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To pay or not to pay: legal advice upon idle stay within Grain Corridor

15/ 09/ 2023
  Everyone engaged in cargo transportation, especially in Black Sea Region, may face such a vital issue. A charterer, large company doing business worldwide, applied to Interlegal upon solving such a problem. While the Grain Corridor was operating, the most widespread claims and disputes concerned excessive idle stay of vessels waiting for JCC inspection (Joint Coordination Centre, i.e. a group of control over compliance with Minsk Treaty, with Ukrainian and russian delegates involved). Our Client applied upon the same incident. What happened? The vessel arrived at anchorage upon entry into the Turkish inspection zone, waiting for instruction from JCC. However, the queue was much larger than the Client expected, which resulted in sustaining essential losses by both parties (the Shipowner and the Client). The Charterers, having understood the fact of excessive losses, desired to cancel the Charter Parties, but the Shipowner did not support such a proposal and filed the claim on recovery of detention and other losses in total amount of ca. 1 million USD. Legal advice by Interlegal Having studied the Contract and all supporting documents, Interlegal law team provided a detailed legal advice indicating arguments upon all the potential scenarios and legal effects of such case. As found out, the Shipowner’s claim amount had no calculations and included only additional expenses and losses to be borne solely by the Shipowner, as agreed by the parties. Therefore, such a claim cannot be treated as feasible in full. Later, Interlegal law team commenced claims handling in order to settle the dispute amicably. Please note: In similar case concerning vessel idle stay at the canal roads (i.e. Sulina or Bystre), crucial aspects are the following: which terms have been agreed in the Charter Party and which potential losses and legal effects may result from actions committed by a certain party. Therefore, we recommend to get focused on the following factors: Obligations of the parties to facilitate canal passage by the vessel; Terms for cancelling the contract (its lawfulness, terms and sequence of actions); Procedure for loss recovery in favor of the suffered party jointly with calculation formula; Option to refer to force majeure or frustration doctrine in each certain case. Case proceedings are still lasting; Interlegal junior lawyer Diana Mykhailova and partner Alexey Remeslo are monitoring the current events in order to provide prompt and proper legal assistance, as usual.

Everyone engaged in cargo transportation, especially in Black Sea Region, may face such a vital issue.

A charterer, large company doing business worldwide, applied to Interlegal upon solving such a problem.

While the Grain Corridor was operating, the most widespread claims and disputes concerned excessive idle stay of vessels waiting for JCC inspection (Joint Coordination Centre, i.e. a group of control over compliance with Minsk Treaty, with Ukrainian and russian delegates involved). Our Client applied upon the same incident.

What happened?

The vessel arrived at anchorage upon entry into the Turkish inspection zone, waiting for instruction from JCC. However, the queue was much larger than the Client expected, which resulted in sustaining essential losses by both parties (the Shipowner and the Client).

The Charterers, having understood the fact of excessive losses, desired to cancel the Charter Parties, but the Shipowner did not support such a proposal and filed the claim on recovery of detention and other losses in total amount of ca. 1 million USD.

Legal advice by Interlegal

Having studied the Contract and all supporting documents, Interlegal law team provided a detailed legal advice indicating arguments upon all the potential scenarios and legal effects of such case.

As found out, the Shipowner’s claim amount had no calculations and included only additional expenses and losses to be borne solely by the Shipowner, as agreed by the parties. Therefore, such a claim cannot be treated as feasible in full. Later, Interlegal law team commenced claims handling in order to settle the dispute amicably.

Please note:

In similar case concerning vessel idle stay at the canal roads (i.e. Sulina or Bystre), crucial aspects are the following: which terms have been agreed in the Charter Party and which potential losses and legal effects may result from actions committed by a certain party. Therefore, we recommend to get focused on the following factors:

  • Obligations of the parties to facilitate canal passage by the vessel;
  • Terms for cancelling the contract (its lawfulness, terms and sequence of actions);
  • Procedure for loss recovery in favor of the suffered party jointly with calculation formula;
  • Option to refer to force majeure or frustration doctrine in each certain case.

Case proceedings are still lasting; Interlegal junior lawyer Diana Mykhailova and partner Alexey Remeslo are monitoring the current events in order to provide prompt and proper legal assistance, as usual.

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