"Once on demurrage, always on demurrage"

李垒

Case backgroud:

We are a FOB buyer under a sales contract, and the sales contract had a simple demurrage clause and without express reference to the captioned maxim.

The vessel was detained in loading port for nearly a month, and much of this period are bad weather according to SOF after the vessel was on demurrage. The shipper argued that, the captioned maxim, which  was only applied to VC, not applicable here since the sale contract did not make any reference to it, meanwhile, the maxim cannot be regarded as an implied term in sales contract. Therefore, the days of bad weather shall not be calculated as demurrage since it was not WWD and cannot be considered as laytime.

One thing can be sure, this demurrage clause is  independent in nature (not indemnify) under the applicable English law.

Our views

The shipper's arguments soud reasonable since the demurrage clause in sales contract is independent indeed, however, if this view is upheld by the court, this may be considered against commercial sense. However, we have not seen any specific English cases dealing with this topic. If you have the case, please send the case or its quotation of this case to me via marvine@126.com.

Thanks in advance for your kind assistance, all the best!

李垒

3# 艨艟剑客
Thanks for your reply. For your information, I supplement/clarify some points, I adopt your number.
1.Yes

2.Yes, shipper is the FOB Seller.

3.Please note that sales contract did have demurrage clause, but very simple, it only stipulated the rate for demurrage.

4.WWD is short for “weather working day”, and SOF is short for “Statement of Fact” .

5.Yes, the demurrage amount has been remitted to the owner.

6.The seller’s refusal based on that after the vessel was on demurrage, there were some days marked as bad weather in SOF, so these days cannot be deemed as laytime and also cannot calculated as demurrage, the maxim “Once on demurrage, always on demurrage” was not applied to contract of sale, it only applied to VC.

7.It is convincing because the demurrage clause in the contract of sale is independent in nature, that is to say, the constructions regarding demurrage (including the maxim of Once on demurrage, always on demurrage ) may not applied to the circumstance in contract of sale. As to commercial sense, I mean the well established understanding of “Once on demurrage, always on demurrage” under VC.  

Thanks.

李垒

2# shirley

Thanks for your attention, Shirley.

As regards the "Commercial Sense", I mean that in the circumstance of VC, owners and charterers  all recognised the maxim of "once on demurrage, always on demurrage". However, the Seller under the sales contract firmly held this maxim did not apply to the circumstance of contract of sale, i.e. the bad weather occured after the vessel was on demurrage shall  not counted as demurrage since the sales contract make no reference to such maxim. If the court upheld the views of the Seller, owners and charterers under VC may be surprised by this result.

李垒

6# 艨艟剑客
Thanks for your input which is very heplful.

李垒

7# admin

Dear Mr. Yang and Si Jia, thanks for your advice, it is very helpful to our decision.

李垒

8# 醉青云2012

Thanks for your interest in this topic.

Under this contract, there is a demurrage clause, so that the FOB Seller is obliged to pay demurrage when there is a delay beyond the laytime. As to "captioned maxim", I must say it is my fault that I have not written a full titile (due to limitation of words in the title), FYI, it refers to the well estabilshed principle "Once on demurrage, always on demurrage".