Deadfreight – Is Prompt Written Protest Required?

July 2001

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The vessel was chartered to carry refrigerated butane from the Arabian Gulf to India. The Asbatankvoy form of charterparty was used and the relevant clauses were:

Clause E, Part I:

"Cargo: 13,000 metric tons 5 per cent more or less in Owners’ option fully refrigerated Butane."

and

Clause 3, Part II

" DEADFREIGHT. Should the Charterer fail to supply a cargo as specified in Clause E, Part I, of this Charter Party, the vessel may, at the Master’s option, and shall, upon request of the Charterer, proceed on her voyage … In that event, however, deadfreight shall be paid at the rate specified in Part I hereof on the difference between the intake quantity and the quantity the Vessel would have carried if loaded to her minimum permissible freeboard for the voyage."

On arrival at the loading terminal the master requested a full cargo of 13,650 mt (13,000 mt plus 5%). The terminal advised, however, that only 12,661 mt of cargo was available and this was the amount of cargo that was, in fact, loaded.

The owners advanced a claim for deadfreight under clause 3, part II.

The charterers raised various objections to the claim which were decided in arbitration as follows:

1. The arbitrators found in favour of the owners that the master had indeed requested the full 13,650 mt of cargo, despite the fact that no evidence could be given to support this (but equally the charterers were not prepared to argue that the master had not made the request).

2. The charterers maintained that a prompt written protest should have been made when the full cargo was not loaded (as opposed to the deadfreight invoice submitted some time later). However, the arbitrators held that this was not a requirement of the charterparty, nor one implied by law and could not be sustained by the charterers’ allegation that it could be implied from a course of dealing between the parties. Nor was there any evidence to support the suggestion that if a prompt protest had been made a full cargo would ultimately have been loaded.

3. The charterers would receive no credit in the deadfreight claim for various savings they allegedly effected in circumstances where the charterparty specifically provided for calculation of deadfreight at a particular rate per quantity of non-shipped cargo. In such a case, where damages are agreed to be calculated by a clear formula, there can be no case for taking into account such alleged savings.

 

London Arbitration 9/01. LMLN 0560 26.4.01.