Claiming for demurrage under sale contracts

Sale of goods – Demurrage – Time bar

Meixian Song, PhD Candidate, University of Southampton

The facts

The defendant purchased an amount of transportation oil from the claimant under two contracts on 15 December 2004 and 10 January 2005 respectively. The goods were to be delivered between 1 and 12 January 2005 at the port of Ashkelon in Israel. The claimant had purchased the cargo from BP on cif terms, and was not responsible for chartering the vessel. Demurrage was incurred due to the unavailability of a berth at the discharging port. The discharging operation was finally completed at 00.25 on 11 January. BP presented its demurrage claim to the claimant on 27 April 2005. The claimant issued a demurrage invoice to the defendant on the following day. Consequently, the claimant commenced the proceedings against the defendant for the unpaid demurrage on 19 April 2011. The terms of the sale contracts provided that laytime allowed for discharging was 48 hours, Sunday and holidays included, pro rata for part cargo (if applicable), which is different from the 84 hours’ laytime indicated in the charterparty, Exxonvoy 84. The demurrage clause in the sale contracts is ‘as per charterparty rate, terms and conditions’.