Here is a paper I presented at the joint ASBA / BIMCO Conference last November, 2002- ASBA / BIMCO  Seminar Agency ? the Profession Orlando, Florida ? November 7 and 8,  2002 Topic ? Understanding the Importance of the Notice of Readiness By Jeffrey A. Weiss This paper provides an overview of the Notice of Readiness, from historical, operational, and legal perspectives. The term Notice of Readiness (NOR) is defined in the VOYLAYRULES 1993 as: Notice of Readiness (NOR) shall mean the notice to the charterer, shipper, receiver, or other person as required by the charter party that the vessel has arrived at the port or berth, as the case may be, and is ready to load or discharge. Most charter parties require the Notice of Readiness to be ?in writing.? The term ?in writing? is also defined in the VOYLAYRULES 1993: In writing shall mean any visibly expressed form of reproducing words, the medium of transmission shall include electronic communications such as radio communications and telecommunications. I. Fundamental Purpose of the NOR The fundamental purpose of the NOR is to inform the shippers, consignees, and / or charterers that the vessel is ready to load or discharge. The agreed laytime, that is, the period of  time within which the parties have agreed to load or discharge the vessel, is measured from that moment in time. NOR also affects the laycan clause, in which it is agreed that time cannot commence before a certain date / time,  and that if the NOR is not given before the laycan?s expiry, the charterers shall have the option of canceling the charter party. There is usually no prohibition on the master?s tendering NOR before the laydays are agreed to begin. However, the laytime will not commence until the agreed earliest time. II.  Brief History of the NOR Under the common law, a Notice of Readiness was only required at the loading port. That is still the rule of law today. No similar NOR is required at the discharging port, unless the charter party specifically requires one to be given.   The concept of NOR is, of course, not new. It is as old as the charter party concept itself, although charter party notice clauses were certainly not as detailed years ago as they are today. This author has a collection of old charter parties. I have attached to the end of this paper the charter party for the Brig Selma,  dated April 16, 1873. The NOR clause in that charter party states: It is agreed that lay days for loading and discharging shall be as follows: commencing from the time the captain reports himself ready to receive or discharge cargo, at New York for loading ten running laydays at Key West and Pensacola for discharging quick dispatch. Much has been written about the NOR, no doubt because of its importance in tramp shipping transactions. In his text  Shipbroking and Charter Party Practice, Lloyd?s of London Press, 4th ed., the author Lars Gorton states: Readiness includes both physical readiness and legal readiness. Physical readiness means that the vessel shall be clean and ready to take on board the intended cargo or to discharge the cargo on board. Legal readiness means the ship shall be clear of formalities (customs clearance, etc) necessary for the commencement of loading or discharging. The vessel need not necessarily be in all respects physically and legally ready to be able to give a valid notice of readiness. Depending on the circumstances the charterers must accept that notice time starts to run although some preparations onboard remain to be done (for example, the uncovering of hatches and rigging) or some formalities remain to be dealt with (for instance, free pratique as required by health authorities) If tanks are to be inspected by or on behalf of charterer for cleanliness, there is need for provisions related to consequences of time lost (Eg. Exxonvoy 90, lines 48,49). Unless otherwise expressly agreed, the notice can be delivered orally, telegraphically or by written message. In order to avoid difficulties, the oral notice should be avoided. The Notice of Readiness should be delivered as soon as the ship is ready to commence  loading or discharging. This means also that if the vessel is ordered to wait outside the berth or port, notice should be delivered. If the charter party states that the notice must be given within office hours, a notice given after office hours will not be valid and will not come into force until the next ordinary office hours in the relevant port and charterers cannot, by closing their office, postpone the notice time and thereby counting of laytime. III. Sample ?Notice of Readiness?  Clauses Very precise Notice of Readiness clauses are used today. Time is money ? and the NOR impacts upon one of the major questions underlying all tramp ship transactions ? who pays for the vessel?s inevitable loss of time in port? Here are some modern charter party clauses pertaining to NOR: Norgrain 89 Clause 18 (a)--Notice of Readiness Notification of vessel?s readiness to load or discharge at the first or sole loading and discharging port shall be delivered in writing at the office of the charterer/receivers between 0900 and 1700 on all days except Sundays and holidays, and between 0900 and 1200 on Saturdays. Such Notice of Readiness shall be delivered when the vessel is in the loading or discharging berth if vacant, failing which from a layberth or anchorage within the limits of the port, or otherwise as provided in clause 18 b hereunder. Clause 18  (b ) Waiting For Berth Outside Port Limits If the vessel is prevented from entering the limits of the loading/ discharging ports because the first or sole loading/discharging berth or a layberth or anchorage is not available within the port limits, or on the order of the charterers, receivers or any competent body or authority, and the master warrants