Kassiopi Maritime Co Ltd v Fal Shipping Co Ltd [2015] EWHC 318 (Comm)

Owners and Charterers had entered into a voyage charter on the BPVOY4 form. The charter contained the following provisions:

  • Clause 19.7.1: demurrage claims to be accompanied by the vessel’s pumping log signed by a senior officer of the vessel and a terminal representative.
  • Clause 19.7.2: demurrage claims to be accompanied by copies of all notices of protest issued or received in connection with the cargo operations.
  • Clause 19.7.3: demurrage claims also to be accompanied “copies of all other documentation maintained by those on board the Vessel or by the Terminal in connection with the cargo operations”.
  • Clause 20: demurrage claims to be time-barred unless presented in writing, together with “all supporting documentation substantiating each and every constituent part of the claim”, within 90 days of completion of discharge.

Owners claimed demurrage as a result of delays at both the load and discharge ports. In arbitration, their claim was found to be time-barred because Owners had not provided Charterers with the port log, time sheets, and a manuscript note concerning free pratique at the discharge port within the 90 day time limit.

Owners appealed, submitting that the Tribunal’s interpretation of clause 19.7.3 as regards the supporting documentation required was too onerous. Owners’ appeal was dismissed. The Court found that the Tribunal had been correct to find that Owners had failed to comply with clause 20, and so their claim was wholly time-barred.

Clause 19.7.3 could not have been intended to impose a far reaching and potentially unworkable obligation on Owners. It did not require them to provide copies of all documents which they would have to disclose in an arbitration reference. The clause had to be construed in context, which was a focus on why loading and/or discharging had taken longer than the time provided for in the charter. In that context, clause 19.7.3 was intended to be a “sweep up” provision covering documents similar to those covered in clauses 19.7.1 and 19.7.2 but not specifically mentioned.

The documents to be presented in support of a demurrage claim were those which, objectively, the charterers would have appreciated substantiated the claim and which would put them in possession of the factual material required to satisfy themselves that the claim was well-founded (National Shipping Co of Saudi Arabia v BP Oil Supply Co). In this case, clause 20 required Owners to provide not only “supporting documentation” but all such documentation. Where Owners had port logs and timesheets, they were relevant to the claim and so were supporting documents which should have been made available to Charterers. Clause 20 was not, therefore, limited to the provision of “essential” documentation only.

This case is the latest to highlight the importance of complying precisely with the charter terms when submitting a demurrage claim. Non-compliance can have serious consequences, as owners may find themselves time-barred from recovering substantial amounts. It should never simply be assumed that the documents sent are sufficient and it is essential to carefully check the relevant clauses before submitting a claim. That this is an issue which repeatedly comes before tribunals and the courts shows that where a party can take a non-compliance point in attempt to have a claim dismissed as time-barred, they will invariably do so.