In some circumstances where lack of cargo prevents laytime from commencing the shipowner will need to claim compensation by way of damages for detention and although the amount is not fixed but related to the losses suffered by the owner, same are often claimed at the demurrage rate. Where lack of cargo does not prevent laytime running, the charterers’ liability is for demurrage if the cargo is not loaded within the laydays. Time is not of the essence for provision of cargo unless the delay is such as to frustrate the adventure, when the shipowner is entitled to treat the charterer as having repudiated the charterparty. There are limited exceptions to the charterers’ obligation to provide a cargo:
- It is illegal to ship the cargo or there is a very clear exceptions clause
- Cargo no longer exists as result of an event beyond the control of either party the cargo is destroyed
Any of above, charterparty is frustrated and the charterer is not obliged to provide a cargo. Frustration, the principle was described by L.J. Griffiths in ‘The Hannah Blumenthal ’ which can be paraphrased as follows: ‘The essence of frustration is that it is caused by some unforeseen supervening event over which the parties to the contract have no control and for which they are therefore not responsible. Supervening means an event that occurs after the conclusion of the contract.