Clause 16 of the charter provided that:

"Owners shall undertake that the Vessel shall discharge a full cargo… within 24 hours… for the commencement of pumping or that the Vessel shall maintain an average discharge pressure of 100 psig at the Vessel’s manifold throughout the period of discharge…

Any additional time used owing to the inability of the Vessel to discharge the cargo within 24 hours… or to maintain an average discharge pressure of 100psig at the Vessel’s manifold throughout the discharge except when stripping shall be for Owners’ account and shall not count as laytime or, if the Vessel is already on demurrage, as demurrage…

Charterers will not consider any claim by Owners for additional time used in the foregoing circumstances in the absence of the provision by Owners of the following documentation:

(a) an hourly pumping log, signed by a responsible officer of the Vessel and a terminal or Charterers’ representative, showing the pressure maintained at the manifold throughout discharge and, in the absence of a signature from a terminal or Charterers’s representative, a Note of Protest:…" 

Clause 23 of the charter provided:

"Charterers shall be discharged and released from all liability in respect of any claim for demurrage which Owners may have under this Charter unless a claim in writing h as been presented to Charterers together with supporting documentation substantiating each and every constituent part of the claim within 90 days of the completion of discharge of the cargo carried hereunder."

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:

Were Owners obliged to provide the Charterers within the 90 day period, as part of the supporting documentation for their demurrage claim, pumping logs signed as provided by clause 16 or, in the absence of a signature from the terminal or Charterers’ representative, a Note of Protest?

If the answer to this question was ‘yes’, it was then necessary to determine the effect of Owners’ failure to provide the documentation required. Was the failure simply de minimis, namely so small that it was legally irrelevant? If the answer to that question were ‘no’, then was it possible to break Owners’ claim into parts, so that it was time-barred in part only.

Further, could the futility argument (the principle that the law never requires a person to do something that is useless or unnecessary) apply in the context of clause 23 in this case, so as to excuse Owners’ failure to provide pumping logs duly signed? The ‘futility’ lay in the assumption that Charterers – before the expiry of the time limit - had received from a third party, namely, the cargo surveyor at Vancouver, the information they needed regarding the performance of the vessel’s pumps.

Finally, if the futility argument was, in principle, open to the Owners, what was the relevance of the fact that the vessel discharge record provided by the cargo surveyor was not signed by or on behalf of the Owners?

Judgment
On the principal issue, the judge held that the Owners were under an obligation to produce signed pumping logs within the limitation period.

"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

"a real commercial purpose and importance in requiring a signed pumping log to support a claim in these circumstances for additional pumping time in excess of 24 hours, i.e. to prove that they had maintained the required average pressure throughout the discharge and that the fault lay with the terminal. The signature of a responsible officer of the Vessel was obviously important to show that such a person was prepared to put his name to the document to confirm its accuracy, to authenticate it and to prove its provenance…"

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.

"An important commercial purpose of the demurrage time-bar clauses in this case was to ensure that the 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 Owner’s claim. In my judgment, that is fatal to the futility principle."

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.

"On no basis can it be said that it was ‘useless and unnecessary’ to require Owners to provide a document in which they confirmed, by the signature of a responsible Vessel’s officer, the pumping performance of the Vessel."

Accordingly, summary judgment was given in Charterers’ favour.

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