Odfjfell Seachem A/S v Continentale Des Petroles Et D'investissements & Anor

A charterparty time-bar clause must be construed strictly and according to its language. A clause requiring claims to be presented within a specified period after discharge does not ordinarily extend to damages for breach unless its wording clearly includes them. Where no cargo was discharged, the court will not imply a commencement date merely to make the clause operate, particularly where the parties had expressly addressed a similar issue elsewhere in the charterparty. Demurrage accrued before an accepted repudiation remains recoverable, and further demurrage forming part of the lost contractual income may be included in damages. Laytime provisions must be read together, giving effect to express wording concerning the time when free pratique is granted.

The Owners chartered the vessel Bow Cedar to the Charterers for a voyage from Bahrain to Benin. The Charterers cancelled the charterparty after failing to obtain the cargo. The Owners accepted the cancellation as a repudiation and claimed damages, including lost freight and demurrage, after arranging a substitute voyage.

The Owners applied for summary judgment under CPR Part 24. The Charterers sought to amend their defence to rely on a contractual time bar and disputed parts of the quantum. The central issues were whether the time-bar clause applied to the damages claim, whether a commencement date could be implied where no cargo was discharged, whether demurrage could form part of the damages, when laytime commenced, and what part of the quantum required a trial.

1. Time bar. The Charterers had no real prospect of establishing that the Owners’ damages claim fell within clause 20.2. The words referring to amounts alleged to be for the Charterers’ account under the charter did not clearly include damages for breach. Time-bar clauses are construed strictly.
2. No term could be implied that, where no cargo was discharged, the 90-day and 180-day periods ran from the date when discharge should have occurred. The charterparty incorporated Article III rule 6 of the Hague and Hague-Visby Rules, which expressly dealt with that eventuality in the time bar applicable to claims against shipowners. The omission from clause 20 was therefore significant. Permission to amend the defence to plead the limitation defence was refused.
3. Demurrage. Demurrage is a liability in damages, accruing day by day after the laydays expire. An accepted repudiation ends unperformed primary obligations but does not affect accrued rights. The Owners could therefore claim demurrage accrued before repudiation, together with demurrage which would have formed part of the contractual income had the charterparty been performed. The Noel Bay was distinguishable and did not require a different result.
4. Laytime. On the true construction of clauses 6.3.3 and 7.3.2, where free pratique was granted more than six hours after the notice of readiness and no protest was issued, laytime commenced when free pratique was granted. It did not commence six hours later.
5. The disputed evidence concerning the probable speed and duration of the contractual voyage raised a real prospect of a defence to part of the quantum. Judgment was therefore entered for the Owners for the indisputable sum, with permission to defend the balance conditional upon payment of the disputed sum into court.

First-instance decision. The judgment itself does not state any prior appellate decision.