' The plaintiff in this case is Toyo Menka Kaisha Limited (the Seller) and the defendant is Trading Corporation of Pakistan Limited (the Buyer). The dispute in question between the parties was referred to arbitration pursuant to clause 19 of the contract dated 21st September, 1978 executed between the parties. As the two nominated arbitrators failed to give their award within the prescribed time, at the request of the parties, the learned Umpire (Retired Justice Dr. I. Mahmud) entered upon the reference and gave his Award dated 29th July, 1982, whereby the defendant was ordered to pay to the plaintiff an amount of U.S. $22,951.74 and costs of Rs, 10,175 as costs of arbitration. The Award was filed in this Court on 24th August, 1981. Notices were issued to the parties and objections to the Award under sections 16, 30 and 33 of the Arbitration Act, 1940 were filed by the defendant in the form of an application being C. M. A. No, 3261 of 1981. Para 2 of the Award dated 29th July, 1981 gives the relevant facts and accordingly the said paragraph is reproduced hereinbelow "2. Briefly, the relevant facts are that the Plaintiff Messrs Toyo Menka-Kaisha Limited entered into a contract with Defendant TCP on 21st September, 1978 (Exh. P. W. 1/1) agreeing to ex-Japanese ports 9000 metric tons, 5% more or less of Metallurgical Hard Coke of agreed specification. Payment was to be made by TCP against presentation of documents including Bills of Lading. The cargo was to be discharged at the average rate of 600 metric tons per weather working day of 24 consecutive hours (Fridays and holidays except even if used). At this agreed rate of discharge, laytime would work out to 15 days, 3 hours, 7 minutes. But if the vessel was detained longer after expiry of laytime, the Buyers (TCP) were to pay demurrage to Plaintiffs Sellers at the rate of U. S. $ 3500 per running day and pro rata for part of the day. The clause (11.c) provided that lay-time at discharging port was to commence 24 hours after Notice of Readiness had been received in writing by the TCP's Agents during normal office hours. Under clause (11 e) TCP had option of ordering the vessel to two safe berths at discharging port and shifting expenses and time was to be on the Plaintiff's account.
It was also provided in clause (12.c) that if the goods were shipped on Chartered vessel, TCP shall not be bound by the terms of the Charter-party, if its terms are at variance with the terms of the Sales Contract. The' Plaintiff chartered the vessel m. v. "Solomon Carrier" owned by Messrs Yamashita Shinninon Steamship Co. Ltd. Tokyo under Charter-Party dated 18th September, 1978 (Exh. P. W. 1/5) for the purposes cf shipment of the contracted goods. The cargo was shipped by Plaintiff in three lots from three different ports in Japan on the vessel under three bills of lading which were issued in the name of Defendant and Bankers. The vessel arrived at Karachi Port on 16th November, 1978 at 05.25 hours and anchored at the Outer Anchorage, as no berth was then available. Notice of Readiness was given and accepted on same day 16th November, 1978 at 09.00 hours. The vessel berthed on 28th November, 1978 at 10.24 hours and discharging commenced on same day at 10.24 hours and was completed on 18th December, 1978 at 16.30 hours. According to the Plaintiff, Laytime had expired on 7th December, 1978 at 03-07 hours and as the vessel had been detained beyond lay-time, the vessel incurred demurrage of 6 days 13 hours and 23 minutes, and T C P became liable to pay demurrage amounting to U. S. 22,951.74. The plaintiff preferred a claim for this amount but the Defendant denied the claim and contended that delay, if any, was extended under clause 18 of the Contract on account of a go-slow strike of Dock Labourers from 28th November, 1978 to 2nd December, 1978 and another go-slow of KPT Crane drivers from 4th December, 1978 to 9th December, 1978."
