Demurrage – obligations in charterparty incorporated into bills of lading – single consignee liable for full demurrage
A full cargo of grain from several shippers was transported from Cronstadt to London.
There were a number of consignees. The bills of lading incorporated the terms of the charterparty which provided for demurrage.
At discharge a consignee was unable to obtain discharge of his portion of the cargo within the stipulated laytime.
The owners insisted on payment of full demurrage from this consignee, seemingly the last to obtain his cargo.
Lush J held that the intention of the ship owner was to make each of the consignees liable in solidum for the obligations of the charterer for demurrage and he ordered the consignee to pay full demurrage.
The Court of Appeal (Thesiger, Cotton and Brett LJJ) affirmed the decision of Lush J.
Thesiger LJ rejected the argument that just as the consignees were liable for freight pro rata so they should only be held liable for demurrage pro rata. This would be difficult to enforce because demurrage would often only be determined once a number of consignees had taken possession of their cargo.
In the Court of Appeal, Brett LJ opined, obiter, that each of the consignees, if sued by the ship owner, would be liable for full demurrage. This was doubted by Thesiger LJ who suggested that a defence would be viable in equity, if not in law, if the ship owner should attempt to recover multiple payments of demurrage.
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