In the last News Update, Phil Stalley questioned whether there was still a need for hard copies of claims. He asked, "What do you think - is the counterparty right in demanding a hard copy and if so why?" This generated a lot of emails and while 95% of the responses from claims analysts agreed that paper claims should be a thing of the past, there were one or two very committed defenders of the time-honoured requirement for hard copies. Here is the rather entertaining argument put forward by one very experienced demurrage analyst who has kindly given us permission to reprint it. We will not publish the name of the author:
Hi Phil,
I've just seen your article in the Asdem Newsletter. You ask for opinions so here is mine. Clearly they are wrong to threaten to time-bar your claim but I fully support their right to expect a hard copy. I say "they" but it might even have been us, were it not for the time-bar aspect. Obviously sending claims electronically is very easy; in fact it's too easy. Envisage the following scenarios:
In the Owners' office:
A) Hey boss, you know that claim I sent out last week with only the Master's port log? ... Well, I got the signed SOF and sent it to Charterers.
B) You'd better resend the whole claim as well.
A) I still don't have pumping logs.
B) Never mind, you can resend the claim again when you get them.
A) How about the "Maritime Disaster" claim? Should I send it to their New York or London office?
B) Good question. Tell you what; send it to both, that way one of them is bound to be right - mind you, perhaps you'd better send it to Paris too.
A) But I don't think their Paris office ever deals with their South America business.
B) Well, it can't hurt can it? Better to be sure and it'll only take two clicks of your mouse.
A) I sent an e-mail telling Charterers that the claim I sent last week headed M/T "Maritime Catastrophe" should read M/T "Maritime Cataclysm" - you want me to resend the corrected claim too?
B) Yeah, better had - it's no effort is it?
A) I already re-sent it once. I realised I started time from commencement of loading but it should have been all fast. Oh well, never mind.
Meantime in offices of the charterers, Dumpton Associates:
C) Good heavens, 250 e-mails - I only took a half-day off yesterday. Flippin' 'eck - how many claims?!
D) Here's one on the "Maritime Liability". I'm sure we got that a few days ago.
C) I saw that one, are you sure this is the same claim?
D) Hang on let's have a look ... it's the same CP date ... but a different amount.
C) It might be voyage two. I think we had exercised our option on that one.
D) Yes it is, but then I think that other one was too. Let me look it up. Yes, voyage two but the amount has changed ... let me see if I can work out what is different.
C) Lucky you've nothing else to do isn't it? (Heavy irony)
D) Have you finished with that ruddy printer?
E) Sorry mate I'm printing off an Owners' claim.
D) You've been at it for ages.
E) There are several claims, what can I say?
D) Any chance I can use it some time to do Dumpton's work?
E) Should be finished in about 20 mins. This one is 75 pages. I don't know what it is about Maritime - do they think we need the ship's cat's vaccination certificate and the galley cutlery inventory?
C) Harry in ops asking if they have included the waiting time in the "Cataclysm" demurrage claim as he's received a detention claim for that period and wants to be sure there's no overlap.
D) We don't have a claim on the "Cataclysm"
E) Yes we do but they wrongly headed it "Catastrophe". I'm just printing off the corrected claim now.
D) One of these days I'm actually going to find time to check one of them.
Yes Phil, electronic claims are very easy... if you're pitching rather than catching. Call me old fashioned but as a matter of principle (and finance if you're a small company) I think if a claimant is expecting you to check his claim and pay him thousands, maybe hundreds of thousands of dollars, then the least he can do is supply his own stationery.
Another thing is fraud. I know how easy it is to lose a piece of information on a document which is detrimental to your case or maybe you don't like the demurrage rate. A little bit of cut and paste and Bob's your uncle. A few trips through the photocopy to smooth over the edges and no one's ever the wiser. Even a hard claim doesn't entirely protect against this as nobody expects to get the original documents, but it helps. Such practices are strictly verboten at our company but not everyone is so squeaky clean and I know that some other companies don't have much in the way of scruples.
Our department gets a lot of e-mails. I'm fortunate in that people know I require a hard copy so I can pretty much ignore electronic claims. I don't need to worry if that one is a repeat of one I got already or a new one on the same ship for a different voyage, or an amendment to one I received earlier. If it's not in hard copy, I don't waste my time!
In the High Court case of Carboex SA v Louis Dreyfus Commodities Suisse SA [2011] EWHC 1165 the judge, Mr. Justice Field, overturning the earlier arbitration award, concluded that an exception to laytime in a charter party for strikes would apply to vessels which suffered delays to berthing as a result of congestion after the strike had ended.
Louis Dreyfus had chartered four vessels to Carboex under a contract of affreightment (COA) to transport coal from Indonesia to Spain. The COA was on an amended AmWelsh voyage charterparty form which is a berth charter. Clause 9 provided "in case of strikes, lockouts, civil commotions ... beyond the control of the Charterers which prevent or delay the discharging, such time is not to count unless the vessel is already on demurrage.
