Tricon Energy Ltd v. MTM Trading LLC (The “MTM Hong Kong”) – QBD (Comm Ct), 23 March 2020

The charter party between Tricon Energy and MTM Trading was dated February 13, 2017, for transport of cargo from Antwerp to Houston. A formal demurrage claim was emailed to the charterer on June 9, 2017, for delays at the load and discharge ports. The amount sought was $56,049.36.

Tricon asserted the demurrage claim was time-barred, for MTM Trading had not attached all the relevant documents within the contracted 90-day period. The dispute was referred to arbitration resulting in the owner’s claim succeeding in full. The tribunal awarded the full $56,049.36. Tricon appealed to the High Court.

Relevant sections of the amended Asbatankvoy charter party included:  

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.

Clause 12: Statement of Facts

Statement of facts must be signed by supplier or receiver, respectively. If they refuse to sign, the Master must issue a contemporaneous protest to them. Owner shall instruct each port agent to release port information to Charterer on request and to forward to Charterer the statement of facts and NOR. as soon as possible after Vessel has completed loading or discharge there.

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 [90] 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.

Critical to the case were Clause 10 Sections (e) and (f) detailing the proration of laytime/demurrage for simultaneous cargo operations and the requirement that the prorations be calculated based on the bills of lading.

Since a second parcel was discharged at the same berth in Houston, the laytime/demurrage had to be prorated. Tricon alleged MTM never provided the bills of lading; MTM asserted it had provided sufficient documentation and that the bills of lading were not required. MTM said the claim was submitted within the 90-day period, and documentation included:

  • The demurrage invoice
  • Laytime/demurrage calculations
  • NOR
  • Vessel timesheet/statement of facts
  • Hourly rate/pressure logs
  • Multiple letters of protest

Upon examination, it was discovered that the statement of facts did not accurately document the bill of lading quantity for the charterer’s parcel.

MTM believed the error occurred when the master listed the wrong amount in the NOR for Houston, and this error was copied to the statement of facts by the port agent.  

Tricon maintained that MTM had failed to provide “all supporting documents” as per Clause 38. Without the bills of lading, the claim was insufficiently documented and, therefore, time barred.

During the arbitration, the tribunal ruled for the owner, citing the documentation provided was sufficient and asserting that the statement of facts was adequate for calculating prorated waiting and discharge time.

The High Court disagreed, stating that Clause 38 required “all supporting documents” to be submitted, including all the bills of lading. Without these documents, the charterers could not confirm whether the demurrage claim was accurate.

Discussion ensued whether “all supporting documents” were limited to essential elements, with the owner persisting that signed statements of fact were “essential” or “primary” documents in a demurrage claim. The High Court rejected this position and countered that if a bill of lading was unavailable, then a proper explanation of that fact would need to be provided to satisfy the requirement of Clause 38.

The High Court ruled in favor of the charterer: the owner’s failure to produce bills of lading in support of their demurrage claim barred the entire claim.  The appeal would be allowed.