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In transit loss clause held to allow permanent deduction from freight

The Facts

Clause 7 of an Exxonvoy 1996 Form read:

If there is a difference of more than .5% between bill of lading figures and delivered cargo as ascertained by customs authorities at discharging port, charterers have the right to deduct from freight the CIF value for the short delivered cargo. Owners have the right to appoint independent surveyor in order to check cargo figures in conjunction with customs authorities.”

The vessel loaded 254,000 tonnes and discharged 2420 tonnes less (less than 1% of the total cargo).

Charterers made the allowable deduction.

Owners argued that the deduction was intended to be provisional. Its purpose was simply to allow for a deduction from freight which would otherwise not be permissible. The deduction was to serve as security for a claim for short delivery which remained to be proved.


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Charter Party Casebook