“The Sebat”: Commencement of Laytime in the Absence of a Valid Notice of Readiness

The recent decision of the Commercial Court (Peter MacDonald Eggers KC sitting as a Deputy Judge of the High Court) in Trans Trade RK SA v Sebat Shipping and Trading Company (“The Sebat”) offers an important clarification on the commencement of laytime, where there is no valid Notice of Readiness (NOR). The judgment has revisited the well-known authority of “The Happy Day” [2002] EWCA Civ 1068 and, crucially, limits where it may apply.  

The case came to Court by way of an appeal under section 69 of the Arbitration Act 1996 from an Arbitration award. The central issue was whether laytime could commence in the absence of a valid NOR, simply upon commencement of cargo operations, or whether something more, for instance a waiver, would be required.

The Court clarified that The Happy Day did not establish a free-standing rule that cargo operations will trigger laytime where no valid NOR is tendered.

The Facts

The dispute initially arose under a voyage Charterparty dated April 2022, for the carriage of Ukrainian barley from Constanta, Romania, to Brake, Germany, on board the vessel “Sebat”.

At the discharge port, the Vessel tendered NOR at the pilot station on 10 May 2022, before it had become an “arrived ship”. In arbitration, the Tribunal found that the NOR was invalid. No further NOR had been served.

The Vessel subsequently berthed on 13 May. On 14 May, the hatches were opened in preparation for discharge operations, but high phosphine gas levels meant that discharge was prevented from commencing. The Vessel was ordered to leave the berth, and remained delayed for a prolonged period, eventually completing discharge on 30 July.

Owners claimed significant demurrage, which Charterers challenged on the basis that no valid NOR had been served, and therefore laytime never commenced.

The Tribunal held that it is “trite law” (by reference to The Happy Day) that, absent tender of a valid NOR, the trigger for laytime to commence is the commencement of cargo operations; they therefore found that laytime commenced upon the hatches being opened.

Appeal

Charterers appealed the Award, the key issue being where no valid NOR is served, when, if at all, does laytime commence?

The decision of the Court

The Commercial Court upheld the appeal and found that the Tribunal had made an error of law when it stated, as a general rule, that where an NOR is invalid, laytime nevertheless begins upon the commencement of cargo operations. The Court reaffirmed the orthodox position that a valid NOR is the necessary precondition to commencement of laytime; if no valid NOR is served, laytime does not begin unless there is a waiver, estoppel, or agreement. Without such factors, laytime will not start.

Crucially, the Tribunal had relied on The Happy Day as the authority for its approach. The Court rejected that interpretation, emphasising that the Court of Appeal in The Happy Day did not find that cargo operations invariably trigger the commencement of laytime – it was a case about waiver by election, requiring that there should be knowledge of the relevant facts (including the invalidity of the NOR), and conduct that amounts to an unequivocal choice not to rely on that invalidity. However, the Court found that there were no findings of knowledge, no findings of waiver, and no argument on waiver before the Tribunal in the present case. Accordingly, The Happy Day did not justify the Tribunal’s decision. In the absence of a valid NOR, and unless there has been an agreement, waiver, or estoppel, laytime will never commence at all.

Comments

The decision offers a reminder that an invalid NOR will not be saved, simply because cargo operations have begun. If no valid NOR is served, the risk will remain that laytime never starts, and no demurrage is recoverable.

Owners should therefore ensure strict compliance with NOR requirements (especially keeping in mind the “arrived ship” status), and in the case of any doubt as to validity, should ensure NOR is re-tendered, as it would be risky to rely on conduct to trigger laytime.

In the words of Donaldson J (The Timna [1970] 2 Lloyd’s Rep 409):

It is a good working rule … to give notice of readiness and to go on giving such notices in order that, when later the lawyers are brought in, no one shall be able to say: “If only the master had given notice of readiness, laytime would have begun and the owners would now be able to claim demurrage”.

The full judgment can be accessed here: Trans Trade RK SA v Sebat Shipping and Trading Company [2026] EWHC 950 (Comm) (28 April 2026)

Tomos Holmes Davies

MFB Solicitors