Demurrage

Demurrage, unlike laytime, is a continuing period, and once laytime has expired and the vessel has come on demurrage, the period runs without interruption until the charterer has finally completed her. This principle of law is epitomised in the expression “once on demurrage, always on demurrage”. The only exception to this very strict rule is that if the parties have agreed that periods excepted from laytime should also be excepted from the demurrage period then, of course, according to the basic rule of freedom of contract, the parties’ intentions will be respected. Unliquidated damages (i.e. those not agreed as between the parties when entering into the contract and to arise on the occasion of specified breaches) are assessed under the rules laid down in Hadley & Baxendale (1854). These are, that the plaintiff is entitled to: Damages for that loss which was an obvious consequence of the breach i.e. that loss which must have been in the contemplation of the reasonable person entering into this contract and general damage and, any special loss of which the defendant was made aware by the plaintiff when entering into the contract. In order to see clearly a situation where demurrage would not be appropriate and damages for detention more correct is exemplified in Nolisement (Owners) v Bunge y Born (1917).  In this case the vessel had completed loading some 19 days before the expiration of the laydays but the charterers held the ship for a further three days before presenting bills of lading to the master because they were unable to decide on the port of discharge. It was held that, rather than simply reducing the amount of despatch money, the charterers should pay damages for detention for two days. One day being considered a reasonable time to wait for presentation of bills of lading.