In March, the Indian Government ordered an almost entire COVID 19 lockdown across the country requiring most Indians to stay at home until early May (at the earliest). This, as can be imagined, has had a colossal impact upon shipping and trade activity in and out of India – one of the world’s busiest shipping areas. With significantly less manpower and stevedores at Indian ports most Vessels are experiencing extraordinary delays berthing and discharging cargoes. The same applies for many Vessels waiting to load cargoes.
The resulting demurrage claims are large and in many instances not straight forward to allocate under applicable Charterparties and fixtures. Consequently, we are assisting clients with disputes and arbitrations involving laytime and demurrage exclusion clauses in many forms of Charterparties, along with Force Majeure issues.
As most sale and purchase contracts for bulk commodities such as Coal and Petcoke typically contain demurrage provisions between buyer and seller – either via incorporation of the applicable Charterparty scheme, or separately – we are also assisting clients pursue and defend claims for large demurrage sums under CIF and CFR sale contracts for delivery at Indian ports.
Demurrage claims and disputes are part and parcel of shipping and our clients are routinely involved in such matters. However, there has been a considerable ‘spike’ in claims throughout April for much larger amounts than are typical seen, due entirely to the COVID 19 steps taken by the Indian authorities.
India ports are not alone. Shipping activity in many other places is similarly disrupted by COIVD 19 type lockdowns and movement restrictions. We anticipate a spate of demurrage claims, probably involving shipments worldwide whilst lockdown measures remain in place.