Beware Charterers Delegating Their Duty Of Discharge

In the case of DGM Commodities Corp v Sea Metropolitan S.A. [2012], the Receivers' refusal to discharge a shipment of frozen chicken landed the Charterers with a demurrage bill in excess of USD 3.5 million.

Background

DGM Commodities (Charterers) chartered the vessel "ANDRA" from Sea Metropolitan SA (Owners) under a voyage charterparty on the Gencon form, to carry a cargo of frozen chicken from the United States to St Petersburg. The sales contracts between the Charterers and the Russian Receivers provided for release of the cargo against payment. The vessel arrived in St Petersburg in December 2007, but commencement of discharge was delayed whilst Receivers paid for the cargo in a piecemeal fashion. Once discharge finally commenced (after laytime had expired and the vessel was on demurrage), one hold was found to be contaminated with gasoil. Discharge from the rest of the vessel continued, but discharge of the contaminated hold ceased.