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04 April 2012
A consignment of goods, which a number of factories required for their production processes, took double the steaming time indicated in the contract of affreightment. The contract provided that carriage would be accomplished, without guarantee, in 15 to 20 days. However, the carriage ultimately took 39 days due to the vessel shuttling between ports in search of additional cargo.
The terms of affreightment were incorporated by reference into the bill of lading. The goods were sound on arrival, but during the additional steaming time the market value of the cargo had fallen dramatically and the cargo receivers had been obliged to make urgent arrangements for alternative stock, which was carried by truck.
The cargo receivers maintained that the vessel had not proceeded with reasonable dispatch and sought the arrest of the vessel in order to secure their claim against the shipowner and the carriers. Arbitration would proceed in England.
The shipowner and carriers opposed the arrest on various grounds and asked the court to release the vessel.
The arrest judge held that under Brussels Arrest Convention 1952 the alleged damages and losses suffered due to delay (ie, as a result of the failure to execute the contract of carriage in a timely manner) constituted proper cause for the vessel's arrest. The arrest was confirmed not only against the carrier, but also against the shipowner. The judge considered that for the purpose of the arrest of a seagoing vessel, an arrest judge does not need to investigate whether the shipowner is a co-debtor.(1)
All too often, carriers consider agreements as to steaming time to be no more than non-binding information. This decision is a stark reminder that even when steaming time is without guarantee, a vessel is at risk of being arrested in respect of costs and damages if it does not proceed with reasonable dispatch. This finding is in line with decisions dating back more than a decade that confirm the same principle: a vessel can be arrested for all losses or damages arising out of delay, which covers not only damage to cargo but also variations in market price and costs incurred in arranging for alternative supply. Consequently, the carrier and shipowner may be held liable for the difference in the value of the goods between the dates of expected and actual arrival, plus other costs and damages suffered by the cargo receivers.
Moreover, the decision confirms that a judge who considers a demand for arrest need not look into the details of the contracts between shipowners and carriers, as both are potentially liable to cargo receivers.
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