Boskalis Offshore Marine Contracting BV v Atlantic Marine and Aviation LLP (the “ATLANTIC TONJER”)
This was an appeal from the decision of an arbitration tribunal concerning the proper interpretation of the payment obligations under the BIMCO SupplyTime 2017 Charter Party for Offshore Support Vessels.
Clause 12 of the SupplyTime states that payments for hire, fuel invoices and disbursements for charterer’s account are to be received within the number of days specified in Box 24 of the form from the date of receipt of the invoice. The clause also states:
“If Charterers reasonably believe an incorrect invoice has been issued, they shall notify the Owners promptly, but in no event no later than the due date, specifying the reason for disputing the invoice. The Charterers shall pay the undisputed portion of the invoice but shall be entitled to withhold payment of the disputed amount…”
So, charterers have to pay invoices, or dispute them, within the agreed number of days – set out in box 24.
In this case charterers didn’t raise a dispute with the relevant invoice within the time frame set out and owners argued that charterers were therefore prevented from raising any dispute at a later date (the clause essentially operating as a time bar). Owners said charterers could not therefore defend their claim for payment of the invoice.
The tribunal considered that the clause prevented charterers from withholding sums unless the relevant invoice was disputed within the required timeframe, but that charterers could subsequently bring a claim in respect of overpaid sums if they subsequently noted an error. Such a “counterclaim” could fall under the “audit” provision in the SupplyTime (for accounting-type errors), or could be pursued as a claim for unjust enrichment or breach of contract.
The appeal judge, Sir Ross Cranston (sitting as a High Court Judge) upheld the tribunal’s decision and agreed that the clause doesn’t operate as a time bar, but that if invoices were not disputed within the deadline charterers come under an obligation to pay the invoices irrespective of any dispute they might have in relation to the same. If charterers later identify an error, they can claim the sums back on one of the grounds mentioned.
In conclusion, where charterers miss the “dispute deadline” they have to “pay now, dispute later”. This is a fairly common theme in shipping circles (see “the rule against set off”) so will not be unfamiliar to those in the shipping industry. But in an industry where cash flow is king it is worth charterers being aware of the need to act fast when invoices are received.