Nature of demurrage: liquidated damages for detention – breach of dangerous cargo provision not altering nature of damages suffered
Voyage charter party. Quantity of turpentine loaded in breach of cargo clause resulting in extended delay.
Special case stated for Court, inter alia, whether damages for detention at market rate higher than demurrage rate applicable to extended delay.
Devlin J thought not. Loading turpentine was breach of a fundamental obligation which gave owners the election to cancel and claim on an implied contract for adequate remuneration. If they elected to abide the contract, as here, they were bound by the demurrage clause.
Devlin J distinguished Reidar v Arcos on the basis that damages of a different kind were suffered on the facts of that case.
This case went on appeal but only on the single question on whether the arbitrator was empowered to award interest. It also contains a discussion on the eiusdem generis rule in the context of the dangerous cargo clause: Devlin J was of the opinion that it was not a presumption but merely a tool to discover the parties’ intention: a circular argument.
Mocatta for the owners, Roskill KC for charterers
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