The 3 biggest mistakes to avoid when submitting a claim for demurrage

Demurrage claim time barred| BDM Blog | BDM Law1. Do not miss the time bar.   Most charters contain a time limit for submitting documents to support the claim.   These time limits are there to tie in with similar provisions in sale contracts. Generally, the time limits will be strictly upheld subject only to the usual restrictions applied by English law i.e. that the wording is clear and unambiguous with any ambiguity being construed against the party seeking to rely on it.

2. Make sure that you comply strictly with the wording of the clause as regards the documents to be submitted.    This is easier said than done.   Most of the cases over the years concern ambiguous wording.   For example, in Kassiopi v. Fal Shipping (M/T Adventure) [2015] EWHC 318 (Comm), the time limit was 90 days from completion of discharge and there was a requirement that copies of all other documentation maintained by those on board the Vessel or by the Terminal in connection with the cargo operations should accompany the demurrage claim as well as all supporting documentation substantiating each and every constituent part of the claim.  There was a dispute over whether this included the port log, time sheets and notes evidencing receipt of free pratique.   It was held that those records should have been disclosed as they were contemporaneous records kept by the vessel in connection with cargo operations and/or supporting documentation relevant to the claim itself.   The failure to disclose them meant that the claim was time barred.   One also often sees the phrase accompanied by all available supporting documents being used.   In The Oltenia [1982] 1 Lloyd’s Rep 448, Bingham J said that this phrase was not in any way ambiguous and was subject only to the de minimis principle.  i.e. a very minor omission would not rule out the claim.     The best practice is to review the demurrage claim and consider how to support each element of the claim with documents so that the charterers are able to make a decision as to whether the claim is well founded or not.  Basically, this is what Lord Tomlinson said in the Court of Appeal in the Abqaiq [2011] EWCA Civ. 1127.

3. Make sure that you submit the claim as stated in the charter.   For example, the term presented to charterers can cover a wide range of options i.e. email, fax, post or personal delivery.  However, it would be wise to obtain evidence of satisfactory delivery.    In other cases, more specific methods of submission are used i.e. by fax with hard copy by post or that copies of documents must be properly certified as copies of originals.   It is important to comply strictly with these provisions.   Strict compliance was the issue in Waterfront v Trafigura AG (The Sabrewing) [2008] 1 Lloyd’s Rep 286 where the charter provided for signed copies of pumping logs to be submitted within the 90 day period.   They were not and Mrs Justice Gloster declined the claim.   That decision was however criticised in The Eternity [2009] 1 Lloyd’s Rep 107 and in Abqaiq and so it is questionable as to whether submission of a claim via the incorrect format would be a problem if the Charterers in fact receive the claim and are in a position to determine if the claim is well founded.   On balance, our view is that the owner should as far as possible comply strictly with the terms of the charter to avoid any problems.

BDM offers a “no win no fee” service for demurrage claims which includes a review of the charter and advice on how to ensure compliance with the contractual terms so as to avoid these mistakes.   We can follow up with a legal demand for payment and, if necessary, commence an arbitration. If you have demurrage claims then please contact us as we can help you achieve a quick resolution.    Please call our office for further information or email one of our founding partners for more details of our “no win no fee” services.

BDM is a specialist shipping law firm offering high quality legal advice and representation at a reasonable price. Please follow us on social media by clicking below.

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