Related topics

Demurrage and Laydays

Demurrage Time Bar Clauses




Laytime/Demurrage Interrupted

Obligation to Provide Cargo

Reasonable Time

Running Days

Statement of Fact, Demurrage Claim Document

Law and Sea.
Laytime. Owners’ Fault

Owners’ claim for laytime and/or demurrage is always subject to their compliance with an obligation to do nothing to prevent the vessel being available and at the disposal of the charterers for the purpose of completing the loading or discharging of the cargo.

Demurrage Time Bar Clauses
Last updated: 08-Jul-2015

Per Bingham J in The Oltenia [1982] 1 Lloyd’s Rep 448 at 453:

The commercial intention underlying this clause seems to me plainly to have been to ensure that claims were made by the owners within a short period of final discharge so that the claims could be investigated and if possible resolved while the facts were still fresh (cf Metalimex Foreign Trade Corp v Eugenie Maritime Co Ltd [1962] 1 Lloyd’s Rep 378 at 386 per McNair J).  This object could only be achieved if the charterers were put in possession of the factual material which they required in order to satisfy themselves whether the claims were well founded or not.  I cannot regard the expression “all available supporting documents” as in any way ambiguous:  documents supporting the owners’ claim on liability would of course be included, but so would a document in relation to quantum only, just as a doctor’s bill would be a document supporting a claim for damages for personal injury.  The owners would not, as a matter of common sense, be debarred from making factual corrections to claims presented in time … nor from putting a different legal label on a claim previously presented, but the owners are in my view shut out from enforcing a claim the substance of which and the supporting documents of which (subject always to de minimis exceptions) have not been presented in time.

Waterfront Shipping Company Limited v Trafigura AG [2007] EWHC 2482 (Comm) per Mrs Justice Gloster, DBE:

30.     …Clause 23 required Owners to present "a claim in writing" (judge’s emphasis) within 90 days of discharge of cargo, "together with supporting documentation substantiating each and every constituent part of the claim" (judge’s emphasis). Unless such a claim, with supporting documentation, is presented within the relevant time period, Charterers are released "from all liability in respect of any claim for demurrage", i.e. not merely that particular constituent part of the claim that is not supported by relevant documentation. Accordingly, if, as here, only one composite claim for demurrage was made, Owners are time-barred in respect of the entirety of the claim, notwithstanding that the absence of documents only relates to one constituent part of the claim. It is clear from the Particulars of Claim, the invoice and the supporting documents, that only one single claim for demurrage was made in the present case.

36.     …The commercial purpose of a demurrage time-bar clause, requiring Owners to submit all supporting documents within a short time period, is to ensure certainty, to ensure that it is clear to Charterers at an early stage what the claim is and what documents are relied upon by Owners in support of it, so that they may take such steps as are appropriate to respond to, or investigate, it.  It is important for Charterers to be told, in formal and certain terms, what Owners’ claim is, and what documents Owners are relying upon in order to support that claim…

37.      An important commercial purpose of the demurrage time-bar clauses in this case was to ensure that Charterers were presented with a package of documents by Owners that was sufficient in itself for them to consider (without the need for any collateral investigation and, therefore, without the need to make any check of other documents received from third parties) in order to evaluate each and every part of Owners’ claim.  In my judgment, that is similarly fatal to the application of the futility principle:  Charterers were entitled to look only at the documents supplied by Owners  and to determine promptly, by reference to those documents alone, whether or not the Owners’ claim was fully supported or was time-barred.

The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd v FR8 Singaporte Pte Ltd [2008] EWHC 2480 (Comm) per Steel J at para 37:

I confess that I find the proposition that a claim put in on time but in respect of part of which the accompanying documents are non contractual gives rise to a bar to the entire claim is a commercially surprising construction.  I am not persuaded that the clause requires the Owners to submit only one composite claim (even though they would usually do so and in fact did so). In my judgment it was open to the Owners to present a number of separate claims if so advised and in those circumstances the lack of documentation for one or more parts of the claim would not constitute a bar to the balance.

National Shipping Company of Saudi Arabia v BP Oil Supply Company [2010] EWHC 3043 (Comm) per Mr Justice Field at para 41:

Whether a claim made before the 90 day time bar is substantially the same claim as the claim ultimately advanced will be a matter of common sense having regard to the purpose of Clause 20.1 – to ensure that claims advanced by owners can be investigated while the facts are still fresh, and to achieve finality – and will be a matter of fact and degree to be determined in light of the particular circumstances of the case. There will accordingly be cases where it will not matter that Owners have attached the wrong label to the claim made within the 90 day limit, and other cases where a claim that is not brought as a claim for demurrage, deviation or detention cannot properly be regarded as substantially the same as the demurrage, deviation or detention claim ultimately advanced.

Leave your comments

Form by