“Once on Demurrage, Always on Demurrage” ~Not a Fairy Tale~
The maxim “once on demurrage, always on demurrage”, although seemingly an innocent phrase, is not a fairy tale and is in fact, serious business. In order to understand this maxim one must first clearly define demurrage. In a strict sense, demurrage represents liquidated damages for delays associated with loading and discharging beyond the laytime contractually allowed. Applicable case law, both as court cases and in arbitration, holds that demurrage is extended freight and that the risk of circumstances which prevent the loading or discharge of cargo within the stipulated laytime lies unconditionally with the charterers. As explained in M/T “Raphael”, SMA No. 3739 (6/10/02), “this rule of ‘absolute liability’ for payment of demurrage is subject to three exceptions:
