Laurence Marron Solicitors
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26 November 2020
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Sea Views

Issue 1 - January 2008

£500 FIRST ADVICE SERVICE
OWNERS - WATCH OUT FOR DEMURRAGE TIME BAR CLAUSES
CARGO LOST POST DISCHARGE - IS THE CARRIER PROTECTED?
AVOID THE COSTS OF MISTAKING A PORT CHARTER FOR A BERTH CHARTER

£500 FIRST ADVICE SERVICE

We provide a service, which is popular with owners, charterers and their P&I Clubs, whereby for a fixed fee of £500 (plus VAT, where applicable), we will review pertinent papers from your file concerning a dispute, for example a charterparty or bill of lading claim, and then provide you with an initial advice on the merits of the case.

If, following that initial opinion, the matter is pursued (and we are formally instructed to pursue the case), any further time spent on the case would be charged at our standard hourly rate.

Call us now on +44 (0)20 8382 3770 for more information about this service.

OWNERS - WATCH OUT FOR DEMURRAGE TIME BAR CLAUSES

Owners, if your charterparty contains a clause which stipulates that certain documents in support of a demurrage claim must be submitted within a stated time period, you must comply strictly with that provision or risk having the claim rejected by the court. That was the result in the recent English Commercial Court decision in The Sabrewing [2007] EWHC 2482.

In that case, the charterparty provided that charterers would be discharged and released from all liability in respect of any claim for demurrage unless a claim in writing was presented to charterers within 90 days of completion of the discharge of the cargo. The documents to be supplied by owners to charterers within the 90 day period included pumping logs signed both by a responsible officer of the vessel and by a representative of the terminal or of the charterers.

Owners presented a demurrage claim to charterers within the 90 day period, but the supporting documents did not include signed pumping logs.

In the opinion of the Court, the parties were obliged to comply strictly with the demurrage time bar provisions and owners had failed to do that. Owners' argument that the requirement for signed pumping logs was de minimis was rejected. In the opinion of the Judge, there is a real commercial purpose and importance in requiring a signed pumping log - the signature of a responsible officer of the vessel was important to show that such a person was prepared to put his name to the document to confirm its accuracy.

Owners' demurrage claim was therefore time barred.

CARGO LOST POST DISCHARGE - IS THE CARRIER PROTECTED?

Do the protections of the Hague Rules continue to be available to a carrier after the cargo has been discharged from the vessel? And are protections available to that carrier if the cargo is misdelivered?

These issues were considered recently by the English Court of Appeal in The MSC Amsterdam [2007] 2 Lloyd's Rep 622.

A cargo of copper was carried from Durban to Shanghai and was discharged from the vessel and stored in a Shanghai warehouse pending delivery to the receivers. Fraudsters presented a false bill of lading and obtained from owners a delivery order entitling those fraudsters to take delivery of the cargo from the warehouse. Fortunately, before the copper cargo was removed by the fraudsters, the true receivers presented the genuine bill of lading and owners were able to prevent delivery of the copper to the fraudsters. Unfortunately, for administrative reasons, the true receivers were unable to take delivery of their copper cargo.

One of the issues before the Court of Appeal was whether owners, if they were liable to the true receivers, would be entitled to limit their liability to the £100 per package Hague Rules limit. Owners argued that the parties, by implication, must have intended for the Rules to continue to apply after the cargo was discharged from the vessel, but the Court rejected that argument as being inconsistent with the other express terms of the bill of lading contract.

Nor were the terms of the bill of lading sufficiently clear to exempt owners from liability for their act of conversion and breach of contract in providing delivery notes to the fraudsters. The Court said that any such exemption or limitation of liability for such a breach had to be clearly expressed.

The salutary reminder from this case is that if owners want to ensure that the Rules continue to apply to post discharge situations, such as occurred at Shanghai in this case, or for owners' liability (if any) for misdelivery to be excluded or limited, such provisions must be clearly expressed in the bill of lading.

AVOID THE COSTS OF MISTAKING A PORT CHARTER FOR A BERTH CHARTER

Whether a fixture is a port or a berth charter is a fundamental question for owners in determining whether their vessel is an arrived ship for the purposes of tendering a Notice of Readiness and the commencement of laytime. If owners get it wrong so that the validity of the NOR can be challenged, owners run the risk that the vessel's waiting time will not count as laytime.

In a recent London arbitration, LMLN 730, the arbitrators provided some interesting observations on whether a fixture which described the voyage as "1SBP ZHENJIANG, CHINA/1SBP VITORIA, BRAZIL" was a berth or a port charter.

Charterers argued that this voyage description (which included the word "berth"), together with the fact that the fixture contained a WIBON provision ("whether in berth or not"), meant that the charter was a berth charter because a WIBON clause would be unnecessary in a port charter.

The arbitrators, however, considered the contract as a whole. There were other specific clauses, concerning the giving of NOR and the identification of the place where the vessel would be considered an arrived ship, which were clearly incompatible with a berth charter. Significantly, the fact that the charter provided that laytime would be interrupted during the shifting of the vessel from the anchorage to the berth made it clear that laytime could begin at the anchorage, thus casting further doubt on charterers' arguments.

The arbitrators, therefore, rejected charterers' argument.

 

 

 

The contents of this bulletin are not intended to be a substitute for legal advice on any of the specific issues discussed in it.

 
   

Laurence Marron Solicitors, 68 Lombard Street, London EC3V 9LJ    
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