EURONAV NV V REPSOL TRADING SA (THE “MARIA”) – QBD (COMM CT) (HENSHAW J) [2021] EWHC 2565 (COMM) – 24 SEPTEMBER 2021

SHELLVOY 6 – DEMURRAGE – TIME BAR – COMPLETION DATE – WHETHER CLAIM TIME-BARRED

Relevant to this case was clause 15(3) of Shellvoy 6, which stated:

 “Owners shall notify Charterers within 30 days after completion of discharge if demurrage has been incurred, and any demurrage claim shall be fully documented and received by Charterers within 90 days after completion. If Owners fail to act accordingly, Charterers’ liability for demurrage will be extinguished.”

As an aside, although not noted in the award as being amended, presumably the fixture recap amended this clause as unamended 15(3) of Shellvoy 6 requires notification within 60 days completion of discharge.

The owners proposed a single time zone for both the start and end of the period and used the time zone with the closest connection with the provision. They also argued that neither theirs nor the charterers’ administrative staff was in California, so using a European time zone would be preferable.

The owners proposed a single time zone for both the start and end of the period and used the time zone with the closest connection….

On the contrary, the charterers argued that the local time should calculate the discharge date. In addition to providing consistency for purposes of clause 15(3), the use of local time provided clarity for other circumstances where a single date of discharge was material, such as the Hague-Visby Rules limitation period for cargo claims.

The Court noted that the discharge date was “day 0” and did not count as one of the 30 days required notifications. Any incorrect reference to a “day” did not refer to a calendar day (24 hours beginning at midnight). Arguably, the owners’ statement would have been out of date measuring the start and end of the period using any single time zone, as required when using an “elapsed time” approach.

Further, the law didn’t recognize fractions of a day. Days were viewed as points or brief periods that matched the events. To determine a period’s duration, one began counting days at midnight on the day of the event.

Pertinent to these principles arose from the case of midnight deadlines:

(Matthew v Sedman [2021] UKSC 19, noting that the reason for the general rule which directed that the day of accrual of the cause of action should be excluded from the reckoning of time was that the law rejected a fraction of a day)

However, the preceding principles did not address the issue of which time zone should be used when assigning an event to a specific calendar day.

The discharge of cargo from a vessel was an actual physical event, which occurred at a specific location and in a particular time zone. The ordinary and natural approach was to allocate to an event the current date where the event occurred. A contracting party would expect the date mentioned in these documents to be the date of discharge. The date of cargo discharge was crucial for notifying demurrage claims and other uses. It marked the end of the shipper’s contractual service and the start of laytime or demurrage. Under clause 15(3) itself was also the start date for the separate 90-day period for the benefit of supporting documents. In addition, it was generally the starting point for the time limit under the Hague-Visby Rules for cargo claims. A contra proferentem interpretation of clause 15(3) was not justified.

Thus, for clause 15(3) notification period for demurrage claims, the date of discharge should be computed using local time at the discharge location, in this case, Pacific standard time. As a result of the late notification, the charterers were entitled to summary judgment.