A recent case may be of great significance for fixtures that stipulate pro rata demurrage amid simultaneous handling of different parcels. Demurrage specialist company C Demurrage* comments on Tricon Energy Ltd v MTM Trading LLC  EWHC 700 (Comm)
On 23 March, the judge made a ruling in Tricon Energy Ltd v MTM Trading LLC  EWHC 700 (Comm). The core issue was "Where a timecharter requires demurrage to be calculated by reference to B/L quantities, and the time bar clause requires all supporting documents, will a demurrage claim be time-barred if the owner fails to provide a copy of bills of lading?"
The Judge said yes, “but only on the basis of an interpretation of the particular clauses here, and without suggesting a requirement for bills of lading where these are not available in a particular case."
C Demurrage comments that though confined to the actual terms with some slight qualification, this decision will allow charterers to argue that by the given deadline the relevant two (or more) bills of lading must be included with this sort of demurrage claim, or it is time-barred.
It is submitted that it is not clear why bills of lading are needed, and that (i) the ruling takes insufficient account of at least one recent decision - Amalie Essberger, which we discussed on 14 January - and (ii) may mean a time bar for unwary owners who simultaneously load and/or discharge on terms that prorate laytime and demurrage when that happens.
The Judge said if a bill of lading was not available, an explanation would have to be given. But this could mean difficulty under common wordings which do not reliably allow this exception, and perhaps also controversy based on culpability where owners no longer have even a copy of what they would generally have issued.
The facts and terms of the case are that under a charterparty on an amended Asbatankvoy form dated 13 February 2017, MTM Hong Kong loaded at Antwerp and at Houston discharged the relevant fixture cargo and another parcel carried under a second bill of lading. The owners’ demurrage claim was for US$55,841.16 which included disport delays and the key provisions were:
The bills of lading were not produced, and the tribunal had said that:
The Judge briefly mentioned many of the authorities examined in the Amalie Essberger case, but not the case itself, or the clear opinion there on "all supporting documents". This required owners:
Thus owners could provide the material that objectively set out their claim, and charterers could assess its apparent validity or investigate the circumstances and formulate any defence.
Provision of Notice of Readiness (NOR), timesheets and SOF etc will achieve that, here.
If charterers identify a possible inconsistency or other challenge, they can seek any relevant bills of lading.
Under the above formulation, it is not necessary for these to be produced to meet a point that might not arise. And as the tribunal said, to date invariable practice has not included the bills of lading, and moreover commercial confidentiality issues could arise which might not always be solvable by redaction as the Judge suggested.
In conclusion, this decision could cause difficulty for owners chartering out on these prorating terms. If, pre-fixture, they somehow know they will be able to produce the bills of lading they can simply include them in any claim.
Otherwise, owners may need to carefully exclude provision of the bills of lading, or (more subtly) omit them from specific listing of all that is needed.
There may be uncertainties here, and owners may wish to seek advice before fixing on these particular terms.
* This article is supplied by C Demurrage. If you would like to discuss any point or topic in this article please contact firstname.lastname@example.org.
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