2. I have heard Mr. Mustafa Lakhani, learned counsel for the plaintiff, who has supported the Award given by the learned Umpire in favour of the plaintiff, and Mr. Sabihuddin Ahmad, learned counsel for the defendant, who has challenged the Award developing the objections filed through application C. M. A. No, 3261 of 1981. Here certain pertinent dates and times may be mentioned. The agreement between the parties was entered into on 21st September, 1978. The vessel bringing the goods in question arrived at the outer-anchorage of the Karachi Port at 05.25 hours on 16th November, 1978 and notice of readiness was given by the Plaintiff to the defendant on the same day i. e. 16th November, 1978 during -Ace hours and was accepted by the defendant on the same day. The vessel was berthed at 10.24 hours on 28th November, 1978 and completed its discharge on 13th December, 1978 at 16.30 hours. According to the defendant, there was a go-slow-strike by the dock-workers from 28th November, 1978 to 2nd December, 1978 and the K. P. T. Crane drivers were also on go-slow-strike from 4th December, 1978 to 9th December, 1978. In the dispute between the parties there were two main points in issue. First point was whether the laytime commenced on 18th November, 1978 on the expiry of 24 hours of the service of notice of readiness on the defendant while the vessel was still at the outer-anchorage waiting for a berth or it commenced from 28th November, 1978 when the vessel was berthed. The second question requiring determination was whether the defendant were entitled to the benefit of extension in the laytime on account of the goslow-strike by the dock-workers and the K. P. T. Crane-drivers. It is an admitted position that if laytime commenced on 28th November, 1978 i. e. The date when the vessel was berthed, the Plaintiff would not be entitled to any claim on account of demurrage or even if the laytime commenced on 18th November, 1978, the plaintiff would not be entitled to any amount on account of demurrage if benefit of eleven days on account of the go-slow-strike by the dock-workers and K.
P. T. Crane-drivers was available to the defendant. The learned Umpire, on both the points, gave his Award in favour of the plaintiff and against the defendant. The learned Umpire came to the conclusion that the lay-time commenced on 18th November, 1978 and further that the defendants were not entitled to any benefit on account of the go-slow-strike by the dock-workers and the K. P.
T. Crane-drivers under the force mafeure clause (clause 18) of the contract dated 21st September, 1978 between the parties. For appreciating the arguments advanced by both the learned counsel, reference may be made to the relevant clauses of the contract dated 21st September, 1978.
Clause 8 of the contract shows the destination as Karachi (Pakistan). Clause 9 is the payment clause and according to it, payment was to be made in U. S. Dollars by an irrevocable letter-of- credit through the designated bank in Pakistan on presentation of documents specified in clause 9 including "copy of charter party, if any". Clause 11 relates to transport and discharge conditions and reads as follows :- "11. Transport and Discharge conditions.-
(a) The quantity to be shipped shall not exceed the value of Yen 244 million.
(b) The vessels of South Africa, Israel and Taiwan (Formosa) flags are excluded for transport of goods.
(c) The cargo shall be discharged at the average rate of 600 metric tons per weather working day of 24 consecutive hours, Fridays and Holidays except even if used. The vessel shall have minimum number of three hatches with facilities for the operation of four shore cranes/derricks to allow simultaneous discharge of cargo. Time from noon Thursday or 5.00 p. m. On a day preceding a legal or port holiday until 8.00 a.m. Next working day, shall not count even if used. However, if the vessel is detained longer after the expiry of laytime the Buyers shall pay demurrage at the rate of U.
S. $ 3,500 per running day and pro rata for any part of the day. Nevertheless the benefit of Fridays and holidays including commencement of lay days after 24 hours of the receipt of notice of readiness, time from noon on Thursday or 5 p. m. On a day preceding a legal port holiday until 8 a.m. Next working day shall be given to the Buyers within the permissible period of laytime.
Despatch money, if any, shall be paid by the Shipowners to Receivers at half the demurrage rate for all time saved. Laytime at discharging port shall commence twenty-four hours after the Notice of Readiness has been received in writing by the Receivers' agents during normal office hours.
(d) Lay days shall be non-reversible.
