Demurrage under a Voyage charter

Charterer        Voyage Charter
Form               Americanised Welsh Coal Charter
Type               FD&D Claim / Demurrage

Class I            Defence (FD&D)

Laytime and demurrage problems

Synopsis: This matter involves a Charterer (the Assured) attempting to recover a substantial claim for demurrage from his sub-charterer. The FD&D department of the Club is immediately instructed to provide a preliminary advice on how best protect the disponent owner’s position. Local correspondents, experts and US attorneys are also retained to advise and collect evidence in support of the Assured’s claim. Costs in excess of USD 20,000 are incurred in this exercise but the Assured is placed in a sound position to pursue its claim in arbitration if the sub-charterer refuses to contemplate settlement at a reasonable level. In addition, some 9 hours-work devoted by the Club’s FD&D department to this matter are completely free of charge to the Assured.

The Charterers P&I Club is always available to advise Assureds on problems relating to the calculation of laytime, demurrage and despatch. Sometimes problems experienced at load or discharge ports can have serious potential implications for the amount of demurrage that will accrue. For example, in this case, an Assured sub-charters one of his vessels on the Americanised Welsh Coal Charter form for a voyage carrying coke from a European port to the United States. This voyage charter form contains numerous exceptions to the counting of laytime and demurrage. Severe delays are experienced at the load port and the Assured becomes concerned that the sub-charterers might try to rely on the exceptions clauses to excuse themselves from paying a substantial demurrage bill. At the Assured’s request, we become involved at an early stage and appoint local correspondents at the load port to investigate and advise on the cause of the delays and to monitor the preparation of the statement of facts in case this is manipulated by the sub-charterers and/or the shippers. Much valuable evidence is collected documenting the problems experienced with obtaining cargo, none of which appears to relate to any of the exceptions under the charterparty.

Since the charterparty is subject to US jurisdiction, the Club, on behalf of the Assured, instructs US attorneys and obtains advice on when the Assured might lawfully claim the loadport demurrage, notwithstanding an additional clause providing that demurrage is to be settled 14 days after completion of the voyage and tendering of supporting documentation, and how the Assured should clause the bill of lading to preserve his right to exercise a lien over the cargo at the discharge port, should this prove necessary.

As a result, the Assured is prepared to deal with particular arguments the sub-charterers might raise that the Assured’s demurrage claim is incorrect and if arbitration under the charterparty is necessary then the Assured will be in a good position to pursue his claim, with our support.

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