Notice of Readiness – 2 (The Sebat and the Return to Orthodoxy)

1. The recent English Commercial Court decision in The Sebat (Trans Trade RK SA v Sebat Shipping and Trading Company) confirms a return to the orthodox position that a valid Notice of Readiness (“NOR”) is a prerequisite for the commencement of laytime. Where an NOR is invalid, laytime will only commence if the charterers have waived the defect. Importantly, for there to be a waiver, the charterers must have knowledge of the facts giving rise to the invalidity of the NOR. In The Sebat, the charterers were unaware that the NOR was invalid at the time it was tendered and therefore could not have waived the defect.
2. This distinguishes The Sebat from The Happy Dayⁱ, a decision of the English Court of Appeal. In that case, the charterers were aware that the NOR was invalid but nevertheless accepted the vessel and proceeded with cargo operations without objection. The Happy Day was often cited for the proposition that, where an NOR is invalid, laytime commences when cargo operations begin. However, following The Sebat, it is clear that The Happy Day should be understood as a case concerning waiver. The critical question is whether the charterers were aware of the defect in the NOR and, despite such knowledge, elected to proceed without reserving their rights.
3. The Sebat judgment was delivered on 28 April 2026. As no appealⁱⁱ appears to have been filed to date, an opportunity to further develop this area of law may have been lost. This is particularly significant given that the charterers obtained the benefit of cargo operations being carried out without the corresponding laytime consequences. In any event, The Sebat now makes it clear that, where an NOR is invalid, owners seeking to establish the commencement of laytime must demonstrate that the charterers knew of the defect and nevertheless chose to proceed in a manner that amounted to a waiver of their rights.
4. In our earlier article on Notice of Readiness, we highlighted the potential role of technology in improving the management of laytime and NOR-related processes. The lessons from The Sebat reinforce the importance of such measures. In addition, Masters should consider tendering fresh NORs at regular intervals, whilst expressly reserving all rights arising under any previously tendered NORs, in the event that an earlier NOR is subsequently found to be invalidⁱⁱⁱ.
   Alternatively, owners may seek to address this issue contractually by incorporating an express provision in the charterparty dealing with the consequences of an invalid NOR. For example:“In the event that any Notice of Readiness is subsequently determined to be invalid, laytime shall nevertheless commence upon the commencement of cargo operations.”
5. Conclusion: To minimise disputes concerning the commencement of laytime:
   1. The vessel should be an arrived ship, ready in all respects, and the NOR should be tendered strictly in accordance with the requirements of the charterparty.
   2. Where an NOR is invalid, the commencement of laytime will depend largely on whether the charterers were aware of the defect and, despite such knowledge, waived their right to rely upon it. Absent such waiver, laytime will not commence and time spent on cargo operations may not count as laytime.
   3. Owners can reduce the risk of such disputes by:
      1. Tendering fresh NORs at appropriate intervals while expressly reserving all rights arising under earlier NORs;
      2. Incorporating express charterparty provisions providing that laytime will commence upon the commencement of cargo operations notwithstanding an invalid NOR; and
      3. Utilising appropriate technology and process controls to ensure the timely and accurate flow of information relating to vessel readiness and the tendering of NORs.

^i. The Happy Day([2002] EWCA Civ 1068)
^ii. Time allowed for appeal a decision of the English Commercial Court is 21 days unless a judge orders a different period
^iii. Without prejudice to the validity and effectiveness of the Notice(s) of Readiness previously tendered on [date/time], and without any admission that such Notice(s) were invalid or ineffective, Owners hereby tender this further Notice of Readiness. Owners expressly reserve all rights to rely upon the earlier Notice(s) of Readiness and to contend that laytime commenced pursuant thereto.