What is demurrage?

Under a voyage charter, a ship is permitted a specified amount of time to carry out loading and discharging operations in port. This is called laytime. If the time spent in port exceeds the contractually specified laytime, demurrage starts to count. Demurrage is a claim for liquidated damages, accruing at a contractually specified daily rate from the time that laytime expires until the vessel’s operations in port are completed.

The Amalie Essberger case

The main point from this case was that as long as a charterer was provided with all documents supporting an owner’s demurrage claim before the time bar, it did not matter if a few supporting documents were not submitted together with the demurrage invoice.

In the recent Amalie Essberger case, the High Court examined what documents owners needed to provide (and when they should have provided them) to comply with demurrage claim time bar provisions in an amended Asbatankvoy voyage charter.

The amended clause 5 of the Asbatankvoy charter said that any claim for demurrage would be considered waived unless received by the charterers or their brokers in writing with all supporting calculations and documents within 90 days after completion of discharge of the last parcel of the charterers’ cargo.

The clause also said that demurrage must be submitted in a single claim and listed a number of documents to be submitted with the demurrage claim. Of these listed documents, the pumping logs and any letters of protest had to be provided earlier, within 7 banking days of completion of discharge under clause 23 of the charter.

In accordance with clause 23, the owners provided the charterers with copies of the pumping logs and a relevant letter of protest within 7 banking days of discharge. Having done this, they did not attach copies of these documents to their demurrage claim which was submitted to the charterers later (but still within the 90-day period).

The charterers claimed that the owners’ demurrage claim was time-barred because the owners had not submitted copies of the pumping logs and the letter of protest as attachments to the demurrage claim. The owners claimed that it was not necessary to attach copies of those documents because copies had already been provided earlier.

In summary, the Court held that the time bar provisions of clause 5 required all supporting calculations and documents to be provided within 90 days of completion of discharge. Having already provided copies of the pumping logs and the letter of protest to the charterers, the owners did not need to provide further copies as attachments to the demurrage claim. There was no express requirement to provide copies of all documents supporting the claim at the same time. To insist on this would have been a pedantic and overly strict interpretation of clause 5.

The owners had provided all supporting calculations and documents within the 90-day period and consequently their claim was not time-barred.

Practical considerations

This is a practical approach to the provision of documents supporting a demurrage claim/invoice. If the owners have already provided the charterers with copies of all documents that support a demurrage claim – particularly if they had provided these documents earlier in accordance with other charter clauses – they need not provide them again as attachments to the demurrage invoice.

That said, if charterparty provisions governing demurrage claims specify that all supporting documents must be provided within a specified time period, then (in order to avoid any questions arising) owners could adopt a “belt and braces” approach and attach copies of all supporting documents to the demurrage claim/invoice – even if it effectively means re-sending copies of some documents which were provided earlier.

Alternatively (and permissibly according to this case), owners could provide a demurrage claim/invoice to charterers and attach copies of supporting documents that have not already been provided and refer charterers to any other supporting documents that have been provided previously in a covering message to them.

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This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.