Time Bars in Charter Parties - 2

continuation .........

3. Can a demurrage claim be time barred if one document out of a full set is not sent?

    The answer to this is both yes and no. It all depends on the wording of the relevant clause in the CP, and to what extent the claim is modified.

4. Do cargo claims have a time bar for submission?

Yes, time bar for cargo claims are governed by the relevant regime. Per the Hague/ Hague-Visby Rules, a cargo claim can be brought forth any time within one year of the delivery of the cargo.Per the Rotterdam Rules /Hamburg Rules, the time allowed to institute proceedings in respect of a cargo claim is two years from the date of delivery. Hence, it is beneficial to be aware of the regime in place for that particular contract.
  In the interest of maintaining certainty in international trade, such time bar periods are strictly enforced by the Courts, and even a small mistake may debar the cargo owners from successfully filing a claim. For example, in The Antares, the cargo owners (Kenya Railways) filed a suit of arbitration against MSC (the "carrier") on Jan 31,1985 ( the statutory one year period being lapsing on Feb 17, 1985). After MSC informed Kenya Railways that they were not the Owners, Kenya Railways attempted to direct the suite of arbitration again the real owners, failing which an attempt was made to extend the time frame for filing such a claim. However, the court was of the view that such time bar periods were sacrosanct and necessary to keep a level of certainty in international trade.


 Finally, we come upon the discussion of time bar clauses in Dry cargo Charter Parties. One of the most common used CP forms is GENCON. Under the relevant clause, demurrage is due payable on a per day basis, with Charterers' having a 96 hour grace period in case of non-payment."NIPPONCOAL" Charter Party leaves it upon the parties concerned to decide on the date and place for settling all demurrage and despatch. Thus, we can see that the demurrage regime in Dry CPs is quite strict as compared to the Wet CPs.
However, it is important to note here that the above does not affect the time bar regimes for the cargo claims.



Abbreviations used:
-------------------

CP - Charter Party
GENCON - The Baltic and International Maritime Council Uniform General Charter
NIPPONCOAL - Coal Charter Party

Disclaimer: The above article are views expressed by the author. Please consult expert opinion prior using same. Any unintentional breach of copyright is totally unintended. Please highlight same, if any, so that necessary corrective action may be promptly taken. Any cases or Charter Parties referred to above are purely for academic discussion only.

Time Bars in Charter Parties - I

   In context of Voyage Charter Party , there are certain claims/costs which can be recovered from Charterers under that CP. It is very imperative that the documentation and time limitation requirements are strictly adhered to, otherwise Charterers' may have a valid reason to time bar that claim.

  In general, the commercial intention is to ensure that claims are made by the Owners within a short period of final discharge, so that they they can investigated and settled while the facts are still fresh. [ Mr. Justice Bingham in The Oltenia]

   Different Charter Parties have different period allowances for submitting a claim, and quite often, such periods are discussed and agreed upon in the pre-fixture stage.

1. How broadly can the time bar clause be interpreted?

  It is important to note the wording of the clause, as some Charter Parties require a Notice of demurrage to be sent, and followed by the actual claim with all supporting documents, for example, in case of Chevron Terms, which are additional Terms to the Asbatankvoy CP. Another example is the wording in BP Voyage CPs, which normally says:"substantiating each and every constituent part of the claim". This means that each commencement of time, deduction, completion of time etc should be duly supported by the necessary documents. In case of ShellVoy Charter Parties, they require additional signatures on the load/discharge port timesheets.
  An important and oft quoted case with regards to the strictness of the documentation requirement is that of "The Obo Venture"[1992]. It was a requirement of the CP that signed Charter Parties were to be provided for complete submission of the demurrage claim. As the Owners had failed to fulfill this requirement, the claim was time barred.

One aspect to be kept in mind is that the Charterers' may require the full documentation to recover costs from their third parties, and the Courts may look at this angle also while deciding on a time bar issue.

However, Owners can take comfort in that fact that, as the result of not adhering to the time limit can be quite severe, the Courts are consistent that a time bar clause should be un-ambiguous. Hence, any ambiguity in the time bar clause goes in favor of the Ship Owner under the Contra Proferentem Rule.

2. Can I revise my claim after the time bar?

 Yes, you can. Unless there is such a drastic revision that the claim after revision takes on the form of an entirely new claim and with new supporting documents.

Below is a snapshot of the time bars in common Tanker Charter Parties and their Clauses. I will discuss a few more questions and about Bulker time bars in my next post on the same topic. Till then.. Namaste! 

