Boskalis Offshore Marine Contracting BV v Atlantic Marine and Aviation LLP (The "Atlantic Tonjer")

A contractual payment clause requiring payment within a specified period may also require a charterer wishing to withhold payment because an invoice is incorrect to give timely notice. Where the parties are commercial parties of equal bargaining strength, the agreed period is not rewritten because it may be inconvenient or short. Such a clause is construed as an ordinary contractual term, rather than automatically as a time bar or exclusion clause. Failure to give notice may prevent a defence to payment, but does not necessarily prevent a later counterclaim or contractual audit rights. The clause may therefore preserve prompt cash flow while allowing subsequent recovery in appropriate cases.

Atlantic Marine and Aviation LLP chartered a vessel to Boskalis Offshore Marine Contracting BV under a BIMCO SupplyTime 2017 charterparty. Clause 12(e) required payment within 21 days of receipt of an invoice and required prompt notice, no later than the due date, where the charterers reasonably believed an invoice was incorrect.

The parties’ dispute was referred to arbitration. The tribunal held that failure to notify a dispute within the payment period required payment of the invoice and excluded later reliance on a defence, subject to specified counterclaim and audit routes. Permission was granted under section 69 of the Arbitration Act 1996 on two questions concerning the construction of clause 12(e) and the possibility of recovering sums paid despite an undisclosed defence.

1. The appeals were dismissed. The first question was answered affirmatively: clause 12(e) required the charterers to notify the owners within the agreed period if they reasonably believed an invoice was incorrect and wished to withhold the disputed amount. The second question was answered negatively.
2. The clause was clear and unambiguous. Its requirement that payment “shall be received” within the specified period was equivalent to barring a dispute unless raised within that period. The parties had negotiated the period and were of equal bargaining strength. The court would not substitute a different period because a shorter period might be inconvenient.
3. The clause was not analogous to a time bar or exclusion clause. It did not exclude liability or imply a term. It required either prompt payment or prompt identification of the issue preventing payment. The contractual language was construed using ordinary principles of contractual interpretation and commercial common sense.
4. Where the charterers reasonably believed that an invoice was incorrect, they could withhold the disputed amount if they gave the required notice within the contractual period. They retained the audit rights in clause 12(g), including the ability to address accounting errors, and could bring a counterclaim, including for breach of contract or unjust enrichment where legally available.
5. The tribunal was correct that a defence not raised timeously by valid notice could not be used to resist payment. Whether a separate term requiring repayment of overpaid hire should be implied, and whether unjust enrichment was available on the facts, remained matters for the tribunal at a later stage and were not decided by the court.

• Arbitration tribunal: The tribunal issued partial final awards requiring payment of the invoices and held that clause 12(e) required disputes to be notified within 21 days of receipt.
• High Court (Commercial Court): Permission was granted under section 69 of the Arbitration Act 1996. Sir Ross Cranston dismissed the consolidated appeals and answered the two questions of law in the affirmative and negative respectively.