144. Gerani Compania Naviera S.A. v Alfred C Toepfer (The “Demosthenes V”) (No. 2) [1982] 1 Lloyd’s Rep 282

Cesser clause – obligation on receivers to pay demurrage at port of discharge – charterers remaining liable

The facts

Grain was shipped from the US Gulf to Egypt.

The charterparty contained the following clause:

“Receivers at discharge to pay demurrage…. At discharging port, demurrage…. is to be settled directly between owners and receivers.”

The charterparty contained a cesser clause but also an addendum to the effect that the charterers would remain liable under the charterparty.

Findings

Staughton J held that the provision that the receivers would be liable for demurrage did not absolve the charterers from liability. The provision was construed as a guarantee by the charterers that the receivers would pay.

Commentary

Were it not for the addendum providing for a continuation of liability, the cesser clause would have had to have been given full effect. In that case, a more convincing and natural interpretation of the charterparty would have been that the owners were required to fend for their own interests vis a vis the receivers and demurrage incurred at discharge and that the charterers would not be liable.

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