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ARTICLE · 27 MAY 2010

Container Detention Charges Decision Sparks Debate

DLA Piper Australia
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The New South Wales Consumer, Trader & Tenancy Tribunal’s recent decision in D V Kelly Pty Ltd v China Shipping (Australia) Agency Co Pty Ltd [2010] NSWCTTT 136 has caused considerable debate and cast doubt over the enforceability of container detention charges. The case concerned the distinction between liquidated damages and penalty clauses in contracts, and has already caused ripples throughout the entire Australian shipping industry.

AustraliaTransport
Andrew Tulloch
Andrew Tulloch
Igor Golshtein
Igor Golshtein

The New South Wales Consumer, Trader & Tenancy Tribunal's recent decision in D V Kelly Pty Ltd v China Shipping (Australia) Agency Co Pty Ltd [2010] NSWCTTT 136 has caused considerable debate and cast doubt over the enforceability of container detention charges. The case concerned the distinction between liquidated damages and penalty clauses in contracts, and has already caused ripples throughout the entire Australian shipping industry. But the long term effect of the decision remains unclear as it is subject to an appeal and it seems the case for the enforceability of the charges was not put as well as it might have been at the initial hearing.

Background

D V Kelly Pty Ltd (DV Kelly) imported furniture from Vietnam as containerised cargo. The contract with China Shipping (Australia) Agency Co Pty Ltd (China Shipping) provided that the container was to be returned within a certain number of days of it becoming available for collection. In the event that the

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