Standard form charterparties frequently contain clauses requiring claims to be submitted within an agreed time limit, together with supporting documents. In three recent cases the Commercial Court has considered disputes under clauses of this kind.
Should privileged documents be produced?
The first case, Mur Shipping BV v Louis Dreyfus (the “Tiger Shanghai”), concerned a time charter with a clause providing that disputes were to be referred to arbitration in London, and that any claim must be notified together with “all available supporting documents” and the arbitrator appointed within 12 months from completion of the charter.
A dispute arose when the owners refused to allow the charterers to make a temporary modification to the vessel, which charterers said they were entitled to do under a specific clause in the charter. The charterers terminated the charter and claimed damages and a refund of hire paid in advance. They sent a claim letter to the owners and subsequently (just under 12 months after termination of the charter) they appointed an arbitrator.
Several months later, they served full claim submissions in the arbitration, enclosing a survey report which had been issued before the termination of the charter but not previously disclosed to the owners. This prompted the owners to raise a time bar defence, arguing that the report was an “available supporting document” which should have been presented within 12 months after the end of the charter.
Charterers claimed that the report was a privileged document prepared for the purposes of the arbitration, and therefore did not fall within the time bar clause. The arbitrators held that it was not privileged and therefore should have been produced with the initial claim, so the claim was time barred.
On appeal to the High Court, the charterers argued that the clause did not require production of documents if it was at least reasonably arguable that they were privileged, so their failure to produce the report earlier did not lead to the claim being time barred. The judge rejected this as an uncommercial interpretation, likely to lead to disputes and uncertainty. The report was a supporting document, and it had been available at the time of presenting the claim, so it should have been produced.
Must all documents be produced together?
The second case, "Amalie Essberger” Tankreederei v Marubeni Corporation, also involved a dispute about whether the right supporting documents had been provided.
On the facts of this case, the court decided that they had, and the claim was not time barred. The charter required demurrage claims to be presented within 90 days after completion of discharge with all supporting documents, including pumping logs and letters of protest.
A separate clause required cargo documents (which also included pumping logs and letters of protest) to be provided within 7 banking days after completion of loading. These documents were duly provided, but when the owners later submitted their demurrage claim the pumping log and letter of protest at the loading port were not attached to it.
The court held that the documents in question did have to be submitted within the 90 days period, but the clause did not require all supporting documents to be provided at the same time. Having received the pumping logs and letter of protest soon after completion of loading, the charterers must have been aware that these were also documents that would support a demurrage claim. The owners were not obliged to re-submit them when presenting the claim, or to draw the charterers’ attention to the fact that they were already in their possession.
Were bills of lading “supporting documents”?
The time bar issue came up yet again in a third case in March 2020, Tricon Energy v MTM Trading. This again concerned a demurrage claim, with a clause requiring “all supporting documents” to be presented within 90 days.
The vessel carried two parcels of cargo under different charterparties, and the charter provided for waiting time to be apportioned between the two parcels according to bill of lading quantities. The documents supporting the owners’ demurrage claim included statements of facts referring to the quantities, but not the bills of lading themselves.
The charterers said that they needed the bills of lading in order to check the calculations, and as these had not been presented the claim was time barred. An arbitration tribunal rejected this argument and upheld the owners’ claim. However, this was reversed on appeal to the court.
The owners argued that they had produced sufficient documents for charterers to understand and evaluate the claim and were not required to produce underlying documents such as the bills of lading. The judge disagreed, pointing out that the charter expressly required the calculation to be based on “bill of lading quantities” and also required production of “all” supporting documents. He therefore concluded that under this particular charter the bills of lading should have been produced and the claim was time barred.