Demurrage Time Bars – FAQ’s

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29.10.2024

Both voyage and time charterparties often contain clauses requiring claims to be notified, or formally commenced, within a certain period failing which they will be time barred. If these time bar clauses are not complied with, the consequences for the claiming party can be severe and may lead to the failure of what would otherwise have been a claim with good merits.

It is important to note that the outcome of each case will depend on the particular facts and the specific charterparty wording that has been agreed. However, below are some general principles which apply from an English law perspective. 

  1. The Timing of a Claim Notification

    Owners may have a set number of days in which to notify Charterers of any demurrage due and to provide the supporting documents for this claim.

    There may be two time bars:

    1. The first for notifying Charterers that demurrage has been incurred; and
    2. A separate one for providing the documented claim.

    The general principles for counting of time for these notifications are:

    • Is there a clause which expressly sets out how times are to be calculated? For example, BPTime 3, clause 8.1 expressly provides that all calculations are to be made in UTC.
    • When computing a period within which a certain thing must be done, the first day is not ordinarily counted. For example, if there was a 30 day period from discharge, the date of discharge would be day zero and would not count as one of the 30 days for providing notice.
    • Save where it is necessary to determine which of two acts done on the same day was done first, fractions of a day do not count.  Unless there is an express provision to the contrary, a ‘day’ is a period of twenty-four hours beginning and ending at midnight i.e. a calendar day.
    • Differing time zones for the parties to the contract may be a complicating factor. Where the clause refers to a number of days following completion of discharge, the date of completion of discharge should be determined according to the time zone of the place where discharge occurred .

     

  2. To Whom Should the Notification Be Sent?

    • In order for the demurrage claim notification to be effective, it must be sent to the correct person.
    • The Charterparty should be carefully checked for any notice provisions. For example, this may expressly provide for demurrage claims to be send to Charterers or to their broker.
    • Receipt by a broker will only be binding on Charterers if that broker is Charterers’ agent . Where there is any doubt as to the authority of a broker to act on behalf of Charterers, the claim should also be served directly on the contractual counterparty.

  3. Documents to be Included with Notification

    The wording of the time bar clause needs to be carefully considered to see what supporting documents need to be included along with the claim notification.

    1. What documents would usually be required?

      The documents which would generally support a demurrage claim are :

      • a summary demurrage report, plus detailed demurrage reports for load and discharge ports; and
      • notice of readiness, port log, statement of facts, discharging log, timesheet, Master’s letter of protest and pumping log (if applicable).
    2. Does the clause specify any particular documents which are to be included?

      The charterparty may also specify particular documents, or categories of documents, to be provided. These should be provided even if strictly irrelevant to the demurrage claim .

    3. Does the clause require all supporting documents? If so, what does this mean?

      As there is no “standard” wording, what needs to be provided may differ depending on the charterparty wording.

      • “all supporting documents” includes more than the “essential” supporting documentation. This would include documents that evidenced the time used by the vessel in berthing, loading, and discharging operations and the interruptions and stoppages in such operations. Port logs, time sheets and emails recording that free pratique had been granted may be relevant.
      • Clauses setting out how demurrage is to be calculated should also be considered. For example, if there is pro rating of demurrage between bill of lading quantities, bills of lading should be provided.
    4. Do all supporting documents need to be provided at the same time?
      • There may be an express requirement for all supporting documents to be provided at one time, and simultaneous with the demurrage claim.
      • If not, provided that the claim and supporting documents are provided within the stipulated time period, this is sufficient .

Source: https://www.steamshipmutual.com/demurrage-time-bars-faqs