Carriage of Goods by Sea

Date:  2020-02-21 06:36:51
3 pages  (879 words)
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This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
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This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Ace Bulk Corporation (ABC) chartered the ship MV Mercury from Namibian freight Limited (NFL) in 2012 for a period of three years. The period would end on June 30th 2015 and ABC was to make its last trip with the ship. Their client Richards Bay Coaling Ltd was a company that needed to transport cargo that would occupy a cargo of 151,000 mt. The contract had a FIOST clause, which implicated that ABC, would cater for the loading and offloading of the goods. The NOR was supposed to be issued on 12th May 2015 but was instead offered on 14th May 2015 on phone. RBC accepted the NOR two days later though reluctantly and was obliged to adhere to the payments as per the NOR. After the completion of the loading process, RBC was supposed to pay a total of 36000 dollars to cater for the hours above the 72 hours demurrage used. The company was reluctant to pay the amount and instead filed a complaint saying it was not liable for the time used in loading of the goods.

The vessel was further delayed for 14 hours by smoke emerging from one of the holds. The ship arrived at the Columbia River in Canada it had to delay because of an erupting volcano. Discharging took 85 hours as two of the vessels cranes were damaged. The vessel was stuck in the berth for two months. ABC lost the June voyage and NFL lost a three-year charter scheduled for 1st July 2015. The fact is that RBC was partly to blame for the losses made by ABC. ABC could make claim legal liabilities on RBC.

RBC had loaded a faulty container on behalf of its client Zimbabwe Coal Company (ZCC). The faulty container caused a fourteen-hour delay on the South African Port. Apart from causing the delay, the damage caused by the faulty container caused the vessel to travel slower. The vessel consumed six tons of fuel daily above the normal rate. The slower speed further cost the company precious time. Owing to these delays caused by RBC, the ship was stuck in Columbia River for two months. Had the vessel wasted the fourteen hours and used its normal speed the ship would have made it in and out of the Columbia River before the volcano had erupted. The consequences of the delay caused by RBC were grievous on ABC. The company not only lost a voyage but was also sued for breach of charter. ABC could charge RBC for loading faulty containers that damaged the vessel causing the delay that was very harmful to the company.

ABC had issued a NOR in good time as agreed in the charter. The nature of the charter had a WIBON clause that gave ABC a right to give a NOR without being on berth. RBCs reluctance to accept the NOR on the grounds the vessel was not at berth was unjust. The WIBON clause allowed ABC to offer the NOR before they got space at the berth. Although RBC was reluctant to accept the NOR, it finally did and was liable to any charges accumulated for the time the vessel spent in the berth. The time count should have begun from the time ABC issued the NOR. RBC delayed to accept the NOR to avoid charges that would accompany hours the vessel spent on berth. Their reluctance to accept the charges incurred for the 69 extra hours spent at the berth was unlawful. Their charter had a SATSHEX WP clause that only eliminated Saturdays, Sundays and Holidays from the hour count. The hours lost to bad weather did not make a significant difference to reduce the three-day extra charge. RBC denied liability for the time taken in loading the vessel since it was not their duty to do so. The FIOST clause of the charter had only exempted them from charges incurred in the actual loading of the containers. The clause does not offer them immunity from secondary charges incurred during the loading process. RBC was therefore supposed to pay for the extra hours used to load their goods into the vessel.

The offloading of the cargo took 85 hours instead of the 76 hours allowed by the SHINC clause of the charter. The consequences of the additional hours used to offload RBCs products were very grievous on ABC. Apart from the secondary charges incurred for the extra time used at the port, RBC should pay for the eventual losses incurred by ABC.

From the incidents above it is clear that ABC was the ultimate loser in its charter with RBC. The company made big losses owing to the delays caused by RBCs mistakes. RBC had caused a delay of several hours that could have helped avoid the difficulties faced by ABC in the transportation. From the beginning, RBC had shown reluctance of adhering to the dictates of the charter by refusing to accept a valid NOR. It later declined to take responsibility of a problem caused by one of its cargo robbing the vessel crucial time and speed. From the facts indicated ABC has a legal ground to sue RBC for the inconveniences and loses caused by their breach failure to adhere to the dictates of the charter.

References

Donaldson J. (1968) Navico A.G. v Vrontados Nafiki Etairia P.E. 1 Lloyds Rep. 379 at p. 383:

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