Container Detention Charges In Italian Case-Law

Many contracts in the shipping industry provide free use for a certain period of the container, and provide for increasing daily charges after such a free time.

The shipping line usually specifies a number of free days after which the container must be returned clean and empty to the terminal or the depot.

Arguments frequently brought before the Courts are that daily costs for renting containers from a third party are generally far less than the daily detention fee charged by shipowners, and it is frequently alleged that no binding agreement has been reached as regards the daily charges applied by the line.

Italy is no exception, and there have been over the last 20 years quite a few proceedings where owners have sought the recovery of container detentions.

In some jurisdictions, container detention has been qualified as penalty clauses,1 with the consequence that it has been disputed whether the quantum of charges being levied by the lines (or their agents) are reasonable and fair and cab be enforceable as damages, or whether they should be construed instead as penalties and be unenforceable.

There is no distinction however under Italian law between penalty clause and liquidated damage clause, and the general rule is that such a clause is valid provided it is fair and reasonable.

It is now settled case-law that:

  1. the supply by the shipping line of containers employed for the carriage of goods gives rise to a contract of lease, separated from the contract of carriage, which exposes the shipper and/or the consignee to the payment of detention charges.

  2. the charges must be agreed upon; the agreement can be evidenced by the indication of the daily detention fee on the front of the bill of lading, or by exchanges of correspondence between the line and the shipper.

  3. if there is no convincing evidence of such an agreement, the charges can be assessed by the Court, possibly on the basis of equity.

It is possible therefore to ask the Court to reduce the charges on the grounds that the penalty for the delayed restitution of the containers is excessive, and can quickly reach an amount largely exceeding the value of the container.

A few decisions have in fact dramatically reduced the quantum claimed by the Owners, and in a few cases the detention awarded have been kept at the value of the container.

It happens rather frequently furthermore that owners react slowly in advising the shipper as regards the delay accrued at discharging port and the...

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