Demurrage

In 1966, in Suisse Atlantique, the House of Lords held that the demurrage provided in a charterparty bound the owner as damages fixed in advance, even in the face of the charterer's repeated delays. Demurrage is what a charterer owes the owner when it exceeds laytime, the period agreed for loading or discharging the ship. The law treats it as liquidated damages rather than a penalty. The owner therefore does not have to prove loss, and the charterer cannot argue the amount, unless it shows the delay came from the owner's own act. The count runs from the notice of readiness. It follows calculation rules whose fine detail feeds a large share of maritime arbitration: working days, waiting time at anchorage, weather exceptions. Containerization moved the word toward a neighboring but distinct reality, the charges billed to a shipper that keeps a box too long inside or outside the terminal, which commercial usage happily conflates. Demurrage answers the case of an asset whose cost is essentially fixed and whose every idle day is lost for good.