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

Factual and Procedural Background

On 8 November 2013, the Plaintiff ("the Charterers") voyage chartered the tanker Vessel from the Defendant ("the Owners") for carriage of a minimum of 35,000 metric tons, with an option to carry a full cargo of clean petroleum products, from one safe port in The State of Taiwan to one to three safe ports in The State of Australia. Demurrage was payable at a fixed rate of US$17,500 per day pro rata, with laytime for loading and discharging set at 84 hours total, including Saturdays and holidays.

The Charterers appealed against a Partial Award dated 25 April 2017 ("the Award") which held that the Owners' demurrage claim in respect of delays at one of the discharge ports was not time barred.

The charterparty was evidenced by a fixture recap email incorporating the ExxonMobil VOY2005 standard form and the Lukoil International Trading and Supply Company Exxonvoy 2005 clauses ("the LITASCO Clauses"), amended and supplemented by the Fixture Recap. The terms included detailed provisions on demurrage, laytime, nomination of ports, and claims procedures.

The Owners claimed demurrage totaling US$772,327.87, with interest and costs. The Charterers denied liability, arguing the claim was time barred due to failure to provide required supporting documentation within 90 days after completion of discharge, as stipulated in LITASCO Clause 2B. The Charterers also counterclaimed for alleged contamination and short delivery of cargo. The Tribunal addressed the time bar defence as a preliminary issue.

Key factual events include:

• The Vessel tendered notice of readiness at the loadport in Taiwan on 17 November 2013 and completed loading on 19 November 2013, with total laytime used at 57.25 hours.
• At the first discharge port in Australia, notice of readiness was tendered on 2 December 2013; the Vessel berthed on 3 December 2013 and remained until 5 December 2013, then shifted to anchorage until 15 January 2014. Delay was caused by receivers refusing delivery due to alleged cargo contamination. The Owners calculated 1,048.58333 hours laytime used at this port.
• The Vessel then proceeded to two further discharge ports, tendering notice of readiness and completing discharge with respective laytimes of 27.83333 and 22.9333 hours.
• The Owners submitted their demurrage claim with supporting documents on 6 February 2014. The Tribunal found that the Owners failed to provide all required supporting documentation, specifically missing statements of facts countersigned by terminals or letters of protest for each port except for the delay at the first discharge port, which was re-labelled as a claim for time lost waiting for orders under LITASCO Clause 4. The Tribunal held that the documentary requirements did not apply to this re-labelled claim, thus it was not time barred.

Legal Issues Presented

1. Whether a claim for time lost waiting for orders under LITASCO Clause 4 constitutes a "demurrage claim" for the purposes of the documentary requirements and time bar provisions in LITASCO Clause 2B.
2. Whether the documentary requirements set out in LITASCO Clause 2B apply strictly to all demurrage claims, including claims for time lost waiting for orders.
3. The proper construction and application of the charterparty terms, including the interplay between ExxonMobil VOY2005 clauses, LITASCO Clauses, and the Fixture Recap amendments.

Arguments of the Parties

Appellant's Arguments

• A claim under LITASCO Clause 4 for time lost waiting for orders is a demurrage claim and therefore subject to the documentary and time bar requirements of LITASCO Clause 2B.
• There are no commercial reasons to depart from the clear and plain meaning of the LITASCO Clauses.
• Applying the plain meaning promotes commercial certainty and consistency in claims handling.

Appellee's Arguments

• LITASCO Clause 2B is a restriction on the Owners’ right to present claims and should be construed restrictively.
• There is a distinction between demurrage claims for operational delays and claims for time lost waiting for orders, which should be treated differently.
• Demurrage claims relate to liquidated damages for breach of charter, whereas Clause 4 confers a contractual liberty involving no breach.
• The documentary requirements in Clause 2B are not relevant or necessary for claims under Clause 4 due to the nature of waiting for orders, often off port limits with no port communications.
• The Tribunal’s reasoning that Clause 2B does not apply to Clause 4 claims is supported by commercial sense and practical considerations.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by applying established principles of contractual interpretation, focusing on the objective meaning of the charterparty language in its commercial context. It examined whether a claim under LITASCO Clause 4 for time lost waiting for orders qualifies as a "demurrage claim" subject to the documentary and time bar provisions of Clause 2B.

The court found that the charterparty explicitly treats waiting time under Clause 4 as time that "counts as" laytime or demurrage under Clause 13(d) of the ExxonMobil VOY2005 form. This language indicates that such waiting time is not merely quantified similarly to demurrage but is indeed a demurrage claim under the charterparty. The court rejected any distinction between "ordinary" demurrage claims and those for waiting time that counts as demurrage.

The court noted that the documentary requirements in Clause 2B are designed to ensure timely and accurate claims presentation, enabling swift investigation and resolution while facts remain fresh. This rationale applies equally to claims under Clause 4. The Tribunal's reasoning that Clause 2B does not apply to Clause 4 claims because documents might not exist in some waiting scenarios was rejected, as Clause 2B is qualified by "whenever possible" and the existence of documents depends on circumstances.

The court observed that if waiting time occurs after tendering notice of readiness at the first loading port, documentation relating to that port's laytime is relevant and necessary to calculate the claim properly. Therefore, the same documentary regimen should apply to all parts of the demurrage claim, including waiting time claims under Clause 4.

The court also addressed the Owners' argument that some documents might be irrelevant in certain scenarios, concluding that occasional irrelevance does not justify departing from clear contractual language requiring documentation. The requirement is not onerous and applies only to documents that exist and are relevant.

Finally, the court rejected the Owners' argument that Clause 10 of the Fixture Recap (concerning drifting) supports a different interpretation, emphasizing that Clause 10 dovetails with Clause 4 and does not negate the application of Clause 2B to Clause 4 claims where documents exist.

Holding and Implications

The court ALLOWED the appeal, overturning the Tribunal's conclusion that the demurrage claim for waiting time at the first discharge port was not time barred.

The effect of this decision is that claims under LITASCO Clause 4 for time lost waiting for orders are to be treated as demurrage claims subject to the documentary and time bar requirements of Clause 2B. Consequently, failure to provide the required supporting documentation within the stipulated time frame results in the claim being time barred.

No new precedent was set beyond the application and clarification of existing principles of contractual interpretation and the enforcement of documentary requirements in voyage charters. The decision reinforces the importance of strict adherence to contractual conditions for claims presentation in maritime charterparty disputes.