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Contracts Keyed to Kuney
American Trading and Production Corp. v. Shell Intl. Marine Ltd.
Citation:453 F.2dd 939 (1972).
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On May 23, 1967, charterer hired owner’s tank vessel (WASHINGTON TRADER) for a voyage from Beaumont/Smiths Bluff, Texas to Bombay, India with a full cargo of lube oil. The freight rate was based on the American Tanker Rate Schedule (ATRS) and was set at $14.25 per long ton, plus 75%, and an additional charge of $.85 per long ton for passage through the Suez Canal. On May 15, the WASHINGTON TRADER departed from Beaumont and, on May 26, the charterer paid an invoiced sum of $417,327.36 to the owner. On May 29, the owner advised the WASHINGTON TRADER via radio to take additional bunkers because the vessel may be diverted due to the Suez Canal crisis. On May 30, the vessel arrived at Ceuta, Spanish Morocco and bunkered before continuing its voyage on May 31. On June 5, the owner again contacted the WASHINGTON TRADER suggesting delay due to reports of trouble at the Canal. The Suez Canal closed that same day due to war in the Middle East. After some communications, the owner advised that the WASHINGTON TRADER should proceed to Bombay via the Cape of Good Hope and that owner was “reserving all rights to extra compensation.” The vessel proceeded and eventually arrived in Bombay on July 15, thirty days late. The alternative route resulted in a total of 18,055 miles rather than 9,709 miles and the owner billed charterer $131,978.44 as extra compensation. Charterer refused to pay.
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