Demurrage – delay caused by Terminal Operators’ failure to adhere to loading regulations – liability for demurrage ensuing for TO’s principals
The vessel loaded crude oil at the Akpo FPSO (Floating Production Storage and Off-loading unit), Port Harcourt, Nigeria, pursuant to a BP Voy 3 form contract.
Loading was subject to extensive governmental regulation which required inter alia, the presence of an official to unlock the padlock securing the export valve through which the oil was pumped onto the vessel.
In the absence of the designated official, the Terminal Operator severed the padlock and loaded the vessel in violation of the regulations. This violation led to the vessel being detained by the authorities for 7 days in which the circumstances of the loading were investigated. After this, and once the facts had been established, a demand was made by the Nigerian government for the payment of a heavy fine to secure the release of the vessel. The imposition of the fine, which was paid by the TO, delayed the vessel for a further 7 days.
The following clauses of the charterparty were relevant:
“If vessel delayed for more than 3 hours after hoses disconnected for charterers’ purposes or waiting cargo documentation, then full time to count”; and
“Any delay(s) arising from arrest or restraint of princes shall provided always that the cause of the delay(s) was not within the reasonable control of charterers count at one half laytime, or if the vessel is on demurrage at one half of the demurrage rate”.
In a trial involving multiple parties, disponent owners claimed demurrage from charterers who claimed indemnities from a chain of FOB sellers of the cargo.
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