(e) The Buyers have the option of ordering the vessel to two safe berths at the discharge port.
Shifting expenses and time shall be on the Owners' account.
(.1) Overtime shall be paid by the party ordering it. If ordered by the Port Authorities, the cost shall be shared on 50:50 basis by the Buyers and the Shipowners. Officers' and Crew overtime shall always be on the Shipowners' account.
(g) The vessel shall allow work at all times of the day or night. The owners shall guarantee gear tested not more than one year prior to readiness.
(h) The vessel shall supply free of expense to the Buyers winches runners, slings, also lights for night work and power to drive them. The vessel shall also supply fresh water for stevedores free of expenses. Any time lost by reason of breakdown of the vessels' winches and/or derricks shall not count.
(i) The Master or agent shall cable "Clearance and Shipping Division Care Tracopak Karachi" on sailing from the loading port, the quantity of cargo loaded and ETA Karachi. The Master shall also cable "Clearance and Shipping Division Care Tracopak Karachi" seven days' notice of vessels' expected time of arrival at Karachi also forty-eight hours and twenty-four hours notice ETA Karachi.
( j) Transhipment and shipment on deck shall not be allowed. (k) The vessel shall not load any other cargo except coke.
(1) No cargo shall be loaded in the deep tanks. If loaded, unloading time shall not count. Holds shall be well ventilated during the voyage to avoid risk of fire. All damages to ship due to loading into and discharging from deep tanks shall be shipowners' liability. Damages, if any, to ship during the course of loading shall be settled directly between the shipowners and the party concerned at loading port(s).
(m) The Shipowners shall be free to appoint their own agents at the port of discharge.
(n) Weight of the cargo at Karachi Port shall be determined by joint draught survey by the respresentatives nominated by the Buyers and the Sellers."
Clause 12(c) reads as follows: - "12(c). If the goods are shipped by the Sellers on chartered vessel, the Buyers shall not be bound by the terms of the Charter Party if the terms of charter party are at variance with the terms and conditions of the contract entered into by the Buyers with the Sellers."
' Clause 18 is the force majeure clause and it is couched in the following terms :- "18. Force Mejeure.-Should any of the force majeure circumstances, namely Government restriction, natural calamity, fire, acts of elements. War, military opera ions of any nature, blockage and/or strikes arise preventing the Sellers/Buyers from performing wholly or partially carrying out any of the contractual obligations, the period stipulated for the performance of the contract, shall be extended for as long as such circumstance may prevail : ' Provided that in the event of such circumstances continuing for more than three months, either party may refuse to fulfil 'its contractual obligations without any claim to indemnification of any losses that it may thereby sustain.
' The party unable to carry out its contractual obligations shall immediately advise the other party of the commencement am I the termination of the circumstances preventing the performance of the Contract.
' A certificate issued by the respective Chamber of Commerce of the Sellers' or the Buyers' country shall be sufficient proof of the existence and duration of such circumstances."
The record shows that a Charter Party agreement was entered into between the Owners of the Vessel and the Plaintiff as the charters on 18th September, 1978 (3 days prior to the contract dated 21st September, 1978 at Tokyo, Japan and clause 26 of the rider to the Charter Party provided follows :- "26. Laytime at discharging port to commence 24 hours after notice of readiness has been received by the receivers agents during normal office hours, whether in berth or not. If discharging berth is not available on vessel's arrival at or off the port of discharging on account of congestion and vessel is not granted free pratique, the vessel shall be entitled to give notice of readiness on arrival there by cable or other method to the receivers agents and the notice shall be received in no time accordingly, with the effect that time count as stipulated above, as if vessel were in berth and in free pratique and also in all respects ready for discharging."
