Demurrage claim: how to combat unlawful cargo detention?

Our clients quite often apply to us upon demurrage claims: each new case is more interesting than the previous one.

Recently, our Client, acting as the Charterer under voyage charter party, applied to us due to demurrage accrual by the Shipowner; the Client treated part of demurrage as unlawful.

The Vessel was chartered for sea carriage from Ukraine to Turkey. It should be noted that vessels got stuck at the entrance to Sulina Canal for a long time.

When the Vessel stayed in queue for ca. 50 days, the Shipowner filed a claim on demurrage recovery amounting to 570,000$.

But why it was unlawful? Because Sulina Canal was closed for passage due to bad weather, so demurrage shall not accrue under such circumstances, as per charter party. Therefore, the Charterer objected on legal grounds.

First of all, the Client applied for avoidance to pay unlawfully accrued losses, followed by sea carriage performance and delivery of goods to the Consignee without additional costs. In turn, the Client promptly paid undisputed reimbursement for delay amounting to ca. 80% from the general claim.

Interlegal associate attorney Mykola Kozachenko & junior lawyer Diana Mykhailova carried out Claims Handling procedure as follows:

• Detailed analysis of documents and correspondence between the Parties,
• Fixing legal mechanisms for dispute settlement,
• Drafting the Letter of Claim addressed to the Shipowner,
• Supporting negotiations between the Parties.
• Regular consulting the Client on the merits.

In the process of permanent and persistent negotiations between the Parties, the Shipowner threated to apply the lien on cargo staying at the port of discharge.

Our lawyers treated such actions as unlawful and groundless in view of English law but potentially impossible in view of Turkish proceedings; therefore, Mykola and Diana drafted and offered to the Client detailed plan of further actions, with each clause aimed to defend Charterer’s rights and interests and to avoid potential expenses.

As the result, we persuade the Shipowner to reduce partially its claim and, first and foremost, to abstain from cargo detention, having facilitated discharge of the whole goods without incurring demurrage and additional costs.

Therefore, due to Interlegal strategy and professionalisms, our Client was able to achieve the set goal promptly and effectively.

In case of facing similar problems, you may contact Interlegal for complex Claims Handling and the most profitable solution.

Interlegal associate attorney Mykola Kozachenko & junior lawyer Diana Mykhailova led the case.