Demurrage, a term used in commercial navigation, signifying on allowance made to the owners of a ship by the freighter, for detaining her in port longer than the period agreed upon for her sailing. It is usually stipulated in charter-parties and bills of lading, that a certain number of days, called running or working or lay days, shall be allowed for receiving or discharging the cargo, and that the freighter may detain the vessel for a further specified time, or as long as he pleases, on payment of so much per diem for such overtime. When the contract of affreightment expressly stipulates that so many days shall be allowed for discharging or receiving the cargo, and so many more for overtime or demurrage days, such limitation is interpreted as an express stipulation on the part of the freighter that the vessel shall in no event be detained longer; if detained the charterer, is liable for damages for breach of contract for which the rate of demurrage is generally the measure. This holds even in cases where the delay is not occasioned by any fault on the freighter's part, but is inevitable. If, for example, a ship be detained, owing to the crowded state of the port for a longer time than is allowed by the contract, demurrage is due; and it is no defence to an action for demurrage that it arose from port regulations, or even from the unlawful acts of the custom-house officers. Demurrage is not, however, claimable for a delay occasioned by the hostile detention of the ship, or the hostile occupation of the intended port; nor is it claimable for any delay wilfully occasioned by the master, or owners, or crew of the vessel. The claim for demurrage ceases as soon as the ship is cleared out and ready for sailing, though she should be detained by adverse winds or tempestuous weather.
It is a charge and not a service, Trustees of the Port of Madras v. Aminchand Pyarelal, (1976) 3 SCC 167: AIR 1975 SC 1935: (1976) 1 SCR 721. [Madras Port Trust Act, (2 of 1905), ss. 42, 43, 43A]
It means the charge levied for the detention of any rolling stock after the expiry of free time, if any, allowed for such detention. [Railways Act, 1989 (24 of 1989), s. 2 (11)]
The expression 'demurrage' has not been defined under the Port Trusts Act. In the context of the goods remaining in the wharfage, it implies the charges which the Port Trust can levy at a particular rate if the goods remain on the docks beyond a specified time. The Port Trust with a view to recover those dues would ordinarily have a lien on the goods and can refuse to deliver the goods till the demurrage charges are paid, Sun Export Corporation v. Board of Trustees of the Port of Bombay, AIR 1998 SC 92 (97): (1998) 1 SCC 142. [Major Port Trust Act, (38 of 1963)]