UK: Shipping Update - Court of Appeal Considers Notice of Readiness Under Shellvoy 5

Last Updated: 22 July 2010
Article by Hatty Sumption and Bethan Bradley

Most Read Contributor in UK, September 2017

In AET Inc Ltd v Arcadia Petroleum Ltd (The "Eagle Valencia") [2010] EWCA Civ 713, the Court of Appeal has considered the circumstances in which a valid Notice of Readiness can be tendered pending grant of free pratique under the Shellvoy 5 form together with Shell Additional Causes (February 1999). Clyde & Co acted for the successful charterers in this case.

The Facts

The claimant owners entered into a voyage charterparty with the defendant charterers dated 18 December 2006. The wording was based on Part II of the Shellvoy 5 form together with Shell Additional Clauses – February 1999.

For ease of reference the Court subdivided Shell Additional Clause 22 (SAC 22) into numbered sentences and the numbers after the number 22 indicate the relevant section of the original (undivided and un-numbered) SAC 22.

SAC 22.1 provided that if owners failed to obtain free pratique within six hours after notice of readiness was tendered, then the notice would be invalid. However, SAC 22.5 provided that the presentation of the notice of readiness and the commencement of laytime would not be invalid "where the authorities do not grant free pratique or customs clearance at the anchorage or other place but clear the vessel when she berths". Under those conditions the notice of readiness would be valid unless the timely clearance of the vessel was caused by the fault of the vessel (SAC 22.6).

Notice of Readiness was tendered at the second load port, Escravos, at 11.48 on January 15, 2007. At that stage the vessel was required to wait at anchorage since the berth was occupied. The port health authority representatives boarded the vessel at the anchorage at 07.30 on January 16 and free pratique was granted at 08.30 the same day.

Owners contended that laytime began at Escravos 6 hours after they tendered notice of readiness, namely at 17.48 hours on 15th January. Charterers submitted that laytime did not commence at Escravos until the vessel was all fast at the berth since free pratique was not obtained within six hours as required by SAC 22 and the Notice of Readiness was therefore invalid.

The High Court

Before Mr Justice Walker in the High Court, owners argued that the Notice of Readiness was valid given that the purpose of SAC 22.5 and 22.6 was to provide that the original notice of readiness was not invalidated where timely clearance within six hours of tender was unobtainable through no fault of the vessel, in particular where timely clearance was not delayed by the fault of the vessel and where the vessel was cleared by, at the latest, the time that she berthed

Charterers submitted that SAC 22.5 and 22.6 were of much more limited application than that contended by owners. The clauses were only concerned with the position where, at the port in question, the authorities did not grant free pratique at the anchorage but only cleared a vessel once she berthed; that was not the case in Escravos and additionally the vessel was in fact cleared at anchorage.

Walker J upheld the Owners' claim to demurrage on the basis that SAC 22.5 meant that the original notice of readiness was not invalid if free pratique had been granted before the vessel berthed. Charterers were granted leave to appeal.

The Court of Appeal

By a unanimous decision the Court of Appeal upheld charterers' appeal. The leading judgment was delivered by Lord Justice Longmore.

By way of introduction Longmore LJ noted that nowadays the granting of free pratique is likely to be something of a formality and the need for free pratique will not, at common law, prevent a notice of readiness from being given (see The "Delian Spirit" [1972] 1QB 103). However, the parties are of course free to make other arrangements in their contract, an example being the Additional Clauses attached to Shellvoy 5 stating that time is to begin to run 6 hours after the tender of notice of readiness, but only if free pratique is granted within that time.

Turning to the arguments of the parties and the judgment below, he was careful to point out that the whole scheme of SAC 22 in relation to free pratique is to implement a different arrangement from the position as it is under clause 13 of Shellvoy 5. As he put it:

"There would otherwise be no point in having a Special Additional Clause at all. If the notice of readiness is to be valid if given at any time before berthing pursuant to SAC 22.5, it is difficult to see how clause 13 will have been altered."

