The vessel “Abqaiq” was voyage chartered from Freeport to Singapore on an amended BPVOY 4 voyage charterparty form. The vessel arrived at Freeport and tendered a NOR on 6 February 2008. She loaded a part cargo and left the berth on 11 February 2008 to await the arrival of “Ganges Spirit” from which she was to load further cargo. The berth was then occupied by another vessel. On the day “Ganges Spirit” arrived the terminal suspended operations due to weather conditions. Further delay was suffered owing to the draft of the “Ganges Spirit”which required her to discharge part of her cargo into shore tanks prior to berthing alongside “Abqaiq”. The balance of the cargo was finally loaded at the original berth on 18 February and the vessel left for Singapore.Owners issued a “Time and Bunkers Invoice” claiming additional freight for the second berthing at Freeport pursuant to the Vitol Interim Ports Clause incorporated into the charter . Subsequently owners issued a “Demurrage Invoice” which covered demurrage at both the load port (the first berthing at Freeport) and the discharge port and calculated demurrage as due only in respect of the discharge port. This claim was negotiated between the parties, agreed and paid by charterers on 9 June 2008.
Owners then pursued the unpaid “Time and Bunkers Invoice”. Charterers contested that this sum ought actually to have been part of the demurrage claim which had already been settled. Owners then sought to redefine the “Time and Bunkers Invoice” as a claim for demurrage, but only after the 90 day time-bar period for submitting demurrage claims had expired. Owners sought summary judgment on their demurrage claim.
The issue in question was whether the second subsequent redefined claim for demurrage (the “second demurrage claim”) was time barred on basis that the original demurrage claim was intended to settle “any and all” demurrage claims arising out of the charterparty or just the claim for the demurrage incurred at Singapore.
Mr Justice Field considered that two very separate claims had been presented by owners, a claim for demurrage at Singapore within the “Demurrage Invoice” and a claim for the extra time at Freeport and that the two claims clearly related to different periods of time during the voyage. He held that the charterers had negotiated and paid the “Demurrage Invoice” expecting that no further demurrage claim was being made or was going to be made for the voyage, that the correspondence between the parties evidenced this and on that basis settlement of the demurrage claim was in respect of “any and all” demurrage claims.
Notwithstanding that decision Field J also addressed owners’ argument that the Freepeort demurrage claim had been brought in time because the second demurrage claim was presented within time on the basis it was substantially the same claim as had been presented in the form of the “Time and Bunkers Invoice”. The Judge’s decision in this respect is a warning to owners where charters provide for specific documents to be submitted within a particular time.
The relevant time bar clause 20.1 under the charterparty stated
“Charterers shall be released from all liability in respect of any claim for demurrage, deviation or detention which Owners may have under this Charter unless a claim in writing has been presented to Charterer, together with all supporting documentation substantiating each and every constituent part of the claim, with 90 days of completion of discharge….”(emphasis added).
Further clause 20.2 stated
“any other claim against Charterers for any and other amounts….shall be extinguished, and Charterers shall be discharged from any liability… unless such claim is presented….together with full supporting documentation substantiating each and every constituent art of the claim, within 180 days of the completion of discharge….”(emphasis added).
Such clauses must be construed as a whole and in light of their commercial purpose so that “a claim in writing” means a claim which is substantially the same as the claim eventually pursued, irrespective that later it may be given a different label. Whether the two claims are the same is a matter of common sense but must be considered as subject to strict compliance with the time bar and necessary documents provision stipulated under the relevant demurrage time bar clause.
In this case it was held that the claim put forward under the “Time and Bunkers Invoice” was not the same as the second demurrage claim which was ultimately advanced by owners. The former was a claim for additional freight under the Vitol Interim Ports clause and was not framed as a demurrage claim nor supported by the similar type of documents. Further, even if it could be said to be a claim of the same nature, owners did not comply with the strict obligation to provide “all the supporting documentation substantiating each and every party of the claim”. Owners’ claim was rejected in full.
One final minor point that arose for consideration was whether charterers were liable for the extra bunkers consumed by reason of a clause in the charter providing “Charterers shall have the option of instructing Owners to load the Vessel at more than one berth at each loading port” with charterers being responsible for “expenses properly incurred, arising from any of the aforementioned movements”. The vessel had loaded only at one berth, albeit shifted off that berth for a period of time. The Judge decided that using the same berth more than once was not using "more than one berth".
The case highlights the need to check that counterparties have complied strictly with both documentary requirements and time limits set out in charterparties and that new claims submitted after a time limit has passed are unlikely to be accepted simply because other claims have been submitted in time.
National Shipping Company of Saudi Arabia v BP Oil Supply Company [2010] EWHC 3043 (Comm)
Article by Anna Yudaeva
Update - March 2012
A review of the Court of Appeal decision in this case can be seen in a new website article: Beware Demurrage Time Bars and Documentation (Part II)
