Demurrage Time Bar Clauses: requirements on 'Supporting Documents'

In the case of The Amalie Essberger[1] the High Court revisited the position on the requirements of demurrage time bar clauses and held the Owners’ demurrage claim not to be time-barred under an incorporated time bar provision. Trainee Solicitor Christopher Chane reviews the ruling.

Background

The claimant (“owners”) chartered the MT Amalie Essberger (the “vessel”) to the defendant (“charterers”) under a voyage charterparty dated 18 November 2017 from Rotterdam, Netherlands to Castellon, Spain.

The relevant Rider Clause provided:

“5) TIME BAR

Any claim for demurrage, deadfreight, shall be considered waived unless received by the Charterer or Charterer's broker in writing with all supporting calculations and documents, within 90 days after completion of discharge of the last parcel of Charterer's cargo (es). Demurrage, if any, must be submitted in a single claim at that time, and the claim must be supported by the following documents:

A. Vessel and/or terminal time logs;

B. Notices of Readiness;

C. Pumping Logs; and

D. Letters of Protest …

On 22 December 2017, Owners submitted to charterers, by email, a demurrage claim in the sum of USD$154,875. Accompanying the claim were all of the requisite supporting documents with the exception of (i) the vessel’s pumping log at the load port and (ii) a letter of protest issued by the master on 30 November 2017 (the “Disputed Documents”). These were provided to charterers 21 days earlier on 1 December 2017.

Charterers denied liability and brought an application for summary judgment on the basis that in any event, the claim was time-barred as it was not submitted in accordance with the requirements of the charterparty within the permitted time period.

Issues:

  1. Did the obligation to provide supporting documents extend only to documents which were relevant to the demurrage claim being made?
  2. Did the obligation to provide supporting documents require Owners to provide documents which were already in charterers’ possession?
  3. Did all supporting documents have to be provided at the same time as the demurrage claim or was it sufficient that they were provided at some point before expiry of the 90-day period?
  4. If a particular supporting document was not provided, was the Owners’ entire claim for demurrage, or only that part of the claim to which the particular document related, time-barred?

Decision:

As to Issues,

  1. The Court considered that in the context of a demurrage claim, the words “all supporting documents” referred to those which the Owners relied in support of their demurrage claim or documents which, taken at face value, established the validity of the demurrage claim. This included documents which evidenced the time used by the vessel in berthing, loading, and discharging operations and the interruptions and stoppages in such operations, including the notice of readiness and the statement of facts or time logs.

It was therefore held that the Disputed Documents were required to be submitted with the claim to satisfy Rider Clause 5.

  1. and 3) The Court held that there was no express requirement in Rider Clause 5 that the supporting documents had to be provided at one time and at the same time as the demurrage claim. The only temporal requirement was that they were provided within the 90-day period.

Having provided the Disputed Documents 21 days earlier which was within the relevant 90-day period, Owners were not obliged to re-submit the Disputed Documents to the charterers on presentation of the demurrage claim.

  1. As the claim was not time-barred, this issue did not arise, however it was held obiter that if any requisite supporting document had not been provided, the entire demurrage claim would be time-barred.

Comment

Parties should carefully consider the wording of any time bar clause to ensure strict compliance. The court’s approach makes clear that it is the construction of the clause itself which determines its effect:

  • Express and unambiguous wording was necessary to require owners to submit all supporting documentation: (i) together at the same time, and (ii) at the same time as the demurrage claim.
  • Parties should pay attention to which documents are listed to be “supporting documentation” under the relevant time bar clause. It was held above, that there was no requirement that Owners submit “relevant” documents, insofar as they were not “supporting documents” i.e. those provided for in the charterparty.

[1] Tankreederei GmbH & Co KG v Marubeni Corporation (“The Amalie Essberger”) – [2019] EWHC 3402 (Comm)