Thursday, May 23, 2024

London Arbitration- damages for detention due to delay in sailing

*Delay in sailing due to insufficient depth of water was an impediment beyond the Owner’s control and damages for detention are payable from completion of discharging until the vessel was able to depart*.

Disputes arose between the parties under an amended HEAVYLIFTVOY form and referred to arbitration under the LMAA Intermediate Claims Procedure (ICP) 2012. The owner claimed the following sums said to be due and owing:

(a) The balance of demurrage at the Port of St Petersburg: USD27,989.47;

(b) Damages for detention at the Port of Kolkata: USD60,571.87;

(c) Interest due on late payment of freight: USD3,822.00;

(d) Interest due on late payment of the amount of demurrage already paid: USD3,321.02 and interest on outstanding amounts and costs.

The owners’ claims

(a) The balance of demurrage at the Port of St Petersburg: USD27,989.47

NOR tendered on 14 December 0700 hrs. Under box 10, “Layday period (i) First layday For St. Petersburg: 19.12.2016 […]“. Thus, the laytime commenced at 00.00 hours on 19 December 2016. Loading began at 07.31 on 23 December and was completed at 11.40 on 28 December. The vessel departed shortly afterwards. The charterer was allowed 48 hours of laytime and after deducting this period, the remaining 7 days 11 hours 40 minutes, equivalent to 7.48611days, counted for demurrage.

The tribunal accepted the owners’ calculation. As per clause 18 (b), “Any sums for demurrage and/or detention shall be payable on receipt of the Carriers’ invoice by the Merchant. Payments shall be made to the Carrier’s bank account as stated in Box 1“. Therefore, the payment fell due on receipt of the invoice.

(b) Damages for detention at the Port of Kolkata: USD60,571.87

The vessel arrived at the customary anchorage at Kolkata and tender NOR at 0300 hours to discharge her cargo. The NOR was neither stamped nor acknowledged, but the Statement of Facts records that it was accepted as per BN. The pilot boarded at 0955 hours and made her way to the berth, where she completed discharge on 18 February at 1715 hours. However, draft restrictions prevented the vessel from sailing on completion of discharge. According to the extract from the vessel’s deck log entry, the vessel’s draft was 6.05 m(FWD) and 6.30m (AFT), and the Kolkata Port Trust’s draft forecast showed it would be 6.2 meters or less, which was insufficient clearance for the vessel to sail. Finally, based on 6.4 meters even keel FW sailing draft, the ship would depart at 2200 hours on 25 February.

The charter party provided inter alia that:

Clause 16 […] actual time lost on the vessel due to impediments beyond the Carrier’s control preventing the vessel from departing the Discharging berth/port will count as laytime or be charged as time for which damages for detention are due at the rate as stated in Box18.

Held, that the delay in sailing due to insufficient depth of water was an impediment beyond the Owner’s control and damages for detention are payable from completion of discharging until the vessel was able to depart.

The Owner’s calculation has been determined by reference to time lost from 21.15 hours on 18 February 2017 to the vessel’s departure when the pilot boarded at 22.00 hours on 25 February 2017, a total of 7 days 0 hours and 45 minutes or 7.03125 days. Therefore, after deducting the allowed period of 18 hours grace time, damages for detention accrued for a total of 6 days 6 hours 45 minutes (6.28125 days).

The charterers said the owner issued an invoice for USD21,252.00 before issuing the invoice for USD60,571.87. The amount of USD 21,252.00 was based on a pro-rata application of the total amount of detention between various part cargoes being carried for the charterer and other interests. The charterer raised two defenses on estoppel and double recovery but failed.

(c) Interest due on late payment of freight: USD3,822.00

Clause 28 of the charter read, “If any amounts due under this Charter Party are not paid when due, then interest at the rate of 1.5% per month or pro rata for part of a month shall be paid on all such amounts until payment is received.”

The tribunal allowed the claim for 28 days’ interest at USD3,698.71 after making the calculations since the owners’ invoice showed an overstated amount.

(d) Interest due on late payment of the amount of demurrage already paid: USD3,321.02

The owners calculated interest on the unpaid demurrage amount for 91 days which was accepted.

Costs

The owners claimed recoverable costs £10,889.31.

The Owner’s claim amounts to USD95,704.36, so the claimed recoverable costs are below the capping level under the ICP (2012). ICP (2012) provides for costs to be awarded on a summary and commercial basis and in such manner and amount as the tribunal, in its absolute discretion, considers to be fair, reasonable and proportional to the matters in dispute. It is further provided that costs are to be capped so that neither party shall be entitled to recover more than a sum equivalent to 30% of the Claimant’s monetary claim. The Owner has largely been successful in the claims made. In accordance with English law, costs normally follow the event. After considering the reasonableness of the costs, the tribunal reduced the lawyers’ fees for document preparation by £866.50.  

Interest

Under section 49 of the Arbitration Act 1996, the owners are entitled to interest on the sums awarded at a commercial rate compounded at three monthly rests as is usual in London arbitrations. Concerning the outstanding demurrage, it shall run from 30 March 2017. Interest on the damages awarded for detention at the Port of Kolkata shall run from 3 August 2017 and interest on the late payments shall run from the date of this Award, 15 February 2018.

There is short reference to more than 50 LMAA awards concerning damages for detention before or after loading or discharging in this free guidebook: https://charterpartydisputes.com/a-snapshot-guide-to-laytime-demurrage/

Note: This website removes the names of the parties involved in this or other awards. The reader can find more details on Jus Mundihttps://jusmundi.com/en/conflict-checker. These awards mostly come into the public domain through enforcement under the NYC 1958.

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