 

Disclaimer: The above article are views expressed by the author. Please consult expert opinion prior using same. Any unintentional breach of copyright is totally unintended. Please highlight same, if any, so that necessary corrective action may be taken.

History of Maritime Law - Part 1

 My apologies for the delay in posting, as I was caught up in other activities.

  I intend to devote this article to the history and emergence of maritime law in the context of vessels, which I hope will enlighten my readers as to its current importance.

  Sea trade has been going on for centuries, both in the Western and Eastern civilisations.  While most Western Scholars rely heavily on the European link to maritime law development, it is an undisputed fact that maritime trade and its jurisprudence had its roots much earlier than that. Manu Smriti, the oldest law book in the world and literally meaning " Laws of men", lays down references to commercial sea borne trade. In the Artha Sastra of 4th century BC, Chanakya mentions sea borne commerce with references to a Board of Trade for shipping.
  Similarily, on the Western front, there are documented reasons to believe that Egyptian civilisation had an active sea trade,but there is no mention of a law governing same.The earliest mentions of a concept similar to maritime law were found in the Rhodian Sea Law ( Latin: Lex Rhodia), which was based on the Code of Justinian, commissioned in the 6th century AD. The Roman maritime laws, which followed subsequently, borrowed heavily from  Lex Rhodia. It is to be noted that these laws gave much importance to General Average, as the sinking and loss of sailing ships, either due to weather or other reasons, was quite common. The Roman Maritime laws lasted quite a while, due to the fact that the conquerors of the Roman Empire were not much sea faring and were content to use the Roman maritime laws. Gradually, Italian cities on the Mediterranean sea front gained prominence in Maritime trade and started out by devising their set of rules known as the Consolat de Mar or "Consulate of the Seas" or "Regulation of the Seas". It is surmised that these Rules were devised either at Barcelona or at Pisa in early 11th century. These "Regulations" covered a wide range of subjects including conduct of Masters and seamen, General Average, jettison of cargoes, freight, salvage etc.
  A most significant development that took place with regards to codification of Maritime Law was the formation of the Rules of Oleron in early 13th century. These Rules were named after the island of Oleron in the Bay of Biscay. It is theorised that the Duchess of Oleron was influenced by the Consolat de Mar in her travels and set about consolidating the Maritime Rules into the Rules of Oleron. Theses Rules highly influenced the development of Maritime laws in England, Scotland and much of Continental Europe. A study of these Rules shows an inclusion of issues which are still relevant such as salvage, average, grounding, maritime liens, demurrage, freight , seamen's wages and so forth.

Why demurrage ?

 Time is money. This adage is old and true, and never more so than in case of ships ferrying cargoes. A shipowner, in most cases, would be paying a mortgage on the ship, plus crewing and maintenance costs. This means, he has to keep the ship running at its maximum ability all ( or almost all) the time. In case of a time charter, the ship owner does not have to worry about it, as the ship will be earning a fixed rate per day pro rata ,of course excepting the off hire periods (discussed later). In case the vessel is on a voyage charter or COA ( contract of affreightment), then the Owners agrees to allow use of the ship for a specific period for loading/unloading. So what happens when this "specified" period s exceeded? This is where the concept of liquidated damages i.e agreed damages comes in the form of demurrage. So, Charterers agree to pay damages at X pdpr (per day pro rata) for the time in excess of this specified amount. While the calculations are simple based on the charter party agreed, the actual negotation is made complicated due to the "grey areas" in the charter party.
  The natural question is whether Charterers get any credit for the time not used. This is a concept called "despatch" and is commonly found in bulker charter parties. However, this concept is not common in the tanker trade.While I will discuss this at length later, this is not my focus at the moment.
  Hopefully the above article will give a beginner's insight into the working of demurrage in the context of the charter party.

Demurrage et all.....

  Since this is the very first post, welcome to my blog. I will try to explain, in simple terms, the plethora of issues that we face in maritime claims. Please note I do not profess to be a maritime lawyer nor do I profess to be an "expert" in this domain. My aim is to present a fresh perspective on already old issues. Often times, a "layman's" view does help to see the picture in its entirety. 
   The views presented here are entirely my own with as minimum plagiarism as possible! Hence, do feel free to leave your comments, suggestions...  and in case I have forgotten to give due credit to any copy righted material, please free to point same out. 
    My initial discussion will be on "demurrage", a topic close to a Owner's heart, as it is second largest revenue earner after freight.. I am talking of spot vessels of course. Initially, we will discuss tanker demurrage and then move on to break bulk and other specialist sectors. Interspersed in between, we will take a look at other issues such as deviation.