Additional freight claim. Effect of change of nominated discharge port/s by voyage charterers.

In London Arbitration 20/21 a shipowner claimed additional freight for discharge ports nominated by the voyage charterer who then changed the nomination to discharge ports which were not subject to additional freight. The vessel was chartered to carry 60,000 mt bulk soya to ½ ports in China with the sole/1st disport to be declared 10 days prior to the vessel passing Singapore. The charterers nominate Zhoushan for lightening and Taixing for discharge of the balance of the cargo. The charter provided for $1.75 per mt extra on entire cargo if Taixing was the nominated discharge port. Thirteen days later charterer changed the discharge port to Tianjin. Owners sent charterers an invoice for Zhoushan and Taixing, and charterers insisted on Tianjin. Eventually the disputed extra freight was paid into an escrow account and the vessel discharged at Tianjin.

The tribunal held that in accordance with established authorities culminating with The Jasmine B [1992] 1 Lloyd’s Rep. 39 the initial declaration of the discharge ports made by charterers had the effect of treating those ports as have been written into the charter from the outset. Charterers assumed the risk of any change of nomination subsequently made by their sub-contractors. The nomination provision was a typically worded nomination provision and nothing in it was special in permitting a change of nomination.

The fact that the owners only proceeded to Tianjin under protested, confirmed by the terms of the escrow agreement, was fatal to all charterer’s arguments as to variation, waiver and estoppel. Nor had owners been unjustly enriched at charterer’s expense because the voyage for which additional freight was contemplated was never performed. Nothing in the charter obliged owners to relinquish the freight for the contractual voyage if in the event that voyage was not performed. Owners were accordingly entitled to the freight payable on the original nomination which was held in the escrow account.

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