Demurrage calculation under the Sale and Purchase Contract of agricultural products upon CIF terms

Interlegal continues to consult actively the clients concerning laytime calculation and demurrage accrual.

Analysis of relevant terms incorporated in sales contracts on agricultural product supply requires for special approach. Calculation correctness shall be assessed with regards to Charter Party provisions, terms of goods supply and actual amendments to agreement between the parties in the process of their performance.

In support of the recent request filed by the Client – foreign trader, the Interlegal lawyers made a complex analysis of demurrage calculation correctness and lawfulness of the Sellers’ rejection of demurrage payment.

The goods were supplied on CIF terms/the Danube port. The parties to the Contract arranged special terms on carriage of goods organization. The goods were supplied in batches not exceeding two shipments. Charter Party provisions were incorporated partially into the Contract.

In the process of Contract performance, the Sellers supplied the goods in full, by three shipments with three convoys involved. All the three convoys were declared for unloading at the destination port and were accepted by the Buyers. Under the unloading results, vessels stayed idle at the port over prescribed term. The Sellers proposed the Buyers to settle the demurrage with regards to two convoys.

For their part, the Buyers contested both validity of submitted Notices of Readiness, the fact of idle stay and the Buyers’ general obligation to reimburse idle stay of convoys, since the shipments exceeded the number set forth in the Contract.

The Sellers applied to Interlegal for defense of their lawful interests.

Having considered the request, Interlegal experts made a complex analysis of calculations declared by the Sellers and case circumstances. They found out that arrangements between the Parties were changed in the process of Contract performance, and the Sellers were entitled to recover demurrage for three convoys.

Interlegal lawyers prepared a correct laytime calculation and demurrage accrual, with regards both to the Contract and the Charter Party provisions. It resulted in essential increase of the demurrage amount. In the process of negotiations with the Buyers, the Sellers used a legal opinion based upon the Sales and Purchase Contract.

Demurrage claim was settled on the grounds of Interlegal calculation, with regards to the Sellers’ interests.

Interlegal lawyer Olena Ptashenchuk, under general supervision of partner Natalia Myroshnychenko, led the case and made calculations.

 

See also:

Calculation of demurrage under the Sales Agreement on agricultural produces under FOB terms

Defense of the exporter’s interests in the dispute with the buyer upon non-payment under CAD terms