Loadport demurrage

Usinas Siderurgicas De Minas Gerais SA - Usimanas v Seanav International Ltd

THIS New York arbitration dealt with a claim by Seanav, as owner of the Yorkgate, for $84,694 in loadport demurrage, and claims by Usiminas, the charterer of the vessel, for delay damages amounting to $110,574 and indemnification for a cargo damage settlement agreement it had concluded with its customer in the sum of $311,842.

The Yorkgate was fixed for a part-cargo of steel products from Brazil to US Gulf ports. Laydays were originally March 18-30, but there was an extension of the cancelling date. The vessel eventually arrived at its loadport in Brazil at 1800hrs on April 10, and tendered notice of readiness, which was accepted at 0821hrs on April 11.

The vessel remained at anchorage awaiting a loading berth until April 20. It went alongside at 1400hrs that day. At that time, Glencore Do Brazil, charterer of a part-cargo on the vessel, initiated legal action to detain the vessel for an alleged short-lifting claim. Seanav opposed the claim and tried, unsuccessfully, to resolve the dispute by posting a letter of undertaking. Thereafter, Seanav had the arrest lifted in the Brazilian courts, on April 27.

The vessel reberthed on April 28, and loading started that day. Glencore appealed the court decision and, on May 9, the Brazilian appellate court ordered the vessel to be detained once more, although loading operations were allowed to continue. Loading/lashing was completed at 1530hrs on May 12. But the Yorkgate remained under arrest until May 24, when judicial detention was rescinded and the vessel was allowed to sail.

Usiminas argued that the vessel had arrived at the loadport on April 10, when it should have arrived on March 18, and that it had therefore encountered additional waiting time as a result of port congestion, to which it would not otherwise have been subjected. It also argued that the delays were further exacerbated by third-party arrests.

The arbitration panel noted the initial laydays of March 18-30 had been modified by agreement of the parties on April 3 whereby, in consideration "of extending the laydays all waiting time for berth would be split on a 50:50 basis, after which normal time/terms to apply as per charter party."

Having concluded this agreement, said the panel, and having accepted the NOR without qualification or condition, Usiminas could not now argue that it was entitled to terms or conditions beyond those contained in the charter party.

Although the charter party incorporated specific laytime exceptions, Usiminas argued that Seanav had breached its obligations under Clause 2, so that all delays, direct or otherwise, caused by the arrest should not count as laytime or give rise to demurrage. Specifically, Usiminas argued that its cargo was the priority cargo for this voyage and that Seanav, by accepting other parcels, created a situation that could have made the vessel more prone to arrest and consequently affect voyage performance.

The panel found that Seanav's demurrage computation was proper and correct in all aspects. The calculation did not include periods when the vessel was under arrest and unable to perform cargo operations, and it also took into account the parties' agreement that only one half of berth waiting time would be chargeable to Usiminas. It was found that Seanav was entitled to its demurrage payment as claimed.

Usiminas's claims for delay damages and cargo damage were unanimously rejected by the panel.
(Society of Maritime Arbitrators Award Service, proceedings not yet published)