Article
Demurrage for Container Shipping?
The reason for the dispute is not entirely clear from the judicial acts in this case. It is not quite clear whether the contractor tried to enrich himself by the amount of the required demurrage, despite the fact that such demurrage was not actually paid for, or the circumstances of the case are not completely stated. Considering that the dispute involves container transportation, the requirement to pay demurrage for the demurrage of the entire vessel is rather unusual.
Mortrans LLC (contractor) and Detotex LLC (customer) entered into an agreement on organization of transportation and freight forwarding services for the customer’s cargo. For the performance of the services, the contractor should enter into carriage contracts. In cases where the carriage of goods is carried out by sea or river transport, the customer is the Charterer under the relevant contract of carriage (charter) and / or bill of lading, the execution of which is provided by the contractor.
The Contractor organized the sea transportation of the defendant’s cargo in a container on the Atlantic Runner II vessel, a bill of lading was issued, where the defendant was indicated as the charterer. Due to a busy berth in the port of discharge, the vessel was moored 3 days, 6 hours and 55 minutes after the notice of readiness was submitted. “Assuming that the lay time is 24 hours from the moment the notice of readiness for loading (unloading) was sent, the plaintiff filed a claim against the defendant for payment of the ship’s downtime (demurrage) at the rate of 15,000 US dollars per day or in proportion for part of the day of downtime”. The defendant refused, and the plaintiff went to court, which also refused the plaintiff. The Court of Appeal upheld the decision.
The decision in favor of the defendant was made taking into account the following:
1. Conditions of carriage referred to in the bill of lading do not contain conditions for payment of demurrage to the carrier for the demurrage of the vessel. The conditions stipulate the obligation of the shipper / consignee only to pay for the delay of the container at the port of loading / unloading.
2. Taking into account Art. 308 of the Civil Code of the Russian Federation, the terms of the contract for freight forwarding services on payment of demurrage do not expand or supplement the terms of the standard contract of sea carriage under a bill of lading.
3. The Contractor is not a carrier or a shipping agent and cannot demand payment of demurrage.
4. The contractor’s argument about payment of demurrage to G. Olsson logistics Ltd. rejected because G. Olsson logistics ltd. provided forwarding services to the plaintiff in organizing the transportation of the defendant’s cargo on the terms of LILO St. Petersburg – Galveston, survey service of the cargo during loading, organizing the delivery of the container. The acts signed by G. Olsson logistics ltd indicate that they provided the services as a freight forwarder, not a sea carrier. The payment order in the amount of 34 323.00 US dollars does not contain information on payment of demurrage to the sea carrier.
5. The organizers of transportation – professional forwarders by their inaction themselves contributed to a delay in the unloading of the consignee’s container from the Atlantic Runner II vessel, since the defendant at this stage of transportation could not and should not have taken any action due to the terms of the contract, and they themselves bear the risk of adverse consequences as a result of their actions.