3. As observed earlier, the learned Umpire found that laytime had commenced on 18th November, 1978 and not on 28th November, 1978 when the vessel had berthed. In coming to this conclusion, the learned Umpire referred to various standard books on Marine Law and also to reported decisions and I may reproduce here para. 6 of the Award dated 29th July, 1981 :- "6. The rules of law are well-settled that Laytime begins to count when certain requirements are satisfied; viz. (1) Reaching the agreed destination; (2) Readiness of the ship to load or to discharge and (3) Giving a notice of readiness after arrival. When these requirements are satisfied, the ship is said to be an "arrived ship" and, subject to the expiry of any prescribed period after the notice of readiness, laytime begins to run-See "Laytime" by Michael Brynmor Summerskill 1966, page 105. The rules of law are also well-settled as to when a ship is deemed to have reached its destination and deemed to be an "arrived ship" so that laytime may begin to count. When the agreed destination mentioned in the charter-party or the contract, is a port named simply (as in the case of a port Charter-party) the ship is an arrived ship when she comes within the commercial area of the port, where ships proposing to discharge their cargoes, usually wait at the disposal of the charterers, even though the ship has not yet reached the berth, where she will actually discharge the cargo.
Where however, a berth is named in the Charter party (as in a berth charter-party) or there is an express provision therein giving the charterer an option to order the ship to a berth on arrival at the discharging port, the ship is not an "arrived ship" and laydays do not commence, until the ship actually gets alongside the berth, as though the berth had been originally named in the Charter party or the Contract. These principles of law were laid down in the leading case of Leonis S. C. Co.
Ltd. v. Bank Ltd. (1908) 1 KB 499 which have been followed in several later cases, Armement Adlof Deppe v. John Robinson & Co. Ltd. 14 Asp. M.C. P-48, and received the approval of the House Lords in the "Aclio's" case 1961 A C 135. The principles was also applied by the High Court of West Pakistan in Naqi Hanna Khabbaz & Co. v. Dalmia Cement Ltd. PLD 1965 Kar. 224 at page 227. A summary of the principles will be found in Carver's Carriage by Sea Vol. II, 12th Edition 1971. Article 1261 page 864 and Halsbury's Laws of England. Third Edn. Vol. 35 Art. 524 ff."
' According to the learned Umpire, therefore, in the instant case, as the agreed destination in the contract dated 21st September, 1978 was mentioned only as Karachi, the vessel in question became an "arrived ship" when it entered the outer-anchorage of Karachi on 16th November, 1978 and on the expiry of 24 hours' notice of readiness given by the plaintiff, the lay-time commenced on 18th November, 1978 and the defendant could not take the position that the laytime would only commence after the vessel had berthed.
' On the question of go-slow-strike on the part of the dock workers and the K. P. T. Crane drivers, the learned Umpire, on the basis of evidence produced before him, found that there was go-slow- strike on the part of dock workers and K. P. T. Crane drivers. However, he came to the conclusion that go-slow was not covered by the word `strike" employed in clause 18 (force mateur clause) of the contract dated 21st September, 1978. Further the learned Umpire, on the basis of the evidence produced before him, reached the following conclusion :- "The question seems to be irresistible that go-slow was not the only effective cause of the delay in discharging the cargo. In any case, the effect of go-slow could have been prevented by engaging more gangs of dock-labours. Moreover, no notice of the go-slow was given to the plaintiff nor certificate of the Chambers of Commerce was submitted us required under clause 18 of the contract. My finding, therefore, on this issue is, that the go-slow did not amount to strike as contemplated in clause 18 of the contract and did not extend time for discharging the cargo.
' It may also be mentioned here that an issue (issue No, 4) had been framed by the learned Umpire, as to whether the defendants were bound by the terms of the Charter Party. On this issue, the finding of the learned Umpire is contained in para 13 of his Award dated 29th July, 1981, which is as follows :- "(13) It is riot necessary to decide this issue. It is relevant only in so far as clause 26 of the Charter party is concerned, which provides that laytime at discharging port is to commence whether the ship is "in berth or not. As held by me under issue No, 1.-Laytime commenced under the contract when the ship was at the outer anchorage, though not in berth and as such, clause 26 of the Charter party is not at variance with the Contract. Moreover, Buyers had agreed under clause 12(c) to be bound by the Charter Party if its terms are not at variance with the contract. The contention of Mr. Sabihuddin Ahmed relying on Naqi Hanna Khabbaz & Co's case referred to above, that T C P had no Notice of this special stipulation of clause 26 of the Charter-Party cannot be accepted."