Clause 40 read:
"At port of discharge.If the berth is not available when vessel tenders Notice of Readiness, but provided vessel/Owners not at fault in relation thereto, then laytime shall commence twelve (12) hours after first permissible tide, Notice of Readiness received and accepted, whether in berth or not, whether in free pratique or not, whether in customs clearance or not, unless no customs clearance or no free pratique due to vessel's fault, unless sooner commenced in which case only time actually used to count..."
On arrival in Spain there was congestion at the port due to a national haulage strike and all four vessels were delayed getting into berth. The owners argued that only delays after the vessel had berthed caused by a strike in progress were excluded by clause 9. Since the strike was over when each of the vessels berthed, they claimed that time should count in full. The owners succeeded in convincing the arbitrators who ruled that the clauses were ambiguous and construed them, contra proferentem*, in their favour.
On appeal, the principal question was whether the exception in clause 9 applied to a vessel which was unable to berth due to congestion caused by a strike. The owners contended that the effect of the "whether in berth of not" (WIBON) provision in clause 40 was that the risk of delay due to congestion at the discharge port was to be borne by charterers and that was still the case if the vessel was unable to berth due to congestion caused by a strike. The charterers argued that the owners' argument was inconsistent with Reardon Smith Line Ltd v East Asiatic Co Ltd [1938] 4 All ER 107. In that case there had been no berth available due to the government requisitioning ships and jetty space. There the Court held that the WIBON provision and the clause which included it could have no effect on altering the construction of the demurrage exceptions clause to shift liability to the charterers.
The judge agreed with the charterers and confirmed that the WIBON provision did no more than start laytime and that it had no effect on the exceptions to laytime. The exception for strikes outside the charterers control would apply not only to congestion after the strike had ended but also to congestion which resulted from a strike which had ended before the vessel had arrived. The other case which supported this conclusion was NV Reederij Amsterdam v. President of India (The Amstelmolen) [1961] 2 Lloyd's Rep 1.
*Contra proferentem is a Latin phrase which describes a rule of contractual interpretation in English law. This provides that a clause in a contract which is held to be ambiguous will be construed against the party that included the clause for his benefit and is trying to rely on it. Exceptions clauses and time bars are examples of clauses which a company includes in a contract for its own benefit. If these clauses are not drafted very clearly, they may be held to be ineffective.
Article from Andrew Wilding, Managing Director, Asdem Asia Pte. Ltd.
Tonnage dues are generally assessed on the tonnage of the vessel but occasionally are assessed on the cargo. We have been asked on a number of occasions whether tonnage dues that are assessed on the cargo are a "tax or due on cargo" and for charterers' account or whether they remain for the owners' account. Whilst this issue is expressly covered by clause 12 of the Asbatankvoy charter party, it is not covered in other commonly used tanker voyage charters which can lead to disputes.
Our opinion is that the fact that tonnage dues are assessed on the cargo simply reflects the method of assessment and does not alter liability. In the absence of an express clause making charterers liable for tonnage taxes, these dues are for owners' account irrespective of the method of assessment. Our opinion is shared by Intertanko and Worldscale and is supported by an (unreported) London arbitration.
Article from Andrew Wilding, Managing Director, Asdem Asia Pte. Ltd.
In the tanker industry, freight is commonly paid either on a lump sum basis or based on Worldscale. When freight is paid on a lump sum basis, charges for using the port - such as tonnage dues (see above) and the costs of tugs - are for owners' account.
London Arbitration 11/99 (LMLN 510) confirmed that tug expenses are for owners' account. However, disputes can arise where, notwithstanding that freight is payable on a lump sum basis, Worldscale terms and conditions are stated to apply and which provide that the costs of tugs at certain ports is for charterers' account.
Our view is that Worldscale and its preambles has no application where freight is paid on a lump sum basis, even where Worldscale terms and conditions are stated to apply, and in the absence of an express provision shifting responsibility for tug charges to charterers, owners remain liable for the costs of tugs.
The Intertanko publication "Worldscale, a Tanker Chartering Tool" and an unpublished London arbitration award referred to in this publication support this conclusion.
We recently held two workshops in London on European Barge Demurrage, both presented by Phil Stalley. His main conclusion was that there was a considerable amount of disagreement on the interpretation of commonly used contract terms including the TTB rules. There were also many significant differences between the contractual terms used by the major oil companies and this has lead to a degree of confusion. It is important to read these terms very carefully. Too many arguments come from people relying on hearsay rather than reading the clauses and interpreting them correctly.
Tags: amwelsh-charter-party---exception-for-delays-after-strike-ended