Devil in the detail

The commercial manager of a tanker arranged a voyage charter. The fixture was recorded in a recap message and was based on the BP Voy 4 form of charterparty with a large number of amendments and additional clauses.

A fully documented claim for demurrage in the amount of US$186,676 was submitted to charterers shortly after discharge. Charterers acknowledged receipt of the claim the next day.

The BP Voy. 4 standard form contains a time bar clause requiring demurrage claims to be presented to charterers, together with all supporting documentation, within ninety days of the completion of discharge.

The failure to send or pass on demurrage claims within the charterparty time bar is a frequent cause of claims against ship brokers and commercial managers operating in the tanker markets. In this case however it was clear that the provisions of that clause had been complied with.

The charterers disputed part of the claim alleging that the delays were attributable to engine problems. The parties exchanged offers but were a long way apart. While the gap between the positions narrowed the matter was not progressed with any speed.

Finally, about 18 months after the discharge, owners said that, to bring the matter to an end they would accept charterer’s previous offer to settle at US$130,000.

This was communicated to the charterers who acknowledged the message saying they would check and revert. Some while later charterers responded saying that the matter was now time barred. They quoted an additional clause which was in the recap (on page 5). The clause provided that charterers shall be discharged from all liability for any claims unless proceedings have been commenced within eighteen months.

It was clear that the claim had become time barred. The managers had taken instructions in relation to the amounts of offers but had been responsible for the administration of the claim. They had overlooked the additional clause and had not diligently pursued the claim.

The manager was liable to owners who initially claimed the full demurrage of US$186,676 plus interest. The managers argued that since owners were willing to accept US$130,000 that was the amount they had lost when the claim became time barred. The claim was settled by ITIC for that amount.