The question of whether demurrage liquidates all or just some of the damages arising from a charterer’s breach in failing to complete cargo operations within the laytime will no longer be decided by the UK Supreme Court following a commercial settlement. The parties have therefore consented to the appeal not proceeding.
This means that, for now, the decision of the Court of Appeal in November 2021 stands as the last word until the issue comes before the Courts in another case.
Regardless of questions that remain without the Supreme Court’s contribution, the law can now be simply stated: demurrage covers every type of loss following a breach by the charterer of its obligation to load or discharge within the laytime. And if a shipowner seeks damages in addition to demurrage resulting from delay, it must prove a breach of a separate obligation in the charterparty. Mere delay by the charterer in loading or discharging beyond the agreed laytime will not suffice, whatever the type of loss incurred (here, a cargo claim liability). Of course, if the parties wish to allow for the possibility of a shipowner recovering damages in addition to demurrage, a bespoke clause could be inserted in the charterparty.