Laytime and demurrage from Kristina's blog

Detention is a concept related to shipping that involves compensation for delays that occur after the completion of loading or discharge. You can find more detailed information on the website https://fortiorlaw.com/news/laytime-and-demurrage/ Unlike demurrage, which is pre-agreed liquidated damages for exceeding the agreed laytime, detention covers damages related to delays after cargo operations have finished. Here are the key points about detention:

Difference from Demurrage: While demurrage is a predefined compensation for exceeding laytime during cargo operations, detention addresses delays that occur once loading or unloading has been completed.

Calculating Detention: Unlike demurrage, which has a predetermined rate stated in the contract (e.g., USD 5,000 per day pro rata), detention does not have a fixed rate specified in the contract. Instead, it may include any damages resulting from the delay of the vessel after cargo operations are finished.

Documents Required for Demurrage Claims: To claim demurrage, specific documents are typically required, including an invoice, timesheet, Notice of Readiness (NOR), and a Statement of Facts. The charterparty or contract may specify additional necessary documents. In English law, demurrage claims have a limitation period of 6 years, but many charterparty riders shorten this period to a maximum of 60 days. Missing this deadline by even one day can result in the claim being time-barred.

Arbitration for Unresolved Claims: If the charterer does not voluntarily pay demurrage, the claim may be referred to an appropriate arbitral forum in accordance with the arbitration clause of the charterparty or commercial contract. Different rules and organizations, such as LMAA, GAFTA, and FOSFA, govern the arbitration procedure.

In summary, detention is the compensation for delays occurring after cargo operations are completed, and it differs from demurrage, which covers delays during cargo operations. Demurrage has a fixed rate specified in the contract, while detention does not, making it essential to negotiate and agree upon detention terms in the charterparty or commercial contract. If disputes arise, arbitration procedures outlined in the contract may be used to resolve them.