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Bagged cargo of sugar lost after vessel went aground. Whether charterparty is a lumpsum freight contract.
Bagged cargo of sugar lost after vessel went aground. Whether charterparty is a lumpsum freight contract.
Brief facts
Brief facts
(Copied from the judgment)
By a charterparty a cargo of sugar in bags was to be loaded at a named port, and the ship so loaded was to proceed to another named port and there deliver the cargo "agreeably to bills of lading on being paid freight
in full of all port charges . . . . at the rate of 10s. 6d. per ton of 20 cwt. gross weight shipped payable on right and true delivery of the cargo.” Charterers' liability was to cease "when cargo is shipped and bills of lading signed, provided all the conditions called for in this charter have been fulfilled, but vessel to have a lien on the cargo for freight, dead freight, and demurrage. "Any difference between the charterparty and bills of lading freight was to be settled at the port of loading on clearance of the vessel if required by the master. The amount due under this clause was ascertained at the port of loading, and paid by the charterers to the shipowners. The vessel loaded a full cargo, but on the voyage she grounded and a portion of the cargo was lost. The remainder was delivered at the port of discharge, and the bills of lading freight on the whole cargo shipped was collected by the shipowners. In an action by the charterers to recover, as money received to their use, the difference between the freight so collected by the shipowners and the amount due to them under the charterparty in respect of the cargo delivered.
Points to note
Points to note
Per charter party (CP), freight is to be paid at load port.
At load port, bill of lading (BL) cargo figure and CP cargo figure was different. This was settled at load port itself and freight was paid according to the BL figure by the charterers.
Vessel aground when enroute to the disport. This resulted in some cargo lost.
Total cargo discharged at disport was then lesser than the BL figure after the lost.
Due to the lost, charterers received lesser cargo at the disport. So, the charterers were claiming from the owners for the surplus paid at load port.
My points
My points
Per Dakin v Oxley[1], the court of appeal in the above case had correctly dismissed the appeal by upholding the judgment of the court below.
In Dakin, shipowner will not earn freight if he fails to carry goods for the merchant to the destined port. If the shipowner carries part of the cargo, he will only claim ‘part' freight according to the part he carried. In this case, the shipowners did not fulfill the former but the latter. Therefore, he earned the freight by reaching the destined port, and the freight earned was only for the part of the cargo that reached the destined port, without taking into account cargo that was lost in the grounding incident.
This is different from Dakin’s regarding full freight still will be earned even though cargo delivered at disport in damaged state.
This is because albeit in damaged state, the shipowners still fulfilled his obligation to deliver all cargo as stipulated in the CP, this includes the cargo in damaged state.
In this case, there is no all cargo that reached the disport, but the remaining cargo and the missing (lost) cargo that reached the disport. Hence, shipowner could only claim for the remaining cargo delivered to the charterers without taking into account the missing (lost) cargo as deemed by them as lumpsum freight.
In conclusion, it is only right for the shipowner to refund the charterers the surplus that he received from the latter at the load port.
[1] (1864) 143 E.R. 938
The above is solely the writer’s opinion and is in no way to be construed as advice, whether legal or otherwise. All errors and omissions are the writer’s.Report abuse