Waterfront Shipping v. Trafigura
Where a charterparty provided that any claim by Owners for demurrage would be time-barred unless submitted to Charterers within 90 days of completion of discharge, accompanied by "all supporting documentation" including signed pumping logs, the Court held that Owners’ failure to submit the claim as required by the charterparty within the limitation period meant that the demurrage claim was time-barred in its entirety, even though the missing documents referred only to part of the claim. In the circumstances of this case, neither the de minimis nor the futility principle applied.
DMC Category Rating: Confirmed
Owners, Waterfront Shipping, chartered the M/T Sabrewing to Trafigura on the BeePeeVoy 3 Form of charterparty for a voyage with a cargo of unleaded gasoline from New York to Vancouver in July/August 2005. Under the charterparty, 84 hours were allowed for loading and discharging. All laytime was consumed at the loading port so that, on her arrival at the discharge port, the vessel went on demurrage immediately after expiry of the notice period. Discharge took in total some 87 hours, giving rise to a total demurrage claim of US$114,887.40.
Clause 16 of the charter provided that:
Clause 23 of the charter provided:
Within the 90 day period, Owners submitted a claim for demurrage, together with various supporting documents, including some described as ‘pumping logs’. However, these documents were not described on their face as pumping logs. Further, they were not signed by a responsible officer of the ship nor by the terminal or a representative of the Charterers; in fact, they were not signed by anyone. But within the 90 day period, Charterers did receive a report from a cargo surveyor at the discharge port, which purported to record pressures at the vessel’s manifold. This was not, however, countersigned by an officer of the vessel.
Charterers accordingly issued an application for summary judgment, claiming that Owners’ demurrage claim was time-barred. The principal issues for determination in the case were, therefore, the following:
"Clause 16", the judge said, "supplements the provision of clause 23 by making it clear that Charterers are under no obligation even to consider a claim for demurrage for additional time if the 24 hour rule is exceeded, unless effectively Owners have demonstrated, by provision of the relevant documentation identified in clause 16… that they are not in breach of their pumping warranty, and that the fault lies with the terminal. Thus clause 16 identifies some of the necessary "supporting documentation" for the purposes of clause 23."
Such an interpretation, the judge said, was consistent with commercial sense and certainty. "The whole purpose of demurrage time bars is that Charterers are provided promptly with all the documents necessary in order to consider Owners’ demurrage claim."
She further held that the de minimis principle did not apply in this case. In her view, there was
She also took the view that the de minimis principle should not be applied to a document that is expressly required to be produced by the contract and is plainly relevant.
The effect of Owners’ failure to produce the required pumping logs by the limitation date was that their whole claim for demurrage failed, including that relating to the port of loading. Where, as in this case, only one composite claim for demurrage was made, Owners were time-barred in respect of the entirety of the claim, notwithstanding that the absence of documents related to only one constituent part of the claim, namely the demurrage at the port of discharge. In the judge’s view, this conclusion followed from the wording of clause 23, which relieved Charterers (in the event of Owners’ failure to provide the complete documentation required by the charterparty) from "all liability in respect of any claim for demurrage." (emphasis added)
Although it was not necessary, in the light of her decision on these points, to consider the arguments on futility, the judge went on to dismiss them.
She went on to say that, even if the report of the cargo surveyor did contain all the data that the Owners should have provided in the vessel’s pumping log, the absence of Owners’ signature on the logs, confirming the accuracy of their contents, meant that on the facts of this case, the futility principle could not apply in any event.
Accordingly, summary judgment was given in Charterers’ favour.
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