Facts
The case involved the charter of a ship for two years’ consecutive voyages between US and Europe. The ship was to be loaded at a specified rate. The owners were to be paid according to the number of voyages made during the two-year period. If the time taken for loading and unloading was longer than required, the charterers were to pay $1000 per day by way of demurrage. The charterers were taking many extra days in loading and unloading but were allowed to continue to have the use of the ship for the remainder of the two years. Eight round trips were made. However, the owners alleged that the charterers delay in loading and unloading had made a further six trips impossible and sued for damages. The owners claimed that they were not bound by that clause because the charterers by their extraordinary delays had committed a fundamental breach of the contract.
The total demurrage, at $1000 per day, was $150,000. Because of a fall in freight rates upon the re-opening of the Suez Canal, after the contract had been made, it may have been more efficient from the charterers' point of view to delay loading and unloading, and therefore breach their contract, than to carry it out by making more voyages.
Read more about this topic: Suisse Atlantique Societe D'Armament SA V NV Rotterdamsche Kolen Centrale
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