MSC Mediterranean Shipping Company SA v Cottonex Anstalt

MSC Mediterranean Shipping Company SA v Cottonex Anstalt

Demurrage began to accrue at the end of the agreed free time following discharge, but the Carrier's right to claim demurrage ceased on 27 September 2011 when the Shipper's repudiation became clear and the Carrier had no legitimate interest in keeping the contracts alive solely to claim demurrage; indefinite accrual would be penal and unenforceable.

Parties
Claimant: MSC Mediterranean Shipping Company S. A.; Defendant: Cottonex Anstalt
Jurisdiction
England and Wales
Judgment Date
12 February 2015
Procedural Posture
Commercial Shipping Contract Dispute / Final Judgment
Outcome
Carrier entitled to demurrage only up to 27 September 2011; claim for demurrage beyond that date rejected.
Legal Topics
Container Demurrage, Liquidated Damages, Mitigation of Loss, Penalty Clauses, Repudiation, Bill of Lading Interpretation
Contract Law Shipping Law Commercial Law Container Demurrage Liquidated Damages Mitigation of Loss Penalty Clauses Repudiation +1 more

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Parties

MSC Mediterranean Shipping Company S. A.

Claimant

Cottonex Anstalt

Defendant

Procedural Posture

Commercial Shipping Contract Dispute / Final Judgment

Legal Issues

  1. 1 When does container demurrage begin to accrue under the bill of lading?
  2. 2 Does demurrage accrue if the containers are not delivered to the Merchant?
  3. 3 Is the Carrier obliged to mitigate its loss by unpacking or replacing containers?

Ratio Decidendi

Demurrage began to accrue at the end of the agreed free time following discharge, but the Carrier's right to claim demurrage ceased on 27 September 2011 when the Shipper's repudiation became clear and the Carrier had no legitimate interest in keeping the contracts alive solely to claim demurrage; indefinite accrual would be penal and unenforceable.

Court Disposition

Carrier entitled to demurrage only up to 27 September 2011; claim for demurrage beyond that date rejected.

Orders

  • Carrier to be paid demurrage from discharge dates until 27 September 2011 at agreed rates.
  • Parties invited to agree calculation of precise sum due.