts found by the Tribunal, when (if at all) did laytime start to run at Brake?”
On the first question, the judge regarded the Tribunal as “obviously wrong” and on the second: “it is further arguable that the Tribunal was obviously wrong.”
The Appeal came before Eggers P KC for determination.
The arbitration reference had been commenced by the Defendant, Owners against the Claimant, Charterers pursuant to a voyage Charterparty evidenced by a recap dated 9th April 2022. The Vessel’s voyage was from Constanta, Romania to Brake, Germany carrying a cargo of barley.
Owners’ claim included a claim for demurrage at the load and discharge ports. An award in the sum of US$840,017.19 was made in respect of the latter, which was the subject of the Appeal. Charterers had a counterclaim, which was dismissed.
The laytime for discharge was 3 days 18 hours and 36 minutes with the recap providing:
- time counting at discharge ports: laytime shall commence at 0800 hours the next working day after presentation of valid n.o.r., if notice tendered during the office hours of the port ….
On 10th May 2022 at 10:00 hours, at the end of the sea passage and at Brake pilot station, the Master tendered an NOR. The Vessel anchored thereafter either at the pilot station at 11:00 hours (per the Brake Statement of Facts / SOF) or at 14:50 hours at an anchorage (per the Vessel’s logs).
The Tribunal found the NOR invalid on the basis it was tendered before the Vessel was an “arrived ship.”
No further NOR was tendered by Owners.
Due to high phosphine levels in the Vessel’s holds which was above recommended, acceptable and safe levels the Vessel was not permitted to discharge at the Brake port. She had to berth twice and only completed discharge just before 20:00 on 30th July 2022.
The Tribunal determined the matter on paper, following an exchange of written closing submissions. Charterers did not challenge the loadport demurrage award.
At paragraphs 61 to 63 of the Award, the Tribunal determined the Owners' claim for discharge port demurrage as follows:
"61. The Claimant's submission as to where the Vessel anchored is partially supported by the evidence, but not as to the when. The evidence before us indicates that the Vessel tendered NOR at the pilot station at 1000 at the same time as ending her sea passage, before dropping anchor (at 1100 at Weser pilot station according to the Brake SOF, alternatively at 1450 at anchorage according to the relevant log entry). Accordingly, as with the first NOR tendered at Constanta, we find that the Brake NOR was tendered before the Vessel became an arrived ship, from which it follows that that NOR tendered was invalid when served.
62. However, unlike the position at Constanta, where a second, valid, NOR was tendered, no further NOR was tendered at Brake. The next question for our determination is therefore whether laytime ever commenced at all.
63. It is trite law that, absent tender of a valid NOR, the trigger for laytime to commence is the commencement of cargo operations. We therefore accept the Claimant's final submission that laytime commenced when hatches were opened at 0550 on 14 May."
On 16th May 2025, following notification of Charterers’ application for permission to appeal, the Tribunal made an amended Award following a section 57 Arbitration Act 1996 application by Owners for clarification of paragraph 63 of the Award.
Owners’ solicitors stated (amongst other things) in their s.57 Application:
“We expect that what the Tribunal had in mind by their reference to "trite law" in para 63 was the decision of the Court of Appeal in The Happy Day in which it was held that the commencement of cargo operations amounts to a waiver by a charterer of its right to argue or rely upon the invalidity of the NOR.
In any event, we would be grateful if the Tribunal could clarify and expand upon its decision at para 63 of the Award to set out the trite law on which the decision was based."
Charterers objected to the application on the basis there was no ambiguity for which s.57 could be invoked, further even if there was, this was not an application for clarification of an ambiguity but:
"rather to say that you reached the conclusion that time started running when cargo operations started on a basis that was not pleaded, not proved and not argued. Had you done that, you would have been in serious breach of your obligations of fairness under section 33. We are confident that you would not have breached those obligations."
Charterers also asserted they had not been provided with an opportunity to meet any case based on waiver of the invalidity of the NOR. Further that Owners had not referred to The Happy Day and had not relied on it as authority for the proposition that:
"the commencement of cargo operations amounts to a waiver by a charterer of its right to argue or rely upon the invalidity of the NOR".
Owners solicitors response was that the Tribunal was merely being asked what it meant by its reference to “trite law”…in its Award.
The Tribunal’s response to the application and revision to paragraph 63 of the Award provided:
“63. It is trite law(1 ft) that, absent tender of a valid NOR in circumstances such as here, namely where an NOR otherwise valid in form is rendered invalid because it was tendered prior to the arrival of a Vessel , the trigger for laytime to commence as if a valid NOR had been served at that time is the commencement of cargo operations. We therefore accept the Claimant's final submission that laytime commenced when hatches were opened at 0550 on Saturday 14 May, in so much as this action triggered time to run as if valid NOR had been tendered at that point. In accordance with our calculation attached at Appendix II, we accordingly find that laytime commenced at 0800 on Monday 16 May ."
