| Archives: February 2012

Award 1192 – C/P GENCON – DAP cargo damaged by water ingress – Personal want of due diligence (yes) – Shipowner’s liability (yes) – Indemnification for depreciation and consequential expenses. To involve the ship owner’s liability, clause 2 of Gencon does not require the ship owner to have committed a personal fault but only that he failed to show the due diligence expected from him. The fact the ship owner declined water-tightness tests of the hatch covers indicates he was aware that there were ascertained deficiencies that he has not repaired in due time. Therefore, he has complete responsibility regarding the consequences of sea water ingress into the hold and the resulting damage to the cargo. However, the arbitral Tribunal did not follow charterer’s request to be indemnified on the basis of the insured value or that of replacement value. They held the ship owner responsible to indemnify the charterer for the value of the damaged cargo and the resulting expenses.

Award 1190 – Agency agreement – Refusal by receiver of a rice cargo damaged after a long stay in port – Agent liability (yes) – Claim for demurrage of containers (partly justified) – Counterclaim from agent (inadmissible). A liner agent who failed to confirm to the receiver the discharge of a rice cargo in containers and took steps only nearly seven months later to deliver the cargo without remittance of original B/L, disregarded the terms of the agency agreement and committed a breach which was the cause of the receiver’s refusal to accept the cargo which a survey found to be damaged. The agent must therefore indemnify the shipowner. However, the shipowner’s claim based on container demurrage was overstated as largely exceeding the containers’ value. Therefore, the arbitrators restricted the computation of demurrage to an amount equivalent to the estimated cost of replacing the containers during their detention. Besides being unfounded, the agent’s counter-claim to recover from the shipowner the sums that the agent had been found liable to pay the receiver by the Court of Appeal of his country was inadmissible by virtue of the binding force of the res judicata.