Research On Demurrage Liability In Voyage Charter

While the international carriage of goods by sea is on the way of uniform legislation, the voyage charter transportation still puts great importance on autonomy of will. Because of the uncertainty of routes, ports of loading and discharging under the voyage charter transportation, it is the most valuable focus beyond such basic provisions as cargo and ports in the negotiation process to strive for time interest, to transfer the risk of delay and to avoid the duty of demurrage. The purpose of this paper is to analyze the conflicts and compromise on the previous focus between the shipper and the charterer with the four stages of a voyage charter as the main line.The first chapter is the summary of the demurrage liability under the voyage charter. The author first distinguishes broad and narrow definition of the demurrage liability and makes a comparison between the demurrage liability and a similar concept, that is, the liability of delay and then come to a conclusion that the concept of demurrage liability is unique to the voyage charter.The performance of a voyage charter falls into four separate and distinct stages: the preliminary voyage to the place specified as the loading point; the loading operation, covering both loading and stowage; the carrying voyage to the place specified for delivery of the cargo and the discharging operation. As far as the demurrage liability is concerned, it is similar between the first and third stage, between the second and fourth stage, so the author will only elaborate on the first and second stages.In the stage of preliminary voyage which is discussed in detail in chapter two, the conflicts between shipper and charterer focus on the nomination of loading port and the time of arrival of the vessel which are two issues discussed in detail in chapter two.In the first part of chapter two, the author first summarizes two manner of the nomination of loading port and draws on a conclusion that shipper assumes greater liability of demurrage. Then the author discusses three measures of avoiding demurrage liability on shipper's side: firstly, limit the charterer's time of exercising his right to nominate; secondly, add a provision of safe port to the charter; thirdly, qualify the shipper's obligation by the words"or so near thereto as she may safely get". Among the three measures, the third one is of greatest effect. If it is abused, it will be extremely unfavorable for the charterer and so its application is limited on two levels: the circumstances in which the application is invoked and the appropriation of the alternative port.In the second part of chapter two, the author first introduces the conflicts of time interest between shipper and charterer on the arrival time of the chartered vessel, and then deduces the provision of"LAYCAN"which is a compromise in order to ease the conflict and avoid the demurrage. In the process of elaborating on the date at which the vessel is expected to be ready to load and the later date at which the charterer is entitled to cancel the charter, the author finds that even the"LAYCAN"clause itself contains conflicts between the charter parties. So the limitation on the right of canceling which the author analyzes later is a good measure both to help settle the conflict and to give expression to the principle of equity.The demurrage liability in the loading operation which is discussed in chapter three is just the narrowly-defined one in chapter one. Because the demurrage is closely connected with laytime, the author briefly introduces its concept, feature and manner of stipulation in part one.Furthermore, requirements to commence the laytime are of great effects for the establishment of the demurrage liability. So the author discusses the requirements to commence in detail in part two. There is general agreement that three requirements needs to be satisfied before laytime can commence: the chartered vessel must have become an"arrived ship"; the vessel is ready to load; and a notice of readiness to load must have been given. Among the three requirements, arrived ship is hard to identify, especially under the port charter. The author discusses various standards of identifying the arrived ship by introducing famous cases. It is extremely unfavorable for the shipper if the chartered vessel can't be identified as an arrived ship, so the author generalizes four provisions shifting risk of delay. As the final form element, the notice of readiness to load appears simple, but actually, there are also conflicts in it: sometimes the notice is ineffective because of law or provisions in the charter, and accordingly the charter parties will conflict on the commencement of laytime. How to solve the problem is unavoidable in both theory and practice. As far as this issue is concerned, there are two typical opinions and the author recommends the principle of waiver which was put forward in the case of"The Happy Day".The third part of chapter three focuses on the narrowly-defined demurrage liability which is on the sense of demurrage. Firstly, the author discusses the nature of demurrage and defines it as a special form of liability which is similar to the default but also different from it. The charterer will assume the liability of demurrage if he can't accomplish the loading or discharging operation within the established laytime, as is almost a rule in practice, so the charterer's defense against demurrage can only be reflected on minimizing the possibility of demurrage before it comes to reality by suspending laytime and reducing the demurrage after it comes into being by breaking the rule of"once on demurrage, always on demurrage".Finally, the author makes a summary of the whole paper, reiterates its content, research method, research value and points out its deficiencies.