Beat The Clock! Practical Considerations In Dealing With Last Minute Claims

P v. Q (Capetan Giorgis) [2018] EWHC 1399 (Comm) The Commercial Court has recently issued helpful guidance on how parties can protect themselves from last minute incoming claims if they are in a back-to-back charter chain. Among other things, the Court considered how to ensure that any claims can still be passed up or down the charter chain and what to do if a contractual time bar is missed in those circumstances.

The background facts

The charterparty chain

The charters were subject to English law and London arbitration, and all contained the following time bar clause:

"Any claim other than the demurrage claim under this contract shall be notified in writing to the other party and claimant's arbitrator appointed within thirteen (13) months of the final discharge of the cargo and where this provision is not complied with, the claim shall be deemed to be waived and absolutely barred."

The timeline of events

The events surrounding the claims were as follows:

16 October 2015

The vessel completes discharge at Nansha, China.

9 September 2016

Without any prior indication, a cargo claim is commenced against the Head Owners in Xiamen Maritime Court.

16 November 2016 (last day of the time limit in each charter)

The Head Owners give notice of a claim and commence arbitration against Sinochart. Sinochart send a similar notice to P and commence arbitration. The notification and commencement of arbitration are sent after P's business hours.

The time limits under all charters expire

17 November 2016

P becomes aware of the claim for the first time. P informs Q of the claim it has received, but does not commence arbitration as its operations department gathers more information. Q informs R of the claim and commences arbitration against R.

23 November 2016

P's operations department informs its legal department of the incoming Sinochart claim for the first time, six days after first receiving the notice. P becomes aware of the terms of the time bar clause.

25 November 2016

P commences arbitration against Q, eight days after first receiving the incoming claim against it.

30 November 2016

Following a dispute between Q and R about the validity of the service of Q's notice of arbitration, Q serves a fresh notice on R without prejudice to its 17 November 2016 notice.

1 December 2016

R serves notice on S of its claim and commences arbitration.

The dispute

The Claimants P, Q and R, all applied for declarations that:

1. Their claims had been brought in time...