Following the High Court decision in Kassiopi Maritime Co Ltd v Fal Shipping Co. Ltd  EWHC 318, a demurrage claim may be time barred if all relevant documentation in support of such a claim is not submitted on time.
An arbitral tribunal (the Tribunal) had held that Kassiopi Maritime’s (the Owners) demurrage claim failed because they had failed to provide all the relevant documents required under a demurrage claims clause within 90 days of completion of discharge of cargo.
The claim had been submitted by email attaching: a) invoice; b) laytime and demurrage calculations for both load and discharge ports; c) NOR for load port; d) SOF for load port; e)four Letters of Protest for load port; f) NOR for discharge port; g) pumping record for discharge port; h) SOF for discharge port; i) four Letters of Protest for discharge port; and j) empty tank certificate for discharge port.
However, the Tribunal found that a number of the Letters of Protest at load port referred to delays or stoppages recorded in the vessel’s port log/time sheets and, in relation to free pratique, that the grant of free pratique was recorded in the SOF for the load port but not for the discharge port.
As a result, the claim failed because the Owners had not provided, within the 90 days’ time frame, the port log and time sheets kept, as referred to in the Letters of Protest and a manuscript note on an email that the Master had received free pratique at the discharge port (the free pratique email).
The Owners appealed on points of law pursuant to Section 69 of the Arbitration Act 1996. The following clauses were relevant to the appeal:
Clause 19.7 No claim by Owners in respect of additional time used in the cargo operations....shall be considered by Charterers unless it is accompanied by the following supporting documentation:
19.7.1 the Vessel’s Pumping Log....
19.7.2 copies of all NOPs issued, or received, by the Master in connection with the cargo operations; and
19.7.3 copies of all other documentation maintained by those on board the Vessel or by the Terminal in connection with the cargo operations
Clause 20 Claims Time Bar
20.1 Charterers shall be discharged and released from all liability in respect of any claim for demurrage...unless a claim in writing has been presented...together with all supporting
documentation substantiating each and every constituent part of the claim, within ninety (90) days of the completion of discharge of the cargo...
The Court considered a number of questions:
1. Does clause 19.7.3 require owners to provide with their demurrage claim copies of all documents which the owners would be required to disclose in arbitration?
The Court said that the obligation of disclosure is likely to go far wider than merely “supporting documentation” and require a search which is considerably more rigorous than that contemplated by the clause. In addition, what disclosure requires may vary as between different arbitration rules, as between arbitration and court, and it may also vary between different arbitration proceedings under the same rules. The Court concluded that the clause “cannot have been intended to impose such a far reaching and potentially unworkable obligation on the owners”.
2. On a proper construction of clause 19.7.3, are “one- off” documents, which are generated by the vessel in connection with the cargo operations, within the scope of “documentation maintained by those on board the Vessel...in connection with the cargo operations...”?
The Court considered that contemporaneous records kept by the vessel relating to the cargo operation will often be kept on an ongoing basis (as opposed to “one-off”), but that this was not necessarily so. Whether the port logs and time sheets, in this case, were such records, would be a matter for the Tribunal. However, because the Court found against the Owners in the next question, and the issue would not be remitted to the Tribunal, then the question was not answered in terms.
3. On a proper construction of clause 20.1, does “all supporting documentation substantiating each and every constituent part of the claim” require owners to provide all relevant supporting documentation, or only “essential” supporting documentation?
The Owners submitted that the clause only required presentation of “essential” supporting documentation, which, they argued, generally means the NOR and SOF. However, the Court said that the most helpful guidance comes from The “ABQAIQ” where it is said that the documents required are “documents which objectively [the charterers] would or could have appreciated substantiated each and every part of the claim” and which meant that they “were thereby put in possession of the factual material which they required in order to satisfy themselves that the claim was well- founded”.
Which documents will meet those requirements will depend on the factual position of each case. The Court concluded that, in the present case, the port logs and timesheets were primary documents containing factual material which should be made available to the charterers so that they may satisfy themselves that the claim is well founded.
As for the free pratique email, the Court said that in most cases secondary documentation of this kind would not be required. However, in this case, because there was no record in the documentation provided as to when free pratique had been provided at the discharge port, then it was probably to be regarded as a supporting document.
The decision may have far-reaching implications, as Hamblen J appears to have expressed the view that port logs and timesheets are primary documents which will always need to be provided by owners to charterers in support of a demurrage claim (see paragraph 41 of the judgment)1.
In any event, what follows from the decision in The “ADVENTURE” is that where a demurrage claim is made under a clause requiring “all supporting documentation” to be provided, owners should carefully consider which documents are relevant to substantiate their claim and should not assume that the provision of “essential” documents (such as NOR, SOF and laytime and demurrage calculations) will suffice.
Where a claim has already been submitted, but the timeframe has not yet expired, the documentation already sent to charterers should be reviewed and any additional relevant documents provided, as failure to do so may result in the claim being time barred.