Demurrage Payments In Kuwait

What is the mindset of an entrepreneur looking to dip his toes in a new venture? Profits? Maybe, certainty? Certainty is a factor that all entrepreneurs look for in a business opportunity. However, certainty is also the factor that is least available to them; primarily, if they are dealing in a speculative industry such as share market, or perhaps, the maritime sector. When a shipowner charters his vessel out, he should consider numerous uncertain factors that may cause obstacles in the future, like when the lay days commence and end, when the bill of lading will come into effect, when freight or hire becomes due and so on. Often the underlying facts of a breach in the maritime industry do not correlate to the obligations and liabilities of the parties as set out in the governing bill of lading and this uncertainty leads to disputes.

The Bill of Lading

During long-distance transportation, damage to the goods is inevitable due to various factors like transit through different climate zones. And varied weather conditions at sea. Therefore, the shipper, carrier, and consignee enter into a bill of lading which lays down the description of the cargo and clarifies the obligation of the parties in case of any uncertain events. It also states the particular condition of demurrage. This requirement specifies which of the parties shall be liable in the event of fault or negligence or if the empty container does not return within the period agreed upon between the parties.

The Role of Bill of Lading

Unfortunately, as mentioned above, damages and delays are likely to occur in long-distance transportation. In the case of any dispute, the settled terms and conditions of the bill of lading shall be used to clarify the obligations of the parties. In this article, we will explain the provisions regarding demurrage payments and bill of lading in Kuwait.

The Kuwaiti Law Number 28 of 1980 enacting the Law of Merchant Shipping (the Maritime Law) has laid down the provisions surrounding shipping law in Kuwait. The Law has stated that the bill of lading shall be in writing and shall indicate the following functions:

the bill of lading shall act as evidence in contracts for sea transport. A clause regarding the liability of the parties in the bill of lading should state the obligation of the parties once the goods have been loaded.

The correct and comprehensive description of the entire cargo should be mentioned in the bill of lading.

Any evidence regarding the...