Longmore LJ then proceeded to address the correct operation of clause 13 in conjunction with additional clause 22. Given that the relevant passage of the judgment so succinctly and clearly summarises what must now be considered the correct interpretation of these widely used clauses, the finding merits quoting in full:

"As I see it, nothing in clause 13 prevents a notice of readiness being tendered in the absence of free pratique (which reflects the common law position if free pratique is expected to be a formality). Subject to an argument on the word "fail" to which I will come, SAC 22.1 provides that clause 13 will continue to govern if free pratique is granted within 6 hours of the tender of notice of readiness; but if it is not granted (and is thus, perhaps, less of a formality than expected) within 6 hours of the notice of readiness, then the "original" notice of readiness is not to be valid. That will not, however, prevent a fresh notice of readiness from being tendered once free pratique has been granted (SAC 22.2) and time will then run after 6 hours from the tender of that fresh notice of readiness (SAC 22.3). Up to that point in time, costs and expenses will (as one would expect) be for Owners' account (SAC 22.4). This is an eminently workable scheme and, although not so favourable to Owners as clause 13, at least allows them to start the laytime clock 6 hours after such fresh notice of readiness is tendered. If the port remains congested, laytime will still accrue, although it has started somewhat later than envisaged by clause 13.

The only situation where Owners will be heavily disadvantaged will be if free pratique is only granted when the vessel berths. That may happen because it is the practice of the port only to board a vessel and grant free pratique when she has actually berthed or for any other reason. If, in these circumstances, the only notice of readiness which Owners have been able to tender is invalid, they will (unfairly) have borne the risk of congestion which clause 13 provides they do not have to bear. SAC 22.5 then comes into play because it provides that, in those circumstances, the original notice of readiness is not to be invalid but is to take effect in accordance with the terms of the charter unless (SAC 22.6) the delay is in some way the fault of the Owners.

This is an entirely understandable and workable scheme.

It followed that the court proceeded to allow the appeal and to enter judgment for the Charterers


The decision provides useful confirmation that under the widely used Shellvoy 5 form together with Shell Additional Causes (February 1999), no fault by owners is needed in order for a notice of readiness to be invalidated by failure to obtain free pratique within the specified time.

However, the case also highlights two other points that are of real practical significance. First, as Longmore LJ pointed out in his useful summary, there is nothing to prevent owners from tendering a fresh notice of readiness once free pratique has been granted, even if the original has been invalidated by failure to obtain free pratique within 6 hours (SAC 22.2). In such a case, time will then run after 6 hours from the tender of that fresh notice of readiness (SAC 22.3).

Indeed in the present case, it was held that owners had tendered a fresh Notice of Readiness after the granting of free pratique. In an email sent by the Master to charterers at 15.39 on 16 January confirmation was provided that the vessel "is ready in all respects to load a parcel of Escravos Crude Oil as per terms, conditions and exceptions of the relevant Charter party." The message concluded by asking charterers to accept the original Notice of Readiness tendered on 15 January.

Longmore LJ noted that this subsequent message, although perhaps not intended by the Master or owners to constitute a new Notice of Readiness, did have that effect given that it contained an accurate statement that the vessel was ready to load. Being an email it also met the additional requirement mentioned in 13.1.a1 of Shellvoy Part 2 that the notice should be in writing. The fact that the notice was not in standard form or headed 'Notice of Readiness' was immaterial. However, notwithstanding this finding, owners' late attempt to rely on the email in question failed and the reason for this highlights the second important practical point: namely the effect of the time bar provisions in Shellvoy 5.

Clause 15(3) of Part II of Shellvoy 5 contains the provision that, if owners fail to submit any demurrage claim "fully and correctly" documented within 90 days, Charterers' liability for any such claim "shall be extinguished". Similar provisions to these frequently occur in charterparties and are a regular source of disputes. In this case, the claim submitted by owners was presented in time and included the original Notice of Readiness of 15 January but, crucially, not the subsequent email of 16 January. Indeed, the suggestion that subsequent messages may have constituted a valid notice was not raised by owners until a few days before the hearing. Given that the original Notice had been held invalid, the Court of Appeal found that the demurrage claim originally submitted within the time bar period could not be said to be "fully and correctly documented" within the wording of clause 15(3) due to the absence of either a valid Notice of Readiness or any reference to it (such as in a statement of facts) that would enable charterers to verify the calculation and the commencement of laytime. Owner's claim therefore failed.

Worthy of note for similar future cases was Longmore LJ's observation that although the onus remains on an owner to ensure that a claim for demurrage is correctly documented, in such circumstances it is not unreasonable to expect an owner claiming demurrage to include alternative notices of readiness when he submits a claim, on the basis that they may be legally relevant

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.