Destruction by fire not a mechanical breakdown under laytime exclusion clause

The Commercial Court has applied a narrow construction in this case to a laytime exclusion clause in respect of time lost at the load port. The delays were due to a fire that had completely destroyed the conveyor belt system linking the terminal normally used by the charterers to the warehouse where the sugar cargo was stored. Nonetheless, the court upheld the owners’ claim for demurrage because it found that the destruction by fire was not a ‘mechanical breakdown’, nor were the subsequent  actions of the port authority ‘government interferences’ under the relevant clause.

The owners originally commenced arbitration against the charterers under a charterparty based on the Sugar Charter Party 1999 Form, claiming demurrage for a period of waiting at the load port at Paranagua, Brazil. 

The charterparty provided for the vessel to “proceed to 1-2 safe berth(s), 1 safe port (intention Santos)…”. Clause 28 was an exceptions clause, stating that time was not to count as laytime in certain specified circumstances…

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