Laytime and Demurrage

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7.1 Despatch1 is the money that a shipowner is sometimes required under a charter to pay to the Charterer for completing loading or discharging in less than the allowed laytime. It only arises where the charter expressly so provides and is virtually unknown in tanker charters. 7.2 Since the full amount of laytime has been paid for in the freight,2 despatch is sometimes referred to as a rebate on freight. It is the opposite of demurrage. As Devlin J said in Compania de Navigación Zita SA v Louis Dreyfus & Cie:3

The shipowner’s desire is to achieve a quick turnround; time is money for him. The object of fixing lay days and providing for demurrage and dispatch money is to penalize dilatoriness in loading and to reward promptitude.

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