Clear wording prevails - Lukoil v Ocean Tankers 2018

There are some cases where (and perhaps with a degree of hindsight) it is difficult to see how there could be any other outcome. Lukoil Asia Pacific PTE Limited v Ocean Tankers (PTE) Limited [2018] is one of them.
The Charterparty contained a 90 day time limit for submitting demurrage claims with supporting documentation. The supporting documentation wasn’t submitted in time and the question was whether the claim as “re-labelled” , not for “demurrage” but for time lost while waiting for owners orders (said in the charterparty to count “as laytime or demurrage”), was still “demurrage” and therefore subject to the documentation requirements and time limit.

The key clauses in the charterparty were clauses 2A, B and 4:

“2A. Charterers shall be discharged and released from liability in respect of any claims owners may have under this charterparty… unless a claim has been presented in writing to charterers with supporting documentation within 90 days.”

“2B. For Demurrage claims supporting documents must include whenever possible… [there follows a list of documents]”

“4. If Charterers require vessel to interrupt her voyage awaiting at anchorage further orders, such delay to be for charterers’ account and shall count as laytime or demurrage, if vessel on demurrage. Drifting clause shall apply if the ship drifts.”

Owners failed to supply all of the required supporting documents within 90 days and the tribunal held that the most of the claims were time barred on that basis. But they also held that the strict documentary requirements under the time bar clause, which referred to “demurrage” claims, didn’t apply to “Clause 4 claims”.

This was appealed to the High Court where it was decided that Clause 4 claims were indeed claims for demurrage.

When viewed against the reasoning of the High Court the Tribunal’s decision seems slightly surprising, but it may have been justified to some extent by the requirement that time bar clauses should be interpreted restrictively where possible. However, the charterparty in this case appears to have been very precisely drafted and, given the clarity of its wording, it does seem that the right decision was reached in the end. 

While the case turns heavily on the precise wording, the judgement does serve as a further reminder that, when submitting demurrage claims (which are commonly subject to 90/150 day time limits), Owners should check the wording and requirements of the specific charterparty carefully and should avoid simply relying on their standard practice of sending a set list of standard documents.

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