Mur Shipping BV v Louis Dreyfus Company Suisse SA (The “Tiger Shanghai”) – QBD (Comm Ct) (Cockerill J) [2019] EWHC 3240 (Comm) – 13 November 2019 [Updated 10 August 2020]

TIME-BAR – BREACH OF CHARTERPARTY – NULLIFYING DOCUMENTS – INCOMPLETE CLAIMS

Arbitration proceedings were brought against the owner’s alleged breach of charterparty by refusing vessel modifications per charterer’s request. However, charterer’s left out a supporting document from their claim. Ultimately, the court decided that the documentation was time-barred, causing the cause to be dismissed. 

[dropcap]T[/dropcap]he Tiger Shanghai was a vessel chartered on an amended NYPE form which included a clause for vessel modifications; clause 46. The clause stated, “The Charterers, subject to the Owner’s and Master’s approval which is not to be unreasonably withheld, shall be at liberty to fit/weld any additional equipment and fittings for loading … cargo. Such work shall be done at the Charterer’s expense and time, and the Charterers shall remove such equipment and fittings at their expense and time prior to redelivery, if so required by the Owners …”. With clause 46 the charterers requested on 12 August 2016 to cut new cement feeder holes into the hatch covers due to the inability of the loading crane to reach the pre existing holes. The owners refused the charterer’s vessel modifications request and subsequently led charterer’s to terminate the charter basis repudiatory breach. Charterer’s claimed that owners unreasonably withheld vessel modifications that were covered under clause 46 and a claim letter for the return of prepaid hire was sent to the owners. However, prior to charterer’s termination a CSS report for the requested vessel modifications was carried out by a Control System Survey representative and issued per charterer’s request. 

Just short of a year later charterer’s assigned their arbitrator the task of handling “all disputes connected with the charterparty” which was inclusive of claims for costs related to the termination of the charterparty and return of prepaid hire and delivery bunkers. Owners appointed their own arbitrator in response. However, charterer’s did not serve claim submissions until nearly a year later on 2 July 2018. Attached to the charterer’s claim submissions was the CSS report that had not been provided prior to the claim submission and which led owners to time bar the claim. Owner’s basis for time bar was the charterer’s failure to properly present the claim in full as it lacked several documents including the CSS Report. Charterers argued that the CSS report was not a blanketed required document, but rather a precautionary measure in preparation for potential arbitration as supported in clause 119. Nonetheless, the tribunal concluded the CSS Report was not privileged and found the charterer’s claim to be time barred due to the charterer’s failure to include the report. Charterer’s subsequently appealed to the high court. 

Held, claimants must have supporting documents to cover both the liability and quantum aspects of their claim. Any document used to support these limbs of the claim are supportive documents that must be originally submitted with the claim. It was determined that the CSS Report was considered a required document given that the charterers ultimately referenced and relied upon the CSS Report to support their claim. Despite the charterer’s protest that the CSS Report was reasonably arguably privileged and that it did not fall within the “all supporting documents” clause the submission was rejected as uncommercial.