Time waits for no claim

The loading of a ship was delayed, as a result of which the owners had a claim against the charterers under the terms of the charterparty for demurrage of around EUR 70,000.

The charterparty contained a standard clause exempting the charterers from liability in respect of demurrage claims unless claims were received within 60 days of the completion of discharge operations. Certain documentation supporting any such claim had to be provided by the owners within the same time frame.

Within the 60 day period, the owners sent the broker a claim for demurrage, which the broker received but failed to pass onto the charterers.

The owners followed up with the broker as to the status of their claim after the 60 day period had elapsed. The broker approached the charterers, who relied on the time bar provision to decline to settle or contribute towards the owner’s demurrage claim. The owners then turned to the broker for settlement of their claim.

The broker reported the claim to ITIC. Whilst reviewing the relevant correspondence, ITIC discovered that, although the owners had passed the demurrage claim over to the broker within the 60 day period, the documented claim was in respect of the same ship but a different voyage. The owner’s claim was therefore rejected.

The owners then engaged their FD&D insurers, and subsequently lawyers, to pursue their claim on the basis that the broker should, on receipt of the incorrect documentation, have alerted the owners of their error.

Negotiations took place and the claim was eventually settled on approximately a 50/50 basis, with ITIC reimbursing the broker for their contribution. ITIC also covered the legal costs.