Soreidom S.A. v Hansen-Mueller Co. – SMA No. 4474 – 14 March 2024
The conflict between Soreidom S.A. (Sor) and Hansen-Mueller Co. (HM) involved demurrage charges under NAEGA 2 contracts. Sor sought to recover $776,202.94 in demurrage for the vessels M/V GANT FLAIR and M/V CENTURY EMERALD. HM disputed its liability for the GANT FLAIR charges and claimed reduced liability for the CENTURY EMERALD charges.
Sor, based in Paris, France, trades bulk commodities internationally. HM, based in Omaha, Nebraska, is involved in grain and feed commodity trading and logistics, with operations across the United States. The parties began a trade relationship in 2019.
GANT FLAIR Claim
This demurrage dispute centered on Sor’s claim of $596,690.25. Sor contended that HM’s payment terms were not violated, and laytime commenced as per the contract. HM argued that Sor breached payment terms by having unpaid balances on previous vessels, invalidating the GANT FLAIR’s Notice of Readiness (NOR). The key issues were whether past interactions changed their obligations and if HM could reject the GANT FLAIR’s Notice of Readiness (NOR) based on a later email.
The court found that while past dealings can help interpret contracts, they cannot override written terms. HM and Sor could modify their contracts but not retroactively or without mutual agreement. The GANT FLAIR contract did not state that NOR would be invalid if two vessels were on credit. HM’s emails from 2020 and 2021 proposing such terms were not enough to establish a binding agreement, and Sor never agreed to these changes.
An HM email on May 16, 2022, could not retroactively invalidate the NOR issued on May 15, 2022. Additionally, resolving the HINASE dispute did not mean Sor accepted invalidating NOR for unpaid balances. Sor was awarded $596,690.25 in demurrage. The tribunal confirmed that contract terms remain as written unless clearly modified by both parties.
CENTURY EMERALD Claim
Sor claimed $179,512.69 in demurrage for delays involving the CENTURY EMERALD. In July 2022, Sor and HM entered contracts for yellow corn and soybean meal, which included specific loading rates and payment terms. Sor nominated the CENTURY EMERALD on September 1, 2022, with its ETA at Houston on September 8. The vessel tendered its NOR on September 8, which HM accepted on September 9, but loading was delayed until September 20 due to berth congestion and not completed until September 23.
HM tried to change the payment terms on September 21 to include a clause that Sor could not have two vessels on credit simultaneously, which Sor rejected. Sor calculated demurrage based on agreed loading rates and laytime, totaling $179,512.69. HM had delayed the CENTURY EMERALD by bringing another vessel, the SARONIC SPIRIT, to the berth first.
Sor argued laytime started on September 9 after HM accepted the NOR. HM’s reliance on a revised tariff to excuse the delays was rejected as it conflicted with the contract terms, and Sor had not been notified in advance of the tariff change. HM claimed delays were due to port scheduling and that Sor was only entitled to $2,820.14 in demurrage.
Award
The court ruled in favor of Sor, finding that HM’s actions caused the delays and the revised tariff did not override the contract terms. Sor was awarded $179,512.69 in demurrage.
Sor was awarded demurrage for both vessels, and interest was calculated accordingly. HM’s attempts to retroactively reject NOR and reliance on conflicting tariff provisions were deemed invalid, while Sor’s prima facie claims for demurrage were upheld.