Cesser clause – bill of lading freight less than voyage charter freight – charterers liable for difference despite cesser clause
A cargo of oats was shipped from New Zealand to London.
The cesser clause read as follows:
“The liabilities of charterers to cease on the vessel being loaded, the master and owners having a lien on the cargo for all freight and demurrage under this charterparty.”
The Captain was required to sign bills of lading at any rate of freight required without prejudice to the charterparty.
Bills of lading were signed where freight was calculated on the volume of cargo discharged. Due to diminution of the weight of the cargo during the voyage, the freight payable on discharge was less than the lump sum, voyage charter freight.
The charterers defended a claim for the balance of the freight on the basis of the cesser clause.
Day J gave judgement for the owners, confirmed on appeal (per Lord Esher MR, Lopes and Davey LJJ).
Davey LJ pointed out that the charterparty did not create a lien but rather the obligation on the charterers to bring about a lien in favour of the owners. It could then be said that the creation of a lien was a condition precedent to the operation of the cesser clause.
The inference that the parties intended the cessation of liability to be predicated upon the existence of a lien was justified by the wording of the clause in question.
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