Cesser clause – held not to apply to liabilities which are not co-extensive with the owners’ lien
The facts
The vessel was chartered for a voyage from Australia to the United States of America to deliver coal.
The charter required loading to take place within a reasonable time but no rate of demurrage was fixed as was the case with reference to the port of discharge.
The cesser clause read as follows:
“The charterers’ liability under this charterparty to cease, cargo being loaded, the owners having a lien on the cargo for freight and demurrage.”
The owners claimed damages for detention at the port of loading. The charterers contended that they were protected by the cesser clause.
Findings
Pollock B found in favour of the owners. So did the Court of Appeal (Lord Esher MR, Bowen and Fry LJJ).
The deciding principle, termed by Bowen LJ as a “practical canon of construction” was that the owners’ lien was always co-extensive with the charterers’ liability – where there was no lien covering the claim for failure to load within a reasonable time (as opposed to demurrage per se), there could be no cessation of liability.
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