Shipping Maritime Admiralty

SHIPPING, DEMURRAGE & DETENTION AND MOVEMENT CONTROL ORDER

“I have shipped goods from overseas. The carrier arrived during Covid-19 pandemic. Movement Control Order (“MCO”) was implemented. There was ambiguous exemptions and restriction with no clear instruction to enforcement agencies. Movement of non-essential goods was restricted. I was unable to collect my goods from the carrier/warehouse/port. Carrier levied demurrage or detention charges on my goods. “

Photo : Reuters
Many does not know what to do when their shipment goes missing.

Does frustration apply?
Frustration does not apply

Section 57 of the Contracts Act 1950 (“CA 1950”) renders a frustrated agreement void. One of the 3 important elements of frustration is that alleged frustrating event “must be such that renders it radically different from that which was undertaken by the contract”. The MCO does not radically alters the salient feature of most contracts of carriage. However, there could be exceptional situation where time of delivery is of the essence for certain types of cargo

Does force majeure apply?
Force majeure only applies if there is such clause in the contract of carriage.

Sample force majeure clause

“No party shall be liable to the other for any failure to fulfill any terms of the agreement if such fulfillment is delayed,hindered or prevented by force majuere including but not limited to Acts of God strikes lockouts riots civil commotion epidemics acts of war or failure to obtain any necessary approval of any local or other appropriate authority or any other circumstances of whatsoever nature beyond the control of the party”.

“Neither party shall be deemed in breach of the Agreement as a result of, or be liable to the others for, any failure, omission or delay in its performance in whole or in part of any of the terms or conditions of the Agreement . . . if such failure, omission or delay arises or results from any cause reasonably beyond, or to be treated as reasonably beyond, the control of that party (any such event being hereafter referred to as ‘Force Majeure’).”

Force majeure applies when delay to vessel (which allows carrier to levy demurrage or detention) was beyond the control of the shipper/consignee.

The MCO which began on 18 March 2020 has gazetted “transport by land, water or air” as essential service. However, the lack of coordination of enforcement agencies has resulted in movement of goods perceived to be non-essential restricted without approval from Ministry of International Trade and Industry (“MITI”). The lack of coordination is evidenced by reports of containers piling up at ports and warehouses. It is for this reason we are of the view that the pandemic, MCO and lack of coordination of enforcement agencies during the initial stage of MCO (which has caused delay to collection of cargo from port/vessel/warehouse) is beyond the control of the shipper/consignee. Force majeure would apply. Carrier is not allowed to levy demurrage or detention.

Recent Post

WINDING-UP – OFFICIAL RECEIVER AND LIQUIDATOR (“ORL”)

In cases of compulsory winding up, the court would appoint a liquidator under s.478 of the Companies Act 2016 (“CA 2016”) to expeditiously recover and realise the assets of the wound-up company for the distribution of dividends to creditors and administer any outstanding matters involving………..

Read More »

JUDICIAL REVIEW – PROCEDURAL FAIRNESS AND LOCUS STANDI

This excerpt illuminates the foundational principles of judicial review as outlined in Order 53 of the Rules of Court 2012. It highlights the criteria for challenging public decisions on grounds of illegality, irrationality, or procedural impropriety. Central to the discussion is the question of timing in judicial review applications, particularly in cases of procedural unfairness. The practical scenario underscores the significance of a “decision” by the relevant authority as a prerequisite for locus standi, drawing insights from the case of Hisham bin Halim v Maya bt Ahmad Fuad & Ors [2023] 12 MLJ 714.

Read More »

CONTRACT LAW – CONTRACTUAL INTERPRETATION REMEDIES UNVEILED: DECIPHERING CONTRACTUAL CLAUSES AND LEGAL BALANCE

This legal updates explore the principles governing the interpretation of agreements, emphasizing the importance of clarity and unambiguity in contractual terms. It delves into a key issue involving restrictions on remedies for breach of contract, shedding light on the court’s commitment to upholding plain meanings. The illustrative scenario involving shareholders X and Y dissects a pertinent clause, showcasing the delicate balance between restricting remedies and ensuring fairness in legal proceedings.

Read More »

TIME’S UP: NAVIGATING THE 12-YEAR LIMITATION

In the intricate dance of land security and loan agreements, the ticking clock of the limitation period cannot be ignored. This excerpt delves into the critical understanding of how the 12-year limitation period, as prescribed by the Limitation Act 1953, plays a pivotal role in the enforcement of property charges in Malaysia. It elucidates the start time of this countdown and its legal implications, providing a comprehensive guide for both lenders and borrowers in navigating these time-sensitive waters.

Read More »

OVERVIEW OF TORRENS SYSTEMS IN MALAYSIA

Malaysia’s land law and transactions are guided by the Torrens System, which ensures that the land registry accurately reflects all vital details about the land’s registered owner. As per Section 89 of the National Land Code 1965, Malaysia’s land law and transactions are guided by the Torrens System, which ensures that the land registry accurately reflects all vital details about the land’s registered owner. As per Section 89 of the National Land Code.

Read More »
en_USEnglish
× How can I help you?