Demurrage time bar - another path across this old ground?
Posted on 14th January 2020 at 15:32
It is notorious that voyage charterparties bar demurrage claims unless presented, with the necessary documents, within a set time after completion of discharge. This is to allow issues to be investigated before recollections fade and the trail goes cold.
We discussed this in 'Demurrage, deadlines and documents' and 'How an implied contract sidestepped a time bar', respectively on 24 March and 27 April of 2018. Disputes are generally about whether the claim is covered by the barring clause, or what documents must be produced, and in the “AMALIE ESSBERGER” Tankreederei GmbH & Co KG v Marubeni Corporation( EWHC 3402 (Comm)) the High Court tackled a number of issues on the second of these topics.
The key one was that:
“Any claim for demurrage … [is] waived unless received ... in writing with all supporting … documents, within 90 days after completion of discharge … . Demurrage … 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.”
A requirement for “[all} supporting documents”, or similar, is almost standard, and it is increasingly common to list certain documents as necessary.
Seeking about $155,000, on 22 December 2017 owners emailed their “demurrage invoice together with ... laytime calculation and support documents", and asked charterers to "immediately advise if any ... missing in order for [them] to review [the] claim".
Charterers later said the claim was time-barred because two of A-D above had not been sent with it.
The judge called these “the Disputed Documents”. Part of C and all of D was missing, but owners had already sent that material, on 1 December.
Issues and decision
Having noted the courts’ emphasis on clarity and certainty, rather than undue strictness and technicality, the judge first discussed (but did not decide) the meaning of the commonplace “all supporting ... documents.”
He favoured an approach that required owners “to submit documents [that they relied on] in support of their ... claim or … [to submit] documents which taken at face value [established] the validity of the … claim”. This would allow:
1. owners easily to identify and provide the documents on which they relied, or which objectively established the validity of their claim; and
2. charterers ... to assess the claim’s apparent validity or investigate the circumstances and formulate any defence.
Whether or not “supporting”, as discussed above, and even if actually irrelevant, any documents listed as necessary had to be provided.
Did all have to be presented in one go, and what if charterers already had some of the required documents?
Charterers had argued that:
(1) the wording required one single, simultaneous submission of the demurrage claim and supporting documents;
(2) there could be slight flexibility, if perhaps something initially omitted was provided immediately afterwards, but the Disputed Documents had been sent three weeks before the demurrage claim. All must come as a package, and charterers should not have to check for anything that they might already have.
But the judge rejected that, ruling first that the clause did not require the supporting documents to be provided (a) at one time and (b) at the same time as the demurrage claim.
The need to send that "with" (and likewise, we consider, if the clause had said “together with”) all supporting documents just meant that all had to be sent before the deadline. A "single claim" meant that only one demurrage claim could be submitted i.e. separate such claims were not allowed.
As to the Disputed Documents having been provided three weeks before, what mattered was that, by the deadline, “charterers [should] have … both the claim and the supporting documentation [and] must be in a position to know that the one relates to the other [our underlining] [and such that] it must objectively speaking be apparent that the documentation is that which supports the claim".
Here, the Disputed Documents were among those identified as necessary (as charterers would have known), and when the claim was later sent it should have been obvious that they already had them, so owners did not have to highlight any of that.
So owners did not have to resubmit the Disputed Documents when they sent the demurrage claim, which was not time-barred.
(On a point that did not therefore arise, the judge said that under the above clause any failure to produce documents would have barred the whole claim, not just any separate part to which the missing material was relevant.)
This decision applies, rather than develops, the law in this area, and concerns only the specific clause. However, amid some detectable indulgence towards owners, it shows that:
1. substance is preferred to form, and purely technical points will usually fail;
2. listed necessary documents must always be provided;
3. the core is probably whether charterers receive in time "documents which objectively [they] would or could have appreciated [substantiate] each and every part of the claim"; so
4. owners should where possible avoid sending their claim in several communications - the more that are used, probably the greater the risk of an issue arising; and
5. owners might well succeed based on charterers’ prior receipt of relevant materials, in some way, but they should never rely on that.
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