Waterfront Shipping Company Ltd v Trafigura AG

A demurrage time-bar clause must be construed by its ordinary and natural meaning, but it must also be applied carefully and strictly where its wording is clear. Where discharge exceeds the contractual period, pumping logs and related documents expressly required by the charterparty may constitute necessary supporting documentation for the demurrage claim. Failure to provide a required signature is ordinarily not de minimis where the signature authenticates the document and confirms its accuracy. If one composite demurrage claim is submitted without the required documentation, the whole claim may be time-barred. The futility principle may apply in an appropriate case, but does not excuse compliance where the contractual documents serve a genuine purpose of certainty and independent evaluation.

Trafigura AG applied under Part 24 of the Civil Procedure Rules 1998 for summary judgment against Waterfront Shipping Company Ltd’s claim for USD114,887.40 in demurrage. The charterparty required a written claim with supporting documentation within 90 days of discharge. The vessel had taken substantially longer than the contractual discharge period, and the owners supplied unsigned documents described as pumping logs.

The issues were whether signed pumping logs and related protest documents formed part of the supporting documentation required by the time-bar clause; whether the omission of signatures was de minimis; whether only part of the composite claim was barred; and whether the futility principle could excuse the absence of documents which charterers had received from another source.

1. Construction of the time bar. The claim was subject to a clear requirement that supporting documentation substantiate each constituent part of the demurrage claim. The clause had to be given its ordinary and natural meaning, consistently with the commercial purpose of prompt finality and investigation. Any residual ambiguity would be resolved in favour of preserving an otherwise legitimate claim: [1985] 2 Lloyd’s Rep 103; [1999] 2 Lloyd’s Rep 101.
2. Because discharge exceeded 24 hours, any demurrage claimed for the excess period was a claim for “additional time”. Clause 16 therefore identified necessary supporting documentation for the purposes of clause 23, including pumping logs signed by a responsible vessel officer and by a terminal or charterers’ representative, or the specified protest document where the latter signature was absent.
3. The signatures were not a trivial formality. They authenticated the pumping logs, confirmed their accuracy and provenance, and supported the owners’ case that the vessel had maintained the required pressure and that responsibility lay with the terminal. The absence of the required signatures was therefore not de minimis, save perhaps in very special circumstances, which were not present.
4. Clause 23 referred to one written claim and supporting documentation substantiating every constituent part. Since the owners had submitted one composite demurrage claim, failure to provide the required pumping documentation barred the entire claim, not merely the portion relating to additional discharge time. The Minerva was distinguishable on its wording and facts.
5. The futility principle was not excluded in every possible case. However, it could not assist here. Charterers were entitled to evaluate the claim by reference to the package supplied by owners, without collateral investigation of documents received from third parties. The Certispec discharge record did not cure the absence of the owners’ confirmation by signature. Charterers were accordingly entitled to summary judgment on the whole claim.