'Demurrage Claims' For The Purposes Of Documentary Time Bars

On 2 February 2018 the Commercial Court allowed an appeal from a decision of the Arbitration Tribunal in Lukoil Asia Pacific Pte Ltd v Ocean Tankers Pte Ltd.

The Judgment serves as a reminder to Owners to ensure that, if they have a claim for demurrage (no matter how it arises under the charter), as opposed to a claim for which any delay is compensated at the demurrage rate, they comply with any time bars in relation to demurrage claims.

The Claim

The question before the Court was whether a claim categorised as one for delay waiting for orders, was in fact a demurrage claim.

The clause under which the claim was brought provided:

Litasco Clause 4 - Waiting for Orders Clause

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.

Under Litasco Clause 2, claims for demurrage had to be presented to Charterers in writing within 90 days of completion of discharge. The clause included a list of supporting documents which were to be provided whenever possible.

Tribunal Decision

The Tribunal had already decided that the majority of the Owners' claims for demurrage were time barred, but they treated the claim arising under Litasco Clause 4 as falling outside the scope of the time bar defence.

Judgment

The Judgment includes a discussion of the principles that Courts must adopt in relation to the...