Award Of Demurrage Charges Under Major Ports Act Is Not Valid When Contract Does Not Provide For Such Charges : Calcutta High Court
Live LawThe High Court of Calcutta held that the arbitral tribunal cannot award demurrage charges on the basis of Major Ports Act, 1963 when the contract between the parties has no provision for such damages. The Court held that the tribunal cannot resort to provisions of Major Ports Act, 1963 for awarding demurrage charges when the agreement contains no such provision for demurrage charges or when the agreement makes no reference to the Act. The Award The majority of arbitrators passed an award in favour of the respondent and allowed the claim of the respondent for demurrage charges by relying on the provisions of Major Ports Act, 1963. The minority award was passed in the favour of the petitioner and the arbitrator held that the respondent failed to adduce any evidence to support its claim that it was entitled to demurrage charges, moreover, Clause 5.12 provided that the maximum cargo volume could be 120000 M.T if the annual volume was likely to reach 2 million M.T and the annual volume had gone beyond 2 million M.T in the past, therefore, the petitioner was not liable to pay the demurrage charges as contended by the respondent.
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