Container Detention Charges Not A Penalty, Court Rules

by David Sexton - last modified Mar 30, 2012 11:44 AM

In a judgement handed down yesterday, the Court held the obligation to pay container detention charges was not based on any breach of contract.
As a consequence the charges have been deemed not to be a penalty.

In the case before the Court, Cosco Container Lines claimed container detention charges from freight forwarder Unity Int’l Cargo.
Norton White partner Robert Wilson acted for Cosco.

He said Unity executed an ImportNet Agreement by which Cosco would deliver and loan containers with the deal including container detention charge payments.

He said the ImportNet Agreement incorporated the terms of usual shipping documents including the bill of lading/sea waybill, the delivery order and the equipment handover agreement.

The free time periods and charges after the expiration of free time were notified to Unity.

“The effect of this judgment is that where the defendant is the named consignee on a bill of lading/seaway bill and the relevant contractual provisions include words similar in effect to clause 6 of the ImportNet Agreement... the charges set out in the tariff governing the carriage of the cargo will apply, those charges are not a penalty.

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