National Shipping Company of Saudi Arabia v BP Oil Supply Company

A settlement of a demurrage invoice does not settle further demurrage unless the correspondence, construed objectively in context, clearly produces that result. A charterparty claims time bar is directed to certainty: the substance of the claim and documents substantiating each constituent part must reach charterers within the prescribed period, but factual corrections and a change of legal label are permissible. “Together with” does not necessarily require simultaneous delivery. The question is whether charterers objectively had the material and could identify its connection with the claim. Clauses dealing with shifting expenses and additional charges do not ordinarily make bunker consumption recoverable without express wording.

The Owners chartered a tanker to BP Oil Supply Company. After an interruption during loading at Freeport, they submitted a claim for time and bunkers under a port clause and a separate demurrage claim. Their demurrage reports wrongly treated unused laytime as remaining. Charterers agreed and paid a revised demurrage invoice relating to Singapore.

The Owners later claimed further demurrage for Freeport and Singapore and the bunker costs. On summary judgment, Field J held that the settlement covered all demurrage, that the balance was time-barred, and that the bunker claim failed: 2010 EWHC 3043 (Comm). The appeal concerned settlement, the claims time bar, and whether clauses 5.2 and 5.3 covered bunkers.

1. Disposition. The appeal was allowed in part. The dismissal of the bunker claim was upheld. The judgment was otherwise set aside, and the matter was remitted to the Commercial Court for directions.
2. Settlement. The June exchange objectively settled only the amount due on the demurrage invoice presented, which concerned time at Singapore and the anchoring calculation. It did not settle all demurrage claims under the charterparty, nor did it preclude further recovery for the relevant periods at Freeport and Singapore. The references to combined ports and to other charges did not establish a wider settlement.
3. Claims time bar. Clause 20.1 required the claim and supporting documentation to be presented within 90 days, but it did not prevent factual correction or the application of a different legal label to a claim whose substance had been presented in time. The approach in The Oltenia [1982] 1 Ll Rep 448 was applied. The Time and Bunkers Invoice conveyed a claim for detention at the demurrage rate, or demurrage, and the documents sent with the Demurrage Invoice objectively substantiated the claim.
4. Clarity and documentation. The touchstone was clarity sufficient to achieve commercial certainty, rather than inflexible strict compliance. The reasoning in Senate Electrical Wholesalers Ltd v Alcatel Submarine Networks Ltd [1999] 2 Ll Rep 423 and The Eagle Valencia [2010] 2 Ll Rep 257 supported that approach. “Together with” did not require simultaneous presentation. It was sufficient that both claim and documents were received within time and that their connection was objectively apparent. The Owners were therefore not time-barred. The court did not need to decide the obiter view in The Sabrewing [2008] 1 Ll Rep 286 concerning documents obtained from another source.
5. Bunkers. Clauses 5.2 and 5.3 did not provide for recovery of bunker costs. Such recovery ordinarily required express wording, as in the applicable port clause. The Owners were entitled to a declaration that their demurrage claim succeeded, subject to the Charterers’ argument concerning adverse weather and the resulting half-rate calculation.

• Court of Appeal (Civil Division): allowed the appeal in part. It upheld dismissal of the bunker claim, set aside the dismissal of the demurrage claim, made the result subject to the adverse-weather issue, and remitted the matter for directions.
• High Court, Queen’s Bench Division, Commercial Court: on summary judgment, Field J dismissed the Owners’ claim, holding that the June agreement settled all demurrage claims, that any balance was time-barred, and that the bunker claim failed: 2010 EWHC 3043 (Comm).