John Habergham, Myton Law, Hull U.K.
This case must be of interest to those who conduct business internationally and which may involve a number of time zones around the world.
Although it was a case dealing with the vessel owners’ claim for demurrage, it is of wider general interest to international commercial contracts.
Owners’ claims for demurrage generally involves a pretty short period of time to make any claim accompanied by supporting documents, absent which, any claim for demurrage becomes time barred.
In this particular case, the time period was 30 days.
The issue was which time zone should be used to decide what was the date of completion of discharge which is the trigger for the 30-day period.
The competing arguments were – charterers said the vessel discharged in California and local time applied, in which case the claim was time barred. Owners said that a number of alternative time zones, all of which were essentially European, should apply in which case the claim was not time barred.
Owners’ contention was that the same time zone should be applied to both the beginning and the end of the period (ie the 30 day period and the claim would be submitted to charterers in a European time zone) and it is the time zone which has the closest and most real connection with the term in the charter which should apply. On this basis, the only connection with California was discharge. In all other respects, administrative staff of both owners and charterers were located within a European time zone.
Conversely, charterers said that the local time zone should be used because that reflects information which is stated in the relevant statement of facts and owners laytime statement. It also reflects the proposition that the date of discharge would be material for any cargo claim brought under the Hague Visby regime.
Although the judgment records an interesting debate on issues such as what is time as a concept? what is a day? what is the implication of these concepts when it comes to service of contractual notices? none of these were actually relevant to the key decision which was which is the relevant time zone to apply.
Ultimately, the court accepted the charterers contention, that local time applies, and, on that basis, the claim was time barred.
The lesson has to be – never leave it this close to the wire before taking any particular step.
And the margins were particularly tight in this matter.
Discharge was completed at 21:54 on the 24 December 2019 in California. At that local point in time, it was 06:54, Central European Time, or 05:54, Greenwich Mean Time on 25 December 2019.
The claim for demurrage was made on 24 January 2020.
Charterers said discharge completed 24 December 2019 and, therefore, the last day for notification was 23 January 2020 being day 30, counting 25 December 2019 as day one.
Owners said discharge was completed on 25 December 2019, that the last day for notification was 24 January 2020 being day 30 counting from 26 December 2019 as day one. It was in time.
As it happened, as mentioned above, the court accepted the charterers proposition, but it just shows that the case came down to one of hours.