Demurrage Time Bars: Whose Time Zone Is It Anyway?

Demurrage Time Bars Whose Time Zone Is It Anyway | BDM Blog | BDM Law

It is rare these days for shipping lawyers to get involved in demurrage issues. Mostly that is a good thing as demurrage should be capable of being agreed between the parties. However, every now and again a horrible issue comes up and lawyers can only do something about it if they are informed about it before it becomes a problem. One fertile area for disputes is in relation to time bars. It is wise therefore to take legal advice if there is a potential time bar and there is any uncertainty as to what that time bar might be.

Witness the recent case of The Maria1 where a dispute arose as to which time zone should be used to determine the date of completion of discharge. The relevant clause in the SHELLVOY 6 form provided that demurrage claims must be notified “within 30 days after completion of discharge” failing which the claim would become time barred.

The vessel completed discharge in Long Beach, California at 20:54 local time on 24 December 2019. Applying CET (the time zone in which both Owners and Charterers were based), discharge occurred at 06:54 on 25 December 2019. Applying GMT (the contract was subject to English law), discharge was completed at 05:54 on 25 December 2019.

It appears that nobody thought of heading off a potential dispute by sending the notification early. Instead, the notification of the demurrage claim was sent and received on 24 January 2020 (under all of the above time zones). It followed that if the date of discharge was taken as 24 December, then the claim notification would be time-barred because it was given 31 days rather than 30 days after completion of discharge. However, if the date of discharge was held to be 25 December, then the claim notification would have been in time.

This led to arguments about which time zone should be used for the purposes of calculating the date of completion of discharge. Charterers argued that the date of completion of discharge should be determined using local time at the place where discharge took place. Owners argued that it should be CET because this was where the giver and receiver of the notice were based. The judge agreed with Charterers that the date of completion of dischage is to be determined applying local time at the place of discharge. That was the “ordinary and natural approach” and one that promoted certainty. Unfortunately, that resulted in the demurrage claim being notified out of time.

We would urge all clients to be very cautious about demurrage time bars and, in the event of any uncertainty, to take legal advice well in advance of the expiry of the time limit. As lawyers we pride ourselves on being able to perform wonders but turning back time is not in our box of tricks.

1 Euronav N.V. v Repsol Trading S.A (“The Maria”) [2021] EWHC 2565 (Comm)

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