Evenly Spread

6th December 2013 phil Asdem Newsletters 0 Comments

This post first appeared in the Asdem Oil Barge Newsletter December 2013.  To see this Newsletter please go to www.asdem.co.uk and look for the ‘Newsletters’ tab

 

Disputes can arise with the term ‘Evenly Spread’ when there is a series of lifting/deliveries under a contract. The contract may say: 20,000mt per month. Liftings to take place evenly spread – minimum lots 950 metric tons. Failure to arrange the liftings ‘evenly spread’ will lead to a dispute over demurrage. The seller does not want a bunch of barges all turning up at the same time as this will clearly lead to congestion at his terminal. So what does a clause like this mean in practice?
 
In a perfect world lifting 2,000mt every three days over the month is evenly spread but, of course, we don’t work in a perfect world. Who decides what is evenly spread? Of course the buyer and the seller will always have different views about this. When there is a dispute, what is the way out? I have not seen a court case or arbitration on a matter like this, but I would say that both the courts and the arbitrators would have to decide what is reasonable when interpreting such clauses. Unfortunately, in our day-to-day dealings ‘being reasonable’ can get discarded in our attempts to avoid paying demurrage or to recover demurrage.
 
Going back to my example, if there were 10 liftings with an ‘average’ gap of three days – is this evenly spread? I think it could be a reasonable interpretation of evenly spread if the gap between the shipments was between two and four days. If gap between shipments was more or less than this range, I would argue that it’s not evenly spread.
 
Is there an answer out there for these disputes?   Are there any clauses out there that you’ve used that solves this problem and you are willing to share? If so let me know or contact Roger Sepkes and we will include in it a future Newsletter. If you have experiences of this situation, good or bad, and you want to share them or you have a comment on this article or disagree with my example please add your comments here

 

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