Demurrage – damages for multiple breaches and different consequences
Tanker voyage charter on Exxonvoy 69. Vessel to proceed from range of ports North Africa there to load a minimum of 40 000 tons crude oil for carriage to a range of ports Italy.
“10 Pumping in and out. The cargo shall be pumped into the vessel at the expense and risk of the charterer…
- Hoses for loading and discharging … shall be connected and disconnected by the charterer …at the charterer’s risk and expense. Laytime shall continue until the hoses have been disconnected.”
Port authorities at the loading port of Ashtart, Tunisia required the vessel to flush sea lines and ballast the loading barge in a combined operation before the hoses were disconnected.
Laytime was exceeded at the loading port. Further time was spent at Genoa, the discharge port, moving from the anchorage to the discharging berth.
Only 34 447 tons were loaded. As the demurrage rate was proportional to the volume of cargo loaded, less demurrage was payable in consequence.
Issues for determination
Whether time counted for flushing/ballasting, whether time counted for moving from anchorage and whether the difference in total demurrage could be claimed in damages in addition to deadfreight.
In a careful and erudite judgment, Webster J, found on the first point that time would not count only if the owners were blameworthy to some extent. This qualification did not require actual breach on the owners’ part. As they were not to be blamed for the delay in flushing/ballasting, time would count.
On the second point, “once on demurrage, always on demurrage” was applied, and time spent moving from anchorage was to be included in demurrage.
On the third point, as the difference in demurrage was a consequence of the charterers’ breach, they were liable for damages in addition to deadfreight. Even if deadfreight was liquidated damages, which Webster J did not think it was, it was not exhaustive of the owners’ remedies for breach of the minimum load obligation which caused damage of a kind different to a diminution of freight.
This case received some attention in the Eternal Bliss for its treatment of the 3rd issue. Webster J embarked on a detailed analysis of Reidar v Arcos. He concluded that although different rationes were to be discerned in the three judgments (one breach, different consequences on the one hand, and 2 breaches, on the other hand), the crucial point was consequences of a different kind, outside the purview of the liquidated damages clause, occurred and this attracted liability. Put differently, demurrage in Reidar v Arcos would cover all losses related to detention of the vessel but not a different type of loss ie diminution in freight. The same principle was involved here where the question was deadfreight.
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