Tricon Energy v MTM Trading - The MTM Hong Kong
Tricon Energy Ltd v MTM Trading LLC (The “MTM Hong Kong”)
English Commercial Court: Robin Knowles J:  EWHC 700 (Comm): 23 March 2020
Judgment Available on BAILII @ https://www.bailii.org/ew/cases/EWHC/Comm/2020/700.html
Thomas Steward (instructed by HFW LLP) for Tricon (Charterers)
Karen Maxwell (instructed by Lax & Co LLP) for MTM (Owners)
VOYAGE CHARTERPARTY: PART CARGOES: DEMURRAGE CLAIMS PRESENTATION TIME BAR CLAUSE: OWNERS OBLIGED TO PRESENT CLAIM WITH “ALL SUPPORTING DOCUMENTS” WITHIN TIME BAR: OWNERS DID NOT PRESENT COPIES OF BILLS OF LADING RELEVANT TO PRO-RATING CALCULATION OF LAYTIME AND DEMURRAGE BETWEEN TWO DIFFERENT CARGO PARCELS HANDLED AT THE SAME BERTH: WHETHER DEMURRAGE CLAIM BARRED FOR WANT OF PRESENTATION OF BILLS OF LADING IN TIME: ARBITRAITON ACT 1996 SECTION 69 APPEAL ON POINT OF LAW
In allowing Charterers’ appeal, on a question of law under section 69 of the Arbitration Act 1996, the High Court held that Owners’ demurrage claim was time-barred because “all supporting documents” had to be presented in time to Charterers but copies of the bills of lading had not been included despite the requirement to calculate the claim by reference to the bill of lading quantities.
Case note contributed by Jim Leighton, LLM (Maritime Law), LLB (Hons), BSc (Hons), Solicitor of England & Wales, LMAA Supporting Member and International Contributor to DMC’s Case Notes
Tricon (“Charterers”) voyage chartered-in the chemical tanker “MTM Hong Kong” from MTM (“Owners”) for a laden voyage carrying a part cargo from Antwerp, Belgium to Houston, Texas. The charter was on an amended ASBATANKVOY form and included, amongst others, the following rider clauses:
Rider Clause 10: “Laytime/Demurrage...
(e) If load or discharge is done simultaneously with other parcels then laytime to be applied prorate between the parcels...
(g) In the event of Vessel being delayed in berthing and the Vessel has to load and or discharge at the port(s) for the account of others, then such delay and/or waiting time and/or demurrage, if incurred, to be prorated according to the Bill of Lading quantities”.
Rider Clause 38: “Time Bar Clause
Charterer shall be discharged and released from all liability in respect of any claim/invoice the Owner may have/send to Charterer under this Charter Party unless a claim/invoice in writing and all supporting documents have been received by Charterer within  days after completion of discharge of the cargo covered by this Charter Party or after other termination of the voyage, whichever occurs first. Any claim/invoice which Owner may have under this Charter Party shall be waived and absolutely barred, if claim/invoice and all supporting documents are not received by Charterer before the time bar”.
A second parcel of cargo, in addition to Charterers’ parcel, was discharged at the same berth in Houston. As a result, rider clause 10, which governed simultaneous cargo operations, was engaged.
Owners’ claim for demurrage of USD55,841.16 was presented to Charterers in time supported by the demurrage invoice, laytime/demurrage calculations, NOR, vessel timesheet/statement of facts, hourly rate/pressure logs and various letters of protest. The claim did not include copies of the bills of lading for the two parcels of cargo. The statement of facts did not accurately record the bill of lading quantities, insofar as Charterers’ parcel was concerned.
Charterers’ case was that Owners did not provide “all supporting documents” in accordance with clause 38 because copies of the bills of lading were not included, as required to determine if the demurrage claim was well-founded.
Owners’ case was that their claim was sufficiently documented for the purposes of clause 38 by the statement of facts and, in any event, the bill of lading for the second parcel was not an available document for the purposes of clause 38.
The question of law in dispute before the arbitral tribunal was:
“Where a charterparty requires demurrage to be calculated by reference to bill of lading quantities, and contains a demurrage time bar which requires provision of all supporting documents, will a claim for demurrage be time-barred if the vessel owner fails to provide copies of the bills of lading?”
The arbitral tribunal answered the question “no” on the basis that the presentation of the statement of facts was sufficient. Charterers appealed the question of law in dispute to the High Court.
The judge first summarised the material facts (above), referred to the relevant voyage charter rider clauses (above), set out the issues to be addressed (above), and considered the approach to construing demurrage time bar provisions.
The judge was not conviced that the passages cited from judgments by Owners, in support of the proposition that what was to be presented was to be limited to “primary” or “essential” documents (which included notices of readiness and statements of fact), because those passages were principally addressing the reason for time limits. The judge, instead, tacitly accept Charterers’ view that what was important was the provision of the primary source of information, because (as in the present case) a statement of facts could be wrong.
In all of the judgments cited by Owners, the courts endorsed the statement by Bingham J, in The “Oltenia”, that the commercial intention underlying such clauses was to “ensure that claims were made by the owners within a short period of final discharge so that the claims could be investigated and if possible resolved while the facts were still fresh ...” (fn.1). Further, In The “Adventure”, Hamblen J had stated that the documentary requirement was not onerous and applied to a very limited class of documents which, if they existed, ought to be capable of submission without undue difficulty or expense (fn.2).
Accordingly, the judge did not accept Owners’ proposition that when “primary” or “essential” documents (as limited by Owners’ own definition) were provided, Owners were not required to provide further documents that duplicate the information. Owners’ proposition was founded on the premise that the parties were most unlikely to have intended to impose such a documentary requirement, because it was inefficient or wasteful.
In accepting Charterers’ view, the judge instead noted rider clause 10(e) “made it clear” (as the arbitral tribunal had stated) that pro-rating for demurrage purposes had to be calculated by reference to the bill of lading quantities. Furthermore, the charter referred not simply to “supporting documents” but to “all” such documents. The judge considered that these circumstances made it impossible to treat the bills of lading as falling outside the requirements of rider clause 38.
The judge did not see Owners’ practical concerns – the difficulties they might encounter in producing copies of the bills of lading and their potentially confidential nature - as an answer. There was no evidence that the bills of lading were unavailable here and any sensitive information in those bills, which would not itself include the quantities, could very easily be redacted.
The judge, therefore, allowed Charterers’ appeal on the above basis.
This judgment adds to the recent cases in which shipowners have been caught out by claims presentation time bars, where the need to include a specific type of document may not have been immediately obvious, unless the circumstances of the particular claim were considered carefully with a critical eye to detail.
The judge was not persuaded that presentation was limited to a selective category of “primary” or “essential” documents, as “all” supporting documents were required. That the same information could be found in more than one document, creating replication or overlap in what was presented, was irrelevant.
While not ordinarily required, the bills of lading could be labelled as being “primary” or “essential” documents in this case, being a principal source of information needed to confirm whether or not the claim was well-founded, as the charter itself identified the significance of the bill quantities to the claim.
Footnote 1:  1 Lloyd's Rep 448 at page 45
Footnote 2:  1 Lloyd's Rep 473 at