that the vessel is physically ready in all respects to load or discharge, the master may tender vessel?s notice of readiness, by radio if desired, from the usual anchorage outside the limits of the port, whether in free pratique or not, whether customs cleared or not. If after entering the limits of the loading port , vessel fails to pass inspection as per clause 18 e, any time so lost shall not count as laytime or time on demurrage from the time the vessel fails inspection until she is passed, but if this delay in obtaining said passes exceeds twenty four hours then all time spent waiting outside the limits of the port shall not count. Clause 18 ( c ) -  Commencement of Laytime Following receipt of Notice of Readiness laytime will commence at 0800 on the next day not excepted from laytime. Time (not excepted from laytime) actually used before commencement of laytime shall count. ASBATANKVOY Clause 6 -  NOTICE OF READINESS Upon arrival at customary anchorage at each port of loading or discharge, the Master or his agent shall give the Charterer or his agent notice by letter, telegraph, wireless or telephone that the Vessel is ready to load or discharge cargo, berth or no berth, and laytime, as hereinafter provided, shall commence upon the expiration of six (6) hours after receipt of such notice, or upon the Vessel?s arrival in berth (i.e., finished mooring when at a sea loading or discharging terminal and all fast when loading or discharging alongside a wharf), whichever first occurs. However, where delay is caused to Vessel getting into berth after giving notice of readiness for any reason over which Charterer has no control, such delay shall not count as used laytime. Gencon Laytime for loading and discharging shall commence 1 PM if notice of readiness is given before noon, and at 6am the next working day, if notice is given during office hours after noon. Notice at the loading port to be given to the shippers named in box 17. Time actually used before commencement of laytime shall count. Time lost in waiting for berth to count as loading or discharging time as the case may be. IV. Some Interesting Notice of Readiness Disputes Disputes have always arisen out of the tendering and acceptance of the NOR, despite the fact that the process seems simple enough. For example, questions may arise as to whether the NOR can be lawfully tendered on a Sunday or holiday (see e.g. The M.V. North King (1971) 2 Lloyd?s Rep. 460 ? (notice may be given on a Sunday or holiday unless provided to contrary in the charter party); what are ?office hours? within the meaning of a charter party?s NOR clause and the affect of tendering NOR outside office hours (see e.g. M.V.  Frotanote SMA 694 (Cederholm, Busche, O' Riordan) - ( ?NOR may not take affect until the earliest time allowed by the charter party?); disputes concerning from where  a vessel can tender a valid NOR (see e.g. The Johanna Oldendorff (1973) 2 Lloyd?s Rep. 285 ? (?that under a port charter party, for a ship to be an arrived ship, that is to say a ship at a place where a valid NOR to load or discharge can be given, she must have ended her voyage at the port named?? );  disputes over to whom may notice be given (see e.g. The M.V. Albatross SMA 2606 (Forti, Geller, Nichols )-  (?tender to a stevedore, unless he is charterer?s agent, is ineffective?);  the accuracy of the NOR (see e.g.  M.V. Virginia M. (1989) 1 Lloyd Rep. 603 ? (?vessel must have adequate supply of fuel oil and boiler water to operate the vessel?s cargo gear without stopping?);  the effect of charterer?s delaying the ability of the vessel to become an arrived ship and tender NOR (see e.g. M.V. Atlantic Sunbeam (1973) 1 Lloyd?s Rep. 482 ? (?charterers were obliged to act reasonably to obtain a ?jetty challan? from the port authorities, as required by the charter party, so that vessel could become an arrived ship?), among so many other issues. This author recommends the treatise Voyage Charters, published by Lloyd?s of London Press,  for a complete review of the subject. Two British legal decisions, discussed below, concern the interesting issue of the effect of an invalid NOR that is accepted by the charterers. Can laytime commence under a voyage charter party (requiring the tendering of an NOR) when a valid NOR was never tendered? The first case, involving the MV Mexico I, was decided in 1990. The second, a recent decision of the U.K. Court of Appeals, involves the M.V. Happy Day. 1. The M.V. Mexico I (1990), 1 Lloyd?s Rep. 507 This vessel arrived off Luanda, Angola with a part cargo of maize in bags. That cargo was overstowed by another cargo. The Master, upon the vessel?s arrival, tendered the vessel?s NOR for both cargoes. However, because of the overstowed condition, the bagged maize did not become assessable for discharge for two weeks. Once assessable, the discharging of the cargo was delayed for an additional  two weeks. The Master did not tender a further NOR. Owners and charterers agreed that the NOR for the bagged maize was defective. The vessel was not ready (notwithstanding the NOR) because of the overstowed condition. However, the Owners, in support of its demurrage claim,  argued that the NOR should be regarded as ?inchoate?,  which became effective when the facts that the NOR represented became true. The shipowners further argued that charterers had accepted the NOR without protest, and that any invalidity was therefore waived (or that the charterer, because of its acceptance, was estopped from arguing the NOR?s invalidity). Charterers rejected Owner?s position that the NOR should become effective when the vessel was ready in fact.  