4. Great stress was laid by Mr. Sabihuddin Ahmad, learned counsel for the defendant that "go-slow" by the workers is in the nature of a strike and as such covered by the word "strikes" employed by the parties in clause 18 (Force majeure clause) of the contract. There appears to be some substance in this contention but in my view it is not necessary to decide this question in the context of the record of the present case. Even if it is assumed that "go-slow" by the dock-workers and the K. P. T. Crane drivers amounts to "strike", the finding of the learned Umpire, on the basis c of the evidence on record, is that "the effect of go-slow could have been prevented by engaging more gangs of dock-labourers." I see no reason or justification to interfere in this conclusion reached by the learned Umpire.
5. The only other point which arises for consideration in these proceedings, and on which both the learned counsel argued at length, is the point of time when the laytime commenced in this case.
As observed earlier, according to the learned Umpire, the vessel in question became an "arrived ship" when it entered the outer-anchorage of Karachi Port on 16th Noveniber, 1978 and on the expiry of 24 hours' notice of readiness given by the plaintiff, the laytime commenced on 18th November, 1978. The learned Umpire, in a very concise and precise manner with references to standard, works and decided cases, referred to the established rules relating to commencement of laytime.
Discussion on this aspect is to be found in para 6 if the Award dated 29th July, 1981, which has been reproduced earlier in this judgment. The Principles enunciated in para 6 of the Award are principles regarding commencement of laytime while interpreting Charter-parties. Reference may be made here to certain observations, with which I respectfully agree, in a Division Bench Judgment (Wahiduddin Ahmad and Sardar Muhammad Iqbal, JJ.), of the erstwhile High Court of West Pakistan, Karachi Bench in the case of Naqi Hanna Khabbaz v. Dalmia Cement Limited. In para. 7 at pages 227-228 of the report it is observed as follows '- "(7) The scope of the present dispute has been narrowed down to a considerable extent. The only serious question which needs detertilination in the case is as to when the lay days could commence in respect of each ship for the purposes of determining the liability to pay demurrage.
If the lay days are to commence from the date the ship was actually berthed. Mr. Noor Muhammad, learned counsel for the appellants, conceded that the appellants would have no case to put forth. In support of his contention that the respondents were liable to load the ships from the time they arrived at the outer anchorage, he relied on the terms of the charater-party. The appellants, as stated earlier, had chartered s. s. San Padro and s. s. Maria Vittoria. They had entered into charter-party with the ship-owners. The respondents were not party to the charter-party. An attempt, however, was made to argue that by the fact that the respondents had agreed to pay the demurrage, they had impliedly agreed to abide by the terms of the charter-party in this behalf. The relevant clause of the Charter-party of the s. s. San Padro dated the 12th December, 1956 (Exh. P. 6) is "that the said vessel shall proceed to Karachi (Pakistan) or so near thereto as she may safely get and lie always afloat and there oad a full and complete cargo 3,400 metric Tons --" Again, in paragraph 6 of the Charter-party it is stated, "Time lost in waiting for berth to count, as loading time." The terms of the charter-party of s. s. Maria Victoria dated the 15th of January, 1957 (Exh. P. 13) are, "That said vessel shall proceed to Karachi or so near thereto as she may safely get and lie always afloat and there load" and that "time lost in waiting for berth to count as loading time."
According to these terms, there can be no manner of doubt that as between the appellants and the ship-owners, the lay days were to commence from the time the ships arrived at Karachi, and the fact that they were not able to obtain berth will not affect this position. It is an express term of the charter-party that the time spent in waiting for berth was to count as loading time. Even if this term had not been there, the appellants could not escape their liability towards the ship-owners.
