Covid-19 Claims; Delays at Port Issue Resolved

There have been lots of cases arising from Covid-19 and the problems that policyholders have suffered when claiming, or debating policy wording definitions. Here’s an update from CJC;

In the latest in a rash of instructions brought about by new COVID-19 port restrictions, CJC Claims Manager Alexandra Bailey and CJC Director Allen Marks explain a case concerning excessive waiting time at an Indian discharge port due to additional port measures put in place to prevent the spread of the novel coronavirus.

  1. This case ultimately turned on whether Charterers could bring the waiting time incurred by the vessel within the exceptions referred to in clause 9 of the amended Americanized Welsh Coal Charter form.

“In case of strikes, lockouts, civil commotions, or any other causes or accidents beyond the control of the consignee Charterers which prevent or delay the discharging, such time is not to count unless the vessel is already on demurrage.”

  1. Did they achieve this? Charterers defended this claim on the basis that the COVID-19 restrictions fell within the catch-all wording of the clause, “or any other causes or accidents beyond the control of the consignee Charterers which prevent or delay the discharging”.
  1. However, where there is a catch-all aspect to this type of clause as there was in this case, CJC [acting for the Owners] took the position that the ejusdem generis rule would apply:

The ejusdem generis rule

The general words are limited in meaning to the preceding specific words

i.e. that the general exceptions are limited in meaning to the same/similar exceptions in the list of preceding specific exceptions.

  1. The COVID-19 restrictions at the discharge port were neither strikes, nor lockouts nor civil commotions as specifically referred to in Clause 9. Charterers initially rejected Owners’ position on the basis that in this case, since there was no common thread in the named exceptions, the ejusdem generis rule does not apply. However, CJC drew their attention to recent applications of the ejusdem generis rule where it was stated that when there are several types of preceding exception then only exceptions of any of those types are excluded. Further, that Charterers could not rely on any wider application of clause 9 because this would only be a potential defence when the words “whatsoever” or “howsoever” have been added to the catch-all aspect of the clause.

Alternative analysis?

  1. Owners’ case was also compounded by the fact that a lengthy load call meant that the vessel was already into demurrage by the time it began to wait at the discharge port. Interestingly the fixture recap contained the specific words “once in demurrage always in demurrage”. While this phrase is an oft repeated mantra, its position in the fixture recap meant that it in this case it had become a contractual clause, also qualified with exceptions, and consequently should be given the true meaning of its words. Accordingly, the waiting time at the Indian discharge port counted in full.
  1. We were also able to bring extra leverage against the Charterers in this case due to their failure to mitigate the parties’ losses by sending the Vessel to this particular discharge port. This was in circumstances where they had the option both in the Charterparty and on the bills of lading to send the vessel to another discharge port.

This case was finally settled by CJC in favour of Owners, avoiding litigation and the subsequent time and costs that would have resulted.

About alastair walker 6830 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

Be the first to comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.