Lukoil Asia Pacific Pte Ltd v Ocean Tankers (Pte) Ltd (Ocean Neptune)

Where a charterparty provides that time spent waiting for charterers’ orders is to count as laytime or demurrage, a resulting claim is a demurrage claim, rather than merely a claim calculated at the demurrage rate. It is therefore subject to any contractual time bar and documentary requirements expressed to apply to demurrage claims.

Commercial common sense cannot displace clear and carefully drafted language. A document-production requirement qualified by “whenever possible” is not engaged where a document never existed, but it applies where relevant documents do exist. An owner cannot avoid a time bar by giving an uncompliant claim a different legal label.

The Charterers voyage-chartered the tanker Ocean Neptune from the Owners for the carriage of petroleum products from Taiwan to Australia. The charterparty incorporated the ExxonMobil VOY2005 form and LITASCO clauses.

After the receivers at Gladstone declined to take delivery, the vessel waited at anchorage for further orders. The Owners presented a demurrage claim, but did not supply all the documents required by LITASCO Clause 2B. An arbitral tribunal held most of the claim time barred, but treated the Gladstone delay as a separate claim for time lost waiting for orders under LITASCO Clause 4 and therefore outside Clause 2B.

The Charterers appealed the Partial Award of 25 April 2017. The central issue was whether a Clause 4 waiting-for-orders claim was a demurrage claim subject to the contractual time bar.

1. Appeal allowed. The tribunal erred in holding that the claim for time spent waiting at Gladstone fell outside the documentary time bar.

2. Under ExxonMobil VOY2005 clause 13(d), demurrage is payable for time by which permitted laytime is exceeded through loading, discharging, or other Charterers’ purposes where that time counts as laytime or demurrage. LITASCO Clause 4 expressly provides that waiting at anchorage for further orders counts as used laytime or, where applicable, demurrage. Such time therefore falls within clause 13(d). It gives rise to a demurrage claim, not merely a separate contractual payment measured at the demurrage rate.

3. This construction was reinforced by the charterparty as a whole. Other provisions, including the ISPS and interim-port clauses, used different language where compensation was to be assessed at the demurrage rate without being demurrage. A Clause 4 claim also required account to be taken of laytime used elsewhere on the voyage. It was necessarily part of the overall demurrage calculation.

4. LITASCO Clause 2B consequently applied. Its qualification that documents were required “whenever possible” meant that documents which never existed need not be supplied. It did not exempt a Clause 4 claim where relevant notices of readiness, statements of facts, or other documents existed and could assist investigation of the claim.

5. The commercial purpose of the time bar was prompt final accounting and investigation while facts remained fresh. That purpose applied equally to waiting-for-orders time. The Owners could not avoid the required documentation by re-labelling an otherwise time-barred demurrage claim. The court would hear the parties on the appropriate relief.

• High Court (Commercial Court): allowed the Charterers’ appeal from the Partial Award and held that the waiting-for-orders claim was subject to LITASCO Clause 2B.
• Arbitral tribunal: in a Partial Award dated 25 April 2017, held the Gladstone claim outside the contractual documentary time bar after treating it as a LITASCO Clause 4 claim rather than a demurrage claim.