Can a shipowner recover damages for delay in addition to demurrage?

COVID has created a period in which, there is often a lack of shore tank ullage. Vessels either as an intentional decision by the trader or due to this lack of ullage are more frequently suffering longer delays discharging their cargo.

In some charters there might be an expressly agreed storage clause covering this type of scenario in which charterers maybe reimburse owners for bunkers in addition to demurrage, the demurrage rate escalates after a certain period of time, demurrage is payable on account every seven days and at the end of the storage period, the charterer pays for hull cleaning costs.

But what happens if the charter contains no such storage clause?

In some charters there might be an expressly agreed storage clause covering this type of scenario in which charterers maybe reimburse owners for bunkers in addition to demurrage, the demurrage rate escalates after a certain period of time, demurrage is payable on account every seven days and at the end of the storage period, the charterer pays for hull cleaning costs.

For some 90 years there has been uncertainty as to the nature of demurrage and the ability of a shipowner to recover damages, in addition to demurrage.

How long can a charterer keep the vessel on demurrage? What happens if freight rates move and the vessel is on demurrage for an extended period, can owners recover the freight differential between the charter party and market rates? Can they recover additional bunkers, port costs or perhaps hull cleaning costs?

The Eternal Bliss [2020] EWHC 2373 seeks to settle the matter.

As an introduction to Pequod’s new petroleum training program, we are pleased to provide our trading clients with a “free” presentation of this issue. We have invited Quadrant Chambers to discuss this judgment and its ramifications for petroleum traders. Quadrant are arguably the pre-eminent shipping and trading barrister’s chambers.

The Quadrant team consists of Poonam Melwani QC, Chirag Karia QC, Ruth Hosking and Andrew Carruth.

The seminar will take place on 11th December
at 11 am UK time via Cisco Webex

Register Interest

Or revert to training@pequodassociates.com if you or any colleagues wish to attend and we will provide you with details as to how to join the seminar.

Speaker

Phil Staley

Pequod – Director

Duration approximately 60mins