NSCSA v BP Oil Supply



National Shipping Company of Saudi Arabia v BP Oil Supply Company

English Court of Appeal: Ward and Tomlinson LJJ and Sir Mark Potter: 12 October 2011: [2011] EWCA Civ 1127

Timothy Young QC, instructed by Holman Fenwick Willan LLP, for the Appellant, NSCSA

Henry Byam-Cook, instructed by Hill Dickinson LLP, for the Respondent, BP Oil Supply



On the facts, Owners were not precluded from making a further demurrage claim, despite settlement of a "Demurrage Invoice". Neither was the further claim time barred, as both the further claim and all the supporting documentation had in substance been presented within the 90-day period as required by the charterparty clause. The words "together with" did not import a strict requirement for the documentation to be presented at the same time as the further claim.

Case note contributed by Julian Pierce, partner in the firm of Holman Fenwick Willan LLP, who represented the successful Appellant in this case.


This was an appeal by Owners against the decision on cross applications for summary judgment of Field J [2010] EWHC 3043 (Comm).

Owners had voyage chartered the VLCC "Abqaiq" to the Charterers for the carriage of an oil cargo from Freeport, Bahamas to Singapore.

Clause 20.1 of the BPVOY4 charterparty (same as the clause considered by the Court of Appeal in The Oltenia [1982]1 Lloyd's Rep 448) required claims for demurrage to be presented in writing with all supporting documentation within 90 days of discharge, failing which Charterers were to be discharged from all liability.

The charterparty also provided that, if additional ports of loading or discharge were used, then the Vitol Interim Port Clause was to apply. Under this clause, Charterers were to pay for any interim load/discharge ports at cost. Time for extra steaming was to be paid for at the demurrage rate, plus bunkers consumed, plus actual port costs, if any. The final invoice plus all supporting documents was to be presented to Charterers not later than 90 days after completion of the voyage.

During loading at Freeport, the vessel was put off the berth on 11 February 2008 due to the unavailability of cargo. She returned to the same berth on 17 February and completed loading the next day.

As later found, under the terms of the charter, laytime and, in due course, demurrage continued to run at Freeport after the vessel had been required to leave the berth, and resumed at Singapore, the discharge port. The vessel arrived at Singapore on 22 March 2008, waited some six days for a berth and then completed discharge on 30 March.

However, on 31 March 2008 (the day after completion of discharge) the Owners issued an invoice entitled "Supplementary Invoice" (described as under the Vitol Interim Port Clause and clause 5 of the charter - see fn.1 -) claiming for the time and bunkers consumed for the second berthing at Freeport. Time was claimed at the demurrage rate for the period commencing with the vessel being put off the berth on 11 February and continuing until loading was completed on 18 February 2008.

Then, on 2 April 2008, Owners issued an invoice entitled "Demurrage Invoice" claiming demurrage for 4.5833 days at Singapore and attaching supporting documents. The laytime and demurrage statements indicated (as later found, incorrectly) that laytime was suspended at Freeport on 11 February 2008 with neither laytime nor demurrage counting thereafter, and that there was, therefore, unused laytime on the vessel’s arrival at Singapore

After a series of email exchanges between Owners and Charterers and some minor revisions to the calculations, the Demurrage Invoice was settled and paid. Meanwhile, Owners continued to press for payment of the Supplementary Invoice, but without success. Owners accordingly issued proceedings on 1 March 2010. The claim was now framed as one for additional demurrage at Freeport and Singapore, plus (under clause 5) additional bunkers consumed for using a second berth at Freeport.

Field J held that:

(1) The settlement of the Demurrage Invoice was in full and final settlement of any and all claims for demurrage under the charter;

(2) The claim for further demurrage was otherwise time barred under clause 20.1 of the charterparty; and

(3) The Owner was not entitled to the cost of additional bunkers consumed by the vessel in re-berthing at the load port.

The Owners appealed


The Court of Appeal allowed the appeal in part.

1. On the true construction of the facts and correspondence, the Court held that the settlement was only of the claim presented in the Demurrage Invoice for demurrage at Singapore (despite use in the Demurrage Invoice of the phrase "combine all ports"). It did not preclude recovery by Owners of further demurrage in respect of time used at Freeport and Singapore. Owners were entitled to succeed in their claim for further demurrage, subject only to determination of Charterers' alternative argument that, between 1052 on 12 February 2008 and 1648 on 15 February 2008, adverse weather had the effect that time counted only as one half laytime or, if the vessel was on demurrage, at one half of the demurrage rate.

2. The touchstone of the approach to the time bar clause as set out in The Oltenia was a requirement of clarity sufficient to achieve certainty, rather than strict compliance which, if applied inflexibly, could lead to uncommercial results. The basic requirement of the clause is that the Charterers shall have received both the claim (in writing, containing the substance of the claim) and all the supporting documentation (everything which could be required to substantiate each part of the claim) within the 90 day period. The words "together with" imported no requirement that the supporting documents must necessarily be presented at the same time. It is the substance of the presentation which is important.

In considering the judgment of The Sabrewing [2008] 1 Lloyd's Rep 286, the Court said that it did not need to express a view on the ‘obiter dicta’ in that case to the effect that the documents must be presented by the Owners themselves and that Owners could not rely upon the circumstance that the Charterers might be in possession of documents from another source. The Court simply cautioned against “too mechanistic an approach”. The Court also referred to the judgment of Longmore LJ. in the The Eagle Valencia [2010] 2 Lloyd's Rep 257, which it felt was consistent with its own more pragmatic approach.

In the circumstances, the claim was not time barred.

3. The cost of bunkers consumed was not recoverable under Clause 5 of the charterparty because re-berthing at the same berth did not constitute a second berthing (The Afrapearl [2004] 2 Lloyd's Rep 305 affirmed). Further, the cost of bunkers did not constitute "any dues and/or other charges".


The decision affirms the 1982 decision of the Court of Appeal in The Oltenia that Owners must comply carefully with the provisions of demurrage time-bar clauses, to ensure that - within the specified period - Charterers are supplied with all the information and documents required to identify the claim with certainty and to investigate it. But Owners will not be debarred from making factual corrections or putting a different legal label on a claim previously presented. However the Court of Appeal has now dismissed as uncommercial any suggestion based on recent cases such as The Sabrewing and the The Eagle Valencia that the requirement is of strict rather than substantial compliance.

Fn.1 Clause 5 of the charterparty gave the Charterers the option to load or discharge at more than one berth on reimbursing Owners the costs incurred in consequence, including “any dues and/or other charges incurred in excess of those which would have been incurred” [if only one berth had been used].