{"id":7946,"date":"2021-07-01T12:00:10","date_gmt":"2021-07-01T12:00:10","guid":{"rendered":"https:\/\/www.cssgroupsite.com\/lighthouse\/?p=7946"},"modified":"2021-07-01T14:55:12","modified_gmt":"2021-07-01T14:55:12","slug":"is-demurrage-an-exclusive-remedy-for-the-ship-owners-in-the-event-of-detention","status":"publish","type":"post","link":"https:\/\/cssgroupsite.com\/lighthouse\/is-demurrage-an-exclusive-remedy-for-the-ship-owners-in-the-event-of-detention\/","title":{"rendered":"IS DEMURRAGE AN EXCLUSIVE REMEDY FOR THE SHIP-OWNERS IN THE EVENT OF DETENTION?"},"content":{"rendered":"

[vc_row][vc_column][vc_column_text]\"css\"Sitting in the Commercial Court division of the High Court of England & Wales, Andrew Baker J aptly stated, \u201cFrom time to time, a case provides the opportunity to resolve a long-standing uncertainty on the point of law of significance in a particular field of commerce.\u201d The Eternal Bliss is certainly such a case.<\/span><\/p>\n

In the case of K Line Pte Ltd v <\/span>Priminds Shipping (HK) Co Ltd \u2013 The <\/span>Eternal Bliss, where the ship (Owned\/<\/span>operated by K Line) on voyage charter <\/span>under (Priminds Shipping) was <\/span>delayed at the discharge port in China <\/span>for 31 days due to alleged congestion <\/span>or possibly lack of storage space <\/span>ashore for the cargo of soybeans, due <\/span>to which, the condition of the cargo <\/span>deteriorated.<\/span><\/p>\n

K-Line settled the receivers\u2019 <\/span>and their insurers\u2019 claims at a total <\/span>cost of about U$1.1 million and <\/span>commenced proceedings against <\/span>Priminds (Charterers) seeking <\/span>indemnity in respect of that cost and <\/span>for failure to discharge the subject <\/span>cargo at the rate (within contractual <\/span>laytime).<\/span><\/p>\n

It is well-established that <\/span>demurrage is by nature liquidated <\/span>damages for failing to discharge at <\/span>the required rate, <\/span>but in that respect what does demurrage, calculated in accordance with the voyage charter, fix or limit the owner\u2019s recovery?<\/span><\/p>\n

In Reidar v Arcos1 and Suisse <\/span>Atlantique2, it was held that, if <\/span>damages in addition to demurrage <\/span>are to be recovered, it is necessary <\/span>to show a breach of a separate <\/span>obligation as well as damage of <\/span>a different kind from delay in the <\/span>completion of the loading and <\/span>discharging operation. However, <\/span>Andrew Baker J held that it is <\/span>unnecessary to prove a separate <\/span>breach to recover damages in addition <\/span>to the detention of the ship, i.e. <\/span>demurrage and quoted \u201cAgreeing <\/span>a demurrage rate gives an agreed <\/span>quantification of the owner\u2019s loss <\/span>of use of the ship to earn freight by <\/span>further employment in respect of <\/span>delay to the ship after the expiry of <\/span>laytime, nothing more. Where such <\/span>delay occurs, the demurrage rate <\/span>provides an agreed measure by which <\/span>the parties are bound for the owner\u2019s <\/span>claim for damages for detention, but it <\/span>does not seek to measure or therefore <\/span>touch any claim for different kinds of <\/span>loss [emphasis added], whatever the <\/span>basis for any such claim.\u201d<\/span><\/p>\n

The judgment by Andrew Baker J <\/span>contains a forensic analysis of the <\/span>cases and legal commentary on the <\/span>issue, and in summary, held that <\/span>\u201cdemurrage is not and\/ or should not <\/span>be the exclusive compensation where <\/span>failure to load within the contractual <\/span>laytime has consequences other <\/span>than the detention of the ship,\u201d and <\/span>therefore, where a ship-owner has <\/span>suffered a different type of loss arising <\/span>from a failure to load or discharge <\/span>the vessel within laytime (such as <\/span>cargo claim liabilities) there should <\/span>be no need for the owner to establish <\/span>a separate and independent breach <\/span>of contract to recover damages in <\/span>addition to demurrage.<\/span><\/p>\n

The decision has brought some delight to vessel owners, but it has yet to be determined since the Charterers have been granted permission to appeal to the Court of Appeal.<\/p>\n

\u00a0<\/span>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"

[vc_row][vc_column][vc_column_text]Sitting in the Commercial Court division of the High Court of England & Wales, Andrew Baker J aptly stated, \u201cFrom time to time, a case provides the opportunity to resolve a long-standing uncertainty on the point of law of significance in a particular field of commerce.\u201d The Eternal Bliss is certainly such a case. In … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[80],"tags":[],"class_list":["post-7946","post","type-post","status-publish","format-standard","hentry","category-css-dubai"],"yoast_head":"\nIS DEMURRAGE AN EXCLUSIVE REMEDY FOR THE SHIP-OWNERS IN THE EVENT OF DETENTION? - Lighthouse<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cssgroupsite.com\/lighthouse\/is-demurrage-an-exclusive-remedy-for-the-ship-owners-in-the-event-of-detention\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"IS DEMURRAGE AN EXCLUSIVE REMEDY FOR THE SHIP-OWNERS IN THE EVENT OF DETENTION? - Lighthouse\" \/>\n<meta property=\"og:description\" content=\"[vc_row][vc_column][vc_column_text]Sitting in the Commercial Court division of the High Court of England & Wales, Andrew Baker J aptly stated, \u201cFrom time to time, a case provides the opportunity to resolve a long-standing uncertainty on the point of law of significance in a particular field of commerce.\u201d The Eternal Bliss is certainly such a case. 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