601. K Line Pte Ltd v Priminds Shipping (HK) Ltd (“the Eternal Bliss”) [2020] EWHC 2373 (Comm)

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Nature of demurrage: liquidated damages for detention – where delay by charterers causes damage of a type different from loss of use of vessel, general damages also available – question of law determined under s45 of the Arbitration Act 1996

The facts

Voyage charterparty. Norgrain form. Heavy grain, Soya or Sorghum in dry bulk carrier.

Discharge completed 42 days after becoming an arrived ship.

Moulding and caking assumed to be caused by delay.

Assumed that damage not owners’ fault.

Owners provided USD6m LOU to cargo receivers – claim settled at USD1.1m

Owners claimed damages on top of demurrage, alternatively, indemnity from charterers.

Findings

Andrew Baker J held, in favour of the owners, that such damages were competent.

Line of reasoning: demurrage liquidated damages for detention of the vessel and not covering damages of a different kind, as here. Reidar v Arcos not authority requiring a separate breach to found a damages claim for damages of a different kind. This a misconception of  Potter J in the Bonde which was wrongly decided. Potter J’s reasoning was faulty and influenced by a misunderstanding of the House of Lords’ treatment of Reidar v Arcos in Suisse Atlantique.

Discussion

This is a lengthy judgment in which the authorities and text books are analysed in detail, conscious of the prospect of appeal– seems right.

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