What was agreed upon was that the vessel would "proceed to Karachi or so near thereto as sbe may safely get and lie afloat.' Under the circumstances, as soon as it arrived at Karachi, the laydays commenced against the charterer and the vessels became the arrived ships. Having reached the outer anchorage, the ships would be legally considered to have arrived at the port of loading. It was held in Leonis S. S. Co. v. Bank (1908) 1 K B 499) that the rule was that where the charter-party named a port simply, without further pecularity or qualification, the ship was an arrived ship when she came within the commercial area of the port. In this case a ship was chartered to load at Bahia Blanca. When she arrived, the port was crowded with vessels, and she could not get to a berth, so she anchored in the river within the port. There she remained for about five weeks before a berth was available. It was held that she was an arrived ship when she anchored in the river. It has thus been elucidated that when the place named is a port or other1 wide district the lay days begin when the ship is ready and at the freighter's disposal within the named place though she may not be in a position to take in a cargo and although she may not be at the Wharf, dock or other part of the place to which the charterer may have properly required her to go. If these terms of the charter-party are applicable to determine the demurrage between the appellants and the respondents. We can have no doubt that the lay days would commence from the respective dates of the ship's arrival at the outer anchorage and the total period in loading had to be computed from that date,"
6. If the contract between the parties were a charter-party I would have agreed with the learned Umpire that laytime commenced in the instant case on the expiry of 24 hours' notice of readiness given by the plaintiff after arrival of the vessel at the outer-anchorage. However, the contract between the parties is a contract of sale and purchase of goods and not charter-party and principles of interpretation of charter parties cannot be pressed into service for interpreting a contract of sale and purchase of good unless such a provision is contained in the contract. This contract was executed between the parties on 21st September, 1978 and clause 12(c) o this contract provides that if the goods were shipped on a chartered vessel, the defendants shall not be bound by the terms of the charter-party, if it terms were at variance with the terms of the contract between the parties. Now the record shows that a charter party was signed at Tokyo (Japan between the owners of the vessel and the plaintiffs on 18th September, 1978 i. e. Three days earlier to the contract between the parties. Although the defendants are not a party to the charter- party but subject to the condition contained in clause 12(c) of the contract dated 21st September, 1978 the plaintiffs are impliedly bound by the terms of the Charter Party. In vie of the clause 12(c) of the contract what is to be seem is whether the respective clauses about laytime in the contract and in the Charter Party are at variance with each other Clause 26 of the Charter Party (reproduced earlier in this judgment) specifically provides that on the vessel arriving at the discharging port, it will be entitled to give notice of readiness whether in berth or not. It is further clarified that in case the discharging berth is not available and a notice of readiness is given, it will be deemed as if the vessel were in berth, Clause 11 of the contract dated 21st September, 1978 does not contain any such provision. There is accordingly variance between the two clauses. If the Charter Party were signed on 18t September, 1978 containing clause 26, and if three days later in the Con. Tract dated 21st September, 1978, terms similar or identical to that contain= ed in clause 26 of the Charter Party are excluded it would paean that the parties did not agree to clause 26 of Charter Party to be a part of their Contract. It would consequently follow that the parties had agreed that notice of readiness could only be given when the vessel was berthed and it was not a term of the contract that notice of readiness could be validly given by the plaintiffs as soon as the vessel entered the Karachi Port area although it was not berthed.
7. Mr. Mustafa Lakhani, learned counsel for the plaintiff had agreed that in case laytime commenced after the vessel was berthed, the plaintiff would not be entitled to any amount from the defendant. I am of the view that in the instant case laytime commenced after the vessel was berthed and the learned Umpire erred in law in reaching the other conclusion.
8. As a result, C.M.A. 3261/81 is accepted and the Award dated 21st September, 1978 is set aside.
There will be no order as to costs. PLD 1965 Kar. 224 revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.