ONE-HALF OF 84H IS NOT 36H

ONE-HALF OF 84H IS NOT 36H.

 

FINALLY SOME COMPANIES “GET IT”  AND HAVE CHANGED THE WORDING IN THEIR CONTRACTS TO

 READ “ ONE-HALF OF THE ALLOWED LAYTIME IN THE C/P PRORATA PART CARGO”.

The first mention of a Charter Party in England was as early as 1369.  The term Charter Party derivesfrom the Medieval Latin phrase “Carta Partita” meaning “divided document”.  The contract would be prepared twice on the same piece of paper and torn into two pieces, each party taking one portion.  If the torn edges of the two pieces fit together, then the document was authentic.  I cannot confirm that there was an allowed laytime for the voyage back in 1369. 

 

However, sometime thereafter, a voyage under a Charter Party allowed 72H.  Thus the logical allowance noted in a contract for supplier and/or receiver was 36H.  This allowed laytime has not changed in the anyone’s contracts until recently.

 

Nowadays, 84H is not uncommon and just this past week a fixture for 96H came across my desk.  Some Charterers who have a fixture with 84H refuse to apply 42 hours from used laytime.  They go back to the contract which says 36H.  Well I don’t know about the rest of you, but one half of 84 is not 36.   Changing laytime allowance in a contract is not a major undertaking.  Change allowed laytime to “ONE-HALF OF THE ALLOWED LAYTIME IN THE C/P PRORATA PART CARGO” and forget about putting in a number.  A minimum of 12H can still be added for part cargoes. 

 

By only applying 36H the Charterer is profiting by 12H and under a 96H voyage by 24H and is recovering monies for demurrage it did not incur. Does this not fall under “unjust enrighment”?  Unjust enrichment is a legal term and a legal principal which has been upheld in U.S. and English courts.  Is the industry going to continue to allow those companies to recover more demurrage than they have to pay the owner?  You can stop this by requesting a copy of the Owner's' invoice and Owner's Demurrage Calculation. 

In case anyone has forgotten the definition of Demurrage I quote below from Llyod's of London Dictionary of Shipping Terms:

"Demurrage:  Amount of money paid to the shipowner by the charterer, shipper or receiver, as the case may be for failing to complete loading and/or discharging with THE TIME ALLOWED IN THE CHARTER PARTY'.

 I received a demurrage claim for $42K.  I requested a copy of the Owner's Invoice and Demurrage Calculation.  I received the Owner's invoice which was for $22K.  I  asked how they could invoice this out at $42K.  The response was that I the client could pay the $22K.  I requested the Owner's Demurrage Calcuation as $22K covered the voyage.  No response.
 

There are only a few companies who argue about applying the allowed laytime under a voyage and refusing to provide the Owner’s demurrage invoice and calculation.  The reason for not doing so is transparent. 

 The stubbornness on the part of these companies prolongs the settling of their claims.  In some cases years before the claim is settled.  Considering the time value of money  you would think that they would move forward.