Late arriving sugar

A sugar trader booked a part cargo of 6,000 mt bagged sugar at Durban for Aqaba for on-selling to Iraq, where there was a severe sugar shortage. The charterparty contained the clause “first in/last out” which normally means the ship would proceed directly to Aqaba. The broker for the owner failed to make it clear to the charterer’s broker that the ship was on liner service and would call at Beira, Mombasa, Dar es Salaam, Massawa and Jeddah before it would reach Aqaba. The ship took about three weeks longer than she would have done if she had gone direct from Durban to Aqaba, and in the meantime other ships carrying sugar had arrived.

The sugar trader/charterer sued the ship owner for USD535,000 on the basis that the late arrival of the sugar had resulted in the loss of their sale of USD385,500 and they had also incurred storage, port and transport costs of USD150,000. The charterer’s broker had been informed that the ship was on liner service from South Africa to the Mediterranean but had not been specifically informed of the calls at East African ports. The owner’s broker believed that the charterer was aware of the ship’s itinerary although the information had not been passed to the charterer’s broker. The charterer instigated arbitration proceedings against the owner, and was awarded the sum of USD110,000, which the owner recovered from the broker.