London Arbitration 13/94

Contract - Owners and charterers reached “ad hoc” agreement under which bill of lading was to state discharge destination different from charterparty destination provided that owners were fully indemnified from all consequences and were protected by bank guarantee - Whether agreement entitled shipowners to detain vessel at loading port until bank guarantee had been received by them

The vessel was chartered for a voyage from India to Indonesia with a cargo of bagged agricultural products. Because of particular requirements, not reflected in the charter, which the charterers had regarding the issuance of bills of lading, arrangements had to be made for a bank guarantee and a letter of indemnity to be issued whilst the ship was at her loading port. In due course, the owners claimed at the demurrage rate for 5 days’ detention, being the period between the completion of loading and the time of the ship’s sailing, contending that during that time the requisite bank guarantee and letter of indemnity had not been properly delivered to them and that accordingly, under the agreement they had reached with the charterers, the ship was not obliged to sail.