On The Non - Demurrage Responsibility Of The Lessee

Liability for demurrage in voyage charter-party is a matter of issue, and often causes disputes in practice. However, in aspect of legislation, there are no conventions accepted by most countries, and there are not many compulsory regulations in domestic laws and rules, either. As a result, in practice, the distribution of liability for demurrage needs to be set up in relative clauses by all parties of the agreement.Although charterer, as a party of the voyage charter-party, usually should be responsible for demurrage according to voyage charter-party, in practice, there are still some third parties, as non-charterer, who may become liable for demurrage. In theory, "non-charterers" include seller in FOB sales contract, who is the shipper in carriage; buyer in CIF sales contract, who is the consignee or B/L holder; and the bank of settlement under L/C.In analyzing the liability of non-charterer for demurrage, we should mainly discuss about the legal relation in B/L between carrier and the third party, as non-charterer. There are two key issues need to be solved. The first one is if there is no agreement about demurrage in the B/L itself, whether the B/L clauses incorporated from charter party have efficiency, and how to construe this kind of clauses. The second one is how cesser and lien clause, which is incorporated from charter party, affects the liability of non-charterers for demurrage. Unquestionably, these issues involve the construction of contract clauses in specific cases. The author achieves the conclusion whether non-charterer, especially the consignee, as non-charterer, should be responsible for demurrage, based on the construction and analysis of Incorporation Clause and Cesser and Lien Clause.In addition, for the payment under L/C involved in sales contract, the pledge of B/L by the bank of settlement during the period of payment in exchange for B/L, may also cause the bank to be responsible for demurrage. The author will analyze this instance in a separate chapter, which mainly talks about the nature of bank's rights towards the B/L held by it.