Charterers conceded that at the very earliest,  laytime should only commence when the vessel actually commenced discharge (which was some two weeks after the vessel was ready to work the maize cargo). The case went to the U.K. Court of Appeals, which commented that ?inchoate? notices posed difficulties, primarily, as in this case, because the point in time at which the vessel became ready to discharge the bagged maize occurred without any meaningful notice to the cargo interests. Judge Mustill, speaking for the Court, ruled: I would therefore agree?.rejection of the argument that the notice was a delayed action device, effective to start the laytime automatically when, at a later date, the ship became ready to discharge the contractual cargo; and also  the linked argument that time began when charterers knew or ought to have known of the readiness. Thus, according to the Court of Appeals, an invalid NOR is invalid for all purposes including commencement of laytime. The Judge ruled that time started only upon discharge,  and not when the vessel eventually became ready to discharge the maize. However, the Judge did not rule out the possibility of allowing an invalid NOR to take affect at some earlier date, depending upon the facts of each case. 2.  The M.V. Happy Day Somewhat similar issues were involved in the recent case involving the M.V. Happy Day.              That vessel was  voyage chartered to Glencore Grain on an amended Synacomex form to carry wheat from  Odessa to Cochin. The charter party provided that laytime would commence at the discharge port when written notice of readiness was given to receivers or their agents, during normal  office hours, laytime to start counting at 0800 the next working day. The charter party was a berth charter party. The vessel arrived off Cochin at 1630 hours on Friday, September 25 1998 but could not enter the port as she had missed  the tide.   The berth was not congested, but  was open at all material times. However, the Master  tendered the vessel?s NOR from the anchorage to the agent for the charterers / receivers. The agents acknowledged the notice ? it having been accepted at 1630 on Sept. 25.     The vessel berthed the next day. However, no further NOR was given by the vessel. The discharging was subsequently further delayed, and was not completed until December 25. The Owners claimed demurrage. Charterers denied the claim and assented a counterclaim for despatch., alleging that the vessel should have completed the voyage by reaching the berth before tendering the NOR. Charterers further argued that since Owners did not tender a valid NOR ?  laytime could not have commenced. In essence, charterers argued that according to the Mexico I ? laytime could not have commenced given the invalid NOR. The matter went to arbitration in the UK. The arbitrators ruled that laytime commenced on Sept 27. that is, the first moment that laytime could have started under the terms of the charter party. Glencore appealed to the Commercial Court. The Commercial Court reversed the arbitrators decision - rejecting Owner?s argument that since charterers accepted the NOR, and knew that the ship was ready to commence discharging, it had effectively agreed to the commencement of laytime, even without the tendering of a valid NOR. The Court stated that NOR to discharge has two functions. First,   to inform the charterers that the voyage has been completed  and that the vessel is at their disposal. Second,  to start laytime.     The  Commercial Court?s rejection of owner?s position was explained in the October, 2001 edition of the Society of Maritime Arbitrator?s publication The Arbitrator:. In the appeal, the charterers relied upon the Mexico I as clear authority in support of the proposition that where a charter party stipulates that a particular notice of readiness is to be given in order to commence laytime; there is no room for a construction which allows for a notice given in the wrong manner or from the wrong place subsequently to become effective or a construction which in effect dispenses with the requirement for a notice once the vessel has commenced discharging. Responding to submissions by the owners that such a conclusion was uncommercial and absurd, the charterers argued that the master should have given more then one notice to cover eventualities. The charterers maintained that if the parties intended for laytime to begin coincidentally with cargo operations, or upon arrival at the port, the parties would have provided for that in the contract. In any event, the charterer continued, there was much to be said for certainty of a notice (or notices) where rights to demurrage under sub contacts may be involved. . Therefore, the Commercial Court ruled that laytime never started at all. Owners were not entitled to demurrage and charterers had earned despatch. The case was further appealed to the U.K. Court of Appeals, who only recently reversed the Commercial Court?s decision and reinstated the Arbitration Panel?s award. The Court of Appeals unanimously agreed that since Glencore knew that the vessel began unloading, and did not object or demand a fresh NOR, it had waived its right to claim that laytime had never started under the charter. The start of the discharge,  without objection or reservation by Glencore, was sufficient for purposes of commencing laytime, despite the invalid NOR. V. Conclusion The charter party?s NOR clause should be precise. It is important because it triggers the commencement of laytime. However, the master?s tendering of a NOR does not make for a valid NOR if the ship has not arrived at the agreed destination; is not in fact ready; or if  the NOR is tendered outside the charter party?s constraints, etc. The whole purpose of the NOR is to inform shippers and / or consignees that the vessel is presently ready to load or discharge, and the period of time for which they have agreed to allow for loading or discharging is measured from that moment.