Laytime and Demurrage – What happens if no valid NOR is tendered?

This question takes me back to my Ince days when we acted for the owners of the Happy Day in a battle against Richards Butler/Glencore. At first instance ⁽¹⁾ , it was held that an invalid NOR tendered by the owners meant that laytime could not run at all and as such there could be no claim for demurrage even where there was a delay in cargo operations beyond the time allowed in the charter. On appeal ⁽²⁾ we managed to get that decision reversed such that, on the facts, charterers conduct in permitting discharge meant that they waived any invalidity of the NOR and laytime commenced from the time when cargo operations in fact began.

This case recently came up again in the context of another dispute in the High Court ⁽³⁾ . The facts of that case can be reviewed by clicking the link below but in essence this was another case where it was held in arbitration that an invalid NOR was tendered. The vessel berthed later and there were some issues with phosphine gas levels in the holds which meant she was sent back the anchorage. She did not return to berth for some 10 weeks. As a result, there was a large demurrage claim of some US$840K. It was accepted that the original NOR was invalid, but the claim was pursued on the basis that, following the Happy Day, laytime began when cargo operations began. The Tribunal agreed.

The Charterers appealed on the basis that the Tribunal had misapplies the principles in The Happy Day. The High Court judge agreed. He said that The Happy Day did not apply to the circumstances of this case and, as such, that earlier higher Court authority was not binding on him. The basis for this was that waiver requires knowledge of a right and of what one is waiving when it elects to forego that right. That was addressed in another recent case before the Court of Appeal ⁽⁴⁾ .

In The Happy Day it was held that the charterers were aware that the NOR had been tendered prematurely and was therefore invalid and, in the face of that knowledge, they elected to commence discharge without objection or reservation of rights. That was on all fours with a waiver. The present case however was very different because there was no evidence that charterers knew that the NOR was invalid nor did they intend to abandon their rights to insist on a valid NOR. It was not right to infer waiver from the start of cargo operations. The Tribunal had misinterpreted The Happy Day. That case was not precedent for a principle of “deemed waiver”. Consequently, the demurrage claim failed.

This case is a salutary lesson on the importance of tendering NOR at the right place in the right time. The moral is, if in doubt re-tender NOR without prejudice to the first NOR. That would have avoided this problem.

⁽¹⁾ Glencore Grain v Flacker Shipping (“The Happy Day”) [2001] 1 Lloyds Rep 754
⁽²⁾ Glencore Grain v Flacker Shipping (“The Happy Day”( [2002] 2 Lloyds Rep 487
⁽³⁾ Trans Trade RK SA v Sebat Shipping and Trading (“The Sebat”) [2026] EWHC 950
⁽⁴⁾ URE Energy Ltd v Notting Hill Genesis [2026] 1 Lloyds Rep 16

Nick Burgess
Partner