Inverkip Steamship Company v Bunge & Company
| Jurisdiction | England & Wales |
| Judgment Date | 26 April 1917 |
| Date | 26 April 1917 |
| Court | Court of Appeal |
Ship - Charterparty - Demurrage - Period of Demurrage not specified - Detention of Ship beyond a reasonable Time - Damages.
A charterparty provided: Steamer to be loaded with customary berth despatch, and, if detained longer than five days, charterers to pay demurrage at the rate of fourpence per ton per day, provided such detention shall occur by default of charterers or their agents. The original port of loading having been wrecked by a tidal wave the ship was by agreement diverted to another port, where great difficulty was experienced in loading and despatching ships at and from that port. At the expiration of a reasonable time beyond the lay days the charterers had not commenced to load the steamer, and she was further detained for the purpose of loading. The plaintiffs claimed damages for the detention beyond the reasonable time:—
Held, affirming the decision of Sankey J. [
The plaintiffs, the owners of the steamship Inverkip, claimed damages from the defendants, the charterers, for thirteen days' detention of the vessel from September 17 to September 29, 1915, at 200l. per day. By the charterparty the vessel was to proceed to New Orleans or Galveston and load a grain cargo for a safe port in the Mediterranean not east of the west coast of Italy and excluding Africa, “steamer to be loaded according to berth terms, with customary berth despatch, and if detained longer than five days, Sundays and holidays excepted, charterers to pay demurrage at the rate of fourpence British sterling, or its equivalent, per net register ton per day, or pro rata, payable day by day, provided such detention shall occur by default of charterers or their agents.” The charterparty also contained this clause: “Time for loading, if required by charterers, not to commence before August 25, 1915.” It also provided that in certain events the charterers should have the option of cancelling the charter at noon on September 15. The Inverkip was to have loaded at Galveston, but owing to serious damage to that port by a tidal wave she was directed to load at Newport News, where she arrived on August 18. Her lay days began on August 25, but owing to the difficulty of getting the grain to that port, the congestion of the port, and the fact that a grain elevator there was destroyed by fire, there was great delay in the loading. Demurrage at the agreed rate, which amounted to 46l. 15s. 4d. per day, was paid by the defendants from September 1 to September 17. On the latter date, the loading not having then been begun, the plaintiffs' solicitors wrote as follows to the defendants: “We are instructed to give you notice that our clients contend that the vessel is no longer on demurrage and that as from this date they will claim damages for detention, which they estimate at 200l. per day. They have therefore instructed the master not to accept any further payment of demurrage.” To that letter the defendants replied: “We must protest against the course which the owners threaten to adopt, and we must refer them to the charterparty, which defines the rights of the parties.” The vessel waited for her cargo, and the defendants tendered the demurrage rate day by day till September 29, on which date the loading was completed, but as it was refused by the master it was deposited, and the defendants brought the amount into Court. The plaintiffs contended that it was an implied term of the charterparty that the defendants should not be allowed to keep the vessel on demurrage at the specified demurrage rate for more than a reasonable time, which time, they said, expired on September 17. The defendants denied that there was any implied term in the charterparty as alleged by the plaintiffs, and they further denied that a reasonable time was exceeded in the loading of the vessel. On the evidence Sankey J. held that on September 17 a reasonable time for keeping the vessel on demurrage had expired, that the demurrage rate of compensation applied to the whole period of detention, and that the plaintiffs were not entitled to damages as distinguished from the demurrage rate in respect of the detention after September 17.
The plaintiffs appealed.
R. A. Wright (Roche, K.C., with him), for the appellants. Where, as here, a charterparty provides for a number of lay days, and then for demurrage at a fixed rate, without specifying any period during which demurrage shall be paid, the ship can only be kept on demurrage for a reasonable period after the expiration of the lay days, and after that reasonable period has elapsed the shipowner is entitled to damages at large. The appellants' case is based on the meaning of “demurrage,” which from its nature refers to a detention of a defined or limited extent. Where its extent is not expressly defined a reasonable period is to be implied. Where the demurrage days have expired and no cargo is forthcoming the charterer is in breach and the owner may repudiate and take the ship away; and his right to damages has accrued: Nolisement (Owners) v. Bunge & Born.F2 Where the demurrage days are not limited by the contract they will be limited by law to what is reasonable in the circumstances: Wilson & Coventry v. Otto Thoresen's LinieF3; Lilly & Co. v. Stevenson & Co.F4 See also Carver's Carriage by Sea, 5th ed., s. 609. The stipulated rate of demurrage only applies to a rightful detention; but the charterer cannot insist on detaining the ship after a reasonable time has expired. Where there is subsequent detention the shipowner is entitled to damages. In Western Steamship Co. v. Amaral Sutherland & Co.F5 Bray J. decided the point against our contention. That was decided on a point of law, and on appeal the Court took the view that the facts ought to be further ascertained and discharged the order of Bray J. without assenting to or dissenting from his judgment.F6 The point, therefore, is still open.
[WARRINGTON L.J. referred to Sanguinetti v. Pacific Steam Navigation Co.F7, where Brett J.A. said: “The question of whether payment or compensation to be made over the lay days is to be considered as demurrage, or whether it is to be considered as detention, generally depends upon this, whether there is a fixed number of demurrage days mentioned in the charterparty, because if there is a fixed number of days beyond lay days, and the ship is...
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