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Sunday, October 21, 2018

DEMURRAGE PAYMENTS – INTERTANKO’s CHARTERPARTY PROVISIONS

We were recently asked to provide a member with some charterparty provisions that can assist in speeding up the payment of demurrage claims. Some while ago a working group of our Documentary Committee produced a set of clauses designed to achieve this. The clauses are as follows:

“1. The charterers shall promptly notify the owners of any objections to any demurrage claim under this charterparty. Unless the owners have received such notification within [30] days after the charterers’ receipt of the claim, the charterers shall be deemed to have waived objection to the claim which shall be deemed accepted by the charterer as presented.

2. The charterers shall pay any undisputed demurrage without delay, but in any event not later than [45] days after the charterers’ receipt of the demurrage claim.

3. The owners shall have the right to present a separate demurrage claim for the loading port(s) if demurrage is incurred there.

4. Payment of demurrage shall be made by the charterers without any set off or deduction for any counterclaim, including but not limited to any cargo claim, provided reasonable security for any documented counterclaims has been provided by the owners. An appropriate undertaking from a P&I club in the International Group shall be regarded as reasonable security in this respect.

5. The charterers shall pay interest on all demurrage due and unpaid at LIBOR plus 2% calculated from the [45th] day after the charterers’ receipt of a properly documented demurrage claim until payment is made.”

Notes on the clauses

Clause 1 is intended to operate reciprocally with the typical limitation clauses where charterers specify a number of days after the completion of discharge within which fully documented demurrage claims must be made.

Clauses 2 and 5 give financial muscle to owners’ rights and charterers’ obligations.

Clause 3 provides owners with the possibility of claiming demurrage incurred at a load port before the vessel has discharged; this is a right owners do not ordinarily have as demurrage covers excess laytime at both load and discharge ports.

Clause 4 deals with the familiar situation where a demurrage claim is not expressly disputed but charterers seek to set off a cargo claim against their liability for demurrage.

Members are requested to contact john.fawcett-ellis@intertanko.com should they wish to discuss any aspects of demurrage payments.