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Demurrage

A term of maritime law which refers to the damages payable by a ship charterer, to the ship owner, as compensation for loss time; where a chartered ship is not returned to the owner on a specified date.

Derived from the French word “demeurer”, which means to stay or remain somewhere although the legal definition refers to the damages paid in respect of a delay in a charterparty contract.

In Law of Demurrage, author Hugo Tieberg defined it as:

“(P)ayment provided by contract or by law for the use by the charterer of time beyond which is conceived to be normally necessary for loading or discharging of a ship of for the performance of certain functions relating thereto.”

Causes are not necessarily related to the charterer’s action and include ice demurrage, or repairs occasioned by collision.

In English law, demurrage is taken as a per diem (daily) rate and always as a fixed sum, liquidated damages; damages contemplated upon in advance, “just in case”, by the contracting parties.

Days beyond the specified date for the end of the charter, and during which demurrage accrues, are called demurrage days.


REFERENCES:
 
  • Moor Line Ltd. v Distillers Co Ltd 1912 SC 514
  • Nielsen v Wait 16 QBD 67 (1885)
  • Tiberg, Hugo, The Law of Demurrage (London: Sweet and Maxwell, 1995), pages 1-3.

 

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Unless otherwise noted, this article was written by Lloyd Duhaime, Barrister, Solicitor, Attorney and Lawyer (and Notary Public!). It is not intended to be legal advice and you would be foolhardy to rely on it in respect to any specific situation you or an acquaintance may be facing. In addition, the law changes rapidly and sometimes with little notice so from time to time, an article may not be up to date. Therefore, this is merely legal information designed to educate the reader. If you have a real situation, this information will serve as a good springboard to get legal advice from a lawyer.

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