The footnote / 1 ft after the words "trite law " in para. 63 of the Award referred to “The Happy Day [2002] 2 Ll.Rep.487”
Permission to Appeal
In Dias J reasons for granting permission to appeal on the basis the Tribunal wrongly applied the relevant principle as to when laytime commenced, she stated:
"1. In paragraph 63 of its corrected Award, the Tribunal clarified that its statement of principle was derived from The Happy Day.
2. The Happy Day is based on the doctrine of waiver/election which requires the allegedly waiving party to lead the other party to believe that he has made a choice between two inconsistent courses of action. As the Court of Appeal recognised, this requires an indication an awareness of the right being waived and the underlying facts relevant to the choice: see also Scrutton on Charterparties (25th ed.) para 9-081; Schofield on Laytime & Demurrage (8th ed.) para 3.382.
The court did not say that commencement of cargo operations invariably triggers the commencement of laytime even where charterers are unaware of any invalidity of the NOR. The decision also has to be read in the light of express findings that the charterers in that case were aware that NOR was invalid.
3. By contrast, in this case there is no discussion by the Tribunal of The Happy Day or of the doctrine of waiver or its ingredients. There are no findings that charterers were aware that Notice of Readiness had been served prematurely or of any other circumstances that might have supported a finding of waiver. Indeed there is nothing in the Award to suggest that the point was raised at all. If it had been it is inconceivable that the Tribunal would not have addressed it.”
On Appeal
Eggers J found it curious that there was no dispute between the parties that the answer to question 1 was that laytime would not run at all, in the absence of any agreement, waiver or estoppel. The focus was on whether the Tribunal had found that Charterers had waived the invalidity of the NOR.
Owners Counsel submitted (to include), it could not be inferred there was an error of law merely because the Tribunal did not articulate each ingredient giving rise to its conclusion (including waiver) and that Owners did have in mind a “deemed waiver.”
Relying on the credentials of the Tribunal it was also submitted that by Owners Counsel that:
“It is unlikely that the Tribunal got the law wrong in this familiar area: this was a highly experienced Tribunal (including both the current President of the LMAA and the past Honorary Secretary of the LMAA) who knew about The Happy Day, to which the Tribunal referred in its Award, describing the law as "trite".
Further, that the Court should strive to uphold arbitration awards and read the same in a reasonable and commercial way.
The Appeal was allowed, despite the Court being very conscious of the starting assumption when dealing with section 69 Applications, namely that there is no error of law.
Pertinently, paragraph 51 of judgment reads:
“51. There is, therefore, a policy - represented by the Arbitration Act 1996 as a whole - in favour of upholding the arbitration process, by reason of the parties' agreement to refer to disputes to arbitration, and any award made by an arbitral tribunal.
Having regard to this policy, the Court should not be pre-disposed to find any errors in the legal reasoning in the Award and should start with the benevolent assumption that there is no error of law on a fair reading of the Award unless the Tribunal's finding as a matter of law is clearly set out and the basis of the Tribunal's error can be clearly discerned. If the reasoning and decision of the Tribunal are not clearly identified, the Court should not assume that there has been error of law by reason of the Tribunal's silence, unless it can safely be concluded that an error of law has been made, for example where the Tribunal's decision cannot stand as being consistent with the correct legal position.”
The Court considered whether there had been a “deemed waiver” on which the Tribunal relied and as submitted by Owners’ Counsel.
There was no suggestion of any estoppel or agreement arising so as to activate the commencement of laytime.
The Court found the Tribunal had not been relying on any waiver argument but rather had decided as a matter of law that where an invalid NOR was tendered because it was premature, having been tendered before the Vessel was an “arrived ship” i.e. before it arrived at its contractual destination and/or was ready to discharge, laytime began to run from the commencement of cargo operations as if a valid NOR had been tendered at that point.
As such there had been an error of law made by the Tribunal as explained by Mustill LJ in The Mexico I [1990] 1 Lloyd's Rep 507, 513 and by Potter LJ in The Happy Day [2002] EWCA Civ 1068; [2002] 2 Lloyd's Rep 487, para. 38.
The Court did however consider whether its judgment would have been different if the Tribunal was relying on a “deemed waiver”, as submitted by Owners.
Eggers J in paragraph 80 found that:
“There is, in my judgment, no principle of " deemed waiver " insofar as it rests upon a less rigorous test of waiver than an actual waiver, in particular as regards the knowledge required on the part of the waiving party”.
Consequently had the Tribunal relied on the same, it would have erred in law as there is no such legal principle, in so far as it differs from an actual waiver whose conditions were authoritatively set out in The Happy Day (at paragraph 68).
The judge also relied on and cited Scrutton on Charterparties (25th ed. 2024) at paragraph 9-081 and The Mexico I when reaching his decision to allow the Appeal.
As the Court found the Tribunal was not addressing any issue of waiver, the matter was not remitted to the Tribunal but the Award amended to delete the discharge port demurrage award. The Award was however remitted on the issue of costs (and potentially on other issues to be decided at a consequentials hearing).
LARA HICKS
BARRISTER