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London Arbitration- unpaid admitted demurrage amount

The vessel was chartered on an amended NORGRAIN Form to carry soya beans in bulk from Paranagua to Rizhao. Disputes arose between the parties and were referred for determination to a sole arbitrator under the LMAA Terms.

Owners served their Claim Submissions that included an email from the Charterers confirming the Owners’ laytime calculations. However, Charterers had not served their Defence Submissions within 28 days or requested any extension of time. Therefore, on 10 October, following the Owners’ request for an order to serve their Defence, the arbitrator asked the Charterers to respond within two days, explaining why they had not served their Defence and how soon they could do so. On the same day, the Charterers asked for an extension of seven days to serve their Defence. Meantime, the Charterers admitted the Owners’ claimed amount and said that this delay was due to “great losses in crops, economic recession, so businesses meant to be very difficult”. Also, the Charterers said that they did not see the non-payment of the balance as a dispute so the parties to resolve it in Arbitration, and this matter could be resolved amicably and proposed payment of this balance in “3 equal parcels” or earlier via freight rate adjustment if the parties fixed another voyage.

Subsequently, on 7th November, the Charterers served their Defence and acknowledged the balance due to the Owners. They said they never refused to pay and repeated their offer for payment in “3 equal parcels”. This prompted a response from the Owners’ London solicitors on 11th November, requesting that the arbitrator proceeds to an award given the admission of the sums claimed. On 3Oth  November, the arbitrator confirmed his intention to proceed to an award.

On 16th December, the Owners’ solicitors advised the arbitrator that the Owners received a payment on account from the Charterers and requested the arbitrator not proceed to an award pending receipt of the balance as promised by February. On 15th March, the Owners’ solicitors requested the arbitrator to proceed to an award, and the arbitrator asked for clarifications from the Owners regarding the applicable interest for the paid sum (on account) and their costs. Then, the arbitrator asked the Charterers to make any comments on the sums now claimed by the Owners.

The arbitrator held that the Charterers were very open in admitting the sum claimed as being due. They wished, though, to find a way of paying this by installments was not an answer to the Owners’ claim. The payment of USD 200,000 obviously reduced the balance due but left an undisputed amount of USD 99,847.34 outstanding. Consequently, the Owners were entitled to an Award for that sum plus interest and costs and interest on the late payment of USD 200,000.

Award accordingly.

Issued 27 March 2017

This website removes the names of the parties involved in this or other awards. The reader can find more details on Jus Mundi awards mostly come into the public domain through enforcement under the NYC 1958.

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