Sea Master Shipping Inc v. Arab Bank (Switzerland) Ltd and Another (The “Sea Master”) – QBD (Comm Ct), 28 July 2020

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Seamaster Shipping, the registered owner of the subject vessel Sea Master, claimed demurrage, or damages in lieu of demurrage, for delays at the discharge port during a charter to Agribusiness United DMCC. 

Agribusiness United DMCC was in insolvent liquidation and unable to meet any obligations under the voyage charter. Seamaster Shipping claimed in this case that the Bank that financed the cargo, and the receivers who took delivery of the cargo should be held liable for discharge port demurrage under the contract of carriage (COGSA 1992). If they could not be held liable for demurrage, the tribunal had to decide if the defendants did everything in their power to prevent the delay and therefore would not owe Seamaster Shipping damages.

Recap of voyage charter provisions included:

Clause 10(a)

Cost of loading and discharging… Cargo is to be discharged free of expense to the vessel …

Clause 11

Stevedores at Loading Port(s) and Discharging Port(s)… Stevedores at … discharging port(s) are to be appointed and paid for by Charterers/Receivers. In all cases, stevedores shall be deemed to be the servants of the Owners and shall work under the supervision of the Master.

The tribunal found the defendants not to be liable for demurrage, citing that the voyage charter held the charterer to be exclusively responsible for paying demurrage. They also concluded that the General Incorporation Clause of the bill lading had the same effect.

The tribunal then declared that the defendants would not be held liable for damages because clause 11 of the voyage charter made Seamaster Shipping responsible for discharging. Seamaster Shipping countered that it was implied in clause 10 and 11 that the defendants would be responsible for discharging cargo within a reasonable time. 

Seamaster Shipping’s argument was rejected due to the lack of clear language needed in the contract to disregard common law (The Jordan II [2003] 2 Lloyd’s Rep 87). The tribunal found that the defendants were only responsible for the operation of the discharge and for appointing stevedores, not for anything else.

The appeal was dismissed.