Thu, Oct

Cargo retention clause


Cargo retention clause. When liquid cargoes are discharged from tankers differences can occur between the quantities stated in bills of lading to have been loaded and the quantities measured on discharge.

Many reasons can cause those differences, such as the differences in temperatures and. unpumpability of liquid cargoes from certain pans of the ship's cargo spaces. Tanker charterers tend to use cargo retention clauses, which cause the owners to bear all the risks of discrepancies in measurements. An example is:

"In the event that any pumpable cargo remains on board as determined by an independent surveyor upon completion of discharge, Charterers shall have the right to deduct from freight the amount equal to the value of such cargo."

In the TANKERVOY 87 Tanker Voyage charterparty, cl. 12(d) requires the quantity of unpumpable cargo to be ascertained by independent surveyors, and the amount of loss compensation to include freight on the cargo retained on board.

Such a clause assumes that the cargo is pumpable. If the cargo is unpumpable because, for example, it is not heated as required by the charterparty, then the charterer can bring an action for damages for short delivery. Courts are reluctant to allow a set-off for short delivery against voyage freight. Until Cargo retention clauses became common, especially after 1973 and 1979 when the price for oil increased dramatically, an allowance of about 0.5 per cent was generally acceptable between loaded and discharged figures.