Shipping – Voyage Charterparty – Beepeevoy 3 form – No signatures on Pumping logs as presented in demurrage claim – Whether demurrage claim time-barred.

this page was last time updated on: 31-Oct-2012

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Cases referring to this case:

Waterfront Shipping Company Limited v Trafigura AG [2007] EWHC 2482 (Comm)

For education purposes only

Facts stated in the text of the report.

When relations between contracting parties governed by the express provisions of contract (and charterparty is a contract of affreightment) the law insist on strict compliance with the terms as bargained between the parties. This attitude has a very long history, but in short it can be summarised as follows: sea carriers were historically under an absolute duty to deliver the goods in same condition as they were loaded. Only acts of god and the king’s enemies could excuse their non-performance. But the law permitted to limit this liability by express terms inserted in the contract. So the owners and the charterers are free to bargain what liability and to what extent they are ready to accept (compare modern multi-page charters with one of 19th century). But when and so far as such liability has been written into the contract its effect is the same absolute as an old absolute duty of sea carrier with regard to the goods – only very limited range of events, similar to acts of god, can excuse the party from performance – see Frustration.

Therefore if the contract says that: "Charterers will not consider any claim by Owners for additional time used in the foregoing circumstances in the absence of the provision by Owners of the following documentation… ", that means that any, however slight, breach by the owners of their promise to present proper documentation will completely relieve the charterers from any duty to pay demurrage. It is called condition-precedent, where there are two mutual conditions, the one precedent to the other. If one is broken an opposite party is under no obligation to perform its part.

Another argument in support of this view is that the owners are the first party to financially benefit from punctual compliance with the condition they agreed upon and that is in their very best interests to ensure that such documentation is properly submitted. If they fail, they only to blame themselves. Finally, if one care to visit Withdrawal for Underpayment of Hire page, one will see that sometimes underpayment of sum of 100USD will allow the owners to withdraw their vessel from a long and valuable time charter, however unfair it may be deemed on the part of charterers. Last but not least, an old adage "once on demurrage always on demurrage" - is not strictly speaking an axiom anymore. There is a number of circumstances when demurrage already started can be suspended.


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