BBC Chartering Carriers GmbH & Co. KG v. Usinas Siderurgicas de Minas Gerais (M/V “LEFKES”) – SMA No. 4446, 4 July 2022

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An amended Gencon (1994) charterparty with Rider Clauses was agreed upon on May 21, 2021, between BBC Chartering Carriers GmbH Co.KG (Owners) and Usinas Siderurgicas de Minas Gerais (Charterers) for delivery of 7,306.274 MT of galvanized steel coils from Praia Mole to Houston. 

The subject vessel, M/V LEFKES, arrived and tendered NOR at Praia Mole on June 11, 2021. Due to port congestion and the decisions of the charterer to order later arriving vessels to the berth, the essel was not allowed to berth until June 24. Loading at Praia Mole was completed on June 27 at 00.40.

As allowed in the charterparty, the vessel was contracted to load a second cargo of 10,096.188 MT for another charterer before heading to Houston for delivery. Clause 34 of the charter indicated that laytime was to be prorated and calculated by dividing the total waiting period between all shippers in proportion to the amount of cargo they shipped. 

BBC issued a freight invoice which was paid in full on July 14, 2021. However, the owner issued another invoice for the laytime (calculated US$166,702.08 for 2.43542467 days in accordance with percentage of total cargo), on June 28, 2021. The charterer then disputed being liable for US$76,585.29 of the total claim. The charterer did not provide any reason or defense for the disputed demurrage.

The owner nominated an arbitrator and requested that the charterer agree within ten days based on the Shortened Arbitration Procedure of the Society of Maritime Arbitrators as agreed in clause 19(b) of the charterparty. The charterer gave no response within the ten days. A schedule for submission and supports were served to two representatives of the charterer with twenty days provided for a response. The charterer still did not make any submissions or supports, so the arbitrator proceeded in issuing the Award. 

The arbitrator asked for clarification on the owner’s exhibits, so the owner submitted the charterparty from May 21, all important dates, laytime calculations, and demurrage invoices. The charterer was given multiple opportunities to support their position, but never responded.

As there was no reasoning or evidence given by the charterer, and no dispute over the laytime calculations, the charterer was directed to pay the owner the full amount of US$166,702.08 in demurrage plus the owner’s legal fees and costs.