Kassiopi Maritime Co Ltd v Fal Shipping Co.Ltd

Contractual demurrage time-bar clauses are construed to achieve commercial certainty, rather than by rigid technicality. A clause requiring all supporting documentation requires documents which objectively substantiate each constituent part of the claim and place the charterer in possession of the factual material needed to assess whether the claim is well founded. It is not confined to documents regarded as merely essential.

A clause requiring documentation maintained on board in connection with cargo operations generally concerns contemporaneous vessel records relating to those operations. It does not ordinarily impose the same wide-ranging obligation as arbitral or litigation disclosure.

The owners appealed under section 69 of the Arbitration Act 1996 against an arbitration award which rejected their claim for demurrage under a voyage charterparty. The tribunal held that the owners had failed to provide port logs, timesheets and an email recording the grant of free pratique. It concluded that the claim was partly barred under clause 19.7 and wholly barred under clause 20.1.

The appeal concerned the construction of clauses 19.7.3 and 20.1, including whether clause 19.7.3 required disclosure equivalent to arbitration disclosure, whether one-off vessel documents fell within its scope, and whether clause 20.1 required all relevant or only essential supporting documents.

1. The appeal was dismissed. The tribunal was correct to hold that the demurrage claim was time-barred under clause 20.1.
2. Clause 19.7.3 did not require owners to provide every document which would be disclosable in arbitration. Such an obligation would be substantially wider than supporting documentation, potentially uncertain and unworkable. Question 1 was therefore answered “No” ([2015] EWHC 318 (Comm), [27]-[28]).
3. Clause 19.7.3 was a sweep-up provision covering documentary records similar to those identified in clauses 19.7.1 and 19.7.2. In context, “documentation maintained by those on board the Vessel in connection with the cargo operations” ordinarily meant contemporaneous vessel records relating to loading or discharge. Whether particular port logs and timesheets fell within the clause was for the tribunal to determine. Question 4 was answered by that guidance rather than in abstract terms ([29]-[32]).
4. Clause 20.1 required all supporting documentation substantiating each constituent part of the demurrage claim. The test was whether the documents objectively substantiated the claim and put the charterers in possession of the factual material needed to satisfy themselves that it was well founded. The requirement was not limited to “essential” documents ([37]-[39], [46]).
5. Port logs and timesheets were relevant primary documents, particularly because the letters of protest referred to delays recorded in them. The email recording free pratique was probably also supporting documentation in the circumstances, since the timing of free pratique affected the commencement and calculation of laytime and was not otherwise recorded for Port Sudan ([41]-[42]).
6. The tribunal was entitled to conclude that the required documents had not been provided. The failure engaged the contractual consequence that the demurrage claim was barred. It was unnecessary to decide the competing approaches in The “Sabrewing” and The Eternity, although the court considered the latter approach preferable if the issue had required determination ([43]-[46]).

• Arbitration tribunal: By the corrected award dated 23 July 2014, the tribunal rejected the owners’ demurrage claim as partly barred under clause 19.7 and wholly barred under clause 20.1.
• High Court (Commercial Court): Permission to appeal was granted on 7 November 2014. The appeal under section 69 of the Arbitration Act 1996 was dismissed.