Monday, July 15, 2024

Freight & Deadfreight

Freight & Deadfreight
  1. Extra port DA Jus Mundi, Two arbitrators 2022

Held, in the context of this voyage Charter, the Parties agreed that the Charterers would pay freight which, pursuant to Clause 36 of the Rider, was to be inclusive of all port charges, labour dues etc on the Vessel, whilst any taxes, dues, wharfage on the cargo was to be for the Charterers; account. The Charter included demurrage provisions to deal with delay to the Vessel after expiry of the agreed laytime. In circumstances where the Claimant expected to be recompensed for port DA by the freight payment, but no freight ultimately fell due as a result of the Charterers’ breach of Charter, it follows that the Claimant is out of pocket in relation to the port DA incurred as a result of the First Respondent’s breach of Charter. Tribunal awarded the Claimant damages in the amount of USD 41,576.07 in respect of wasted loadport DA.

(LMAA, Two arbitrators 2022- JM)

  1. Prima facie measure of damages for repudiation

Held, the prima facie measure of damages recoverable by a shipowner for repudiation of a voyage charter is set out in Smith v M’Guire [1858] 3 H & N 554 as being the amount of freight which the ship would have earned if the charter-party had been performed and that from this amount there should be deducted the expenses which would have been incurred in earning it together with what the ship earned (if anything) during the period which would have been occupied in performing the voyage. This has recently been affirmed by Males J in MTM HongKong [2016] 1 Lloyd’s Rep 197.

(LMAA, Sole arbitrator 2017- JM)

  1. Interest for unpaid freight

Clause 28 Interest

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.

Held, the sum of USD273,000.00 was due within three banking days of completion of loading. Loading was completed on 28th December 2016. The Owner’s Claims Submissions seek interest between 1st January 2017 and 30th January 2017 in USD3,822.00. The Owner’s invoice, in the amount of USD3,822.00, quantified payment as being due for 28 days. The amount owing was, therefore, overstated. Having given the Charterer the benefit of the doubt, the claim for 28 days’ interest was recalculated at USD3,698.71.

(LMAA, Sole arbitrator 2018- JM)

4. Set off sums under different contracts

New York law seems to the Tribunal to be clear that in circumstances such as those presented here there is no right to withhold or to set part of the purchase price admittedly due under one contract against an unliquidated claim for damages under an unrelated contract.

(Two Arbitrators, 2008- JM)

5. Delayed payment of admitted sums- costs on top


The Charterers were very open in their admission of the sum claimed as being due. Their wish, though, to find a way of paying this by instalments was not an answer to the Owners’ claim. The payment of US$200,000 obviously reduced the balance due but left an undisputed amount of US$99,487.34 outstanding. The Owners are entitled to an Award for that sum plus interest and costs, as well as interest on the late payment of US$200,000. I considered the costs claimed to be reasonable.

(LMAA, Sole Arbitrator 2017- JM)

6. Damages for lost freight- losses due to charterers’ repudiation / renunciation

The owners  claim damages of $725,000 in respect of the freight they lost under the charterparty. Charterers  accepted that the owners did not obtain any substitute employment during the period in which the charterparty would have been performed, and did not suggest that there was any saving of expenses by reason of the termination of the contract (and in fact the owners incurred expenses thereafter which exceed the amount of the freight claimed by way of damages). However, charterers suggested that the owners had failed to mitigate their damages. The burden of proof must be upon them in this respect, and they failed to discharge it. They had two points. The first was that the owners failed to keep the charterparty alive until such time as “the original cargo” could be loaded , but (of course, in the light of what we have already said) they were unable to show when if at all, a contractual and lawful cargo would have been loaded. And, as the owners pointed out, they had no duty to mitigate before the moment at which they accepted charterers’ repudiation/ renunciation, so this argument could not succeed as a matter of logic in any event. Secondly, as regards mitigation, charterers suggested that the owners had failed to accept an offer which charterers made for a substitute fixture; but the fact was that they never made a firm offer to the owners. On the contrary, some days later the owners expressly offered to consider alternative employment if charterers had only to offer, but there was no response.

(LMAA, Three arbitrators 2016- JM)

7. Repudiation and calculation of net deadfreight claim

The Carrier’s dead-freight invoice (US $231,869.26) represented gross dead-freight US $249,000 less stevedoring US $17,130.26. The Carrier stated that the amount said to be stevedoring also incorporated the port expenses that would have been incurred had the cargo have been loaded. The Merchant maintained that the figure was too low and that the Carrier had not included the notional port expenses in their calculation of net dead-freight. To illustrate its point, the Merchant submitted a copy of an invoice for pilotage for the “vessel [Redacted]” at Houston in February 2010 in the amount of US $6,148.89, observing that there would have been other expenses, such as wharfage, payable for a call at Houston to load the cargo under the booking note.

Held, in agreeing with the Merchant, the figure given by the Carrier as total port and stevedoring expenses which would have been incurred, US $17,130.26, appeared too low. Based on the tribunal’s experience, while that figure was certainly appropriate for stevedoring at Houston, it could not have included port expenses there or at the discharge port. There were, in addition, the stevedoring costs at the discharge port to be taken into account, although these would not have been at the same level as the stevedoring expense at Houston. The tribunal calculated that the loading and discharging port expenses plus stevedoring at discharge would have been in the order of US $20,000. As no figures in this respect had been put forward by the Carrier, however, and to be as fair as possible to the Merchant, it felt better to take a conservative view and deducted US $25,000 from the amount claimed by the Carrier as dead-freight.

(LMAA, Sole arbitrator 2012-JM)