United States District Court, W.D. Washington, Seattle
ORDER GRANTING IN ADDITIONAL PART AND DENYING IN PART
DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
RICARDO S. MARTINEZ, CHIEF UNITED STATES DISTRICT JUDGE.
matter comes before the Court on the remainder of Defendant
Hyupjin Shipping Co., Ltd.'s (“Hyupjin”)
Motion for Summary Judgment. Dkt. #22. Defendant initially
sought summary judgment on three issues: (1) whether it was
entitled to a “reasonable time under the
circumstances” for discharging its cargo at a
particular port; (2) whether it is entitled to 6.2187 days of
“grace period” to offset any delay the Court
might find in loading or discharge operations; and (3)
whether its 6.2187 days of “grace period” exceeds
any period of delay, negating any liquidated damages for
Plaintiff. Id. at 1-2. Plaintiff opposed the motion,
primarily arguing that disputes over material fact preclude
judgment in favor of Defendant. Dkt. #28.
31, 2017, this Court granted Defendant's motion in part,
agreeing with Defendant that it was entitled to a reasonable
amount of time under the circumstances for discharging its
cargo in Venezuela. Dkt. #56. The Court deferred ruling on the
remaining issues, directing the parties to provide
supplementing briefing. Id. The parties have since
submitted such briefing, which this Court has reviewed. For
the reasons set forth below, the Court now GRANTS IN
ADDITIONAL PART AND DENIES IN PART the remainder of
a contract dispute. The dispute concerns liquidated damages
pursuant to demurrage provisions of shipping
agreements. Defendant is an international freight
forwarder based in South Korea. Dkts. #23 at ¶ 3 and
#23-1 at 22. It chartered a ship operated by Plaintiff Teras
Chartering, LLC (“Teras”) to carry equipment from
Asia to Venezuela for a refinery construction project. Dkts.
#9 at ¶ 4, #11 at ¶ 4 and #23-1 at 19-20. The ship
(the MV NORFOLK) was to pick up Defendant's cargo in
Sattahip, Thailand, then pick up additional cargo in Masan,
South Korea, and deliver the cargo in Guanta, Venezuela, 35
days later, “AGW WP” (meaning “all going
well, weather permitting”). See Dkt. #30 at
alleges that delays occurred in the loading and unloading of
cargo at various ports, and ship time was lost as a result.
Thus, Plaintiff brings this action to recover demurrage for
Defendant's alleged delays, and costs including
attorney's fees. Dkt. #9 at ¶ ¶ 7-12. Defendant
has filed a counterclaim, asserting that Plaintiff cannot
“substantially prevail” on its claims and
Defendant is therefore entitled to legal fees and costs
pursuant to the Booking Notes. Dkt. #11 at 6.
Timeline of Events
noted in its prior Order, the Court has discerned the
following timeline of events leading to the instant dispute.
Dkt. #56. On September 14, 2015, Defendant and Plaintiff
negotiated an agreement, using Plaintiff's form
“Booking Note, ” to carry Defendant's cargo
aboard the United States flag vessel, MV NORFOLK, from
Sattahip, Thailand to Guanta, Venezuela. See Dkt.
#23-1 at 66. The Booking Note provided a “laycan”
period of October 5-15, 2015. See Id., Box 6.
“Laycan” refers to the window of time during
which a vessel must arrive at the port to avoid cancellation
by the charterer. Kolmar Americas, Inc. v. Koch Supply &
Trading, LP, 10 CIV. 7905 JSR, 2011 WL 6382566, at *2
(S.D.N.Y. Dec. 15, 2011) and Dkt. #23-1 at 39.
point, it became clear that the NORFOLK would not be able to
arrive in Sattahip before October 15, 2015. Dkt. #23-1 at 12
and 14. As a result, Defendant had the option to cancel its
agreement to hire the MV NORFOLK. Dkt. #23-1 at 12, 16 and
40. Instead, the parties amended the Booking Note on October
19th, extending the laycan period until October 25th.
See Dkt. # 23-1 at 13 and 72. There appears to be no
dispute that the MV NORFOLK arrived at the port of Sattahip
at 0648 on October 24, 2015. Dkt. #61, Exs. A and B. However,
there remains a factual dispute with respect to when the
carrier issued a Notice of Readiness to load cargo. Defendant
contends that no Notice of Readiness was ever issued, but
that the vessel could not actually load cargo at Sattahip
until 1000 on October 28, 2015. See Dkts. #22 at 16,
#23-1 at 43 and #59-1 at 6-7. Plaintiff contends that a
Notice of Readiness was issued on October 24, 2015 at 7:18
a.m. Dkts. #60 at 6 and #61, Exs. A and B. This dispute is
significant to the remaining issues, as further discussed
below. The MV NORFOLK departed Sattahip on October 31, 2015,
heading for Masan. Dkt. #61, Ex. B.
meantime, the parties signed another Booking Note on November
3rd regarding the transport of additional cargo from Masan to
Guanta. Dkt. #23-1 at 84. That Booking Note specified a
laycan period of November 3-13, 2015. Id. On
November 12, 2015, one day before the end of the laycan, the
MV NORFOLK presented her Notice of Readiness to load in
Masan. Four days later, on November 16th, the MV NORFOLK
departed Masan for Guanta. Dkt. #30 at 48.
on the record, it appears that the MV NORFOLK presented her
Notice of Readiness to unload in Guanta on December 21, 2015.
Dkt. #30 at 49. The next day, the MV NORFOLK began
discharging cargo. Dkts. #11 at 3 and #30 at 50. Unloading
then appears to have stopped entirely for a period of days.
See Dkt. #23-1 at 10. The process of discharging
cargo finished on December 30, 2015. Dkts. #9 at ¶ 7 and
#11 at ¶ 7. Plaintiff now asserts claims for demurrage
for alleged delays during the unloading period.
Contract Language in Dispute
parties agree that the Booking Notes govern the instant
dispute. The relevant aspects of the original Sattahip
Booking Note include:
. Time For Shipment: October 5 -15, 2015.
. “Full Liner Terms Hook/Hook”
and “[m]erchant to provide cargo at load port as fast
as vessel can load; and take away from under ship at
discharge port as fast as ship can discharge, otherwise
vessel detention to apply for account of
. “Loading, Discharging and Delivery
of the cargo shall be arranged by the Carrier's Agent and
unless otherwise agreed . . . [t]he merchant or his assign
shall tender the goods when the vessel is ready to load and
as fast as the vessel can receive - but only if required by
the carrier - also outside ordinary working hours
notwithstanding any custom of the port.”
. “Carrier shall give shipper notice
of readiness of vessel to load/discharge upon arrival at each
loading/discharging port when the vessel is ready to
load/discharge cargo, whether the vessel is in berth or
. “Counting of laytime shall commence
upon date/time of issuance of Notice of Readiness to
load/discharge by carrier and shall continue uninterruptedly
until loading/discharge has been completed. Any time in
excess of the allocated laytime shall be charged as demurrage
. . . .”
. Defendant shall pay to Plaintiff
“[demurrage at the rate identified in Box 11 on the
face of this agreement or pro rata thereof . . . when the
actions of the [Defendant] or of third parties beyond the
control of [Plaintiff] cause any delay in the transport
services, including loading/discharging of the goods.”
The demurrage rate identified in Box 11 is “USD 20, 000
pdpr (“per day, prorated”) plus any port,
terminal, equipment, labor or other expenses.”
. “Detention to count in case of swell
and port ...