Demurrage time-bar clauses often cause problems for unsuspecting shipowners who have otherwise valid demurrage claims. Two recent judgments add to the long line of decisions in this area.
The first decision is The Amalie Essberger [2019] EWHC 3402 (Comm). In that case owners failed to attach to their demurrage claim the vessel's loadport pumping log and a letter of protest issued by the Master, but these documents had been sent to charterers earlier and were assumed at the hearing to be irrelevant to the demurrage claim made. The relevant clause (Clause 5) required the claim "with all supporting...documents" to be provided within 90 days of completion of discharge, and also stated that the claim "must be supported by" specific documents including pumping logs and letters of protest. Peter McDonald Eggers QC held that the claim was not time-barred. Regardless of their relevance to the demurrage claim, because specifically mentioned in Clause 5 the documents had to be provided before the expiry of the time-bar period. However, they did not need to be provided at the same time as the demurrage claim. Because expressly identified as documents which the claim "must be supported by", it should have been apparent to charterers that these documents constituted supporting documents under Clause 5 that were already in their possession.
The second case is Tricon Energy Ltd v MTM Trading LLC [2020] EWHC 700 (Comm) (Robin Knowles, J.), where the relevant clause also required "all supporting documents" to be provided. Charterers' cargo was one of several parcels onboard and under the charterparty laytime and time on demurrage were to be pro-rated between parcels according to the bill of lading quantities. Owners submitted a demurrage claim and supporting documents on time but did not attach the bills of lading for the parcels discharged at the discharge port. Even though the parcel quantities were recorded in statements of fact provided, the demurrage claim failed. The Charterparty provided that pro-rating for demurrage purposes was to be calculated by reference to bill of lading quantities and therefore the bills constituted "supporting documents" which had to be provided.
As is clear from the judgments, both results turned on construction of the particular clause in issue. This may be frustrating in terms of legal certainty, but there are decisions covering some of the common clauses (such as that in the BPVoy4 form) and, in any event, an inclusive approach is always advisable. As illustrated by The Amalia Essberger, if specific documents are mentioned in the time-bar clause then they should be provided regardless of relevance. However, as Tricon makes clear, when deciding which documents to include, owners cannot consider the demurrage time bar clause in isolation and should also refer to (in particular) the laytime and demurrage regime. In most cases bills of lading are not relevant to a demurrage claim, but if, for example, the amount of laytime is based on bill of lading quantities then it is necessary to include them.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
