Missing Midnight: Banking Days, Time Zones and Contractual Deadlines
Christina Moh
Published: October 27, 2026
Summary
When does a banking day end? It is a question that appears simple enough, but when multiple time zones are included within the definition of a banking day – which time zone applies? A recent Commercial Court decision in the case Songa Product and Chemical Tankers IV AS v Gardsea Shipping Inc [2026] EWHC 1559 (Comm) (“Songa”) provides clarity over this question.
This article discusses this case but also how the concept of banking days applies to other obligations which require the counting of time.
Facts and Arbitration Decision
In Songa the definition of “banking days” was considered in the context of a ship sale contract (the “Contract”). “Banking Day” had been defined to mean days on which the banks were open. The issue was that this definition did not specify a single time zone:.
“‘Banking Days’ are days on which banks are open both in the country of the currency stipulated for the Purchase Price in Clause 1 (Purchase Price) and in the place of closing stipulated in Clause 8 (Documentation) and United States of America, Canada, United Kingdom, Switzerland, Turkey, UEA [sic], Greece, Norway … ).”
Under the Contract, the Buyer had until midnight on the third banking day following the Seller’s tender of the notice of readiness to pay the purchase monies into the escrow account.
The Seller tendered the requisite notice of readiness on Friday, 2 September 2022 in Norway. As such, it was agreed that Saturday and Sunday (3 and 4 September) did not qualify as banking days. Monday, 5 September was also not a banking day, as it was Labour Day in the US and Canada. Therefore, the 3 banking days started from Tuesday, 6 September 2022 and ended on 8 September 2022.
Due to the inclusion of multiple countries within the definition of "Banking Day", a dispute arose as to when the banking day expired: midnight on 8 September in Norway, where performance of the contract was taking place, or the latest midnight on 8 September across all included time zones?
In the event, the Buyer did not make payment into the escrow account by midnight on 8 September (Norwegian time), and the Seller subsequently terminated the contract 9 minutes later, at 00:09. At this point in time, there was a 12-hour time difference between Norway and the westernmost time zone included in the definition of “Banking Day”, Hawaii, USA. As such, it was only around 12:09pm on 8 September in Hawaii when the Seller terminated the contract.
In the arbitration, the tribunal had to determine which interpretation of "Banking Day" applied. If the relevant banking day ended at midnight in Norway, the Buyer had failed to make payment into escrow under the Contract. If, however, the banking day ended at the latest midnight across all included time zones (i.e. the westernmost time zone), the Buyer still had just under 12 hours remaining to make payment and the Seller had wrongfully terminated the Contract.
In the first instance, the tribunal found in favour of the Buyers, holding that the relevant deadline was to be determined by reference to the westernmost time zone. However, that decision was recently overturned on appeal to the Commercial Court in June 2026.
Commercial Court’s Decision
The Commercial Court held that where multiple time zones are specified in a contract, the relevant midnight deadline is to be determined by the time zone in which contractual performance takes place. In this case Norway. The result of this is that the Buyer had not paid the deposit in time and the Seller had lawfully terminated the Contract. The Commercial Court arrived at this decision taking the following into account:
The definition of a “Banking Day” remained, in essence, a 24-hour calendar day.
Under the tribunal’s interpretation, determining the end of the banking day to be at the end of the westernmost time zone would create an impractical 37-38 hour day. The purpose of specifying it as a banking day, is to carve out certain days (such as bank holidays and week ends) whereby banks are not usually open.
Parties should look to where performance of the obligation (relevant to the application of banking days) is to take place.
In this case, “Banking Days” under clause 3 was used in reference to the Buyers’ obligation to pay the purchase price into the escrow account. This obligation was to be performed in Norway. The escrow agreement itself, separate to the Contract, referenced “Norwegian banking days”.
Banking Days in Other Contexts
The concept of Banking Days, or the counting of time across a specified number of days across time zones, is not limited to ship sale contracts and is something that is frequently seen in respect of other payment obligations in shipping contracts.
For example, similar issues can arise in the context of demurrage time bars. In The Maria1, the Court considered a contractual time bar requiring supporting documents to be submitted within 90 days following completion of discharge. The question arose as to which time zone ought to be used to determine the date of the completion of discharge, which affected whether the claim was time-barred or not. The Owners contended that the applicable time zone should be that of one of the contracting parties, or alternatively GMT on the basis that the contract was governed by English law, such that the claim would not be time-barred. The Charterers, conversely, argued that the applicable time zone was the local time at the discharge port, with the result that the claim was time-barred. The Court ultimately held that where the clause referred to a specified number of days following completion of discharge, the relevant date was to be determined by reference to the time zone of the place where the discharge occurred, rather than the time zone of one of the contracting parties.
Although arising in a different context, the decision in The Maria reflects a similar principle to that applied in Songa. Where a contractual deadline is triggered by a particular event, the relevant time zone will often be that of the place where the event occurred or where the obligation is to be performed.
Similar principles may also arise in the context of time charter hire payments. Legal commentary has suggested that, absent an express agreement to the contrary, the deadline for making a hire payment would be at the end of the relevant due date. The "end" of the due date would be determined by reference to midnight on the relevant day in the place where payment is to be made. Accordingly, where hire is payable into a bank account in a particular jurisdiction, the due date is likely to expire at midnight in that jurisdiction, notwithstanding the vessel's location or the parties' respective time zones. The same considerations are relevant to anti-technicality notices, which generally cannot be served until the charterers have actually failed to make payment by the expiry of the due date.
Commentary
Where a payment obligation and multiple time zones are included within the definition of a "Banking Day" or “Day”, the Court is likely to look to the place where the relevant contractual obligation is to be performed and apply that time zone. For a payment obligation, this is likely to be the country in which payment is to be made.
Where there are related contractual arrangements governing the performance of that obligation (such as, in this particular case, the escrow agreement), the Court may also take those arrangements into account when determining the relevant time zone.
If, however, the parties have expressly specified a single time zone within the contract, that time zone will apply.
Parties should therefore pay careful attention not only to the wording of "Banking Day" definitions, but also to the place where the relevant obligation is to be performed. Failure to do so may result in parties inadvertently missing a critical contractual deadline or terminating before they are legally permitted to do so, leaving themselves in breach and exposed to a potential damages claim. Should Members have any concerns as to when a contractual obligation falls due, please contact your usual contact at the Club for advice.
1 Euronav N.V. v Repsol Trading S.A (“The Maria”) [2021] EWHC 2565 (Comm)
